Filed by: Monolithic System Technology, Inc. This
Communication is filed pursuant to
Rule 425 under The Securities Act
of 1933, as amended, and deemed
filed pursuant to Rule 14d-9 of
the Securities Exchange Act of 1934.
Subject
Company: Monolithic System Technology, Inc.
(File No. 000-32929)
On February 23, 2004, Synopsys, Inc. ("Synopsys") held a "First Quarter Fiscal Year 2004 Earnings Conference Call." Fu-Chieh Hsu of Monolithic System Technology, Inc. ("MoSys") participated in the conference call and made statements relating to the proposed acquisition of MoSys by Synopsys. The following is a transcript of the conference call:
SOURCE: Synopsys, Inc.
Monday February 23, 2004, 5:00 pm Eastern Time
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Ladies and Gentlemen, Thank you for standing by. And welcome to the Synopsys First Quarter Fiscal Year 2004 Earnings Conference Call. At this time, all participants are in a listen only mode. Later we will conduct a question and answer session, and instructions will be given at that time. If you should require assistance during the call, please press "*" followed by "0". Today's call is scheduled to last one hour. Five minutes prior to the end of the call, I will alert the conference of the time remaining. As a reminder, today's conference is being recorded. During the course of this conference call, Synopsys may make predictions, estimates and other forward-looking statements regarding the company. While these statements represent the best current judgment about the company's future performance, the company's actual performance is subject to significant risks and uncertainties that could cause actual results to differ materially from those that may be projected. In addition to any risks that may be highlighted during this conference call, important factors that could cause the company's actual results to differ materially from those that may be projected in this conference call are described in Synposys' Annual Report on Form 10-K, which is on file with the Securities and Exchange Commission. In addition, during the course of this conference call, Synopsys and Monolithic System Technology, known as MoSys, will make forward looking statements regarding the benefits of the proposed acquisition of MoSys by Synopsys. While these statements represent each company's best current judgment about the expected benefits of the acquisition, actual performance is subject to uncertainties that could cause actual results to differ materially from those that may be projected. Including the risks described in Synopsys' most recent Annual Report on Form 10-K and MoSys' Quarterly Report on Form 10-Q, which is on file with the Securities and Exchange Commission.
Finally, Synopsys would like to advise you that financial and other statistical information to be discussed on this conference call, as well as the reconciliation of certain non-GAAP financial measures discussed on this call to GAAP financial measures is currently available on the company's website. The web address for such information is http://www.synposys.com/corporate/invest/invest.html. At this time I would like to turn the conference over to Aart de Geus, Chairman and Chief Executive Officer. Please go ahead, sir.
Thank you, Operator.
This is Aart de Geus, and I have with me Steve Shevick, our CFO, and Fu-Chieh Hsu, Chairman and CEO of Monolithic System Technology, or "MoSys" for short.
Thank you all for joining us.
Synopsys entered 2004 with two key long term objectives: to gain share in the core EDA market and to accelerate our business penetration in the emerging high growth areas of IP and Design for Manufacturing.
In Q1 we made excellent progress in our core tools, and today I have some very important announcements to share with you in the IP area.
But first I will provide a brief overview of our results, then give you my thoughts on the current spending environment, and share what I'm hearing from our top customer executives. After that, I will tell you about our announcements and give you updates on our core products.
So let me start by reviewing our financial results.
In Ql Synopsys achieved revenue of $285.3 million and pro forma earnings per share of 33 cents. Book to bill was between 0.5 and 0.6. Orders were within our range of 10 to 15% of our original annual orders guidance of $1.425 to $1.475 billion, largely reflecting typical Q1 seasonality.
Looking around us, consumer demand for electronic products worldwide is very healthy, and semiconductor production is nearing capacity. The semiconductor outlook remains strong, and I would not be surprised to see semiconductor revenues grow in excess of 20% in 2004.
Cost controls remain tight, but a number of execs have told me that their design plans will require an increase in spending in the second half of the year.
Reflecting on my interactions with top customer executives over the last 18 months, I see a substantial change in their expectations from us. Instead of looking at us as just an EDA supplier, and perhaps having a dialogue on tool utilization, features, or bugs, today, CEOs and COOs are calling us with a complex set of economic and technical vision questions.
