Mentor Graphics Corporation (NASDAQ:MENT) today announced fiscal
fourth quarter revenues of $242.6 million, non-GAAP earnings per
share of $.35, and GAAP earnings per share of $.33. For full fiscal
2009, the company reported revenues of $789.1 million, non-GAAP
earnings per share of $.20, and a GAAP loss per share of $.97.
�Large accounts fared well in the quarter, with modest growth in
the company�s top ten renewal contracts. This strength was
significantly offset, however, by weakness in smaller
transactions,� said Walden C. Rhines, chairman and CEO of Mentor
Graphics. �For the year, our diversity of product line and breadth
of served markets, as well as growth in newer product segments,
helped sustain the business. In particular, automotive and design
for manufacturing both showed solid growth for the year. Looking
forward, we see the opportunity to take advantage of this period of
weakness to help customers consolidate on Mentor�s leading design
platforms.�
During the quarter, the company launched an expansion of
capacity to 512 million gates for its Veloce� emulation product
line, now double the capacity of competitive offerings. The company
qualified its Olympus-SoC� place-and-route solution for Taiwan
Semiconductor Manufacturing Company�s (TSMC) 40nm processes in
record time, winning an award from TSMC for the speed of its
qualification. Olympus-SoC place-and-route also won the 2009
DesignVision award in the IC design tools category at the DesignCon
tradeshow. Olympus-SoC place-and-route and the company�s printed
circuit board radio frequency (RF) design solution are both
finalists in the EDN innovation awards.
The company extended its leadership in electronic system level
(ESL) design by acquiring the high level synthesis assets of
Agility Design Solutions as well as with its announcement of a
scalable design methodology with its Vista� design tools based on
the new 2.0 transaction level modeling standard. In functional
verification, the company announced the availability of an open
source solution that allows users of the industry standard open
verification methodology (OVM) to incorporate their legacy
verification methodology manual (VMM) code. The company also
launched Capital� Architect, an extension to its cabling product
line, which helps automotive manufacturers and their suppliers
develop lighter and more cost-effective electrical distribution
systems in vehicles. In analog simulation, the company released a
multiprocessor version of its ELDO� simulator that can increase the
speed of circuit simulation by 3 to 10 times.
�Given the environment, the company has further strengthened its
existing cost control efforts with new reductions in compensation
and travel, targeted personnel reductions and strict hiring limits.
We will continue to assess our cost envelope as the year unfolds,�
said Gregory K. Hinckley, president of Mentor Graphics. �Our
relatively strong balance sheet will also allow us to consider
opportunities this market is presenting.�
GUIDANCE
For fiscal first quarter 2010 ending April 30, 2009, the company
expects revenues of $200 to $210 million, non-GAAP earnings per
share between $.05 and $.10, and a GAAP loss per share between $.08
and $.13.
Discussion of Non-GAAP Financial Measures
Mentor Graphics management evaluates and makes operating
decisions using various performance measures. In addition to our
GAAP results, we also consider adjusted gross margin, operating
margin and net income (loss), which we refer to as non-GAAP gross
margin, operating margin, and net income (loss), respectively.
These non-GAAP measures are derived from the revenues of our
product, maintenance, and services business operations and the
costs directly related to the generation of those revenues, such as
cost of revenue, research and development, sales and marketing, and
general and administrative expenses, that management considers in
evaluating our ongoing core operating performance. These non-GAAP
measures exclude amortization of purchased and other identified
intangible assets, in-process research and development, special
charges, equity plan-related compensation expenses and charges,
debt issuance costs, equity in losses of unconsolidated entities,
impairment of long-lived assets, and impairment of cost method
investments which management does not consider reflective of our
core operating business.
Purchased and other identified intangible assets consist
primarily of purchased technology, backlog, trade names, customer
relationships, and employment agreements. In-process research and
development charges represent products in development that had not
reached technological feasibility at the time of acquisition.
Special charges consist of post-acquisition rebalance costs
including severance and benefits, excess facilities, and
asset-related charges, and also include strategic reallocations or
reductions of personnel resources. Equity plan-related compensation
expenses represent the fair value of all share-based payments to
employees, including grants of employee stock options, as required
under Statement of Financial Accounting Standards No. 123 (revised
2004), �Share-Based Payment� (SFAS 123R). For purposes of
comparability across other periods and against other companies in
our industry, non-GAAP net income (loss) is adjusted by the amount
of additional taxes or tax benefit that we would accrue using a
normalized effective tax rate applied to the non-GAAP results.
During the year ended January 31, 2008, we excluded $1.1 million
of interest expense attributable to net retirement premiums and
write-offs of debt issuance costs. The amounts were expensed in
connection with the refinancing or repurchase of certain
convertible debt. The amounts were excluded as management does not
consider these transactions a part of its core operating
performance. There were no debt repurchases during the year ended
January 31, 2009.
During the year ended January 31, 2009, we excluded $1.4 million
of equity in losses of unconsolidated entities. The amounts
represent our equity in the losses of a common stock investment
accounted for under the equity method. The amounts were excluded as
management does not consider these transactions a part of its core
operating performance. We had no equity in unconsolidated entities
during the year ended January 31, 2008.
During the year ended January 31, 2009, we excluded $4.6 million
of charges related to the impairment of long-lived assets. The
amounts represent the write-off of fixed assets and purchased
technology associated with our emulation division. The amounts were
excluded as management does not consider the impairment part of its
core operating performance. We had no impairment of long-lived
assets during the year ended January 31, 2008.
