Synopsys Posts Financial Results for Fourth Quarter and Fiscal Year 2011

Synopsys had an outstanding fiscal 2011, with double-digit revenue and non-GAAP earnings per share growth, said Aart de Geus, chairman and CEO of Synopsys. Our customers continue to drive design aggressively, even in the context of economic uncertainty. Our combination of advanced technology and support expertise is helping to solve the most pressing technical challenges. Synopsys' financial strength and predictable business model support an objective of double-digit non-GAAP earnings per share growth in fiscal 2012.



GAAP Results

On a generally accepted accounting principles (GAAP) basis, net income for the fourth quarter of fiscal 2011 was $39.9 million, or $0.27 per share, compared to $25.4 million, or $0.17 per share, for the fourth quarter of fiscal 2010. GAAP net income for fiscal year 2011 was $221.4 million, or $1.47 per share, compared to $237.1 million, or $1.56 per share, for fiscal 2010.



Non-GAAP Results

On a non-GAAP basis, net income for the fourth quarter of fiscal 2011 was $65.3 million, or $0.45 per share, compared to non-GAAP net income of $59.9 million, or $0.39 per share, for the fourth quarter of fiscal 2010. Non-GAAP net income for fiscal 2011 was $270.3 million, or $1.80 per share, compared to non-GAAP net income of $242.4 million, or $1.60 per share, for fiscal 2010. Reconciliation between GAAP and non-GAAP results is provided at the end of this press release.



Financial Targets

Synopsys also provided its financial targets for the first quarter and full fiscal year 2012. These targets do not include any impact of future acquisition-related activities. These targets constitute forward-looking information and are based on current expectations. For a discussion of factors that could cause actual results to differ materially from these targets, see Forward-Looking Statements below.



First Quarter of Fiscal Year 2012 Targets:



Revenue: $412 million - $420 million



GAAP expenses: $340 million - $357 million



Non-GAAP expenses: $310 million - $320 million



Other income and expense: $0 - $2 million



• Tax rate applied in non-GAAP net income calculations: 24 – 25 percent

• Fully diluted outstanding shares: 145 million - 149 million

• GAAP earnings per share: $0.33 - $0.38

• Non-GAAP earnings per share: $0.51 - $0.53

• Revenue from backlog: greater than 90 percent



Note: The first quarter of fiscal 2012 includes an extra week.

Full Fiscal Year 2012 Targets:



Revenue: $1.640 billion - $1.665 billion

Other income and expense: $0 million - $4 million

Tax rate applied in non-GAAP net income calculations: 25 – 26 percent

Fully diluted outstanding shares: 145 million - 149 million

GAAP earnings per share: $1.28 - $1.44

Non-GAAP earnings per share: $1.93 - $1.99

Cash flow from operations: approximately $300 million

Revenue from backlog: greater than 80 percent



GAAP Reconciliation



Synopsys continues to provide all information required in accordance with GAAP, but believes evaluating its ongoing operating results may not be as useful if an investor is limited to reviewing only GAAP financial measures. Accordingly, Synopsys presents non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate Synopsys' operating results in a manner that focuses on what Synopsys believes to be its ongoing business operations and what Synopsys uses to evaluate its ongoing operations and for internal planning and forecasting purposes. Synopsys' management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Synopsys' management believes it is useful for itself and investors to review, as applicable, both GAAP information that includes: (i) the amortization of acquired intangible assets, (ii) the impact of stock compensation, (iii) acquisition-related costs, (iv) other significant items, including the effect of tax benefits from settlements with the Internal Revenue Service, and (v) the income tax effect of non-GAAP pre-tax adjustments as well as unusual or infrequent tax adjustments; and the non-GAAP measures that exclude such information in order to assess the performance of Synopsys' business and for planning and forecasting in subsequent periods. Whenever Synopsys uses a non-GAAP financial measure, it provides a reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure.