UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
______________
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
May 19, 2016 |
MENTOR GRAPHICS CORPORATION |
(Exact name of registrant as specified in charter) |
OREGON |
1-34795 |
93-0786033 |
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
8005 S.W. BOECKMAN ROAD WILSONVILLE, OR |
97070-7777 |
|
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: |
(503) 685-7000 |
NO CHANGE |
(Former name or former address, if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
Attached as Exhibit 99.1 is a copy of a press release of Mentor Graphics Corporation dated May 19, 2016, announcing the Company’s financial results for the first quarter of fiscal year 2017 and the Company’s outlook for the second quarter and full fiscal year 2017, which is being furnished to the Securities and Exchange Commission.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
MENTOR GRAPHICS CORPORATION |
|||
(Registrant) | |||
Date: | May 19, 2016 | By: |
/s/ Dean M. Freed |
Dean M. Freed |
|||
Vice President and General Counsel |
3
Exhibit 99.1
Mentor Graphics Reports Fiscal First Quarter Results
WILSONVILLE, Ore.--(BUSINESS WIRE)--May 19, 2016--Mentor Graphics Corporation (NASDAQ:MENT) today announced financial results for the company’s fiscal first quarter ended April 30, 2016. The company reported revenues of $228 million, non-GAAP earnings per share of $0.02, and a GAAP loss per share of $0.12.
“Mentor modestly exceeded guidance for first quarter, although weakness in semiconductor-related activity continued,” said Walden C. Rhines, chairman and CEO of Mentor Graphics. “Bookings and revenue from automotive customers set a first quarter all-time record. Mentor’s customer breadth and our range of system design products and services continue to be an advantage.”
Mentor announced three new software applications for the Veloce® emulation platform to overcome critical challenges in complex system-on-chip (SoC) and system designs. In other news, several Mentor tools and flows have been certified and optimized for Samsung’s 10 nm FinFET process, and for TSMC’s 7 nm design starts and 10 nm production. Mentor also announced a design, layout and verification solution, targeting mobile and consumer products, to support TSMC’s Integrated Fan-Out (InFO) wafer-level packaging technology.
During the quarter the company announced the Open Manufacturing Language (OML) for printed circuit board assembly and the Valor® Internet of Manufacturing solution, a hardware device with embedded software for live data collection from shop-floor machines and processes. The company also launched its newest HyperLynx® product release, which integrates signal and power integrity analysis, 3D-electromagnetic solving, and fast rule checking into a single unified environment.
“We have a strong portfolio of system companies renewing in fiscal 2017,” said Gregory K. Hinckley, president of Mentor Graphics. “We are increasing our second quarter revenue guidance and continue our rigorous attention to expense control.”
Outlook
For the second quarter of fiscal 2017, the company expects revenues of about $245 million, non-GAAP earnings per share of about $0.09 and GAAP earnings per share of approximately break-even. For the full year fiscal 2017, the company affirms revenues of about $1.215 billion, non-GAAP earnings per share of about $1.68, and GAAP earnings per share of approximately $1.19. Cash flow from operations in fiscal 2017 is expected to be approximately $200 million.
Dividend
The company announced a quarterly dividend of $0.055 per share. The dividend is payable on June 30, 2016, to shareholders of record at the close of business on June 10, 2016.
Fiscal Year Definition
Mentor Graphics Corporation’s fiscal year runs from February 1 to January 31. The fiscal year is dated by the calendar year in which the fiscal year ends. As a result, the first three fiscal quarters of any fiscal year will be dated with the next calendar year, rather than the current calendar year.
Discussion of Non-GAAP Financial Measures
Mentor Graphics’ management evaluates and makes operating decisions using various performance measures. In addition to our GAAP results, we also consider adjusted gross profit, operating income, operating margin, net income, and earnings per share which we refer to as non-GAAP gross profit, operating income, operating margin, net income, and earnings per share, respectively. These non-GAAP measures are derived from the revenues of our product, maintenance, and services business operations and the costs directly related to the generation of those revenues, such as cost of revenues, research and development, marketing and sales, and general and administrative expenses, that management considers in evaluating our ongoing core operating performance. These non-GAAP measures exclude amortization of intangible assets, special charges, equity plan-related compensation expenses, interest expense associated with the amortization of original issuance debt discount on convertible debt, the equity in earnings or losses of unconsolidated entities (except Frontline PCB Solutions Limited Partnership (Frontline)), and the impact on basic and diluted earnings per share of changes in the calculated redemption value of noncontrolling interests, which management does not consider reflective of our core operating business.
Management excludes from our non-GAAP measures certain recurring items to facilitate its review of the comparability of our core operating performance on a period-to-period basis because such items are not related to our ongoing core operating performance as viewed by management. Management considers our core operating performance to be that which can be affected by our managers in any particular period through their management of the resources that affect our underlying revenue and profit generating operations during that period. Management uses this view of our operating performance for purposes of comparison with our business plan and individual operating budgets and allocation of resources. Additionally, when evaluating potential acquisitions, management excludes the items described above from its consideration of target performance and valuation. More specifically, management adjusts for the excluded items for the following reasons:
In certain instances our GAAP results of operations may not be profitable when our corresponding non-GAAP results are profitable or vice versa. The number of shares on which our non-GAAP earnings per share is calculated may therefore differ from the GAAP presentation due to the anti-dilutive effect of stock options, restricted stock units, employee stock purchase plan shares, and convertible debt in a loss situation.
Non-GAAP gross profit, operating income, operating margin, net income, and earnings per share are supplemental measures of our performance that are not presented in accordance with GAAP. Moreover, they should not be considered as an alternative to any performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of our liquidity. We present non-GAAP gross profit, operating income, operating margin, net income, and earnings per share because we consider them to be important supplemental measures of our operating performance and profitability trends, and because we believe they give investors useful information on period-to-period performance as evaluated by management. Non-GAAP net income also facilitates comparison with other companies in our industry, which use similar financial measures to supplement their GAAP results. Non-GAAP net income has limitations as an analytical tool, and therefore should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. In the future, we expect to continue to incur expenses similar to the non-GAAP adjustments described above and exclusion of these items in our non-GAAP presentation should not be construed as an inference that these costs are unusual, infrequent or non-recurring. Some of the limitations in relying on non-GAAP net income are:
About Mentor Graphics
Mentor Graphics Corporation 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 electronic, semiconductor and systems companies. Established in 1981, the company reported revenues in the last fiscal year of approximately $1.18 billion. Corporate headquarters are located at 8005 S.W. Boeckman Road, Wilsonville, Oregon 97070-7777. World Wide Web site: http://www.mentor.com/.
(Mentor Graphics, Mentor, Veloce, Valor, and HyperLynx are registered trademarks of Mentor Graphics Corporation. All other company and/or product names are the trademarks and/or registered trademarks of their respective owners.)
Statements in this press release regarding the company’s guidance for future periods constitute “forward-looking” statements based on current expectations within the meaning of the Securities Exchange Act of 1934. 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) continued economic weakness in the European Union, China, Japan or other countries, and the adverse impact of such weakness on the company’s customers in those regions; (ii) the company’s ability to successfully update existing hardware and software products and offer new products and services that compete in the highly competitive EDA industry, including the risk of obsolescence for our hardware products; (iii) effects of customer mergers, divestitures or shutdowns of business units or divisions, customer seasonal purchasing patterns and the timing of significant orders which may negatively