During the year ended January 31, 2009, we excluded $3.5 million
for the impairment of cost method investments. The amounts
represent the full write-off of two cost method investments. The
amounts were excluded as management does not consider these
transactions part of its core operating performance. We had no
impairment of cost method investments during the year ended January
31, 2008.
In certain instances our GAAP results of operations may not be
profitable when our corresponding non-GAAP results are profitable
or vice versa. The number of shares on which our non-GAAP EPS is
calculated may therefore differ from the GAAP presentation due to
the anti-dilutive effect of stock options in a loss situation.
Non-GAAP gross margin, operating margin and net income (loss)
are supplemental measures of our performance that are not required
by, or presented in accordance with, GAAP. Moreover, they should
not be considered as an alternative to any performance measure
derived in accordance with GAAP, or as an alternative to cash flow
from operating activities as a measure of our liquidity. We present
non-GAAP gross margin, operating margin and net income (loss)
because we consider them to be important supplemental measures of
our operating performance and profitability trends, and because we
believe they give investors useful information on period-to-period
performance as evaluated by management.
Management excludes from our non-GAAP measures certain recurring
items to facilitate its review of the comparability of our core
operating performance on a period-to-period basis because such
items are not related to our ongoing core operating performance as
viewed by management. Management considers our core operating
performance to be that which can be affected by our managers in any
particular period through their management of the resources that
affect our underlying revenue and profit generating operations
during that period. Management uses this view of our operating
performance for purposes of comparison with our business plan and
individual operating budgets and allocation of resources.
Additionally, when evaluating potential acquisitions, management
excludes the items described above from its consideration of target
performance and valuation. More specifically management adjusts for
the excluded items for the following reasons:
- Amortization charges for our
purchased and other identified intangible assets are inconsistent
in amount and frequency and are significantly impacted by the
timing and magnitude of our acquisition transactions. We therefore
consider our operating results without these charges when
evaluating our core performance. Generally, the most significant
impact to inter-period comparability of our net income (loss) is in
the first twelve months following an acquisition.
- Special charges are primarily
severance related and are due to our reallocation or reduction of
personnel resources driven by modifications of business strategy or
business emphasis and by assimilation of acquired businesses. These
costs are originated based on the particular facts and
circumstances of business decisions and can vary in size. Special
charges also include excess facility and asset-related
restructuring charges. In fiscal 2009 fees incurred in response to
the unsolicited bid by Cadence Design Systems were included as a
special charge. These charges are not specifically included in our
annual operating plan and related budget due to the rapidly
changing technology and competitive environment in our industry. We
therefore exclude them when evaluating our managers' performance
internally.
- In-process research and
development charges are largely disregarded as acquisition
decisions are made, since they often result in charges that vary
significantly in size and amount. Management excludes these charges
when evaluating the impact of an acquisition transaction and our
ongoing performance.
- Management supplementally
considers performance without the impact of equity plan-related
compensation charges and believes this information is useful to
investors to compare our performance to the performance of other
companies in our industry who present non-GAAP results adjusted to
exclude stock compensation expense. We view equity plan-related
compensation as a key element of our employee retention and
long-term incentives, not as an expense that should be an element
of evaluating core operations in any given period. We therefore
exclude these charges for purposes of evaluating our core
performance.
- Impairment of long-lived assets
can occur whenever events or changes in circumstances indicate that
assets� carrying amount may not be recoverable. These charges are
inconsistent in amount and frequency. We therefore consider our
operating results without these charges when evaluating our core
performance.
- Impairment of cost method
investments can occur when the fair value of the investment is less
than its cost. This can occur when there is a significant
deterioration in the investee�s earnings performance, significant
adverse changes in the general market conditions of the industry in
which the investee operates, or indications that the investee may
no longer be able to conduct business. These charges are
inconsistent in amount and frequency. We therefore consider our
operating results without these charges when evaluating our core
performance.
- Equity in losses of
unconsolidated subsidiaries represents the net income (losses) in
an investment accounted for under the equity method. The carrying
amount of our investment is adjusted for our share of earnings or
losses of the investee. We do not influence or control the results
of operations for this investment. We therefore consider our
results without the charge when evaluating our core
performance.
- Income tax expense (benefit) is
adjusted by the amount of additional tax expense or benefit that we
would accrue if we used non-GAAP results instead of GAAP results in
the calculation of our tax liability, taking into consideration our
long-term tax structure. We use a normalized effective tax rate of
17%, which reflects the weighted average tax rate applicable under
the various tax jurisdictions in which we operate. This non-GAAP
weighted average tax rate is subject to change over time for
various reasons, including changes in the geographic business mix
and changes in statutory tax rates. Our GAAP tax rate for the year
ended January 31, 2009 is (14)%, which considers tax expense on our
international operations. The GAAP tax rate�considers certain
mandatory and�other non-scalable tax costs which may adversely or
beneficially�affect�our tax rate depending upon our level of
profitability.
