WILSONVILLE, Ore. -- November 11, 2008 -- Mentor Graphics Corporation (NASDAQ: MENT) announced that slowing customer activity has reduced the company’s outlook for the second half of the fiscal year. Revenue is expected to be about $185 million for the fiscal third quarter ending October 31, 2008 with a non-GAAP loss of approximately $.05 per share. The current estimate of the GAAP loss per share is approximately $.80, which includes a GAAP tax provision for the third quarter of approximately $.50 per share. The tax provision is abnormally high as it includes recapture of tax benefits previously claimed in prior quarters as well as the continuing effect of tax expense in non-US jurisdictions.
For the fiscal fourth quarter ending January 31, 2009, the company now expects revenues of approximately $270 million, non-GAAP earnings per share of about $.55, and GAAP earnings per share of about $.60. For fiscal 2009 the company expects full year revenues of approximately $815 million, non-GAAP earnings per share of about $0.40 and a GAAP loss per share of about $.65.
“Typically, our customers had been negotiating contract renewals a quarter or two before their expiration,” said Walden C. Rhines, chairman and CEO of Mentor Graphics. “In this economic environment customers are now waiting until the contracts come closer to expiration to renew. We expect a number of sizeable contracts to renew in the next several quarters, which should lead to a stronger fiscal 2010 than fiscal 2009.”
Given these pending contract renewals, the company anticipates fiscal first quarter 2010 revenues of $200 to $210 million, non-GAAP earnings per share between $.05 and $.10, and GAAP loss per share between $.01 and $.06.
“These contract renewal delays should produce greater business linearity in fiscal 2010,” said Gregory K. Hinckley, president of Mentor Graphics. “Excluding acquisitions, non- GAAP expenses for the quarter were less than third quarter last year as a result of reductions in staffing undertaken earlier in the year, reduced incentive compensation and an improving foreign exchange environment.”
Mentor Graphics will release financial results for its third fiscal quarter as well as revised fiscal 2009 guidance, on Wednesday, November 19 at 5:00 a.m. Pacific Time. Following the release, Mentor will host a live webcast to discuss the third quarter results, beginning at 5:30 a.m. Pacific Time.
What: Mentor Graphics live webcast of Q3 Fiscal Year 2009 financial results
When: Wednesday, November 19 at 5:30 a.m. Pacific Time.
The company emphasized that the foregoing results are preliminary and are subject to adjustments upon final closing of financial results and completion of the quarterly review by independent accountants.
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 about $850 million and employs approximately 4,500 people worldwide. Corporate headquarters are located at 8005 S.W. Boeckman Road, Wilsonville, Oregon 97070- 7777. World Wide Web site: http://www.mentor.com/.