STOCKREPORTS

Quickturn Design Systems, Inc.

NASDAQ Symbol QKTN

Recent Price 12.00 52 Wk Range 20.25 - 7.13

Yield Nil 12-Mo. P/E 22.2

Quantitative Evaluation: Outlook (1 Lowest - 5 Highest) NA Fair Value NA Risk MEDIUM Earn/Div Rank NR
Technical Evaluation: BULLISH since 05/97 Rel. Strength Rank (1 Lowest - 99 Highest) 23 Insider Activity NA

Business Profile 16-APR-97

QKTN's announcement that it expected a loss for the 1997 first quarter sent its shares tumbling in early April. QKTN laid the weakness to delayed purchasing decisions by its customers, which the company attributes to structural changes within those customers' respective segments of the electronics industry, and to near-term uncertainty generated by new competition. QKTN remains committed to becoming the leading supplier of high performance design verification technologies to the semiconductor and electronics industries. Towards this end, QKTN launched two initiatives in the first quarter of 1997, including a strategic technology and marketing partnership with Cadence Design Systems to create a combined methodology for the co-verification of complex IC and electronic systems designs; and its Affinity Partnership Program, which formalizes the company's strategic relationships with third-party design and verification technology suppliers.

Operation Review 16-APR-97

Revenues in the three months ended March 31, 1996, fell 10%, year to year, as delayed purchasing decisions by customers resulted in decreased order rates. Margins narrowed on the lower volume, as operating expenses continued to increase. Further penalized by $1.2 million ($0.05 a share) of merger-related costs, a net loss of $2,118,000 ($0.13 a share) contrasted with income of $2,744,000 ($0.16).

Stock Performance 20-JUN-97n

In the past 30 trading days, QKTN's shares have increased 5%, compared to a 9% rise in the S&P 500. Average trading volume for the past five days was 382,980 shares, compared with the 40-day moving average of 213,290 shares.

Key Stock Statistics

Fiscal Year Ending Dec. 31

Dividend Data: No cash dividends have been paid, and the company does not expect to pay any in the foreseeable future.

Business Summary 16-APR-97

Quickturn Design Systems, Inc. designs, manufactures, markets and supports system-level verification solutions for the design of integrated circuits and electronic systems. Its cycle-based simulation and emulation technologies are designed to improve design quality and to reduce time-to-market and prototype development costs compared to traditional verification methodologies. The cycle-based simulation products can be used by customers to verify digital logic designs early in the design process, particularly when design changes occur several times per day. Later in the process, when designs become more stabilized, customers use in-circuit emulation to test the entire system containing the design and to help identify system-level bugs. International sales represented 37% of revenues in 1996, versus 31% in 1995 and 26% in 1994.

The company's SpeedSim high performance simulation software uses cycle-based simulation (CBS) technology, which is an alternative to traditional event-based simulation. CBS is specifically designed to overcome the verification speed limitations of event-based simulation, and may help reduce integrated circuit design costs by reducing the need for expensive hardware simulation accelerators. The company's SpeedSim cycle-based simulator employs a proprietary technology to enhance verification performance. The company's CBS approach may be ten to one hundred times faster than event-based simulation.

QKTN's System Realizer emulation system and the new CoBALT emulation system are used by electronic design engineers to generate reprogrammable physical prototypes, or "virtual silicon" representations, of their electronic circuit designs. This enables designers to achieve concurrent verification of the entire target system, including system software and applications, and to perform iterative design changes prior to actual silicon fabrication. Both of the company's emulation systems share the same software environment, allowing designers to select the optimum emulation solution for any design style.

The company plans to continue substantial investment in research and development to allow continued innovation in key technology areas, to develop new products and improve existing products to support its current leadership position in the verification market. R&D costs amounted to $18.6 million (17.8% of total revenues) in 1996, $14.9 million (18.2%) in 1995 and $12.4 million (18.9%) in 1994.

Important Developments

Feb. '97 Quickturn completed its previously announced acquisition of SpeedSim, Inc., a provider of cycle-based simulation software for the verification of digital logical designs, for approximately 2.8 million QKTN common shares.

Capitalization

Long Term Debt: None (3/97).

Curr. Ratio	2.7	2.8	2.5	3.4	2.3	NA	NA	NA	NA	NA
% LT Debt of Cap.	Nil	5.1	7.1	8.3	5.8	NA	NA	NA	NA	NA
% Net Inc.of Revs.	12.1	16.0	7.0	NM	NM	NA	NA	NA	NA	NA
% Ret. on Assets	12.5	15.4	6.7	NM	NM	NA	NA	NA	NA	NA
% Ret. on Equity	17.1	22.7	10.1	NM	NM	NA	NA	NA	NA	NA

Data as orig. reptd.; bef. results of disc. opers. and/or spec. items. Per share data adj. for stk. divs. as of ex-div. date. E-Estimated. NA-Not Available. NM-Not Meaningful. NR-Not Ranked.

Office--440 Clyde Ave., Mountain View, CA 94043. Tel--(415) 967-3300. Website--http://www.quickturn.com Chrmn--G. M. Antle. Pres & CEO--K. R. Lobo. VP-Fin, CFO & Secy--R. K. Ostby. Dirs--R. C. Alberding, G. M. Antle, F. J. Caufield, M. R. D'Amour, Y. Huang, D.K. Lam, K. R. Lobo. Transfer Agent--Bank of Boston, Canton, MA. Incorporated--in California in 1987; reincorporated in Delaware in 1993. Empl-- 369. S&P Analyst: Adam Penn

This report is for information purposes and should not be considered a solicitation to buy or sell any security. Neither S&P nor any other party guarantee its accuracy or make warranties regarding results from its usage. Redistribution is prohibited without written permission. Copyright © 1997