Non-GAAP net income (loss) also facilitates comparison with
other companies in our industry, which use similar financial
measures to supplement their GAAP results. However, non-GAAP net
income (loss) has limitations as an analytical tool, and therefore
should not be considered in isolation or as a substitute for
analysis of our results as reported under GAAP. In the future we
expect to continue to incur expenses similar to the non-GAAP
adjustments described above and exclusion of these items in our
non-GAAP presentation should not be construed as an inference that
these costs are unusual, infrequent or non-recurring. Some of the
limitations in relying on non-GAAP net income (loss) are:
- Amortization of purchased
intangibles, though not directly affecting our current cash
position, represents the loss in value as the technology in our
industry evolves, is advanced or is replaced over time. The expense
associated with this loss in value is not included in the non-GAAP
net income (loss) presentation and therefore does not reflect the
full economic effect of the ongoing cost of maintaining our current
technological position in our competitive industry, which is
addressed through our research and development program.
- We regularly engage in
acquisition and assimilation activities as part of our ongoing
business and therefore we will continue to experience special
charges on a regular basis. These costs also directly impact our
available funds.
- Our stock option and stock
purchase plans are important components of our incentive
compensation arrangements and will be reflected as expenses in our
GAAP results for the foreseeable future under SFAS 123R.
- Impairment of long-lived assets
occurs when events or circumstances indicate that the value of the
asset may not be recoverable. The impaired assets may still be in
use in our current operations, however, and the expense associated
with the asset impairment may not reflect the full economic effect
of the ongoing cost of maintaining the associated assets. We will
continue to evaluate the fair value of our assets and investments
and will record impairment charges when appropriate.
- Our income tax expense (benefit)
will be ultimately based on our GAAP taxable income and actual tax
rates in effect, which often differ significantly from the 17% rate
assumed in our non-GAAP presentation.
- Other companies, including other
companies in our industry, may calculate non-GAAP net income (loss)
differently than we do, limiting its usefulness as a comparative
measure.
About Mentor Graphics
Mentor Graphics Corporation (NASDAQ:MENT) is a world leader in
electronic hardware and software design solutions, providing
products, consulting services and award-winning support for the
world�s most successful electronics and semiconductor companies.
Established in 1981, the company reported revenues over the last 12
months of about $800 million and employs approximately 4,500 people
worldwide. Corporate headquarters are located at 8005 S.W. Boeckman
Road, Wilsonville, Oregon 97070-7777. World Wide Web site:
http://www.mentor.com/.
Mentor Graphics, Veloce, Capital and ELDO are registered
trademarks and Olympus-SoC and Vista are trademarks of Mentor
Graphics Corporation. All other company or product names are the
registered trademarks or trademarks of their respective owners.
Statements in this press release regarding the company�s
guidance for future periods constitute �forward-looking� statements
based on current expectations within the meaning of section 21E of
the Securities Exchange Act of 1934, as amended. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
performance or achievements of the Company or industry results to
be materially different from any results, performance or
achievements expressed or implied by such forward-looking
statements. Such factors include, among others, the following: (i)
reductions in the spending on the company�s products and
services�by its customers due to the current worldwide downturn;
(ii)�continued weakness�or recession in the US, EU, Japan or other
economies;�(iii) the company�s ability to successfully offer
products and services that compete in the highly competitive EDA
industry; (iv)�product bundling or discounting of products and
services by competitors, which could force the company to lower its
prices or offer other more favorable terms to customers; (v)
effects of the increasing volatility of foreign currency
fluctuations on the company�s business and operating results; (vi)
changes in accounting or reporting rules or interpretations;
(vii)�the impact of tax audits by the IRS or other taxing
authorities, or changes in the tax laws, regulations or enforcement
practices where the company does business; (viii)�effects of
unanticipated shifts in product mix on gross margin; and
(ix)�effects of customer seasonal purchasing patterns and the
timing of significant orders may negatively or positively impact
the company�s quarterly results of operations, (x) an industry
downturn that could lead to smaller customer renewals, all as may
be discussed in more detail under the heading �Risk Factors� in the
company�s most recent Form 10-K or Form 10-Q. Given these
uncertainties, prospective investors are cautioned not to place
undue reliance on such forward-looking statements. In addition,
statements regarding guidance do not reflect potential impacts of
mergers or acquisitions that have not been announced or closed as
of the time the statements are made. Mentor Graphics disclaims any
obligation to update any such factors or to publicly announce the
results of any revisions to any of the forward-looking statements
to reflect future events or developments.
