Cadence reported fourth quarter 2009 revenue of $220 million, compared to revenue of $227 million reported for the same period in 2008. On a GAAP basis, Cadence recognized net income of $2 million, or $0.01 per share on a diluted basis, in the fourth quarter of 2009, compared to a net loss of $1.63 billion, or $(6.55) per share on a diluted basis in the same period in 2008. The news is a mixture of reasonably good news, and not so good news. The reasonable good news is that Cadence is coming out of the significant slump in revenue experienced in 2008. The not so good news is that financial conditions worldwide will not permit Cadence to work its way back to a revenue level above the $1 billion. In fact the company recognizes that there is a possibility that revenue will not grow at all in 2010. We are living in interesting times indeed.

Revenue for fiscal year 2009 totaled $853 million, compared to revenue of $1.04 billion in fiscal year 2008. The net loss for fiscal year 2009 was $150 million, or $(0.58) per share on a diluted basis, compared to a net loss of $1.86 billion, or $(7.30) per share on a diluted basis for fiscal year 2008. The GAAP net loss for the fourth quarter and fiscal year 2008 included a non-cash impairment charge of $1.36 billion, related to Cadence's goodwill, intangible assets, and fixed assets. The impairment charge, which was driven by adverse economic conditions and a decline in Cadence's market capitalization, had no effect on Cadence's cash flows.

Using a non-GAAP measure, net income in the fourth quarter of 2009 was $15 million, or $0.06 per share on a diluted basis, as compared to a net loss of $11 million, or $(0.04) per share on a diluted basis, in the same period in 2008. For fiscal year 2009, non-GAAP net loss was $16 million, or $(0.06) per share on a diluted basis, compared to a net loss of $10 million and $(0.04) per share on a diluted basis in fiscal year 2008.

Kevin S. Palatnik, Senior Vice President and Chief Financial Officer added that for the full year 2009 orders totaled approximately $615 million dollars for 2009 and year-end backlog was approximately $1.6 billion dollars.

Cadence made good progress in the first full year of transition to a 90/10 ratable mix. Over 90 percent of orders booked in Q4 were ratable, as well as over 90 percent for the full year. Weighted average contract life for Q4 was again near the low-end of the expected range of 2.8 to 3.2 years. Weighted average contract life for the full year was approximately 2.8 years.

Total revenue for the fourth quarter was $220 million dollars. Product revenue was $114 million dollars, maintenance revenue was $83 million dollars, and services revenue was $23 million dollars. Revenue for the year 2009 totaled $853 million dollars.
Revenue mix by geography for Q4 was: 51 percent for the Americas; 24 percent for EMEA; 12 percent for Japan; and 13 percent for Asia.

Total costs and expenses on a non-GAAP basis for Q4 were $199 million dollars, a decrease of 19 percent when compared with Q4 of 2008.
Non-GAAP operating margin for Q4 was 10 percent. For the full year 2009 non-GAAP operating margin was a negative 2 percent.

Quarter-end headcount was approximately 4,400. The impact of our restructuring announced in January of this year is not reflected in this figure.

Lip-Bu Tan, President and Chief Executive Officer remarked that "In 2009, we positioned Cadence for future growth. We improved our customer engagement, strengthened our foundation technology, and reduced our cost structure. We've identified new opportunities for growth, and renewed Cadence's culture of innovation and accountability." He then continued: "Our primary operational focus in the year was to enhance the level of research and development engagement at key accounts and open new business opportunities for the company."

Business Outlook

For the first quarter of 2010, the company expects total revenue in the range of $210 million to $220 million. First quarter GAAP net loss per diluted share is expected to be in the range of $(0.10) to $(0.08). Net income per diluted share using the non-GAAP measure defined below is expected to be in the range of $0.00 to $0.02.
For the full year 2010, the company expects total revenue in the range of $865 million to $900 million. On a GAAP basis, net loss per diluted share for fiscal 2010 is expected to be in the range of $(0.29) to $(0.19). Using the non-GAAP measure net income per diluted share for fiscal 2010 is expected to be in the range of $0.05 to $0.15.