Exhbit 99.2
Mentor Graphics Updates 2005 Outlook
WILSONVILLE, Ore.--(BUSINESS WIRE)--April 27, 2005--Mentor
Graphics Corporation (Nasdaq:MENT) today updated 2005 guidance. While
weakness experienced in the first quarter is expected to continue
through the second quarter of 2005, the company anticipates the second
half of 2005 will remain at previously guided revenues and earnings,
based on a healthy number of contract renewals due in the fourth
quarter.
For the second quarter, revenues are expected to be approximately
$155 million with pro forma earnings per share ranging between a loss
of $.10 and break-even, with a GAAP loss of between $.14 and $.04 per
share. In the third quarter, revenues are expected to be approximately
$180 million and pro forma earnings per share of approximately $.10,
with GAAP earnings per share of about $.06. For the fourth quarter,
revenues should be approximately $226 million with pro forma earnings
per share of about $.54 and GAAP earnings per share of about $.49.
For the full year 2005, we expect revenues of about $725 million,
a 2% growth from 2004. Pro forma earnings are anticipated to range
between $.55 and $.65. GAAP earnings per share are expected to range
between $.36 and $.46.
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/.
Mentor Graphics and Calibre are registered trademarks and Scalable
Verification is a trademark of Mentor Graphics Corporation.
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.
Included in pro forma earnings was a $1million gain related to the
sale of a building classified in other income, net. 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) reductions in spending on EDA tools by
the Company's customers due to cyclical downturns or initiatives to
increase profitability, (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, (vii)
the Company's ability to successfully integrate and manage its
acquisitions, 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 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
Q2 2005 Q2 2005
GAAP Adjustments Pro Forma
----------------- ----------- ----------------
Revenue $155 - $155
Diluted earnings per
share ($0.14) - ($0.04) $0.04 (a) ($0.10) - $0.00
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 $226 - $226
Diluted earnings per
share $0.49 $0.05 (a) $0.54
2005 2005
GAAP Adjustments Pro Forma
----------------- ----------- ----------------
Revenue $725 - $725
Diluted earnings per
share $0.36 - $0.46 $0.19 (a) $0.55 - $0.65
(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.
CONTACT: Mentor Graphics Corporation
Ryerson Schwark, 503-685-1462
ryschwark@mentor.com
or
Dennis Weldon, 503-685-1462
dennisweldon@mentor.com