MENTOR GRAPHICS CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except earnings per
share data)
� � � � �
Three Months Ended January 31, Twelve Months
Ended January 31, 2009 2008 2009
2008 Revenues: System and software $ 157,566 $
201,135 $ 447,551 $ 555,297 Service and support � 85,072 � � 83,685
� � 341,550 � � 324,435 � Total revenues � 242,638 � � 284,820 � �
789,101 � � 879,732 �
Cost of revenues: (1) System and
software 4,583 8,365 17,787 24,913 Service and support 23,280
26,011 97,002 95,714 Amortization of purchased technology � 3,363 �
� 1,955 � � 12,403 � � 9,468 � Total cost of revenues � 31,226 � �
36,331 � � 127,192 � � 130,095 � Gross margin � 211,412 � � 248,489
� � 661,909 � � 749,637 �
Operating expenses: Research and
development (2)(a) 66,572 60,242 260,351 247,870 Marketing and
selling (3) 91,338 87,152 317,473 309,431 General and
administration (4) 23,545 26,038 95,038 97,118 Other general
expense (income), net 245 (294 ) (24 ) (332 ) Amortization of
intangible assets (5) 3,014 2,575 11,113 8,936 Special charges (6)
1,789 4,988 16,888 10,148 Impairment of long-lived assets (7) 4,553
- 4,553 - In-process research and development (8) � - � � - � �
22,075 � � 4,100 � Total operating expenses � 191,056 � � 180,701 �
� 727,467 � � 677,271 �
Operating income (loss) 20,356
67,788 (65,558 ) 72,366 Other income (expense), net (9) (319 )
1,264 4,378 5,225 Interest expense (10) � (4,674 ) � (5,152 ) �
(16,904 ) � (20,264 ) Income (loss) before income tax 15,363 63,900
(78,084 ) 57,327 Income tax expense (benefit) (11)(a) (16,174 )
29,006 10,850 28,556 Minority interest in net loss of subsidiary �
- � � - � � (132 ) � - � Net income (loss) $ 31,537 � $ 34,894 � $
(88,802 ) $ 28,771 � Net income (loss) per share: Basic $ 0.34 � $
0.39 � $ (0.97 ) $ 0.33 � Diluted $ 0.33 � $ 0.38 � $ (0.97 ) $
0.32 � Weighted average number of shares outstanding: Basic �
92,859 � � 89,978 � � 91,829 � � 88,086 � Diluted � 94,452 � �
92,490 � � 91,829 � � 89,981 � � Refer to following page for a
description of footnotes. � � (a) For the January 31, 2008
presentation, the research and development credit was reclassified
from Income tax expense (benefit) to Research and development. The
reclassifications were made for consistency in presentation with
the current year.
MENTOR GRAPHICS CORPORATION
FOOTNOTES TO UNAUDITED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands) � � � � � � Listed below are the items included in
net income that management excludes in computing the non-GAAP
financial measures referred to in the text of this press release.
Items are further described under "Discussion of Non-GAAP Financial
Measures". � � �
Three Months Ended January 31, Twelve
Months Ended January 31, 2009 2008 2009
2008 (1) Cost of revenues: Equity plan-related
compensation $ 442 $ 322 $ 1,544 $ 964 Prepaid royalty costs - -
103 - Amortization of purchased intangible assets � 3,363 � � 1,955
� 12,403 � 9,468 $ 3,805 � $ 2,277 $ 14,050 $ 10,432 �
(2)
Research and development: Equity plan-related compensation $
3,175 � $ 2,702 $ 12,005 $ 7,881 �
(3) Marketing and
selling: Equity plan-related compensation $ 2,256 � $ 1,847 $
8,627 $ 5,525 �
(4) General and administration: Equity
plan-related compensation $ 1,217 � $ 1,120 $ 6,047 $ 4,107 �
(5) Amortization of intangible assets: Amortization of other
identified intangible assets $ 3,014 � $ 2,575 $ 11,113 $ 8,936 �
(6) Special charges: Rebalance, restructuring, and other
costs $ 1,789 � $ 4,988 $ 16,888 $ 10,148 �
(7) Impairment of
long-lived assets Impairment of long-lived assets $ 4,553 � $ -
$ 4,553 $ - �
(8) In-process research and development
In-process research and development $ - � $ - $ 22,075 $ 4,100 �
(9) Other income (expense), net: Equity in losses of
unconsolidated entities $ 3,832 � $ - $ 4,920 $ - �
(10)
Interest expense: Debt retirement costs $ - � $ 612 $ - $ 1,064
�
(11) Income tax expense (benefit): Income tax effects $
(22,804 ) $ 15,402 $ 7,078 $ 9,938
MENTOR GRAPHICS CORPORATION
UNAUDITED RECONCILIATION OF NON-GAAP
ADJUSTMENTS
(In thousands, except earnings per share data) � � � � �
Three
Months Ended January 31, Twelve Months Ended January 31,
2009 2008 2009 2008 GAAP net income
(loss) $ 31,537 $ 34,894 $ (88,802 ) $ 28,771 Non-GAAP adjustments:
Equity plan-related compensation: (1) Cost of revenues 442 322
1,544 964 Research and development 3,175 2,702 12,005 7,881
Marketing and selling 2,256 1,847 8,627 5,525 General and
administration, and other 1,217 1,120 6,047 4,107 System and
software cost of revenues (2) - - 103 - Acquisition - related
items: Amortization of purchased and other identified intangible
assets Cost of revenues (3) 3,363 1,955 12,403 9,468 Amortization
of intangible assets (4) 3,014 2,575 11,113 8,936 Impairment of
long-lived assets (5) 4,553 - 4,553 - In-process research and
development (6) - - 22,075 4,100 Special charges (7) 1,789 4,988
16,888 10,148 Other income, net (8) 3,832 - 4,920 - Interest
expense (9) - 612 - 1,064 Income tax effects (10) � (22,804 ) �
15,402 � 7,078 � � 9,938 Total of non-GAAP adjustments � 837 � �
31,523 � 107,356 � � 62,131 Non-GAAP net income $ 32,374 � $ 66,417
$ 18,554 � $ 90,902 � GAAP weighted average shares (diluted) 94,452
92,490 91,829 89,981 Non-GAAP adjustment � - � � - � 714 � � -
Non-GAAP weighted average shares (diluted) � 94,452 � � 92,490 �
92,543 � � 89,981 � GAAP net income (loss) per share (diluted) $
0.33 $ 0.38 $ (0.97 ) $ 0.32 Non-GAAP adjustments detailed above �
0.02 � � 0.34 � 1.17 � � 0.69 Non-GAAP net income per share
(diluted) $ 0.35 � $ 0.72 $ 0.20 � $ 1.01 � � � � � � � � � �
(1) Equity plan-related compensation expense recognized in
accordance with SFAS 123R.