Coming out of the most massive semiconductor downturn on record, they are worried about three dimensions:
Top down, customer decisions are driven primarily by economics, but bottom up, they will move forward only if they can rely on their partner's technical credibility. This is music to our ears, as we provide the best solutions for both.
We have built Synopsys to become a key player in the broader silicon infrastructure market. In this broader market, concepts such as IP and yield are on par with the more traditional areas of design and verification. All these areas work together to meet our customers' major concerns about differentiation, cost, and schedule.
IP reuse directly impacts design cost and schedule, while our Design for Manufacturing is clearly aimed at fabrication cost and yield. From a Synopsys growth point of view, these areas are funded from outside the traditional EDA budgets; thus, they expand our potential market significantly.
Speaking of IP, our IP business has done very well in the last 18 months. Driven by demand from our customers for more IP this year, we have decided to increase our investment in this area. I would like to update you on two important acquisitions that we are announcing today: Accelerant Networks and MoSys.
Let me give you the background. As long ago as the early 90's, Synopsys had a vision of design reuse as one of the fundamental ways to increase design productivity and reduce cost.
Over the years, we built a very complete, high quality collection of building blocks under the name "DesignWare." This collection is available on a subscription basis to our customers and is the most widely used commercial IP in the world.
As design complexity increases, so does the complexity of the building blocks. Standard interfaces, such as PCI or USB, become more and more sophisticated with each new generation.
Customers need to outsource these building blocks so they can focus on their own differentiation. But to ensure that their products get to market quickly with acceptable quality, they require rock solid quality levels from their IP providers.
Our own internal verification tools and expertise have turned out to be great assets in achieving that objective. Our ability to provide the right building blocks with quality they can trust frees them up to let go of these portions of the SoC and focus on what they do best.
As a result, our business has grown rapidly in the last 18 months, and customers increasingly want Synopsys to become their "house supplier" for the majority of their diverse IP needs.
Exploiting this opportunity, we are taking big steps to expand our IP portfolio this quarter by adding more standards based IP and embedded memory IP.
The acquisition of Accelerant strengthens our existing position in what's called "connectivity IP." These are the devices that allow computers and popular consumer products to talk to each other. You may be familiar with some of the names, such as the USB and 1394 ports on your computer, but there are many others, such as PCI, Serial ATA, and so on.
Synopsys DesignWare Cores are already the market leading solution for connectivity IP cores, which get data in and out of SoCs.
To expand our IP into emerging connectivity standards further, we have acquired Accelerant Networks.
Accelerant provides highly efficient, low power, high speed analog interface technology called Serializer Deserializers (or "SERDES" for short). The SERDES technology will be the foundation for high speed analog interfaces for such new connectivity standards as PCI Express and Serial ATA.
Accelerant brings a very talented set of designers and some excellent technology to Synopsys, Just as connectivity blocks are moving to the next level of speed and sophistication.
In that sense, Accelerant will accelerate our IP connectivity solutions and should especially benefit such markets as consumer products, storage, and network infrastructure.
The major new expansion of our IP portfolio is in embedded memory IP. We are very excited to announce the acquisition of MoSys, a leader in innovative memory for SoC design.
Most people don't realize how much of the area of a modem SoC is taken up by embedded memory. In 2002 it was already about 50% of the chip. The International Technology Roadmap for Semiconductors sees this growing to over 70% by 2005! Consumer electronics, with integrated voice, data, and multimedia, are driving this trend.
This is why it is so timely for Synopsys to be expanding into embedded memory IP right now.
As you can imagine, embedded memories have real impact on both the yield and the overall cost of chips. This is where MoSys' key product, the 1T SRAM, makes all the difference.
MoSys' 1T (meaning 1 transistor) memory is unmatched in density, power, speed, low cost, and high yield and works with regular digital processes.
1T SRAM technology offers all the benefits of traditional 6 transistor SRAM, such as high speed, simple interface, and ease of manufacturability. But there, all comparisons end.
