Cadence Reports First Quarter 2013 Financial Resul

SAN JOSE, CA--(Marketwired - Apr 24, 2013) - Cadence Design Systems, Inc. (NASDAQ: CDNS) today announced results for the first quarter of fiscal year 2013.

Cadence reported first quarter 2013 revenue of $354 million, compared to revenue of $316 million reported for the same period in 2012. On a GAAP basis, Cadence recognized net income of $79 million, or $0.27 per share on a diluted basis, in the first quarter of 2013, compared to net income of $31 million, or $0.11 per share on a diluted basis, in the same period in 2012. GAAP net income for the first quarter of 2013 included a $34 million income tax benefit due to a reversal of an uncertain tax position.

Using Cadence's non-GAAP measure, net income in the first quarter of 2013 was $61 million, or $0.21 per share on a diluted basis, as compared to net income of $47 million, or $0.17 per share on a diluted basis, in the same period in 2012.

"In Q1 we accelerated our IP strategy through key acquisitions that will expand the scope of our IP business and demonstrate our capabilities and readiness for FinFET-based high performance design, and we also saw significant strength in repeat orders for Palladium XP," said Lip-Bu Tan, president and chief executive officer. "Looking ahead, I expect to see our focus and discipline in scaling our IP business start to show meaningful growth."

"Strong execution by the Cadence team continued in Q1 as results for all key operating metrics exceeded expectations," added Geoff Ribar, senior vice president and chief financial officer. "The Tensilica acquisition not only significantly expands the scope of our IP business, but also brings a growing royalty component to our revenue mix."

IP Acquisitions

Cadence this week completed its previously announced acquisition of Tensilica, Inc., a leader in dataplane processing IP. The cash outlay at closing, after taking into account adjustments for certain costs and an estimated $25 million of cash held by Tensilica at closing, was approximately $326 million. In addition, Cadence assumed certain unvested Tensilica options.  Tensilica's configurable dataplane processing units complement industry-standard processor architectures and are optimized for embedded data and signal processing. Tensilica's target markets include mobile wireless, network infrastructure, auto infotainment and home applications. The Tensilica team, led by Jack Guedj, will report to Martin Lund, Cadence's senior vice president of research and development, SOC Realization Group.  

During the first quarter 2013, Cadence also announced its intent to acquire Cosmic Circuits Private Limited, a developer of low-power connectivity and analog/mixed-signal IP. This transaction is expected to close soon. These acquisitions accelerate Cadence's strategy of growing its IP business by providing high quality differentiated IP for leading protocols at advanced process nodes. Cadence is pursuing this strategy through both targeted acquisitions and increased investment in internal IP development. In addition to expanding Cadence's IP portfolio focused on growing markets, these acquisitions, as they are integrated into Cadence, will enable optimization with Cadence's design tools and accelerate IP subsystem development and integration.

It is estimated that 2013 revenue on a standalone basis for Tensilica would be about $57 million prior to merger accounting, of which $13 million would be royalties, representing growth of about 30 percent over Tensilica's revenue in 2012. Cadence is assuming that Tensilica will contribute approximately $27 million of revenue in the remainder of 2013, after a deferred revenue adjustment of approximately $16 million due to merger accounting. The transaction is expected to be approximately eight cents dilutive to GAAP EPS and one cent dilutive to non-GAAP EPS for 2013.

The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.

Business Outlook

For the second quarter of 2013, the company expects total revenue in the range of $355 million to $365 million. Second quarter GAAP net income per diluted share is expected to be in the range of $0.10 to $0.12. Net income per diluted share using the non-GAAP measure defined below is expected to be in the range of $0.19 to $0.21.

For 2013, the company expects total revenue in the range of $1.440 billion to $1.470 billion. On a GAAP basis, net income per diluted share for 2013 is expected to be in the range of $0.59 to $0.69. Using the non-GAAP measure defined below, net income per diluted share for 2013 is expected to be in the range of $0.81 to $0.91.

A schedule showing a reconciliation of the business outlook from GAAP net income and diluted net income per share to non-GAAP net income and diluted net income per share is included with this release.