(2) Amount represents the
write-off of prepaid royalty amounts associated with the closure of
our Intellectual Property division.
(3) Amount represents
amortization of purchased intangible assets resulting from
acquisitions. Purchased intangible assets are amortized over two to
five years.
(4) Other identified intangible assets are
amortized to other operating expense over two to five years. Other
identified intangible assets include trade names, employment
agreements, customer relationships and deferred compensation which
are the result of acquisition transactions.
(5) Amount
represents the write-off of fixed assets and purchased technology
associated with our emulation division.
(6)
Twelve months ended January 31,
2009: $8,090 for in-process research and development related to the
Ponte and Flomerics acquisitions. $13,985 related to the
acquisition of technology from IBM which has not yet reached
technological feasibility and provided no alternative future uses.
The technology is expected to be the basis for a new offering in
the Calibre product family once development is completed.
Twelve months ended January 31, 2008: $4,100 for in-process
research and development related to the Sierra acquisition.
(7) Three months ended January 31, 2009: Special charges
consist of (i) $1,190 in advisory fees and (ii) $599 of costs
incurred for employee rebalances which includes severance benefits,
notice pay and outplacement services. Three months ended January
31, 2008: Special charges consist of (i) $3,878 of costs incurred
for employee rebalances which includes severance benefits, notice
pay and outplacement services, (ii) $952 for the abandonment of an
information technology project, (iii) $230 for the true-up of lease
costs on a previously abandoned facility, and (iv) $(72) in other
adjustments. Twelve months ended January 31, 2009: Special charges
consist of (i) $9,793 of costs incurred for employee rebalances
which includes severance benefits, notice pay and outplacement
services, (ii) $3,345 incurred in response to the unsolicited bid
by Cadence Design Systems, Inc., (iii) $2,547 related to the
abandonment of excess leased facility space, (iv) $1,190 in
advisory fees, and (v) $13 in fixed asset write-offs related to the
closure of our Intellectual Property division.
Twelve months ended January 31,
2008: Special charges consist of (i) $9,676 of costs incurred for
employee rebalances which includes severance benefits, notice pay
and outplacement services, (ii) $952 for the abandonment of an
information technology project, (iii) $230 for the true-up of lease
costs on a previously abandoned facility, (iv) $100 for a wind-up
services agreement related to the liquidation of a subsidiary, (v)
$(721) related to reoccupation of a previously abandoned facility,
and (vi) $(89) in other adjustments.
(8) Three months ended January 31, 2009: Equity losses of
Calypto Design Systems was $344. We recorded an impairment of
$3,488 for investments accounted for under the cost method. Twelve
months ended January 31, 2009: Equity losses of Calypto Design
Systems was $1,432. We recorded an impairment of $3,488 for
investments accounted for under the cost method.
(9)
Discounts, premiums, and unamortized debt costs related to the
redemption of convertible debt.
(10) Non-GAAP income tax
expense adjustment reflects the application of our assumed
normalized effective 17% tax rate, instead of our GAAP tax rate, to
our GAAP pre-tax income and the application of the 17% tax rate to
our non-GAAP adjustments.
MENTOR GRAPHICS CORPORATION
UNAUDITED RECONCILIATION OF GAAP FINANCIAL
MEASURES TO NON-GAAP FINANCIAL MEASURES
(In thousands, except
percentages)
� � � � � �
Three Months Ended January 31, Twelve Months
Ended January 31, 2009 2008 2009
2008 GAAP gross margin $ 211,412 $ 248,489 $ 661,909 $
749,637 Reconciling items to non-GAAP gross margin Equity
plan-related compensation 442 322 1,544 964 Prepaid royalty costs -
- 103 - Amortization of purchased intangible assets � 3,363 � �
1,955 � � 12,403 � � 9,468 � Non-GAAP gross margin $ 215,217 � $
250,766 � $ 675,959 � $ 760,069 � � � �
Three Months Ended
January 31, �
Twelve Months Ended January 31,