First, the 1T SRAM requires 50-70% less silicon for the same amount of memory. Manufacturers of cellular phones and video game consoles can thus either add more functionality or reduce the cost of their chips.
Second, 1T memories consume less than one quarter the power for the same speed of operation.
Third, for very large memories, the speed is equal to or greater than those of traditional SRAM.
And last, it is scalable for current and future process geometries and has already been ported to a wide variety of foundries, including TSMC, UMC, and Chartered.
In fact, MoSys' licensees have shipped more than 50 million chips, using a wide range of silicon processes and applications.
As you can see, we are systematically advancing our IP portfolio to help customers deal with differentiation, cost, and schedule concerns. In Q1 examples of customers that chose Synopsys IP were AMS, Sony, and TI.
Let me now say a few words about our more traditional design and verification markets. The move to smaller geometries continues unabated, and my semi equipment colleagues report strong business across all geographies. Interestingly, roughly half of all the new equipment is going towards 130nm geometries on 200nm wafers, with the other half going to 90nm designs on 300nm wafers.
If we assume that this equipment sees production usage in 6 to 9 months, the time frame jibes well with our tracking of 90nm design starts, which are steadily growing, and with customer reports of increased success on advanced chips.
Speaking of advanced chips, as I mentioned earlier, our interaction with customers is now about the impact of our tools on differentiation, cost, and schedules.
In that context, I'm pleased to highlight our new agreement with ATI, which we announced in Q1.
ATI designs very advanced, high volume graphics cores, and our agreement provides them with long term access to Synopsys design and verification technologies. We expect to work closely with ATI on their most advanced chips.
In Q1 we made excellent technical progress in both design and verification.
Starting with verification, which consumes 60 to 70% of overall chip design time, we moved the bar up significantly.
In Q1 we released a 10X faster version of Vera, release 6.2, which is getting superior results in competitive benchmarks.
We also released version 7.1 of VCS, which extends our lead in the built in testbench capability, resulting in up to 5X faster overall verification speeds.
SystemVerilog customer momentum keeps growing, with over 1,500 engineers attending an industry sponsored seminar series during the last four months. Building on this momentum, we expanded our relationship with ARM to jointly develop a SystemVerilog reference methodology, which will be showcased at the Design Automation Conference in June.
Moving to the intersection of digital and analog, in Q1 Synopsys introduced Discovery AMS, our analog/mixed signal verification platform. Since the launch, we have already won and deployed Discovery AMS at 69 logos worldwide.
A new area that is showing great promise is automatic analog optimization. After carefully evaluating all the opportunities, we decided to acquire the technology leader in this emerging field: Analog Design Automation, or "ADA" for short.
ADA provides brand new, state of the art optimization technology that can immediately build on our strong analog simulation position. It allows customers to rapidly tune their circuits using our simulators HSPICE and NanoSim.
Now looking at the design side, as I mentioned earlier, the move to 90nm and below continues unabated. 90nm designs are underway at 7 of the top 10 semiconductor companies, and we are already actively engaged in 65nm design projects at 4 of the top 10.
Looking at our own R&D output, I told you last quarter that our engineering teams were really cranking in the Galaxy Design Platform. This became clearly visible when we shipped a slew of big improvements and enhancements in December.
For example, the new version of Design Compiler is 3X faster and offers 25% more capacity than the prior year's release. This boost in speed and capacity makes a big difference to our customers and is having a positive impact in competitive benchmarks.
I'm also pleased to report that Design Compiler now supports SystemVerilog for design. Stay tuned for more improvements in DC in the coming months.
DC Ultra continues to capture the high end of the synthesis market, adding 11 new logos in Q1 and making up 25% of all DC bookings in the quarter.
Primetime, our flagship timing verifier and the sign off product for the IC industry, also saw a 3X runtime improvement and up to 3X capacity improvement. These enhancements, combined with leading signal integrity capabilities, enable PrimeTime to handle the most advanced, one hundred million gate, 90nm designs.
Power has been another key engineering worry for our customers. Whether they want to increase battery life in consumer products such as cell phones or minimize heat dissipation in high speed computers and routers, power is an enormous challenge at the smaller geometries. In Q1 we took a major step forward with our December release of Power Compiler, increasing its speed of power optimization by 10X.