Audio Webcast Scheduled

Lip-Bu Tan, Cadence's president and chief executive officer, and Geoff Ribar, Cadence's senior vice president and chief financial officer, will host a first quarter 2013 financial results audio webcast today, April 24, 2013, at 2 p.m. (Pacific) / 5 p.m. (Eastern). Attendees are asked to register at the website at least 10 minutes prior to the scheduled webcast. An archive of the webcast will be available starting April 24, 2013 at 5 p.m. (Pacific) and ending May 8, 2013 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/company/investor_relations.

About Cadence

Cadence enables global electronic design innovation and plays an essential role in the creation of today's integrated circuits and electronics. Customers use Cadence software, hardware, IP, and services to design and verify advanced semiconductors, consumer electronics, networking and telecommunications equipment, and computer systems. The company is headquartered in San Jose, California, with sales offices, design centers, and research facilities around the world to serve the global electronics industry. More information about the company and its products and services is available at www.cadence.com.

Cadence, the Cadence logo and Palladium are registered trademarks of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners.

The statements contained above regarding Cadence's first quarter 2013 results, as well as the information in the IP Acquisitions and Business Outlook sections and the statements by Lip-Bu Tan and Geoff Ribar, include forward-looking statements based on current expectations or beliefs and a number of preliminary assumptions about future events that are subject to factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence's control, including, among others: (i) Cadence's ability to compete successfully in the electronic design automation product and the commercial electronic design and methodology services industries; (ii) the success of Cadence's efforts to improve operational efficiency and growth; (iii) the mix of products and services sold and the timing of significant orders for Cadence's products, and its shift to a ratable license structure, which may result in changes in the mix of license types; (iv) change in customer demands, including those resulting from consolidation among Cadence's customers and the possibility that Cadence's customers' restructurings and other efforts to improve operational efficiency could result in delays in customers' purchases of Cadence's products and services; (v) economic and industry conditions in regions in which Cadence does business; (vi) fluctuations in rates of exchange between the U.S. dollar and the currencies of other countries in which Cadence does business; (vii) capital expenditure requirements, legislative or regulatory requirements, interest rates and Cadence's ability to access capital and debt markets; (viii) the acquisition of other companies or technologies or the failure to successfully integrate and operate these companies or technologies Cadence acquires, including the potential inability to retain customers, key employees or vendors; (ix) the failure or inability to consummate the previously announced acquisition, the effect of regulatory approval requirements and the effects of the acquisitions on Cadence's financial results; (x) the effects of Cadence's efforts to improve operational efficiency on Cadence's business, including strategic, customer and supplier relationships, and its ability to retain key employees; (xi) events that affect the reserves or settlement assumptions Cadence may take from time to time with respect to accounts receivable, taxes, litigation or other matters; and (xii) the effects of any litigation or other proceedings to which Cadence is or may become a party.

For a detailed discussion of these and other cautionary statements related to Cadence's business, please refer to Cadence's filings with the Securities and Exchange Commission. These include Cadence's most recent reports on Form 10-K and Form 10-Q, including Cadence's future filings.

GAAP to Non-GAAP Reconciliation

To supplement Cadence's financial results presented on a GAAP basis, Cadence management uses non-GAAP measures that it believes are helpful in understanding Cadence's performance. One such measure is non-GAAP net income, which is a financial measure not calculated under GAAP, and is calculated by taking GAAP net income and excluding, as applicable, amortization of intangible assets and debt discount related to our convertible notes, stock-based compensation expense, acquisition and integration-related costs including changes in fair value of contingent consideration, investment gains or losses, income or expenses related to Cadence's non-qualified deferred compensation plan, restructuring and other significant items not directly related to Cadence's core business operations, and the income tax effect of non-GAAP pre-tax adjustments.

Cadence's management uses non-GAAP net income because it excludes items that are generally not directly related to the performance of the company's core business operations and therefore provides useful supplemental information to Cadence's management and investors regarding the performance of the company's business operations, facilitates comparisons to the company's historical operating results and enhances investors' ability to review Cadence's business from the same perspective as Cadence's management. Cadence's management also uses non-GAAP net income internally for forecasting and budgeting. Non-GAAP financial measures should not be considered as a substitute for or superior to measures of financial performance prepared in accordance with GAAP. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures contained within this press release with their most directly comparable GAAP financial results. Investors are encouraged to look at the GAAP results as the best measure of financial performance.