or positively impact the company’s quarterly results of operations; (iv) effects of the volatility of foreign currency fluctuations on the company’s business and operating results; (v) product bundling or discounting of products and services by competitors, which could force the company to lower its prices or offer other more favorable terms to customers, or result in loss of business; (vi) changes in accounting or reporting rules or interpretations, including new rules affecting revenue recognition; (vii) the impact of audits by taxing authorities, or changes in applicable tax laws, regulations or enforcement practices; (viii) effects of unanticipated shifts in product mix on gross margin; and (ix) litigation; all as may be discussed in more detail under the heading “Risk Factors” 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 guidance 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 |
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Three Months Ended April 30, | ||||||||||
2016 | 2015 | |||||||||
Revenues: | ||||||||||
System and software | $ | 106,704 | $ | 155,931 | ||||||
Service and support | 120,935 | 116,212 | ||||||||
Total revenues | 227,639 | 272,143 | ||||||||
Cost of revenues: (1) | ||||||||||
System and software | 8,332 | 13,624 | ||||||||
Service and support | 32,748 | 33,569 | ||||||||
Amortization of purchased technology | 1,785 | 1,858 | ||||||||
Total cost of revenues | 42,865 | 49,051 | ||||||||
Gross profit | 184,774 | 223,092 | ||||||||
Operating expenses: | ||||||||||
Research and development (2) | 91,136 | 89,515 | ||||||||
Marketing and selling (3) | 84,259 | 84,951 | ||||||||
General and administration (4) | 17,535 | 17,963 | ||||||||
Equity in earnings of Frontline | (636 | ) | (870 | ) | ||||||
Amortization of intangible assets (5) | 1,554 | 2,219 | ||||||||
Special charges (6) | 2,991 | 36,977 | ||||||||
Total operating expenses | 196,839 | 230,755 | ||||||||
Operating loss: | (12,065 | ) | (7,663 | ) | ||||||
Other income, net (7) | 889 | 342 | ||||||||
Interest expense (8) | (4,138 | ) | (4,694 | ) | ||||||
Loss before income tax | (15,314 | ) | (12,015 | ) | ||||||
Income tax benefit (9) | (1,878 | ) | (1,512 | ) | ||||||
Net loss | (13,436 | ) | (10,503 | ) | ||||||
Less: Loss attributable to noncontrolling interest (10) | - | (618 | ) | |||||||
Net loss attributable to Mentor Graphics shareholders |
$ | (13,436 | ) | $ | (9,885 | ) | ||||
Net loss per share attributable to Mentor Graphics shareholders: |
||||||||||
Basica | $ | (0.12 | ) | $ | (0.08 | ) | ||||
Diluteda | $ | (0.12 | ) | $ | (0.08 | ) | ||||
Weighted average number of shares outstanding: | ||||||||||
Basic | 109,085 | 116,003 | ||||||||
Diluted | 109,085 | 116,003 | ||||||||
a We increased the numerator of our basic and diluted earnings per share calculation by $269 for the adjustment of the noncontrolling interest with redemption feature to its calculated redemption value, recorded directly to retained earnings, for the quarter ended April 30, 2015. |
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Refer to following table for a description of footnotes. |
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MENTOR GRAPHICS CORPORATION |
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Listed below are the items included in net loss that management excludes in computing the non-GAAP financial measures referred to in the text of this press release. Items are further described under "Discussion of Non-GAAP Financial Measures." | ||||||||||
Three Months Ended April 30, | ||||||||||
2016 | 2015 | |||||||||
(1) Cost of revenues: | ||||||||||
Equity plan-related compensation | $ | 711 | $ | 708 | ||||||
Amortization of purchased technology | 1,785 | 1,858 | ||||||||
$ | 2,496 | $ | 2,566 | |||||||
(2) Research and development: | ||||||||||
Equity plan-related compensation | $ | 4,323 | $ | 4,318 | ||||||
(3) Marketing and selling: | ||||||||||
Equity plan-related compensation | $ | 2,855 | $ | 2,480 | ||||||
(4) General and administration: | ||||||||||
Equity plan-related compensation | $ | 2,612 | $ | 2,772 | ||||||
(5) Amortization of intangible assets: | ||||||||||