Physical Compiler improved as well, with greater than 2X runtime improvement, 20% increase in capacity, and new capabilities for physical power optimization.
Let me not forget to mention the most recent release of Astro. It delivered 2X faster runtime, up to 40% capacity increase, and improvements for 90nm design, including yield, which is of very high value to our customers.
In fact, we are receiving first indications that Synopsys products are giving better yield results than those of our competitors. Astro added 13 new logos in the quarter.
And while we're on the subject of yield and manufacturing, Design for Manufacturing (or "DFM" for short) is of extremely high interest to our customers. It has the potential to profoundly impact their economic equation. Here again, we are making excellent progress.
For example, we announced a substantial customer win when Toshiba licensed our PSM technology for their 65 nm technology node. This win is significant, as Toshiba will be one of the very first companies to put 65nm technology into production in the first half of 2005.
To help customers develop even smaller geometries, we released Taurus Process Atomistic. This is TCAD software that models interactions at the atomic level and improves time to yield for 65nm and below.
Its software value has already been endorsed by leading companies, including Toshiba and Matsushita.
Optical Proximity Correction, or "OPC" for short, is vital for mask making. Here we have also made great progress.
Our product Proteus demonstrated near linear scalability when distributed on more than 1,000 Intel Xeon processors. As a result, Proteus can reduce the time to obtain OPC results from days to hours on advanced 90nm and 65nm chips.
Synopsys' leading semiconductor customers have already taped out complex designs containing over 500 million transistors with Proteus, using thousands of computer servers.
In summary, against an economic backdrop that is showing promise for the second half of the year, we have forcefully moved the ball forward in our core technologies, as well as in our new growth areas.
Our major business thrusts, acquisitions, and technical investment strategies are in solid alignment, and we are first in line with customers as their spending picks up. IP and DFM are resonating very well with customers and seeing sales momentum today.
While our incremental investments in these initiatives will have a modest impact on fiscal 2004, they should positively impact orders and profits in 2005.
With that, I will turn it over to Steve Shevick for further details regarding our financials.
Thanks Aart, and good afternoon.
As usual, during this call I will discuss our financial performance on a pro forma basis. Our pro forma measures exclude amortization of intangible assets, in process R&D and other merger related charges, and follow on charges relating to our workforce realignment implemented at the beginning of fiscal 2004, which was communicated at our Q4 earnings call in December of last year. Reconciliation of pro forma results to GAAP results appears in our press release and financial supplement.
For your convenience a copy of our remarks and all of the numbers I discuss will be posted on our website.
Now, for the numbers.
Revenue for the first quarter was $285 million, within our guidance range of $275 million to $290 million. Approximately 21 percent of revenue came from upfront licenses, 60 percent from time based licenses and 19 percent from maintenance and consulting.
Revenue increased 6.4% from Q1 of FY03, principally due to growth in time based license revenue. Time based license revenue increased by approximately $30 million, to $171 million, upfront license revenue increased by approximately $5 million, to $59 million, and services revenue decreased by $17 million, to $55 million.
Sequentially, revenue declined seasonally from Q4 of fiscal year 2003 due to a lower level of upfront licenses. Revenue from upfront licenses dropped by $28 million from Q4 to Q1, revenue from time based licenses increased by $3 million and revenue from services declined by $6 million.
One customer accounted for more than 10% of revenue for the quarter.
Geographically, Asia Pacific contributed 13% of revenue, its highest contribution ever, reflecting the success of our field investment in that region. North America contributed 56% of revenue, Europe contributed 17% of revenue, and Japan contributed 14% of revenue.
Revenue from our core EDA products accounted for 72% of total revenue and revenue from our emerging businesses 18%, with 7% coming from IP and 11% from DFM.
From a bookings perspective, as is typically the case in our first quarter, book to bill was well below one, ending between 0.5 and 0.6. A number of sizeable orders pushed from Q1 to Q2 on account of unfavorable terms. These orders closed early in Q2, which gets us off to a good start.
Notwithstanding the pushed orders, Q1 orders were within our guided range of 10 and 15% of our original orders target for the year.