The following tables reconcile the specific items excluded from GAAP net income and GAAP net income per diluted share in the calculation of non-GAAP net income and non-GAAP net income per diluted share for the periods shown below:

Net Income Reconciliation			Three Months Ended
			March 30, 2013				March 31, 2012
			(unaudited)
(in thousands)
Net income on a GAAP basis			$	78,609			$	31,104
	Amortization of acquired intangibles			7,598				6,685
	Stock-based compensation expense			13,810				11,525
	Non-qualified deferred compensation expenses			152				1,798
	Restructuring and other charges (credits)			(148	)			(51	)
	Shareholder litigation costs			--				46
	Integration and acquisition-related costs			4,935				448
	Amortization of debt discount			5,536				5,089
	Other income or expense related to investments and non-qualified deferred compensation plan assets*			(990	)			(1,949	)
	Income tax benefit due to a reversal of an uncertain tax position			(33,719	)			--
	Income tax effect of non-GAAP adjustments			(15,146	)			(8,195	)
Net income on a non-GAAP basis			$	60,637			$	46,500

*	Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on sale of investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.

Diluted Net Income per Share Reconciliation			Three Months Ended
			March 30, 2013				March 31, 2012
			(unaudited)
(in thousands, except per share data)
Diluted net income per share on a GAAP basis			$	0.27			$	0.11
	Amortization of acquired intangibles			0.03				0.03
	Stock-based compensation expense			0.05				0.04
	Non-qualified deferred compensation expenses			--				0.01
	Restructuring and other charges (credits)			--				--
	Shareholder litigation costs			--				--
	Integration and acquisition-related costs			0.02				--
	Amortization of debt discount			0.02				0.02
	Other income or expense related to investments and non-qualified deferred compensation plan assets*			(0.01	)			(0.01	)
	Income tax benefit due to a reversal of an uncertain tax position			(0.12	)			--
	Income tax effect of non-GAAP adjustments			(0.05	)			(0.03	)
Diluted net income per share on a non-GAAP basis			$	0.21			$	0.17
Shares used in calculation of diluted net income per share -- GAAP**				292,151				277,733
Shares used in calculation of diluted net income per share -- non-GAAP**				292,151				277,733

*	Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on sale of investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.

**	Shares used in the calculation of GAAP net income per share are expected to be the same as shares used in the calculation of non-GAAP net income per share, except when the company reports a GAAP net loss and non-GAAP net income, or GAAP net income and a non-GAAP net loss.

Cadence expects that its corporate representatives will meet privately during the quarter with investors, the media, investment analysts and others. At these meetings, Cadence may reiterate the business outlook published in this press release. At the same time, Cadence will keep this press release, including the business outlook, publicly available on its website.

Prior to the start of the Quiet Period (described below), the public may continue to rely on the business outlook contained herein as still being Cadence's current expectations on matters covered unless Cadence publishes a notice stating otherwise.

Beginning June 14, 2013, Cadence will observe a Quiet Period during which the business outlook as provided in this press release and the company's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q no longer constitute the company's current expectations. During the Quiet Period, the business outlook in these documents should be considered to be historical, speaking as of prior to the Quiet Period only and not subject to any update by the company. During the Quiet Period, Cadence's representatives will not comment on Cadence's business outlook, financial results or expectations. The Quiet Period will extend until the day when Cadence's Second Quarter 2013 Earnings Release is published, which is currently scheduled for July 24, 2013.