Amortization of other identified intangible assets | $ | 1,554 | $ | 2,219 | ||||||
(6) Special charges: | ||||||||||
Rebalance, restructuring, certain litigation, and other costs | $ | 2,991 | $ | 36,977 | ||||||
(7) Other income, net: | ||||||||||
Net (income) loss of unconsolidated entities | $ | 2 | $ | (25 | ) | |||||
(8) Interest expense: | ||||||||||
Amortization of original issuance debt discount | $ | 1,723 | $ | 1,604 | ||||||
(9) Income tax benefit: | ||||||||||
Non-GAAP income tax effects | $ | (2,494 | ) | $ | (9,282 | ) | ||||
(10) Loss attributable to noncontrolling interest: | ||||||||||
Amortization of intangible assets, equity-plan related compensation, and income tax effects |
$ | - | $ | (200 | ) | |||||
MENTOR GRAPHICS CORPORATION |
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Three Months Ended April 30, | ||||||||||
2016 | 2015 | |||||||||
GAAP net loss attributable to Mentor Graphics shareholders | $ | (13,436 | ) | $ | (9,885 | ) | ||||
Non-GAAP adjustments: | ||||||||||
Equity plan-related compensation: (1) | ||||||||||
Cost of revenues | 711 | 708 | ||||||||
Research and development | 4,323 | 4,318 | ||||||||
Marketing and selling | 2,855 | 2,480 | ||||||||
General and administration | 2,612 | 2,772 | ||||||||
Acquisition - related items: | ||||||||||
Amortization of purchased assets | ||||||||||
Cost of revenues (2) | 1,785 | 1,858 | ||||||||
Amortization of intangible assets (3) | 1,554 | 2,219 | ||||||||
Special charges (4) | 2,991 | 36,977 | ||||||||
Other income, net (5) | 2 | (25 | ) | |||||||
Interest expense (6) | 1,723 | 1,604 | ||||||||
Non-GAAP income tax effects (7) | (2,494 | ) | (9,282 | ) | ||||||
Noncontrolling interest (8) | - | (200 | ) | |||||||
Total of non-GAAP adjustments | 16,062 | 43,429 | ||||||||
Non-GAAP net income attributable to Mentor Graphics shareholders | $ | 2,626 | $ | 33,544 | ||||||
GAAP weighted average shares (diluted) | 109,085 | 116,003 | ||||||||
Non-GAAP adjustment | 1,950 | 4,753 | ||||||||
Non-GAAP weighted average shares (diluted) | 111,035 | 120,756 | ||||||||
Net loss per share attributable to Mentor Graphics shareholders: | ||||||||||
GAAP (diluted) | $ | (0.12 | ) | $ | (0.08 | ) | ||||
Non-GAAP adjustments detailed above | 0.14 | 0.36 | ||||||||
Non-GAAP (diluted) | $ | 0.02 | $ | 0.28 | ||||||
(1) Equity plan-related compensation expense is the fair value of all share-based payments to employees for stock options and restricted stock units, and purchases made as a result of the employee stock purchase plans. |
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(2) Amount represents amortization of purchased technology resulting from acquisitions. Purchased technology is generally amortized over two to five years. |
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(3) Other identified intangible assets are generally amortized to operating expense over two to five years. Other identified intangible assets include trade names, customer relationships, and backlog resulting from acquisition transactions. |
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(4) Three months ended April 30, 2016: Special charges consist of (i) $2,088 of costs incurred for employee rebalances which include severance benefits and notice pay, (ii) $807 for EVE litigation costs, and (iii) $96 in other adjustments. |
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Three months ended April 30, 2015: Special charges consist of (i) $25,435 of severance costs incurred for the voluntary early retirement program, (ii) $9,863 of costs incurred for employee rebalances which include severance benefits and notice pay, (iii) $1,575 for EVE litigation costs, and (iv) $104 in other adjustments. |
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(5) Amount represents (income) loss for an investment accounted for under the equity method of accounting. |
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(6) Amount represents the amortization of original issuance debt discount. |
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(7) Non-GAAP income tax expense adjustment reflects the application of our assumed normalized effective 19% tax rate, instead of our GAAP tax rate, to our non-GAAP pre-tax income. |
