Mentor Graphics Announces Revenues of $123M; Product

Revenue Growth Rate Hits 25% - WITH PHOTO - Wilsonville, Ore. (PROTEXT) - Mentor Graphics Corporation (Nasdaq: MENT) today announced first quarter revenue was $123 million, up 13.5% from the first quarter of 1998, and earnings-per-share was $.07, before special charges. The product growth rate year-over-year for the quarter rose to 25%, making Mentor Graphics the fastest growing major electronic design automation company on total, as well as product revenue. (Photo: http://www.newscom.com/cgi-bin/prnh/19990428/SFW078 ) "Competitive wins across the business continue to drive our product revenue growth," said Walden C. Rhines, president and CEO of Mentor Graphics. "Our investment in next generation tools like the Calibre(R) physical verification solution is paying off with strong market-share gains, as we reap the benefit of the strong industry growth in deep sub-micron. Similarly, our IC Station(R) product bookings more than doubled as competitors' older products did not meet the need for leading-edge custom design acceleration tools that allow designers to quickly and efficiently trouble-shoot key areas of deep-submicron designs where traditional place-and-route tools fail." Earnings-per-share after special charges was a loss of $.13. Special charges related primarily to the completion of our acquisition of the minority equity position in Exemplar Logic, Quickturn Design Systems acquisition related expenses, and the restructure of some businesses. Total gross margin for the quarter was 75.7%, a first quarter record for Mentor Graphics. "The market is healthy and vibrant, and we remain bullish on the state of our business," said Gregory K. Hinckley, CFO and COO of Mentor Graphics. "North America remained strong, and we saw a resurgence in Asia. Additionally, Y2K issues seem to have helped us as customers consolidated their established flows in preparation for the new millennium. Our BoardStation(R) product took significant share in the printed circuit board market with bookings up over 100% year-on-year." 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 2,600 people worldwide. Company headquarters are located at 8005 S.W. Boeckman Road, Wilsonville, Oregon (USA) 97070-7777. World Wide Web site: http://www.mentor.com. Investor Relations Web site: http://www.mentor.com/investor_relations. 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 industries 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; and (iv) 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. NOTE: IC Station, Boardstation, Calibre and Mentor Graphics are registered trademarks of Mentor Graphics Corporation. All other company or product names are the registered trademarks or trademarks of their respective owners. CONTACT: Ryerson E. Schwark, Public and Investor Relations, (USA) 503-685-1660 or ry_schwark@mentor.com, or Dennis M. Weldon, Treasurer, (USA) 503-685-1462 or dennis_weldon@mentor.com, both of Mentor Graphics Corporation. MENTOR GRAPHICS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three months ended March 31, 1999 1998 Revenues: System and software $72,740 $58,206 Service and support 49,833 49,802 Total revenues 122,573 108,008 Cost of revenues: System and software 7,446 6,256 Service and support 22,382 24,547 Total cost of revenues 29,828 30,803 Gross margin 92,745 77,205 Operating expenses: Research and development 28,869 28,405 Marketing and selling 42,315 38,954 General and administration 12,896 10,505 Special charges 16,575 5,775 Total operating expenses 100,655 83,639 Operating loss (7,910) (6,434) Other loss, net (2,821) (3,123) Loss before income taxes (10,731) (9,557) Income tax benefit (2,361) (2,103) Net loss $(8,370) $(7,454) Net loss per share: Basic $(.13) $(.12) Diluted $(.13) $(.12) Weighted average number of shares outstanding: Basic 66,213 64,582 Diluted 66,213 64,582 MENTOR GRAPHICS CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands) As of As of March 31, 1999 Dec 31, 1998 (Unaudited) Assets Current assets: Cash and short-term investments $95,985 $137,585 Trade accounts receivable, net 124,013 125,844 Other receivables 7,172 7,575 Prepaid expenses and other 17,317 23,503 Deferred income taxes 10,813 10,937 Total current assets 255,300 305,444 Property, plant and equipment, net 92,009 95,214 Term receivables, long-term 50,266 36,430 Other assets, net 27,763 27,035 Total assets $425,338 $464,123 Liabilities and Stockholders' Equity Current liabilities: Short-term borrowings -- 24,000 Accounts payable 6,233 10,101 Income taxes payable 17,694 20,408 Accrued payroll and related liabilities 24,659 41,958 Accrued liabilities 39,374 33,295 Deferred revenue 46,390 36,484 Total current liabilities 134,350 166,246 Other long-term deferrals 1,608 1,425 Total liabilities 135,958 167,671 Minority interest 1,154 1,170 Stockholders' equity: Common stock 305,845 303,352 Accumulated deficit (30,617) (22,246) Accumulated other comprehensive income 12,998 14,176 Total stockholders' equity 288,226 295,282 Total liabilities and stockholders' equity $425,338 $464,123 ots Original Text Service: Mentor Graphics Corporation Internet: http://www.newsaktuell.de Contact: Ryerson E. Schwark, Public and Investor Relations, (USA) 503-685-1660, or ry_schwark@mentor.com, or Dennis M. Weldon, Treasurer, (USA) 503-685-1462, or dennis_weldon@mentor.com, both of Mentor Graphics Corporation Photo: http://www.newscom.com/cgi-bin/prnh/19990428/SFW078 or NewsCom, (USA) 213-237-5431 Web site: http://www.mentor.com Subscribers please note that material bearing the slug "PROTEXT" is not part of CTK's news service and is not to be published under the "CTK" slug. Protext is a commercial service providing distribution of press releases from clients, who are identified in the text of Protext reports and who bear full responsibility for their contents. PROTEXT