2009 2008 2009 2008 GAAP gross margin
as a percent of total revenues 87 % 87 % 84 % 85 % Non-GAAP
adjustments detailed above � 2 % � 1 % � 2 % � 1 % Non-GAAP gross
margin as a percent of total revenues � 89 % � 88 % � 86 % � 86 % �
� �
Three Months Ended January 31, Twelve Months Ended
January 31, 2009 2008 2009 2008
GAAP operating expenses $ 191,056 $ 180,701 $ 727,467 $ 677,271
Reconciling items to non-GAAP operating expenses Equity
plan-related compensation (6,648 ) (5,669 ) (26,679 ) (17,513 )
Amortization of other identified intangible assets (3,014 ) (2,575
) (11,113 ) (8,936 ) Rebalance, restructuring and other costs
(1,789 ) (4,988 ) (16,888 ) (10,148 ) Impairment of long-lived
assets (4,553 ) - (4,553 ) - In-process research and development �
- � � - � � (22,075 ) � (4,100 ) Non-GAAP operating expenses $
175,052 � $ 167,469 � $ 646,159 � $ 636,574 � � � �
Three Months
Ended January 31, Twelve Months Ended January 31,
2009 2008 2009 2008 GAAP operating
income (loss) $ 20,356 $ 67,788 $ (65,558 ) $ 72,366 Reconciling
items to non-GAAP operating income Equity plan-related compensation
7,090 5,991 28,223 18,477 Prepaid royalty costs - - 103 -
Amortization of purchased and other identified intangible assets:
Cost of revenues 3,363 1,955 12,403 9,468 Amortization of
intangible assets 3,014 2,575 11,113 8,936 Rebalance, restructuring
and other costs 1,789 4,988 16,888 10,148 Impairment of long-lived
assets 4,553 - 4,553 - In-process research and development � - � �
- � � 22,075 � � 4,100 � Non-GAAP operating income $ 40,165 � $
83,297 � $ 29,800 � $ 123,495 � � � �
Three Months Ended January
31, �
Twelve Months Ended January 31, 2009
2008 2009 2008 GAAP operating margin as a
percent of total revenues 8 % 24 % -8 % 8 % Non-GAAP adjustments
detailed above � 9 % � 5 % � 12 % � 6 % Non-GAAP operating margin
as a percent of total revenues � 17 % � 29 % � 4 % � 14 % � � �
Three Months Ended January 31, Twelve Months Ended
January 31, 2009 2008 2009 2008
GAAP other income, net and interest expense $ (4,993 ) $ (3,888 ) $
(12,526 ) $ (15,039 ) Reconciling items to non-GAAP other income,
net and interest expense Equity in losses of unconsolidated
entities 344 - 1,432 - Impairment of cost method investments 3,488
- 3,488 - Debt retirement costs � - � � 612 � � - � � 1,064 �
Non-GAAP other income, net and interest expense $ (1,161 ) $ (3,276
) $ (7,606 ) $ (13,975 ) �
MENTOR GRAPHICS CORPORATION
UNAUDITED CONSOLIDATED BALANCE
SHEETS
(In thousands) � �
As of January 31, �
2009 � �
2008 Assets Current assets: Cash, cash
equivalents, and short-term investments $ 95,639 $ 126,215 Trade
accounts receivable, net 133,719 175,564 Term receivables,
short-term 139,133 157,077 Prepaid expenses and other 39,236 38,051
Deferred income taxes � 10,163 � � 9,574 �
Total current assets
417,890 506,481
Property, plant, and equipment, net 100,991
100,421
Term receivables, long-term 146,682 134,059
Goodwill and intangible assets, net 480,956 451,881
Other
assets � 39,918 � � 45,271 � Total assets $ 1,186,437 � $
1,238,113 �
Liabilities and Stockholders' Equity Current
liabilities: Short-term borrowings $ 36,998 $ 14,178 Accounts
payable 10,197 23,634 Income taxes payable 5,340 6,675 Accrued
payroll and related liabilities 65,687 78,948 Accrued liabilities
46,034 41,053 Deferred revenue � 155,098 � � 154,821 � Total
current liabilities 319,354 319,309
Long-term notes payable
201,102 201,102
Deferred revenue, long-term 16,890 18,977
Other long-term liabilities � 75,211 � � 59,558 Total
liabilities � 612,557 � � 598,946 �
Stockholders' equity:
Common stock 580,298 531,153 Retained earnings (17,652 ) 71,150
Accumulated other comprehensive income � 11,234 � � 36,864 Total
stockholders' equity � 573,880 � � 639,167 � Total liabilities and
stockholders' equity $ 1,186,437 � $ 1,238,113 �
MENTOR GRAPHICS CORPORATION
UNAUDITED SUPPLEMENTAL BOOKINGS AND REVENUE
INFORMATION
(Rounded to nearest 5%) � � � � � � � � � � � � � � �
Fiscal
year ended January 31, 2009 Fiscal year ended January 31,
2008 Fiscal year ended December 31, 2006 Product
Group Bookings (a) Q1 �
Q2 �
Q3 �
Q4 �
YEAR Q1 �
Q2 �
Q3 �
Q4 �
YEAR Q1 �
Q2 �
Q3 �
Q4 �
YEAR Integrated Systems Design 15 % 20 % 25 % 15