Cadence Design Systems, Inc.
Condensed Consolidated Balance Sheets
March 30, 2013 and December 29, 2012
(In thousands)
(Unaudited)
				March 30, 2013			December 29, 2012
Current assets:
	Cash and cash equivalents			$	810,152		$	726,357
	Short-term investments				100,992			100,704
	Receivables, net of allowances of $0 and $85, respectively				75,253			97,821
	Inventories				37,016			36,163
	2015 notes hedges				315,895			303,154
	Prepaid expenses and other				122,604			127,036
		Total current assets			1,461,912			1,391,235
Property, plant and equipment, net of accumulated depreciation of $626,732 and $635,450, respectively					237,455			244,439
Goodwill					232,608			233,266
Acquired intangibles, net of accumulated amortization of $104,822 and $104,351, respectively					177,891			184,938
Long-term receivables					3,734			7,559
Other assets					209,663			225,566
Total assets				$	2,323,263		$	2,287,003
Current liabilities:
	Convertible notes			$	452,571		$	447,011
	2015 notes embedded conversion derivative				315,895			303,154
	Accounts payable and accrued liabilities				156,606			171,318
	Current portion of deferred revenue				285,553			295,787
		Total current liabilities			1,210,625			1,217,270
Long-term liabilities:
	Long-term portion of deferred revenue				41,432			50,529
	Other long-term liabilities				51,533			104,033
		Total long-term liabilities			92,965			154,562
Stockholders' equity					1,019,673			915,171
Total liabilities and stockholders' equity				$	2,323,263		$	2,287,003

Cadence Design Systems, Inc.
Condensed Consolidated Income Statements
For the Three Months Ended March 30, 2013 and March 31, 2012
(In thousands, except per share amounts)
(Unaudited)
					Three Months Ended
					March 30, 2013				March 31, 2012
Revenue:
	Product and maintenance				$	328,271			$	286,288
	Services					25,995				29,542
		Total revenue				354,266				315,830
Costs and expenses:
	Cost of product and maintenance					29,847				27,212
	Cost of services					18,344				19,374
	Marketing and sales					90,402				83,795
	Research and development					124,084				108,594
	General and administrative					29,810				27,770
	Amortization of acquired intangibles					3,791				3,786
	Restructuring and other charges (credits)					(148	)			(51	)
		Total costs and expenses				296,130				270,480
			Income from operations			58,136				45,350
	Interest expense					(9,262	)			(8,537	)
	Other income, net					2,175				2,434
			Income before provision (benefit) for income taxes			51,049				39,247
	Provision (benefit) for income taxes					(27,560	)			8,143
			Net income		$	78,609			$	31,104
Net income per share - basic					$	0.29			$	0.12
Net income per share - diluted					$	0.27			$	0.11
Weighted average common shares outstanding - basic						274,936				267,940
Weighted average common shares outstanding - diluted						292,151				277,733

Cadence Design Systems, Inc.
Condensed Consolidated Statements of Cash Flows
For the Three Months Ended March 30, 2013 and March 31, 2012
(In thousands)
(Unaudited)
						Three Months Ended
						March 30,				March 31,
						2013				2012
Cash and cash equivalents at beginning of period						$	726,357			$	601,602
Cash flows from operating activities:
	Net income						78,609				31,104
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization					21,682				21,939
		Amortization of debt discount and fees					6,281				5,734
		Stock-based compensation					13,810				11,525
		Gain on investments, net					(1,006	)			(1,949	)
		Deferred income taxes					8,695				223
		Provisions (recoveries) for losses (gains) on receivables, net					(85	)			-
		Other non-cash items					(922	)			746
		Changes in operating assets and liabilities, net of effect of acquired businesses:
			Receivables				23,652				60,172
			Inventories				(979	)			(154	)
			Prepaid expenses and other				(1,099	)			(5,545	)
			Other assets				4,148				(577	)
			Accounts payable and accrued liabilities				(11,003	)			(19,582	)
			Deferred revenue				(16,648	)			(39,315	)
			Other long-term liabilities				(49,799	)			(3,612	)
				Net cash provided by operating activities			75,336				60,709
Cash flows from investing activities:
	Purchases of available-for-sale securities						(24,282	)			-
	Proceeds from the sale of available-for-sale securities						14,985				-
	Proceeds from the maturity of available-for-sale securities						8,700				-
	Proceeds from the sale of long-term investments						6,102				44
	Purchases of property, plant and equipment						(6,569	)			(8,201	)
	Investment in venture capital partnerships and equity investments						-				(250	)
	Cash paid in business combinations and asset acquisitions, net of cash acquired						(757	)			(1,041	)
				Net cash used for investing activities			(1,821	)			(9,448	)
Cash flows from financing activities:
	Principal payments on receivable financing						(2,526	)			-
	Payment of acquisition-related contingent consideration						(582	)			(39	)
	Tax effect related to employee stock transactions allocated to equity						5,276				2,842
	Proceeds from issuance of common stock						21,801				12,761
	Stock received for payment of employee taxes on vesting of restricted stock						(8,775	)			(6,173	)
				Net cash provided by financing activities			15,194				9,391
Effect of exchange rate changes on cash and cash equivalents							(4,914	)			(2,567	)
Increase in cash and cash equivalents							83,795				58,085
Cash and cash equivalents at end of period						$	810,152			$	659,687

