MOUNTAIN VIEW, Calif.,
Sept. 2 /PRNewswire-FirstCall/ --
Synopsys, Inc. (Nasdaq: SNPS), a world leader in software and IP
for semiconductor design, verification and manufacturing, has
completed its acquisition of Virage Logic Corporation (Nasdaq:
VIRL), a leading independent provider of semiconductor intellectual
property (IP) for the design of complex integrated circuits. Virage
Logic's offering complements Synopsys' DesignWare® interface and
analog IP portfolio by adding embedded memories with test and
repair, non-volatile memories (NVMs), logic libraries, and
configurable cores for control and multimedia sub-systems.
Designers can use Synopsys' expanded portfolio of high-quality IP
to quickly incorporate standard functions into their
systems-on-chips (SoCs) so they can focus more of their time on
developing differentiated products.
Synopsys paid $12.00 cash per
Virage Logic share, resulting in a transaction value of
approximately $315 million. We expect
the impact of the acquisition on our non-GAAP earnings per share in
the fourth quarter of fiscal 2010 to be roughly neutral. In
addition, with the exception of charges associated with the
acquisition of Virage Logic such as incremental stock-based
compensation, amortization of intangibles, acquisition-related
charges and others, we expect the impact of the acquisition on our
GAAP earnings per share in the fourth quarter of fiscal 2010 to be
roughly neutral. Since we have not completed our valuation and
purchase price allocation analyses, we are unable to determine the
full impact of the acquisition on our GAAP earnings per share at
this time. Therefore, we are not making changes to the earnings per
share targets and the related GAAP to non-GAAP reconciliation we
provided on August 18, 2010.
GAAP to non-GAAP Reconciliation
of Fourth Quarter Fiscal Year 2010 Targets (1)
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(in thousands, except per share
amounts)
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Range for Three
Months
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Ending October 31,
2010
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Low
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High
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Target GAAP earnings per
share
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$ 0.21
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$ 0.27
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Adjustment:
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Estimated impact of amortization
of intangible assets
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0.09
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0.07
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Estimated impact of stock
compensation
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0.13
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0.09
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Net non-GAAP tax
effect
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(0.06)
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(0.04)
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Target non-GAAP earnings per
share
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$ 0.37
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$ 0.39
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Shares used in non-GAAP
calculation (midpoint of target range)
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151,000
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151,000
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(1) The above forward-looking
guidance does not include charges associated with the acquisition
of Virage Logic, such as incremental stock-based compensation,
amortization of intangibles, acquisition-related charges and
others, as the valuation and purchase allocation cannot yet be
reliably estimated without unreasonable efforts.
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GAAP Reconciliation
This press release includes non-GAAP earnings per share.
This non-GAAP measure is not in accordance with, or an
alternative for, U.S. generally accepted accounting principles
("GAAP") and may be different from non-GAAP measures used by other
companies. In addition, this non-GAAP measure is not based on any
comprehensive set of accounting rules or principles and management
exercises judgment in determining which items should be excluded in
the calculation of this non-GAAP measure. While we believe that
non-GAAP measures have limitations in that they do not reflect all
of the amounts associated with our results of operations as
determined in accordance with GAAP, we believe that non-GAAP
measures are valuable in analyzing our operations. Management
analyzes current and future results on a GAAP basis as well as a
non-GAAP basis, and also provides GAAP and non-GAAP measures in our
earnings releases. The presentation of non-GAAP financial
information is not meant to be considered in isolation or as a
substitute for the directly comparable financial measures prepared
in accordance with GAAP. Non-GAAP financial measures are meant to
supplement, and be viewed in conjunction with, GAAP financial
measures. We believe that the presentation of non-GAAP measures
provides useful information to investors and management regarding
financial and business trends relating to our financial condition
and results of operations.