%
20 % 15 % 20 % 20 % 15 %
20 % 10 % 15
% 20 % 20 %
20 % IC Design to Silicon 40 % 30 % 30 %
40 %
35 % 40 % 35 % 30 % 40 %
35 % 50 %
40 % 35 % 25 %
35 % Scalable Verification 20 % 20 %
20 % 30 %
20 % 20 % 25 % 20 % 20 %
25 %
20 % 25 % 25 % 30 %
25 % New & Emerging Products
10 % 20 % 15 % 10 %
15 % 15 % 15 % 20 % 20 %
15 % 10 % 15 % 15 % 20 %
15 % Services
& Other (b) 15 % � 10 % � 10 % � 5 % �
10 % 10 %
� 5 % � 10 % � 5 % �
5 % 10 % � 5 % � 5 % � 5 % �
5 % Total 100 % �
100
% �
100 % �
100 % �
100
% 100 % �
100 % �
100
% �
100 % �
100 % 100
% �
100 % �
100 % �
100
% �
100 % �
Fiscal year ended January 31,
2009 Fiscal year ended January 31, 2008 Fiscal year
ended December 31, 2006 Product Group Revenues (b)
Q1 �
Q2 �
Q3 �
Q4 �
YEAR
Q1 �
Q2 �
Q3 �
Q4 �
YEAR
Q1 �
Q2 �
Q3 �
Q4 �
YEAR
Integrated Systems Design 20 % 20 % 25 % 20 %
20 % 20
% 20 % 25 % 20 %
20 % 25 % 20 % 25 % 25 %
25
% IC Design to Silicon 40 % 30 % 30 % 35 %
35
% 40 % 40 % 25 % 30 %
35 % 35 % 30 % 30 % 25 %
30 % Scalable Verification 20 % 25 % 25 % 30 %
25 % 20 % 20 % 25 % 30 %
25 % 20 % 25 %
30 % 30 %
25 % New & Emerging Products 10 % 15 %
10 % 10 %
10 % 10 % 15 % 15 % 15 %
15 %
10 % 15 % 10 % 15 %
15 % Services & Other (b) 10
% � 10 % � 10 % � 5 % �
10 % 10 % � 5 % � 10 % � 5 %
�
5 % 10 % � 10 % � 5 % � 5 % �
5 %
Total 100 % �
100 % �
100
% �
100 % �
100 % 100
% �
100 % �
100 % �
100
% �
100 % 100 % �
100
% �
100 % �
100 % �
100
% �
Fiscal year ended January 31, 2009 Fiscal year
ended January 31, 2008 Fiscal year ended December 31,
2006 Bookings by Geography Q1 �
Q2 �
Q3 �
Q4 �
YEAR Q1 �
Q2 �
Q3 �
Q4 �
YEAR Q1 �
Q2 �
Q3 �
Q4 �
YEAR North America 40 % 30 % 40 % 35
%
35 % 50 % 40 % 45 % 30 %
40 % 30 % 50
% 40 % 65 %
50 % Europe 35 % 35 % 35 % 35 %
35
% 25 % 30 % 15 % 30 %
25 % 30 % 20 % 20 % 20 %
25 % Japan 15 % 20 % 10 % 5 %
15 % 10 %
10 % 20 % 20 %
15 % 25 % 10 % 20 % 5 %
10
% Pac Rim 10 % � 15 % � 15 % � 25 % �
15 % 15
% � 20 % � 20 % � 20 % �
20 % 15 % � 20 % � 20 % � 10
% �
15 % Total 100 % �
100 % �
100 % �
100 % �
100 % 100 % �
100 % �
100 % �
100 % �
100 %
100 % �
100 % �
100 % �
100 % �
100 % �
Fiscal year ended
January 31, 2009 Fiscal year ended January 31, 2008
Fiscal year ended December 31, 2006 Revenue by
Geography Q1 �
Q2 �
Q3 �
Q4 �
YEAR Q1 �
Q2 �
Q3 �
Q4 �
YEAR Q1 �
Q2 �
Q3 �
Q4 �
YEAR North America 40 % 35 % 40 % 40 %
40 % 50
% 55 % 40 % 40 %
45 % 35 % 45 % 45 % 55 %
45
% Europe 30 % 30 % 35 % 35 %
30 % 25 % 20 % 25
% 30 %
25 % 30 % 20 % 25 % 25 %
25 %
Japan 20 % 20 % 10 % 10 %
15 % 15 % 10 % 20 % 15 %
15 % 20 % 15 % 20 % 10 %
15 % Pac Rim
10 % � 15 % � 15 % � 15 % �
15 % 10 % � 15 % � 15 % �
15 % �
15 % 15 % � 20 % � 10 % � 10 % �
15
% Total 100 % �
100 % �
100 % �
100 % �
100 %
100 % �
100 % �
100 % �
100 % �
100 % 100 % �
100 % �
100 % �
100 % �
100 % �
Fiscal year ended January 31, 2009
Fiscal year ended January 31, 2008 Fiscal year ended
December 31, 2006 Bookings by Business Model (c)
Q1 �
Q2 �
Q3 �
Q4 �
YEAR
Q1 �
Q2 �
Q3 �
Q4 �
YEAR
Q1 �
Q2 �
Q3 �
Q4 �
YEAR
Perpetual 20 % 20 % 20 % 10 %
15 % 30 % 25 % 30 % 10
%
20 % 30 % 30 % 25 % 20 %
25 % Ratable
25 % 20 % 15 % 10 %
15 % 20 % 20 % 10 % 10 %
15 % 25 % 20 % 10 % 10 %
15 % Up Front
55 % � 60 % � 65 % � 80 % �
70 % 50 % � 55 % � 60 % �
80 % �
65 % 45 % � 50 % � 65 % � 70 % �
60
% Total 100 % �
100 % �
100 % �
100 % �
100 %
100 % �
100 % �
100 % �
100 % �
100 % 100 % �
100 % �
100 % �
100 % �
100 % �
Fiscal year ended January 31, 2009
Fiscal year ended January 31, 2008 Fiscal year ended
December 31, 2006
Revenues by Business Model
(c)
Q1 �
Q2 �
Q3 �
Q4 �
YEAR
Q1 �
Q2 �
Q3 �
Q4 �
YEAR
Q1 �
Q2 �
Q3 �
Q4 �
YEAR
Perpetual 20 % 20 % 20 % 10 %
15 % 25 % 20 % 20 % 15
%
20 % 30 % 30 % 20 % 25 %
25 % Ratable
20 % 20 % 20 % 10 %
15 % 15 % 15 % 20 % 10 %
15 % 15 % 15 % 15 % 10 %
15 % Up Front
60 % � 60 % � 60 % � 80 % �
70 % 60 % � 65 % � 60 % �
75 % �
65 % 55 % � 55 % � 65 % � 65 % �
60
% Total 100 % �
100 % �
100 % �
100 % �
100 %
100 % �
100 % �
100 % �
100 % �
100 % 100 % �
100 % �
100 % �
100 % �
100 % � (a) Product Group Bookings excludes support
bookings for all sub-flow categories. � (b) Product Group Revenues
includes support revenue for each sub-flow category as appropriate.
