Mentor Graphics Releases 2005 Guidance
WILSONVILLE, Ore.—(BUSINESS WIRE)—Jan. 27, 2005—
Mentor Graphics Corporation (Nasdaq:MENT) today released
the company's detailed 2005 earnings guidance which remains in-line
with previously given guidance for 2005.
For the first quarter, the company expects revenue of
approximately $177 million and pro forma earnings per share between
$.05 and $.10. First quarter GAAP earnings per share are expected to
be in the range of $.01 and $.06. Both the second and third quarters
are expected to have revenue of about $180 million, pro forma earnings
per share of $.10, and GAAP earnings per share of $.06. For the fourth
quarter, revenue should be approximately $223 million, pro forma
earnings per share of about $.50, and GAAP earnings per share of $.46.
For the full year 2005, guidance remains consistent with previous
guidance. The company expects revenue of about $760 million, a 7%
growth from 2004, within the previously guided range of 6% to 8%.
Anticipated pro forma earnings per share are expected to range between
$.75 and $.80, unchanged from previous guidance, while GAAP earnings
per share are expected to range between $.60 and $.65.
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 over
$700 million and employs approximately 3,850 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 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) the Company's ability to successfully offer products
and services that compete in the highly competitive 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 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 where the
Company does business; (v) effects of the increasing volatility of
foreign currency fluctuations on the Company's business and operating
results; (vi) 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 January 27, 2005
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
Q1 2005 Q1 2005
GAAP Adjustments Pro Forma
-------------- ----------- --------------
Revenue $177 - $177
Diluted earnings per share $0.01-$0.06 $0.04 (a) $0.05-$0.10
Q2 2005 Q2 2005
GAAP Adjustments Pro Forma
-------------- ----------- --------------
Revenue $180 - $180
Diluted earnings per share $0.06 $0.04 (a) $0.10
Q3 2005 Q3 2005
GAAP Adjustments Pro Forma
-------------- ----------- --------------
Revenue $180 - $180
Diluted earnings per share $0.06 $0.04 (a) $0.10
Q4 2005 Q4 2005
GAAP Adjustments Pro Forma
-------------- ----------- --------------
Revenue $223 - $223
Diluted earnings per share $0.46 $0.04 (a) $0.50
2005 2005
GAAP Adjustments Pro Forma
-------------- ----------- --------------
Revenue $760 - $760
Diluted earnings per share $0.60 - $0.65 $0.15 (a) $0.75 - $0.80
(a) 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
Dennis Weldon, 503-685-1462, dennis_weldon@mentor.com
