NSDA Nassda Corp (MM)

Nassda Announces Revenue of $11.0 Million for the Quarter Ended September 30, 2004 Net Income of $175,000, or $0.01 Per Diluted Share SANTA CLARA, Calif., Oct. 19 /PRNewswire-FirstCall/ -- Nassda Corporation (NASDAQ:NSDA), a leading provider of full-chip circuit simulation and analysis software for the design and verification of complex semiconductors, today announced financial results for the quarter ended September 30, 2004, the fourth quarter of Nassda's fiscal 2004. Revenue for the quarter ended September 30, 2004 was $11.0 million, a 31% increase from $8.4 million for the quarter ended September 30, 2003 and was substantially unchanged from $11.0 million for the quarter ended June 30, 2004. Net income for the quarter ended September 30, 2004 was $175,000, or $0.01 per diluted share, a decrease of $148,000 from $323,000, or $0.01 per diluted share, for the quarter ended September 30, 2003 and a decrease of $891,000 from $1.1 million, or $0.04 per diluted share, for the quarter ended June 30, 2004. Fiscal 2004 Results Total revenue for fiscal 2004 was $41.5 million, an 18% increase from $35.1 million for fiscal 2003. Net income for fiscal 2004 was $2.6 million, or $0.09 per diluted share, a decrease of $1.0 million as compared to net income for fiscal 2003 of $3.6 million, or $0.12 per diluted share. "Nassda again achieved its highest level of quarterly revenue and our cash, cash equivalents and short-term investments increased by approximately $1.6 million during the quarter to a total of $101.4 million, as of September 30, 2004," said Sang Wang, Chief Executive Officer. "Our customers' continued support and our employees' dedication contributed to our success during fiscal 2004. In fiscal 2005, we expect to face similar economic and competitive challenges as we create both sales and research and development strategies to meet these challenges and take advantage of the opportunities in front of us." Business Outlook We believe that our customers will remain cautious with regards to their spending and EDA budgets are likely to continue to be tight. As a result, for the quarter ending December 31, 2004, Nassda expects total revenue of $10.8 million to $11.0 million and fully diluted per share earnings of approximately $0.00 to a net loss of $0.05. This $0.05 per share range is largely due to the uncertainty relating to the timing and magnitude of our spending on our litigation defense. For fiscal 2005, Nassda anticipates total revenue of $44.0 million to $46.0 million and fully diluted net loss per share of approximately $0.05 to $0.15. Due to seasonally lower bookings expected in the first half fiscal 2005, Nassda expects quarterly revenue for the first half of fiscal 2005 to be relatively flat but expects sequential quarterly revenue growth in the second half of fiscal 2005. With time-based licenses accounting for 57% of our total bookings in fiscal 2004, Nassda expects time-based license bookings as a percent of total bookings to increase slightly in fiscal 2005 to over 60%. As a result, time-based license revenue as a percent of total revenue is expected to increase to between 55% to 65%. Nassda intends to continue its efforts to control operating costs, but also anticipates making additional investments in Nassda's worldwide sales, support, research and development organizations. We expect the cost of the Synopsys litigation to increase as we continue to defend ourselves vigorously and the lawsuits move toward trials and the additional defense costs related to the class action and derivative cases will also increase our general and administrative expenses. The guidance provided for the fully diluted net loss per share of fiscal 2005 includes approximately $18.0 million to $20.0 million of litigation related costs. Additionally, we also expect costs related to being a public company, such as directors' and officers' liability insurance, compliance with corporate governance rules adopted by The Nasdaq Stock Market and the Securities and Exchange Commission, professional fees and various filing fees to increase our general and administrative expenses. Nassda will host a conference call that includes business outlook, with financial analysts and investors at 2:00 p.m. PDT today. A live webcast of the call will be available on Nassda's Web site at http://www.nassda.com/ or http://www.fulldisclosure.com/ . Following completion of the call, a rebroadcast of the webcast will be available at http://www.nassda.com/ or http://www.fulldisclosure.com/ through October 26, 2004. Those without internet access may listen to a replay of the call by dialing 719-457-0820, access code 900477. The replay will be available from 5:00 p.m. PDT on October 19, 2004 through October 26, 2004. About Nassda Nassda Corporation is a leading provider of full-chip circuit verification software for complex nanometer semiconductors. Headquartered in Santa Clara, California, the company