Cadence Reports Record Revenue and Earnings Per Share for Fourth Quarter and 1995; EDA leader reports 35% jump in revenue for Q4, revenue reaches $548 million for 1995

Business Wire, Jan 23, 1996

SAN JOSE, Calif.--(BUSINESS WIRE)--Jan. 23, 1996--Cadence Design Systems, Inc., the worldwide leader in electronic design software and services, today announced record revenue and earnings per share for both the fourth quarter of 1995 as well as the year ended December 30, 1995. Revenue of $163.8 million for the fourth quarter of 1995 increased 35% compared to the prior year quarter. Net income and earnings per share for the fourth quarter were $30.8 million and $.50 respectively, an increase of 47% and 52% over the prior year quarter.

The prior year fourth quarter results included a $4.2 million pre-tax ($.05 per share) one time gain on the sale of investments. Excluding the effect of the one time gain, net income and earnings per share increased 73% and 79%, respectively.

For the full year, revenue totaled $548.4 million, an increase of 28% over the prior year. Net income of $97.3 million increased 165% over the prior year. Earnings per share increased 180% over fiscal 1994 to $1.57. Full year results for 1994 included net charges for non-recurring items totaling $10.5 million pre-tax ($.12 per share). 1995 results included an $18.9 million pre-tax ($.22 per share) gain on the sale of IMS stock. Excluding the effects of these non-recurring items, net income and earnings per share increased 88% and 99% respectively.

"Our success in 1995 is a satisfying reflection of the electronics industry's continued acceptance of both our state-of-the-art design technology and our pioneering approach to partnering with our customers," said Joe Costello, President and CEO of Cadence. "The fact that Cadence is growing revenue at twice the rate of the EDA industry as a whole demonstrates our commitment to innovation in both technology as well as with our business model." Growth in key product areas and professional services

Cadence saw strong growth from both its software product portfolio as well as its evolving professional services offerings. Fourth quarter product revenue increased 32% from the prior year quarter to $90.1 million. For the full year, product revenue increased from $241.5 million in 1994 to $292.2 million in 1995, a jump of 21%. The Company achieved record revenue in strategic areas such as its integrated circuit place-and-route, logic simulation and Alta Group system-level design tools. Cadence's ability to meet complex challenges, such as deep submicron IC design and high-speed board design, were reflected in the Company's product revenue growth. Cadence's design services business also continued to expand, with revenue growing 114% to $21.5 million when compared with the prior year quarter. Services margins improved to 22% for the fourth quarter compared to 15% in the third quarter of 1995. For the year, service revenue increased 132% to $65.9 million. In the fourth quarter, Cadence closed significant services agreements with several major semiconductor manufacturers.

"As our customers look to Cadence to provide more complete solutions to their product development requirements we are growing our services capacity to meet strong demand," Costello said. "The product pipeline we have built in 1995 and the continued expansion of our professional services provide us with a strong foundation for 1996 and beyond."

Cadence Design Systems, Inc. provides comprehensive business solutions to the product development requirements of the leading electronics companies in the world. The Company is the largest supplier of software tools and professional services used to accelerate and manage the complexity of the design of semiconductors, computer systems, networking and telecommunications equipment, consumer electronics and a variety of other electronic-based products. With nearly 3,000 employees and annual revenue of more than a half-billion dollars, Cadence has sales and research facilities around the world. It is headquartered in San Jose, California and traded on the New York Stock Exchange (CDN). -0-

                Cadence Design Systems, Inc.
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