Mentor Graphics Releases Guidance
WILSONVILLE, Ore.—(BUSINESS WIRE)—July 22, 2004—
Mentor Graphics Corporation (Nasdaq:MENT) expects
revenue in the third quarter to range between $165 million and $170
million. Pro forma earnings per share are expected to range between
$.05 and $.10, while GAAP earnings per share are expected to range
between $.01 and $.06. Fourth quarter guidance remains unchanged as
does Mentor's $.80 pro forma earnings per share forecast for the
entire year. GAAP earnings per share are expected to be $.09 for the
entire year.
For 2005, preliminarily Mentor expects to report pro forma
earnings of about $1.00 on revenue growth in the range of 6 to 8%.
2005 GAAP earnings per share are expected to be $.84 for the entire
year.
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
$675 million and employs approximately 3,800 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: http://www.mentor.com/.
In the calculation of pro forma earnings, gross margin and
operating expenses, 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, as
well as income tax expense in excess of a normalized 17% effective tax
rate. These excluded items are generally infrequent, less predictable
and are often non-cash in nature. 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.
These pro forma measures should be assessed in conjunction with
GAAP earnings measures for a more complete understanding of the
Company's results. Since pro forma measures exclude certain items,
differences in earnings from GAAP can be significant; Mentor Graphics
management evaluates its performance under both measures for a
complete understanding of its results. Investors are encouraged to
review both measures for their evaluations and consider the GAAP
earnings measures as the most complete measure of Mentor Graphics'
overall performance.
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 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;
(ii) the Company's ability to successfully integrate and manage its
recent and future acquisitions, (iii) changes in accounting or
reporting rules or interpretations, limitations on repatriation of
earnings, licensing and intellectual property rights protection; (iv)
changes in tax laws, regulations or enforcement practices in the
jurisdictions where the Company does business; (v) effects of the
increasing volatility of foreign currency fluctuations on the
Company's business and operating results; (vi) 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 and (vii) 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 July 22, 2004
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
Q3 2004 Q3 2004
GAAP Adjustments Pro Forma
------------------------- --------------
Revenue $ 165 - $ 170 - $ 165 - $ 170
Diluted earnings per share $ 0.01 - $ 0.06 $ 0.04 (a) $ 0.05 - $ 0.10
(a) GAAP to Pro Forma adjustments include amortization of intangibles,
the tax effect on these adjustments and differences between GAAP
and Pro Forma tax rates.
2004 2004
GAAP Adjustments Pro Forma
------------------------- --------------
Diluted earnings per share $ 0.09 $ 0.71 (b) $ 0.80
(b) GAAP to Pro Forma adjustments include amortization of intangibles,
special charges, the tax effect on these adjustments, and
differences between GAAP and Pro Forma tax rates.
2005 2005
GAAP Adjustments Pro Forma
------------------------- --------------
Diluted earnings per share $ 0.84 $ 0.16 (c) $ 1.00
(c) GAAP to Pro Forma adjustments include amortization of intangibles
and the tax effect on these adjustments
Contact:
Mentor Graphics Corporation
Ryerson Schwark, 503-685-1462
ry_schwark@mentor.com
or
Dennis Weldon, 503-685-1462
dennis_weldon@mentor.com