develops and markets simulation and analysis solutions for advanced ICs, especially for analog, memory, high-performance digital, and mixed-signal SoC designs. Nassda's products enable first silicon success and improve IC quality and yield for its consumer, communication, computer and memory customers. The company has sales and distribution offices throughout the world. For more information about Nassda, please visit the company's website at http://www.nassda.com/ . Forward Looking Statements This press release contains forward-looking statements regarding anticipated revenue, operating expenses, diluted earnings per share, time-based license bookings as a percent of total bookings and time-based license revenue as a percent of total revenue that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements in this release involve risks and uncertainty, including without limitation the availability of customer budgets for Nassda's products, Nassda's cost control measures, the timing and extent of legal expenses related to Nassda's on-going litigation, Nassda's product development schedules, the design performance of Nassda's existing and new electronic design automation software and other tools, customers' adoption of Nassda's products, whether customers purchase time-based or perpetual licenses and those customers' design and manufacturing schedules. In addition, continued reduced capital spending or delayed implementation of programs due to adverse general economic conditions and reduced demand for products containing complex nanometer-scale semiconductors may impact Nassda's future performance. These risks, uncertainties and other factors may cause Nassda's actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. In addition, historical information should not be considered a predictor of future performance. Neither Nassda nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. Nassda disclaims any obligation to update information contained in any forward-looking statement. For additional information and considerations regarding the risks faced by Nassda, see Nassda's Annual Report on Form 10-K for the fiscal year ended September 30, 2003 and Quarterly Reports on form 10-Q for the quarters ended December 31, 2003, March 31, 2004 and June 30, 2004, as filed with the Securities and Exchange Commission. NOTE: Nassda is a registered trademark of Nassda Corporation. Nassda Corporation Condensed Consolidated Balance Sheets (in thousands) September 30, September 30, 2004 2003 ASSETS Current assets: Cash, cash equivalents and short-term investments $101,440 $92,165 Accounts receivable, net of allowance 1,302 1,874 Prepaid expenses and other current assets 1,093 996 Deferred income taxes 3,768 2,568 Total current assets 107,603 97,603 Property and equipment, net 483 704 Other assets 921 1,165 Total assets $109,007 $99,472 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $2,168 $230 Accrued compensation 3,710 2,689 Accrued liabilities 2,842 3,281 Income taxes payable 1,790 1,712 Deferred revenue 10,143 8,982 Total current liabilities 20,653 16,894 Deferred revenue 482 849 Other long-term liabilities 57 64 Total liabilities 21,192 17,807 Stockholders' equity: Common stock 27 26 Additional paid-in capital 73,117 70,343 Deferred stock-based compensation (235) (1,117) Accumulated other comprehensive loss (76) (4) Retained earnings 14,982 12,417 Total stockholders' equity 87,815 81,665 Total liabilities and stockholders' equity $109,007 $99,472 Nassda Corporation Consolidated Statements of Income (in thousands, except per share data) Three Months Ended Twelve Months Ended September 30, September 30, 2004 2003 2004 2003 Revenue Product $1,720 $2,061 $8,937 $11,796 Subscription 6,566 3,852 22,356 14,601 Maintenance 2,712 2,500 10,174 8,658 Total revenue 10,998 8,413 41,467 35,055 Cost of revenue Cost of product revenue 13 43 227 241 Cost of subscription revenue 126 83 443 343 Cost of maintenance revenue 282 193 1,035 802 Total cost of revenue 421 319 1,705 1,386 Gross profit 10,577 8,094 39,762 33,669 Operating expenses: Research and development 2,390 1,942 8,851 7,145 Sales and marketing 3,022 2,366 11,607 10,774 General and administrative 5,196 3,318 16,328 10,653 Stock-based compensation 165 230 796 955 10,773 7,856 37,582 29,527 Income (loss) from operations (196) 238 2,180 4,142 Interest Income 271 240 1,002 986 Other Income Expense 10 (18) (9) (37) Other income, net 281 222 993 949 Income before income taxes 85 460 3,173 5,091 (Provision) Benefit for income taxes 90 (137) (608) (1,527) Net income $175 $323 $2,565 $3,564 Earnings per share: Basic $0.01 $0.01 $0.10 $0.14 Diluted $0.01 $0.01 $0.09 $0.12 Shares used in computing earnings per share: Basic 26,953 25,653 26,457 25,058 Diluted 28,801 29,167 29,031 28,781 DATASOURCE: Nassda Corporation CONTACT: Tammy Liu of Nassda Corporation, +1-408-327-7710, or , or Web site: http://www.nassda.com/

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