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(8) Adjustment for the impact of amortization of intangible assets, equity plan-related compensation, and income tax expense on noncontrolling interest. |
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MENTOR GRAPHICS CORPORATION |
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Three months ended April 30, | ||||||||||
2016 | 2015 | |||||||||
GAAP gross profit | $ | 184,774 | $ | 223,092 | ||||||
Reconciling items to non-GAAP gross profit: | ||||||||||
Equity plan-related compensation | 711 | 708 | ||||||||
Amortization of purchased technology | 1,785 | 1,858 | ||||||||
Non-GAAP gross profit | $ | 187,270 | $ | 225,658 | ||||||
Three months ended April 30, | ||||||||||
2016 | 2015 | |||||||||
GAAP gross profit as a percent of total revenues | 81.2 | % | 82.0 | % | ||||||
Non-GAAP adjustments detailed above | 1.1 | % | 0.9 | % | ||||||
Non-GAAP gross profit as a percent of total revenues | 82.3 | % | 82.9 | % | ||||||
Three months ended April 30, | ||||||||||
2016 | 2015 | |||||||||
GAAP operating expenses | $ | 196,839 | $ | 230,755 | ||||||
Reconciling items to non-GAAP operating expenses: | ||||||||||
Equity plan-related compensation | (9,790 | ) | (9,570 | ) | ||||||
Amortization of other identified intangible assets | (1,554 | ) | (2,219 | ) | ||||||
Special charges | (2,991 | ) | (36,977 | ) | ||||||
Non-GAAP operating expenses | $ | 182,504 | $ | 181,989 | ||||||
Three months ended April 30, | ||||||||||
2016 | 2015 | |||||||||
GAAP operating loss | $ | (12,065 | ) | $ | (7,663 | ) | ||||
Reconciling items to non-GAAP operating income: | ||||||||||
Equity plan-related compensation | 10,501 | 10,278 | ||||||||
Amortization of purchased technology | 1,785 | 1,858 | ||||||||
Amortization of other identified intangible assets | 1,554 | 2,219 | ||||||||
Special charges | 2,991 | 36,977 | ||||||||
Non-GAAP operating income | $ | 4,766 | $ | 43,669 | ||||||
Three months ended April 30, | ||||||||||
2016 | 2015 | |||||||||
GAAP operating loss as a percent of total revenues | (5.3 | %) | (2.8 | %) | ||||||
Non-GAAP adjustments detailed above | 7.4 | % | 18.8 | % | ||||||
Non-GAAP operating income as a percent of total revenues | 2.1 | % | 16.0 | % | ||||||
Three months ended April 30, | ||||||||||
2016 | 2015 | |||||||||
GAAP other income, net and interest expense | $ | (3,249 | ) | $ | (4,352 | ) | ||||
Reconciling items to non-GAAP other income (expense), net and interest expense: |
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Equity in earnings of unconsolidated entities | 2 | (25 | ) | |||||||
Amortization of original issuance debt discount | 1,723 | 1,604 | ||||||||
Non-GAAP other income, net and interest expense | $ | (1,524 | ) | $ | (2,773 | ) | ||||
MENTOR GRAPHICS CORPORATION |
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April 30, 2016 |
January 31, 2016 |
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Assets | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 216,325 | $ | 334,826 | ||||||
Trade accounts receivable, net | 87,423 | 176,021 | ||||||||
Term receivables, short-term | 323,755 | 317,188 | ||||||||
Prepaid expenses and other | 81,143 | 70,432 | ||||||||
Total current assets | 708,646 | 898,467 | ||||||||
Property, plant, and equipment, net | 184,045 | 182,092 | ||||||||
Term receivables, long-term | 253,636 | 268,657 | ||||||||
Goodwill and intangible assets, net | 642,313 | 644,288 | ||||||||
Other assets | 72,827 | 70,860 | ||||||||
Total assets | $ | 1,861,467 | $ | 2,064,364 | ||||||
Liabilities and Stockholders' Equity | ||||||||||
Current liabilities: | ||||||||||
Short-term borrowings | $ | 30,686 | $ | 33,449 | ||||||
Accounts payable | 8,117 | 16,740 | ||||||||
Income taxes payable | 1,578 | 3,966 | ||||||||
Accrued payroll and related liabilities | 50,766 | 73,371 | ||||||||
Accrued and other liabilities | 34,413 | 37,059 | ||||||||
Deferred revenue | 241,957 | 258,725 | ||||||||
Total current liabilities | 367,517 | 423,310 | ||||||||
Long-term notes payable | 242,037 | 240,076 | ||||||||