One customer accounted for more than 10% of orders in the quarter.
Approximately 81% of software orders were booked as renewable licenses and 19% as perpetual licenses. We expect the percentage of perpetuals to trend downward over the course of the year, and that for the year perpetuals will contribute 10 percent or less of license orders.
During the quarter, upfront licenses represented 57% of license orders, including between $5 to $10 million in license orders that will not turn to revenue until after Q1. This was well above our target
for the quarter, and reflects both the acceptance by the customer base of term licenses and the high sensitivity of this percentage in a low orders quarter. For the year we expect upfront orders to be in a range around 25% of total license orders.
The average length of our renewable customer license commitments in Q1 was 2.7 years, roughly 10% shorter than the average length of such commitments in fiscal 2003.
Aggregate pro forma operating expenses for the first quarter were $205 million, at the bottom of our target range of $205 to $211 million, principally due to lower sales commissions associated with the quarter's level of orders and lower than expected litigation and depreciation expenses. Expenses for the quarter also reflected a savings of $3.4 million from the shutdown of our North American facilities between Christmas and New Years, and a headcount reduction, each of which was described on our Q4 earnings call and contemplated in our original guidance.
The decline of the dollar versus the Euro cost us $1 million in expenses versus plan during the quarter, as backlog in Europe is denominated in dollars and our European expenses are primarily in Euros. Beginning this quarter we are hedging our Euro expenses from beginning to end of quarter, which will give us stability in our current quarter forecasting of Euro expenses. Over the rest of the year, however, the strength of the Euro could negatively impact earnings by approximately 3 to 4 cents.
Our pro forma operating margin for the quarter was 28%.
Other income for Q1 was an expense of $1.1 million, at the bottom of our target range, and included $1.4 million in investment write downs.
Our pro forma tax rate was 31%, down from 32.5% last year. As I indicated last quarter, this reduction was made possible by a refinement of our international subsidiary structure.
Weighted average shares outstanding for the quarter was 166 million shares, near the high end of our target range of 159 to 167 million shares. During the quarter 4.4 million options were exercised, contributing 1.7 million shares to weighted average shares. Our overhang currently stands at 24%, approximately twelve percentage points lower than one year ago.
Pro forma earnings was $0.33 cents per share, one cent above the top of our guidance range of 28 to 32 cents per share and two cents above the First Call consensus.
Cash and short term investments were $618 million at the end of Q1, down approximately $80 million from the end of fiscal year 2003, largely reflecting the net effect of share repurchases offset by option exercise proceeds.
During the quarter we purchased approximately 4.6 million shares of Synopsys stock at an average price of $35.13 per share, and between the end of the quarter and February 13th, we repurchased an additional 1.6 million shares under our 10b5-1 plan at an average price of $35.48 per share. As of today, therefore, approximately $284 million remains in our repurchase program. As a result of the MoSys transaction, we will be out of the market until the completion of the transaction.
Cash from operations on a GAAP basis was $11 million, and reflected the payment of FY 2003 bonuses and cash disbursements for taxes of $34M in Q1 of FY2004. Capex was $15 million for the quarter, and expenses and disbursements relating to our work force realignment were $10 million, leaving pro forma free cash flow of approximately $6 million.
Q4 accounts receivable totaled $194 million, down approximately 3% from last quarter, and DSO was 62 days, up from 58 days at the end of Q4, in both cases minor movements reflecting solid collections and the impact of improved payment terms in the quarter.
Deferred revenue at the end of the quarter was $434 million, up $14 million from the end of Q4.
Payment terms improved during the quarter because of the high proportion of upfront licenses and the fact that, unlike others in the industry, we do not permit extended payment terms on upfront licenses.
Aggregate backlog was seasonally down from the October quarter and should grow sequentially throughout the remainder of the year. For the second quarter we expect that over 70% of our target revenue will come from backlog.
Headcount totaled 4,206 employees at the end of the quarter, down from 4,408 at the end of Q4, reflecting the headcount reduction implemented at the beginning of the quarter. As a result of the MoSys, Accelerant and ADA transactions and our planned incremental investments in promising growth areas of the business, we expect to exit the year with headcount of approximately 4,500 to 4,550.
