Synopsys announces financial results for Q3 2009

MOUNTAIN VIEW, USA: Synopsys Inc. today reported results for its third quarter ended July 31, 2009.

For the third quarter of fiscal 2009, Synopsys reported revenue of $345.2 million compared to $344.1 million for the third quarter of fiscal 2008.

"Synopsys again made excellent progress towards delivering on our year's objectives," said Aart de Geus, chairman and CEO of Synopsys. "We are actively working with customers to help them successfully navigate the economic recovery, and are positioning ourselves for even greater strength in the future."

GAAP results
On a generally accepted accounting principles (GAAP) basis, net income for the third quarter of fiscal 2009 was $47.4 million, or $0.32 per share, compared to $57.7 million, or $0.39 per share, for the third quarter of fiscal 2008, which included a $17.3 million tax benefit associated with the settlement of an IRS tax issue for fiscal years 2000 and 2001.

Non-GAAP results
On a non-GAAP basis, net income for the third quarter of fiscal 2009 was $68.3 million, or $0.47 per share, compared to non-GAAP net income of $64.5 million, or $0.44 per share, for the third quarter of fiscal 2008.

Financial targets
Synopsys also provided its financial targets for the fourth quarter and full fiscal year 2009. These targets constitute forward-looking information and are based on current expectations.

Fourth Quarter of Fiscal Year 2009 Targets:
Revenue: $335 million - $343 million
GAAP expenses: $297 million - $313 million
Non-GAAP expenses: $272 million - $282 million
Other income and expense: $0 - $3 million
Tax rate applied in non-GAAP net income calculations: approximately 26 percent
Fully diluted outstanding shares: 146 million - 149 million
GAAP earnings per share: $0.14 - $0.21
Non-GAAP earnings per share: $0.29 - $0.33
Revenue from backlog: greater than 90 percent

Full-Year Fiscal Year 2009 Targets:
Revenue: approximately $1.357 billion - $1.365 billion
Other income and expense: $11 million - $14 million
Tax rate applied in non-GAAP net income calculations: approximately 27 percent
Fully diluted outstanding shares: 144 million - 146.5 million
GAAP earnings per share: $1.16 - $1.23
Non-GAAP earnings per share: $1.71 - $1.75

Cash flow from operations: $190 million-$210 million (excludes potential impact of a tentative settlement with the Internal Revenue Service, described below).

In the second quarter, the company reached a tentative settlement with the IRS that would resolve a dispute regarding its 2002-2004 returns, primarily associated with the acquisition of Avant!.

The tentative settlement is subject to further approval by the government. If approved, we expect it to result in a cash payment to the IRS of approximately $50 million, most likely within the next 12 months. If the tentative settlement is approved, this payment would be fully offset by tax reductions in future years.