Cadence Design Systems, Inc.
As of April 24, 2013
Impact of Non-GAAP Adjustments on Forward Looking Diluted Net Income Per Share
(Unaudited)
			Three Months Ending		Year Ending
			June 29, 2013		December 28, 2013
			Forecast		Forecast
Diluted net income per share on a GAAP basis			$0.10 to $0.12		$0.59 to $0.69
	Amortization of acquired intangibles		0.04		0.15
	Stock-based compensation expense		0.05		0.21
	Integration and acquisition-related costs		0.03		0.09
	Amortization of debt discount		0.02		0.08
	Other income or expense related to investments and non-qualified deferred compensation plan assets*		-		(0.01)
	Income tax benefit due to a reversal of an uncertain tax position		-		(0.11)
	Income tax effect of non-GAAP adjustments		(0.05)		(0.19)
Diluted net income per share on a non-GAAP basis			$0.19 to $0.21		$0.81 to $0.91

*	Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on sale of investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.

Cadence Design Systems, Inc.
As of April 24, 2013
Impact of Non-GAAP Adjustments on Forward Looking Net Income
(Unaudited)
			Three Months Ending		Year Ending
			June 29, 2013		December 28, 2013
($ in millions)			Forecast		Forecast
Net income on a GAAP basis			$29 to $35		$172 to $202
	Amortization of acquired intangibles		12		46
	Stock-based compensation expense		13		63
	Integration and acquisition-related costs		8		26
	Amortization of debt discount		6		22
	Other income or expense related to investments and non-qualified deferred compensation plan assets*		-		(1)
	Income tax benefit due to a reversal of an uncertain tax position		-		(34)
	Income tax effect of non-GAAP adjustments		(13)		(56)
Net income on a non-GAAP basis			$55 to $61		$238 to $268

*	Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on sale of investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.

Cadence Design Systems, Inc.

(Unaudited)

Revenue Mix by Geography (% of Total Revenue)
			2012															2013
GEOGRAPHY			Q1			Q2			Q3			Q4			Year			Q1
	Americas		44	%		46	%		43	%		45	%		45	%		44	%
	EMEA		19	%		20	%		20	%		21	%		20	%		22	%
	Japan		18	%		16	%		17	%		14	%		16	%		15	%
	Asia		19	%		18	%		20	%		20	%		19	%		19	%
Total			100	%		100	%		100	%		100	%		100	%		100	%
Revenue Mix by Product Group (% of Total Revenue)
			2012															2013
PRODUCT GROUP			Q1			Q2			Q3			Q4			Year			Q1
	Functional Verification, Hardware and IP		30	%		33	%		30	%		30	%		30	%		26	%
	Digital IC Design		23	%		22	%		23	%		23	%		23	%		25	%
	Custom IC Design		23	%		22	%		24	%		24	%		23	%		25	%
	Design for Manufacturing		7	%		6	%		6	%		6	%		6	%		7	%
	System Interconnect		8	%		8	%		9	%		9	%		9	%		10	%
	Services and other		9	%		9	%		8	%		8	%		9	%		7	%
Total			100	%		100	%		100	%		100	%		100	%		100	%