Deferred revenue, long-term | 16,922 | 18,303 | ||||||||
Other long-term liabilities | 50,460 | 62,246 | ||||||||
Total liabilities | 676,936 | 743,935 | ||||||||
Stockholders' equity: | ||||||||||
Common stock | 683,402 | 818,683 | ||||||||
Retained earnings | 513,710 | 522,846 | ||||||||
Accumulated other comprehensive loss | (12,581 | ) | (21,100 | ) | ||||||
Total stockholders' equity | 1,184,531 | 1,320,429 | ||||||||
Total liabilities and stockholders' equity | $ | 1,861,467 | $ | 2,064,364 | ||||||
MENTOR GRAPHICS CORPORATION |
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Three Months Ended April 30, | ||||||||||
2016 | 2015 | |||||||||
Operating activities | ||||||||||
Net loss | $ | (13,436 | ) | $ | (10,503 | ) | ||||
Depreciation and amortization | 14,794 | 15,041 | ||||||||
Other adjustments to reconcile: | ||||||||||
Operating cash | 7,910 | 8,136 | ||||||||
Changes in working capital | 35,562 | 33,277 | ||||||||
Net cash provided by operating activities | 44,830 | 45,951 | ||||||||
Investing activities | ||||||||||
Net cash used in investing activities | (10,202 | ) | (11,928 | ) | ||||||
Financing activities | ||||||||||
Net cash used in financing activities | (155,980 | ) | (14,778 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents | 2,851 | 247 | ||||||||
Net change in cash and cash equivalents | (118,501 | ) | 19,492 | |||||||
Cash and cash equivalents at beginning of period | 334,826 | 230,281 | ||||||||
Cash and cash equivalents at end of period | $ | 216,325 | $ | 249,773 | ||||||
Other data: | ||||||||||
Capital expenditures, net | $ | 10,202 | $ | 4,728 | ||||||
Days sales outstanding | 163 | 145 | ||||||||
MENTOR GRAPHICS CORPORATION |
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The following table reconciles management's estimates of the specific items excluded from GAAP in the calculation of estimated non-GAAP net income per share for Q2'17 and fiscal year 2017. | ||||||||||
Estimated Q2'17 |
Estimated FY'17 |
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Diluted GAAP net income (loss) per share | $ | - | $ | 1.19 | ||||||
Non-GAAP adjustments: | ||||||||||
Amortization of purchased technology (1) | 0.02 | 0.06 | ||||||||
Amortization of other identified intangible assets (2) | 0.01 | 0.05 | ||||||||
Equity plan-related compensation (3) | 0.10 | 0.38 | ||||||||
Special charges (4) | - | 0.03 | ||||||||
Other income (expense), net and interest expense (5) | 0.02 | 0.06 | ||||||||
Non-GAAP income tax effects (6) | (0.06 | ) | (0.09 | ) | ||||||
Diluted non-GAAP net income per share | $ | 0.09 | $ | 1.68 | ||||||
(1) Excludes amortization of purchased technology resulting from acquisitions. Purchased technology is generally amortized over two to five years. |
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(2) Excludes amortization of other identified intangible assets including trade names, customer relationships, and backlog resulting from acquisition transactions. Other identified intangible assets are generally amortized over two to five years. |
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(3) Excludes equity plan-related compensation expense for the fair value of all share-based payments to employees for stock options and restricted stock units, and purchases made as a result of the employee stock purchase plans. |
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(4) Excludes special charges primarily consisting of costs incurred for employee rebalances, which includes severance benefits and notice pay, and certain litigation costs. Full year adjustment represents the impact of actual special charges for the three months ended April 30, 2016 as we do not provide guidance for special charges. |
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(5) Excludes amortization of original issuance debt discount, and income (loss) from an investment accounted for under the equity method of accounting. |
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(6) Non-GAAP income tax expense adjustment reflects the application of our assumed normalized effective 19% tax rate, instead of our GAAP tax rate, to our non-GAAP pre-tax income. |