Before I provide our targets for Q2 and FY04, let me first briefly summarize the terms of the transactions announced today.
The purchase price of MoSys is $13.50 per share, or $432 million, including the value of assumed options, or approximately $349 million net of cash. The acquisition will be paid half in cash and half in Synopsys Common Stock, although we have an option to offer all cash at our discretion. The acquisition is structured as an exchange offer, which we expect to launch within two weeks. The transaction is subject to customary closing conditions and receipt of regulatory approvals. The target for closing is the end of April.
Accelerant was acquired for $22.5 million in cash and closed last Friday.
I will now describe our expectations for Q2 and fiscal 2004, which reflect the MoSys and Accelerant transactions, the ADA transaction announced last month, which we expect to close before the end of February, and the acquisition of certain memory test technology from iROC Technologies.
Our second quarter targets are as follows:
Our targets for the full year are as follows:
Although we are maintaining our original comments on fiscal 2005, we believe that our incremental investments in our growth initiatives should have a positive impact on our results. As a reminder, we said to expect fiscal 2005 revenue of approximately $1.4 billion and pro forma earnings over $1.90 per share.
With that, we will now open for questions.
Ladies and Gentlemen, if you would like to ask a question, please depress the "*" then "1" on your touchtone phone. You will hear a tone indicating you have been placed in cue, and you may remove yourself from cue at any time by depressing the "#" key. Once again, if you have a question, please press the "*" then "1" on your touchtone phone. One moment please for the first question.
The first question this morning is from Garo Toomajanian from RBC Capitalplease go ahead.
that our emphasis on yield is starting to pay off handsomely. So I expect that going forward, we will gradually be able to put some cost numbers on that that will show very quickly that there's enormous value in using our tools, and I think at this point in time you should stay tuned for our announcement coming up on that.
Okay, great. Thank you.
You're welcome.
The next question is from Raj Seth from SG Cowen.
Right.
O.K. thanks!
You're welcome.
The next question is from Sumit Dhanda from Bank of America Securities.
O.K. sounds good!
All right.
Thank you!
Yeah.
The next question is from Bill Freirichs from B. A. Davidson and Company. Please go ahead.
O.K. Thanks!
The next question is from Jay Vleeschhouwer from Merrill Lynch.
OK. Talk to you later. Thanks.
Thanks, Jay.
And we move onto the line to Rich Velera from Needham & Company. Please go ahead.
OK, great, thank you.
Yeah.
And, ladies and gentlemen, just as a reminder, we have approximately five minutes left of today's conference call and we have a question from the line of Erach Desai from American Technology Research. Please, go ahead.
OK, thanks.
You're welcome.
And we have a question from Rohit Pandey from Credit Suisse First Boston. Please go ahead.
[Answered by Fu-Chieh Hsu]
Thank you.
You're welcome.
And Mr. Shevick and Mr. De Geus, we'll go ahead and turn the conference back to you for any closing comments.
Well, thank you very much for attending our conference call. As usual, Steve and I will be available for detailed questions afterwards and we appreciate the time spent with us. Bye bye.
Ladies and gentlemen, that concludes your conference for today. Thank you for your participation and for using AT&T Executive Teleconference. You may now disconnect.
Additional Information and Where to Find It
This transcript is being filed pursuant to Rule 425 under the Securities Act of 1933. This transcript is neither an offer to purchase nor a solicitation of an offer to sell shares of Monolithic System Technology, Inc. (MoSys). MoSys stockholders are urged to read the relevant exchange offer documents when they become available because they will contain important information that stockholders should consider before making any decision regarding tendering their shares. At the time the offer, if any, is commenced, Synopsys will file exchange offer materials with the U.S. Securities and Exchange Commission and MoSys will file a Solicitation/Recommendation Statement with respect to the offer. The exchange offer materials (including a Preliminary Prospectus/Offer to Purchase, a related Letter of Transmittal and certain other offer documents) and the Solicitation/Recommendation Statement will contain important information, which should be read carefully before any decision is made with respect to the offer. The Preliminary Prospectus/Offer to Purchase, the related Letter of Transmittal and certain other offer documents, as well as the Solicitation/Recommendation Statement, will be made available to all stockholders of MoSys at no expense to them. The exchange offer materials (including a Preliminary Prospectus/Offer to Purchase, a related Letter of Transmittal and certain other offer documents) and the Solicitation/Recommendation Statement will be made available for free at the Commission's Web Site at www.sec.gov. Free copies of the Preliminary Prospectus/Offer to Purchase, the related Letter of Transmittal and certain other offering documents will be made available by Synopsys for free at Synopsys' website at http://www.synopsys.com/corporate/invest/invest.html or by mail to Synopsys, 700 Middlefield Road, Mountain View, CA 94043, attention: Investor Relations.
