SAN JOSE, Oct. 20, 2004 — Cadence Design Systems Inc. announced total revenue for the third quarter of 2004 of $302 million compared to $269 million in the same period last year. On a GAAP basis, Cadence recognized net income of $20 million, or $0.07 per share in the third quarter of 2004, compared to a net loss of $14 million, or $0.05 per share in the same period last year.

In addition to using GAAP results in evaluating Cadence's business, management also believes it is useful to measure results using a non-GAAP measure of net income (loss), which excludes, as applicable, amortization of intangible assets and deferred stock compensation, in-process research and development charges, integration and other acquisition-related expenses, and restructuring charges and equity in losses (income) from investments.

Non-GAAP net income (loss) is adjusted by the amount of additional taxes or tax benefit that the company would accrue if it used non-GAAP results instead of GAAP results to calculate the company's tax liability. Using this non-GAAP measure, earnings in the third quarter were $52 million, or $0.19 per share, on a fully diluted basis as compared to $34 million, or $0.12 per share, on a fully diluted basis, in the same period last year.