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MENTOR GRAPHICS CORPORATION |
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2017 | 2016 | 2015 | ||||||||||||||||||||
Product Category Bookings (a) | Q1 | Q1 | Q2 | Q3 | Q4 | Year | Q1 | Q2 | Q3 | Q4 | Year | |||||||||||
IC DESIGN TO SILICON | 30% | 30% | 40% | 40% | 50% | 45% | 20% | 25% | 45% | 55% | 45% | |||||||||||
SCALABLE VERIFICATION | 15% | 25% | 30% | 15% | 15% | 20% | 25% | 25% | 20% | 20% | 20% | |||||||||||
INTEGRATED SYSTEMS DESIGN | 25% | 15% | 15% | 20% | 15% | 15% | 30% | 25% | 15% | 10% | 15% | |||||||||||
NEW & EMERGING MARKETS | 5% | 10% | 5% | 10% | 10% | 10% | 10% | 15% | 10% | 5% | 10% | |||||||||||
SERVICES / OTHER | 25% | 20% | 10% | 15% | 10% | 10% | 15% | 10% | 10% | 10% | 10% | |||||||||||
Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | |||||||||||
2017 | 2016 | 2015 | ||||||||||||||||||||
Product Category Revenue (b) | Q1 | Q1 | Q2 | Q3 | Q4 | Year | Q1 | Q2 | Q3 | Q4 | Year | |||||||||||
IC DESIGN TO SILICON | 30% | 35% | 40% | 40% | 50% | 40% | 25% | 30% | 35% | 55% | 40% | |||||||||||
SCALABLE VERIFICATION | 20% | 30% | 25% | 25% | 15% | 25% | 35% | 25% | 20% | 20% | 25% | |||||||||||
INTEGRATED SYSTEMS DESIGN | 25% | 20% | 20% | 20% | 20% | 20% | 25% | 25% | 25% | 15% | 20% | |||||||||||
NEW & EMERGING MARKETS | 10% | 5% | 5% | 5% | 5% | 5% | 5% | 10% | 10% | 5% | 5% | |||||||||||
SERVICES / OTHER | 15% | 10% | 10% | 10% | 10% | 10% | 10% | 10% | 10% | 5% | 10% | |||||||||||
Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | |||||||||||
2017 | 2016 | 2015 | ||||||||||||||||||||
Bookings by Geography | Q1 | Q1 | Q2 | Q3 | Q4 | Year | Q1 | Q2 | Q3 | Q4 | Year | |||||||||||
North America | 30% | 35% | 35% | 45% | 40% | 40% | 50% | 40% | 50% | 40% | 45% | |||||||||||
Europe | 25% | 25% | 30% | 20% | 20% | 25% | 15% | 25% | 15% | 15% | 15% | |||||||||||
Japan | 30% | 15% | 5% | 10% | 5% | 5% | 15% | 5% | 10% | 5% | 5% | |||||||||||
Pac Rim | 15% | 25% | 30% | 25% | 35% | 30% | 20% | 30% | 25% | 40% | 35% | |||||||||||
Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | |||||||||||
2017 | 2016 | 2015 | ||||||||||||||||||||
Revenue by Geography | Q1 | Q1 | Q2 | Q3 | Q4 | Year | Q1 | Q2 | Q3 | Q4 | Year | |||||||||||
North America | 40% | 50% | 40% | 40% | 40% | 45% | 50% | 45% | 50% | 40% | 45% | |||||||||||
Europe | 25% | 15% | 25% | 25% | 20% | 20% | 25% | 20% | 20% | 15% | 20% | |||||||||||
Japan | 15% | 10% | 5% | 10% | 5% | 5% | 10% | 10% | 10% | 5% | 5% | |||||||||||
Pac Rim | 20% | 25% | 30% | 25% | 35% | 30% | 15% | 25% | 20% | 40% | 30% | |||||||||||
Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | |||||||||||
2017 | 2016 | 2015 | ||||||||||||||||||||
Bookings by Business Model (c) | Q1 | Q1 | Q2 | Q3 | Q4 | Year | Q1 | Q2 | Q3 | Q4 | Year | |||||||||||
Perpetual | 20% | 20% | 15% | 15% | 10% | 15% | 35% | 20% | 15% | 10% | 15% | |||||||||||
Term Ratable | 15% | 10% | 10% | 10% | 10% | 10% | 20% | 10% | 5% | 5% | 10% | |||||||||||
Term Up Front | 65% | 70% | 75% | 75% | 80% | 75% | 45% | 70% | 80% | 85% | 75% | |||||||||||
Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | |||||||||||
2017 | 2016 | 2015 | ||||||||||||||||||||
Revenue by Business Model (c) | Q1 | Q1 | Q2 | Q3 | Q4 | Year | Q1 | Q2 | Q3 | Q4 | Year | |||||||||||
Perpetual | 20% | 15% | 15% | 10% | 15% | 15% | 35% | 30% | 15% | 10% | 20% | |||||||||||
Term Ratable | 15% | 10% | 10% | 10% | 5% | 10% | 10% | 10% | 10% | 5% | 5% | |||||||||||
Term Up Front | 65% | 75% | 75% | 80% | 80% | 75% | 55% | 60% | 75% | 85% | 75% | |||||||||||
Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | |||||||||||
(a) Product Category Bookings excludes support bookings for all sub-flow categories. | ||||||||||||||||||||||
(b) Product Category Revenue includes support revenue for each sub-flow category as appropriate. | ||||||||||||||||||||||
(c) Bookings and Revenue by Business Model are System and Software only (excludes finance fee). | ||||||||||||||||||||||
CONTACT:
Mentor Graphics Corporation
Joe Reinhart, 503-685-1462
Vice
President, Investor Relations and Corporate Development
joe_reinhart@mentor.com