In addition to the Preliminary Prospectus/Offer to Purchase, the related Letter of Transmittal and certain other offer documents, as well as the Solicitation/Recommendation Statement, Synopsys and
MoSys file annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission. You may read and copy any reports, statements or other information filed by Synopsys or MoSys at the SEC public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information on the public reference room. Synopsys' and MoSys' filings with the Commission are also available to the public from commercial document-retrieval services and at the website maintained by the Commission at http://www.sec.gov.
Interests of Certain Persons in the Merger.
Synopsys will be, and certain other persons may be, soliciting MoSys stockholders to tender their shares into the offer. The directors and executive officers of Synopsys and the directors and executive officers of MoSys may be deemed to be participants in Synopsys' solicitation of MoSys' stockholders to tender their shares into the offer.
Synopsys is a registered trademark of Synopsys, Inc. All other trademarks mentioned in this release are the intellectual property of their respective owners.
The foregoing statements made by Dr. Aart de Geus, Synopsys' Chairman and Chief Executive Officer, and Steve Shevick, Synopsys' Chief Financial Officer, during the conference call held on Monday, February 23, 2004 are based on Synopsys' current expectations and beliefs. Actual results could differ materially from those described by these statements due to a number of factors, including but not limited to:
In addition, the Company's actual expenses on a GAAP basis will be higher, and GAAP earnings will be lower, for the second quarter and full-year fiscal 2004 following the Company's determination of charges and expenses relating to amortization of intangible assets and deferred stock compensation, in-process research and development and integration and other acquisition-related expenses for the Accelerant Networks and iRoC Technologies acquisitions and the contemplated MoSys and Analog Design Automation acquisitions. Finally, the Company's actual expenses and earnings per share on a
GAAP basis for the second quarter and full-year fiscal 2004 could differ materially from the targets stated in this transcript for a number of reasons, including a determination by the Company that any portion of its intangible assets have become impaired, changes in deferred stock compensation expenses caused by employee terminations, and integration and other acquisition-related expenses, amortization of additional intangible assets and deferred stock compensation associated with additional acquisitions, if any.
For further discussion of these and other factors that may cause results to differ from those projected in this release, readers are referred to documents Synopsys has filed with the Securities and Exchange Commission, specifically the section contained in Part III, Item 7 of Synopsys' Annual Report on Form 10-K for the fiscal year ended October 31, 2003 filed with the SEC on January 29, 2004 entitled "Factors That May Affect Future Results." Synopsys is under no obligation to (and expressly disclaims any such obligation to) update or alter these forward-looking statements whether as a result of new information, future events or otherwise.
This conference call transcript was issued by Synopsys on February 25, 2004. It is the filer's belief that Synopsys intends to commence an exchange offer and to file exchange offer materials and a registration statement on Form S-4 with the Commission with respect to the proposed acquisition of MoSys by Synopsys.
In addition to the information given above, free copies of the Solicitation/Recommendation Statement and certain other offering documents will be made available for free at the Commission's website at www.sec.gov and by MoSys for free at MoSys' website at www.MoSys.com. INVESTORS AND SECURITY HOLDERS OF MOSYS ARE URGED TO READ THE SOLICITATION/RECOMMENDATION STATEMENT AND ALL RELEVANT MATERIALS CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT SYNOPSYS AND MOSYS AND THE PROPOSED EXCHANGE OFFER AND RELATED TRANSACTIONS.