Note: Product Group total revenue includes product and maintenance revenue

Cadence Design Systems, Inc.
Supplemental Reconciliation of Certain GAAP to Non-GAAP Measures
For the Three Months Ended March 30, 2013
(In thousands, except per share amounts)
(Unaudited)
					Three Months Ended
					March 30, 2013
					GAAP				Adjustments							Non-GAAP
Revenue:
	Product and maintenance				$	328,271			$	-						$	328,271
	Services					25,995				-							25,995
		Total revenue				354,266				-							354,266
Costs and expenses:
	Cost of product and maintenance					29,847				(4,175	)		(A	)			25,672
	Cost of services					18,344				(530	)		(A	)			17,814
	Marketing and sales					90,402				(3,104	)		(A	)			87,298
	Research and development					124,084				(7,928	)		(A	)			116,156
	General and administrative					29,810				(6,967	)		(A	)			22,843
	Amortization of acquired intangibles					3,791				(3,791	)		(A	)			-
	Restructuring and other charges (credits)					(148	)			148							-
		Total costs and expenses				296,130				(26,347	)						269,783
			Income from operations			58,136				26,347							84,483
	Interest expense					(9,262	)			5,536			(B	)			(3,726	)
	Other income, net					2,175				(990	)		(C	)			1,185
			Income before provision (benefit) for income taxes			51,049				30,893							81,942
	Provision (benefit) for income taxes					(27,560	)			48,865			(D	)			21,305
			Net income		$	78,609			$	(17,972	)					$	60,637
Notes:
(A) For the three months ended March 30, 2013 adjustments to GAAP are as follows for the line items specified:

			Amortization of acquired intangibles			Stock-based compensation expense			Non-qualified deferred compensation expenses			Integration and acquisition-related costs			Total adjustments
Cost of product and maintenance			$	3,807		$	364		$	4		$	-		$	4,175
Cost of services				-			525			5			-			530
Marketing and sales				-			3,018			22			64			3,104
Research and development				-			6,553			78			1,297			7,928
General and administrative				-			3,350			43			3,574			6,967
Amortization of acquired intangibles				3,791			-			-			-			3,791
	Total		$	7,598		$	13,810		$	152		$	4,935		$	26,495

(B)	Amortization of debt discount related to convertible notes
(C)	Other income or expense related to investments and non-qualified deferred compensation plan assets
(D)	Income tax benefit due to reversal of an uncertain tax position $33,719 and income tax effect of non-GAAP adjustments $15,146

Cadence Design Systems, Inc.
Supplemental Reconciliation of Certain GAAP to Non-GAAP Measures
For the Three Months Ended March 31, 2012
(In thousands, except per share amounts)
(Unaudited)
					Three Months Ended
					March 31, 2012
					GAAP				Adjustments							Non-GAAP
Revenue:
	Product and maintenance				$	286,288			$	-						$	286,288
	Services					29,542				-							29,542
		Total revenue				315,830				-							315,830
Costs and expenses:
	Cost of product and maintenance					27,212				(3,250	)		(E	)			23,962
	Cost of services					19,374				(503	)		(E	)			18,871
	Marketing and sales					83,795				(2,877	)		(E	)			80,918
	Research and development					108,594				(6,045	)		(E	)			102,549
	General and administrative					27,770				(4,041	)		(E	)			23,729
	Amortization of acquired intangibles					3,786				(3,786	)		(E	)			-
	Restructuring and other charges (credits)					(51	)			51							-
		Total costs and expenses				270,480				(20,451	)						250,029
			Income from operations			45,350				20,451							65,801
	Interest expense					(8,537	)			5,089			(F	)			(3,448	)
	Other income, net					2,434				(1,949	)		(G	)			485
			Income before provision for income taxes			39,247				23,591							62,838
	Provision for income taxes					8,143				8,195			(H	)			16,338
			Net income		$	31,104			$	15,396						$	46,500

(E)	For the three months ended March 31, 2012 adjustments to GAAP are as follows for the line items specified:

			Amortization of acquired intangibles			Stock-based compensation expense			Non-qualified deferred compensation expenses			Integration and acquisition-related costs			Shareholder litigation costs			Total adjustments
Cost of product and maintenance			$	2,899		$	331		$	20		$	-		$	-		$	3,250
Cost of services				-			474			29			-			-			503
Marketing and sales				-			2,511			257			109			-			2,877
Research and development				-			5,008			807			230			-			6,045
General and administrative				-			3,201			685			109			46			4,041
Amortization of acquired intangibles				3,786			-			-			-			-			3,786
	Total		$	6,685		$	11,525		$	1,798		$	448		$	46		$	20,502

(F)	Amortization of debt discount related to convertible notes
(G)	Other income or expense related to investments and non-qualified deferred compensation plan assets
(H)	Income tax effect of non-GAAP adjustments