The company's stock traded as high as 25-1/2 today, and retained most of those gains to close at 25, up from yesterday's close of 21-1/8.
During a conference call this afternoon, the company lent weight to the rumors.
Avant and Lucent Technologies Microelectronics Group have signed a multiyear extension of their agreement for the supply of integrated circuit design automation (ICDA) tools, Avant's chairman, president, and chief executive Gerald Hsu announced today during the conference call.
Terms of the agreement were not disclosed, but Hsu said the sales contract is signed. "It is a major deal," said Hsu, adding that the company is working on closing several other multimillion-dollar deals.
Hsu said the quarter has been extremely strong: "This shows the customers strong commitment (to the company), even after legal action. The customer is no fool. They vote with their pocketbooks," he said.
Although the quarter is still not closed, Hsu said purchase orders are strong; he expects the company to continue this momentum. "No one will beat us down?we are strong worldwide: U.S. Japan, Korea, Taiwan. I cannot think of one area that is weak now," he said.
The company is expected to announce its second-quarter results on July 18. Wall Street is expecting the company to report profits of 26 cents a share, according to First Call. For the year-ago quarter, the company reported revenue of $14.1 million, with net income at $2.9 million, or 20 cents a share.
The multiyear agreement with Lucent lengthens a previous contract that began in December of 1994. It expands Lucent's use of Avant's ICDA, including its design planning and analysis tools, and verification tools.
But the good news shining on the software maker may not quell the anger of shareholders. Just days ago, shareholders filed a class-action suit against the company. Felony charges were filed against Avant executives in April for allegedly stealing proprietary software technology from former employer Cadence Design Systems (CDN).
The class-action suit states that the executives denied any wrongdoing and repeatedly assured investors that claims also levied by Cadence against Avant had no merit and would not have a material adverse impact on Avant's financial position.
The shareholder suit, which was filed on June 2 in a United States District Court of Northern California, also alleges the company made misleading statements and failed to disclose information about defendants' wrongful use of the technology allegedly stolen from Cadence.
Avant saw its stock plummet nearly 60 percent to 9-3/4 after the criminal charges were filed against the company and its top executives.
In a recent letter to employees, Hsu reiterated that all charges are false. "The Santa Clara District Attorney's recent charges are false, period," the letter said.
Felony charges were filed in early April in Santa Clara County, California, against Hsu, director Yull-Chung "Eric" Cho, technology vice president Yuh-Zen Liao, engineering vice president Steven Tzyh-Li Wuu, director of business operations Shiao-Li Huang, and engineer Chih-Liang "Eric" Cheng. All the defendants had at one time worked at Cadence.
Also named in the complaint was former Cadence employee Mitsuru "Mitch" Igusa, who in 1995 was charged with a similar complaint regarding Cadence trade secrets. Igusa, who was never a full-time Avant employee, allegedly emailed Cadence software files to his home and had once served as a consultant to Avant. Igusa is awaiting trial on these earlier charges.