� (c) Bookings and Revenues by Business Model are System and
Software only. �
MENTOR GRAPHICS CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF CASH
FLOWS AND SUPPLEMENTAL INFORMATION
(In thousands, except days sales outstanding) � � � �
Three
Months Ended January 31, �
Twelve Months Ended January
31, �
2009 � �
2008 � �
2009 � �
2008 �
Operating activities Net income (loss) $
31,537 $ 34,894 $ (88,802 ) $ 28,771
Depreciation and
amortization(1)
15,095 13,462 57,604 49,615 Other adjustments to reconcile:
Operating cash 5,558 20,590 54,090 34,524 Changes in working
capital � (35,381 ) � (9,490 ) � (1,014 ) � (33,295 ) � Net cash
provided by operating activities 16,809 59,456 21,878 79,615 �
Investing activities Net cash used in investing activities
(8,064 ) (3,895 ) (90,078 ) (42,201 ) �
Financing activities
Net cash provided by (used in) financing activities 5,178 (22,242 )
45,304 (17,339 ) � Effect of exchange rate changes on cash and cash
equivalents � 2,126 � � 1,247 � � (1,388 ) � 2,619 � � Net change
in cash and cash equivalents 16,049 34,566 (24,284 ) 22,694 Cash
and cash equivalents at beginning of period � 77,593 � � 83,360 � �
117,926 � � 95,232 � � Cash and cash equivalents at end of period $
93,642 � $ 117,926 � $ 93,642 � $ 117,926 � �
(1) Depreciation and
amortization includes a write-off of note issuance costs in the
amount of $861 for the three months ended January 31, 2008 and
$1,042 for the year ended January 31, 2008.
�
Other data: Capital expenditures $ 6,552 � $ 8,615 � $
40,402 � $ 37,923 � Days sales outstanding � 101 � � 105 � � - � �
- � �
MENTOR GRAPHICS CORPORATION
UNAUDITED RECLASSIFICATION OF RESEARCH &
DEVELOPMENT CREDIT
(In thousands) � � � � �
Quarter Ended Year-to-Date
Fiscal year ended January 31, 2008 April 30, 2007
July 31, 2007 October 31, 2007 January 31,
2008 January 31, 2008 � Research and development expense
prior to reclassification $ 59,190 $ 65,468 $ 64,034 $ 60,577 $
249,269 Research credit � (331 ) � (405 ) � (328 ) � (335 ) �
(1,399 ) Research and development expense after reclassification $
58,859 � $ 65,063 � $ 63,706 � $ 60,242 � $ 247,870 � � Income tax
expense (benefit) prior to reclassification $ 762
$
1,034
$ (2,480 ) $ 27,841 $ 27,157 Research credit � 129 � � 131 � � (26
) � 1,165 � � 1,399 � Income tax expense (benefit) after
reclassification $ 891 � $ 1,165 � $ (2,506 ) $ 29,006 � $ 28,556 �
�
MENTOR GRAPHICS CORPORATION
UNAUDITED RECONCILIATION OF GAAP TO
NON-GAAP
EARNINGS PER SHARE GUIDANCE
� � The following table reconciles management's estimates of the
specific items excluded from GAAP in the calculation of expected
non-GAAP earnings per share for the periods shown below: �
Q1
FY10 Diluted GAAP net loss per share ($0.13) - ($0.08) Non-GAAP
Adjustments:
Amortization of purchased
intangible assets (1)
0.03
Amortization of other identified
intangible assets (2)
0.04
Equity plan-related compensation
(3)
0.09
Special charges (4)
0.00
Income tax effects (5)
0.02 Non-GAAP net income per share $0.05 - $0.10 � � � � �
(1) Excludes amortization of purchased intangible assets
resulting from acquisition transactions. Purchased intangible
assets are amortized over two to five years. The guidance for Q1
fiscal year 2010 (FY10) assumes no additional acquisitions. �
(2) Excludes amortization of other identified intangible
assets including trade names, employment agreements and customer
relationships resulting from acquisition transactions. Other
identified intangible assets are amortized over two to five years.
The guidance for Q1 FY10 assumes no additional acquisitions. �
(3) Excludes equity plan-related compensation expense
recognized in accordance with SFAS 123R, Share-Based Payment. �
(4) Excludes special charges consisting primarily of costs
incurred for facility closures and employee rebalances, which
includes severance benefits, notice pay, and outplacement services.
The guidance for Q1 FY10 assumes no special charges. �
(5)
Non-GAAP income tax expense adjustment reflects the application of
our assumed normalized effective 17% tax rate, instead of our GAAP
tax rate, to our GAAP pre-tax income and the application of the 17%
tax rate to our non-GAAP adjustments.
Mentor Graphics Corp. (NASDAQ:MENT)
과거 데이터 주식 차트
부터 6월(6) 2024 으로 7월(7) 2024
Mentor Graphics Corp. (NASDAQ:MENT)
과거 데이터 주식 차트
부터 7월(7) 2023 으로 7월(7) 2024