Mentor Graphics Reports Revenues of
$155 Million; Earnings per Share of $.30 for Fourth
Quarter 1999 as Orders and Backlog Reach Record Levels
WILSONVILLE, Ore., Jan. 31 /PRNewswire/ -- Mentor Graphics Corporation (Nasdaq:
MENT - news) today announced revenues for the fourth quarter of 1999 of $155 million.
Earnings-per-diluted-share were $.30, before special charges and a $.02 operating loss
incurred by VeriBest©, a company acquired in November of 1999. Earnings-per-share grew
over 40% compared to the fourth quarter of 1998 when Mentor Graphics© reported earnings,
before special charges, of $.21 on revenues of $145 million.
``We performed well, with strong order growth in our core businesses this quarter. Orders for
system-on-chip verification tools doubled year over year, and printed circuit board system
design tools, FPGA design tools, and physical verification and analysis tools all had strong
double-digit growth,' said Walden C. Rhines, president and CEO of Mentor Graphics. ``We set
new records for revenue and operating earnings before special charges, and built strong
momentum as we enter the year 2000. Encouragingly, the strength we saw in the business was
across all regions and all major product lines. We're looking forward to accelerating growth
this year.'
Mentor Graphics also built record backlog for the quarter. Software backlog was up 30% over
the year ago quarter paced by product order growth for the quarter which was up over 20%.
Gross margin hit 80% for the first time in company history. Special charges of $17 million for
the quarter related principally to the acquisition and integration of VeriBest. Earnings, after
charges, were $.08 per-diluted-share.
``Our HDL division came back strongly in the fourth quarter, as our channel re-alignment
earlier in the year began to pay off with increased sales of our FPGA Advantage(TM) suite,'
said Gregory K. Hinckley, CFO and COO of Mentor Graphics. ``Additionally, the integration
of our acquisition of VeriBest has proceeded well. We're seeing strong interest from customers
for the superior printed circuit board solutions that result from combining our market leading
board system design solutions with complementary technology gained in the VeriBest
acquisition. The quarter beat our own expectations, and we're excited with our prospects in
2000.'
Mentor Graphics Corporation is a world leader in electronic hardware and software design
solutions, providing products and consulting services for the world's largest electronics and
semiconductor companies. Established in 1981, the company reported revenues over the last 12
months of over $500 million and employs approximately 2,700 people worldwide. Company
headquarters are located at 8005 S.W. Boeckman Road, Wilsonville, Oregon 97070-7777.
World Wide Web site: mentor.com.
FPGA Advantage is a trademark of Mentor Graphics Corporation. Certain statements contained
in the press release 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) effects of the increasing volatility of foreign currency fluctuations on the
Company's business and operating results; (iii) the overall instability of Asian or other
economies, including changes in regional or worldwide economic or political conditions,
government trade restrictions, limitations on repatriation of earnings, licensing and intellectual
property rights protection; (iv) the timing of completion of customer contracts and the terms of
delivery of software, hardware and other services and (v) the Company's ability to recruit and
retain necessary personnel to research and develop, market, sell and service products. Given
these uncertainties, prospective investors are cautioned not to place undue reliance on such
forward-looking statements. 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
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
(Unaudited)
1999 1998 1999 1998
Revenues:
System and software $96,704 $90,998 $295,325 $277,396
Service and support 58,269 54,337 215,809 212,997
Total revenues 154,973 145,335 511,134 490,393
Cost of revenues:
System and software 8,795 6,063 29,726 26,536
Service and support 22,580 24,244 88,328 96,961
Total cost of
revenues 31,375 30,307 118,054 123,497
Gross margin 123,598 115,028 393,080 366,896
Operating expenses:
Research and
development 32,464 31,218 118,848 117,853
Marketing and
selling 51,356 51,776 172,622 169,034
General and
administration 12,637 13,023 47,134 45,825
Special charges 16,765 19,135 38,596 29,442
Total operating
expenses 113,222 115,152 377,200 362,154
Operating income (loss) 10,376 (124) 15,880 4,742
Other loss, net 3,891 1,205 13,011 4,721
Income (loss) before
income taxes 6,485 (1,329) 2,869 21
Income tax expense 1,430 243 635 540
Net income (loss) $5,055 $(1,572) $2,234 $(519)
Net income (loss) per share:
Basic $.08 $(.02) $.03 $(.01)
Diluted $.08 $(.02) $.03 $(.01)
Weighted average number of
shares outstanding:
Basic 64,181 65,667 65,629 65,165
Diluted 64,827 65,667 66,324 65,165
MENTOR GRAPHICS CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
As of As of
Dec 31, 1999 Dec 31, 1998
Assets
Current assets:
Cash and short-term
investments $133,187 $137,585
Trade accounts
receivable, net 71,042 90,597
Term receivables,
short-term 54,375 44,362
Other receivables 6,440 7,575
Prepaid expenses and other 14,921 23,503
Deferred income taxes 10,954 10,937
Total current assets 290,919 314,559
Property, plant and
equipment, net 83,970 95,214
Term receivables, long-term 31,695 27,315
Other assets, net 42,755 27,035
Total assets $449,339 $464,123
Liabilities and Stockholders' Equity
Current liabilities:
Short-term borrowings $-- $24,000
Accounts payable 9,979 10,101
Income taxes payable 22,599 20,408
Accrued payroll and
related liabilities 41,628 41,958
Accrued liabilities 37,085 33,295
Deferred revenue 46,425 36,484
Total current
liabilities 157,716 166,246
Other long-term deferrals 1,221 1,425
Total liabilities 158,937 167,671
Minority interest 1,622 1,170
Stockholders' equity:
Common stock 289,478 303,352
Accumulated deficit (20,362) (22,246)
Accumulated other
comprehensive income 19,664 14,176
Total stockholders'
equity 288,780 295,282
Total liabilities and
stockholders' equity $449,339 $464,123
CONTACT: Ryerson Schwark, Public and Investor Relations, ry_schwark@mentor.com, or
Dennis Weldon, Treasurer, dennis_weldon@mentor.com, both of Mentor Graphics
Corporation, 503-685-1462.
SOURCE: Mentor Graphics Corporation |