Synopsys' management evaluates and makes decisions about its
business operations primarily based on the revenue and orders, and
on the direct, ongoing and recurring costs of those operations. We
use these non-GAAP financial measures in making operating decisions
because we believe the measures provide meaningful supplemental
information regarding our operational performance and give us a
better understanding of how we should invest in research and
development and fund infrastructure and product and market
strategies. We use these measures to help us make budgeting
decisions, for example, among product development expenses and
research and development, sales and marketing, and general and
administrative expenses. In addition, these non-GAAP financial
measures facilitate our internal comparisons to our historical
operating results, forecasted targets and comparisons to
competitors' operating results.
We have excluded the following items from non-GAAP EPS:
(i) Amortization of acquired intangible assets. We incur
expenses from amortization of acquired intangible assets which
include contract rights associated with certain executory contracts
and core/developed technology, trademarks, trade names, customer
relationships, covenants not to compete, and other intangibles
related to acquisitions. We amortize the intangible assets over
their economic lives. We exclude this item because this expense is
non-cash in nature and because we believe the non-GAAP financial
measure excluding this item provides meaningful supplemental
information regarding our operational performance, liquidity and
ability to invest in research and development and fund acquisitions
and capital expenditures.
(ii) Stock compensation impact. We exclude stock compensation
expenses from our non-GAAP measures primarily because they are
non-cash expenses. We believe that it is useful to investors to
understand the impact of stock compensation to our operational
performance, liquidity and ability to invest in research and
development and fund acquisitions and capital expenditures. While
stock compensation expense constitutes an ongoing and recurring
expense, such expense is excluded from non-GAAP results because it
is not an expense that typically requires or will require cash
settlement by us and because such expense is not used by us to
assess the core profitability of our business operations. In
addition, excluding this item from non-GAAP EPS facilitates
comparisons to our competitors' operating results.
(iii) Income tax effect of non-GAAP pre-tax adjustments from the
provision for income taxes. Excluding the income tax effect of
non-GAAP pre-tax adjustments from the provision for income taxes
assists investors in understanding the tax provision associated
with those adjustments and the effect on net income.
About Synopsys
Synopsys, Inc. (Nasdaq: SNPS) is a world leader in electronic
design automation (EDA), supplying the global electronics market
with the software, intellectual property (IP) and services used in
semiconductor design, verification and manufacturing. Synopsys'
comprehensive, integrated portfolio of implementation,
verification, IP, manufacturing and field-programmable gate array
(FPGA) solutions helps address the key challenges designers and
manufacturers face today, such as power and yield management,
system-to-silicon verification and time-to-results. These
technology-leading solutions help give Synopsys customers a
competitive edge in bringing the best products to market quickly
while reducing costs and schedule risk. Synopsys is headquartered
in Mountain View, California, and
has more than 65 offices located throughout North America, Europe, Japan, Asia
and India. Visit Synopsys online
at http://www.synopsys.com.
Safe Harbor Statement/Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of U.S. federal securities laws, including statements
about the expected impact of the acquisition of Virage Logic on
Synopsys' financial results and the expected benefits of the
transaction. Forward-looking statements are subject to both
known and unknown risks and uncertainties that may cause actual
results to differ materially from those expressed or implied in the
forward-looking statements, and that are outside our control.
These risks and uncertainties include, among others: our
ability to successfully integrate Virage Logic's business and
technologies with our own; the effect of the acquisition on our
business, including possible delays in customer orders, the
potential loss of customers, key employees, partners or vendors;
and uncertain customer demand and support obligations for the new
offerings. Other risks and uncertainties that may apply are set
forth in the Risk Factors section of our most recently filed
Quarterly Report on Form 10-Q. Synopsys assumes no obligation
to update any forward-looking statement contained in this press
release.
Synopsys is a registered trademark of Synopsys, Inc.
Editorial
Contact:
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Yvette Huygen
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Synopsys, Inc.
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650-584-4547
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yvetteh@synopsys.com
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Investor Contact:
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Lisa Ewbank
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Synopsys, Inc.
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650-584-1901
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SOURCE Synopsys, Inc.
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