CIMdata PLM Industry Summary Online Archive
11 January 2005
Financial News
Mentor Graphics Reports Preliminary 2004 Results; Fourth Quarter Revenue and Bookings Hit Records on 40% Bookings Growth
In anticipation of a presentation today at the Seventh Annual Needham & Co. Growth Conference, Mentor Graphics Corporation announced that its fourth quarter 2004 bookings and revenues had achieved record levels, with revenues expected to exceed Thomson First Call consensus estimates of $204 million. Bookings for the fourth quarter were up about 40%, year over year. The company also grew backlog significantly, up approximately 35% from the fourth quarter of 2003. Fourth quarter special charges are expected to result in GAAP basis earnings below guidance. Earnings per share on a pro forma basis are expected to modestly exceed consensus estimates.
Fourth quarter bookings performance was broad-based across all regions and product lines, and not driven by any particular large transactions. All regions performed well with bookings in North America up 15%, Europe up 50%, and Japan and the Pacific Rim both up over 100% over the fourth quarter of 2003.
The company emphasized that the foregoing results are preliminary and are subject to adjustments upon final closing of financial results and completion of the annual audit by independent accountants. Mentor Graphics will release fourth quarter and full year 2004 results after the close of the market on Thursday, January 27, 2005.
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. 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.
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