Mentor Graphics Provides Outlook
WILSONVILLE, Ore.--(BUSINESS WIRE)--April 24, 2003--Mentor
Graphics Corporation (Nasdaq:MENT) today provided the outlook for the
second quarter and balance of 2003.
For second quarter 2003, Mentor expects revenues between $156 and
$162 million and earnings of between $0.06 and $0.11 per share, before
amortization of acquired intangibles and special charges. GAAP
earnings are expected to be $0.02 to $0.07 per share. Gross margin
excluding amortization of acquired intangibles is expected to be
approximately 84 percent, while gross margin on a GAAP basis is
expected to be in the range of 82 to 83 percent. Operating expense
excluding amortization of acquired intangibles should be approximately
$123 million, up 2 percent sequentially. Operating expense on a GAAP
basis is expected to be about $124 million. OI&E will be about a $3
million expense. The tax rate should remain at 20 percent and diluted
shares outstanding are expected to be 69 million.
For 2003, full-year guidance remains unchanged, with revenues of
$665 million, earnings before amortization of acquired intangibles and
special charges of $.55 per share and GAAP earnings of $.39 per share.
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
$600 million and employs approximately 3,500 people worldwide.
Corporate headquarters are located at 8005 S.W. Boeckman Road,
Wilsonville, Oregon 97070-7777; Silicon Valley headquarters are
located at 1001 Ridder Park Drive, San Jose, California 95131-2314.
World Wide Web site: www.mentor.com.
In the calculation of earnings, gross margin and operating
expenses before amortization of acquired intangibles and special
charges, Mentor Graphics excludes amortization of acquired intangibles
and write-offs of in-process R&D from acquisitions. Also excluded are
non-operating and non-recurring items classified as special charges
such as restructure expenses and asset impairments. Mentor Graphics
believes that excluding these items provides investors with a
representation of its core performance, and a pro forma base line for
assessing the future earnings potential of Mentor Graphics.
Mentor Graphics is a registered trademark 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 outlook
for future periods constitute "forward-looking" statements 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) the Company's
ability to continue selling products and services during the
continuing severe slowdown in the electronics industry, particularly
in the telecommunications, semiconductor and personal computer
segments; (ii) the Company's ability to manage expenses during the
current very severe slowdown in the electronics industry; (iii) the
overall instability of diverse economies, including changes in
regional or worldwide economic or political conditions, government
trade restrictions, or war in the Middle East or elsewhere (iv)
changes in accounting or reporting rules or interpretations, changes
in the tax environment worldwide, limitations on repatriation of
earnings, licensing and intellectual property rights protection; (v)
the Company's ability to successfully integrate and manage its recent
and future acquisitions; (vi) the completion of customer contracts and
the terms of delivery of software, hardware and other services; (vii)
the Company's ability to successfully offer products and services that
compete in the highly competitive and dynamic EDA industry including
the risk that the Company's technology, products or inventory become
obsolete; (viii) effects of the increasing volatility of foreign
currency fluctuations on the Company's business and operating results,
and (ix) effects of unanticipated shifts in product mix on gross
margin and unanticipated shifts in geographic mix on the overall tax
rate, all as may be discussed in more detail under the heading
"Factors That May Affect Future Results and Financial Condition" 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 outlook 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
As of April 24, 2003
Reconciliation of Forward Looking Diluted Net Income
per Share Between GAAP
and Earnings Before Amortization of Acquired Intangibles
and Special Charges
(Unaudited)
$ in Millions except per share data
Q2 2003 Q2 2003
GAAP Adjustments Pro Forma
--------------------------------------------
Revenue $156 to $162 - $156 to $162
Gross margin 82% to 83% $2 (a) 84%
Operating expense $124 $1 (b) $123
Other income & expense ($3) - ($3)
Per share impact of
adjustments $0.05
Per share tax effect of
reconciling items ($0.01)
-------
Diluted earnings
per share $0.02 to $0.07 $0.04 $0.06 to $0.11
2003 2003
GAAP Adjustments Pro Forma
--------------------------------------------
Revenue $665 - $665
Gross margin 83% $9 (a) 84%
Operating expense $504 $4 (b) $499
Special charges $1 $1 (c) -
Other income & expense ($11) - ($11)
Per share impact of
adjustments $0.20
Per share tax effect of
reconciling items ($0.04)
-------
Diluted earnings per share $0.39 $0.16 $0.55
(a) Amortization of purchased technology (in cost of revenues)
(b) Amortization of intangible assets (in operating expense)
(c) Special charges may occur in future periods but amounts and
timing are unknown and therefore are not forecasted.
CONTACT: Mentor Graphics Corporation
Ry Schwark, 503/685-1462 (Investor Relations)
ry_schwark@mentor.com
Dennis Weldon, 503/685-1462 (Treasurer)
dennis_weldon@mentor.com
