[August 21, 2014] |
|
Mentor Graphics Reports Fiscal Second Quarter Results
WILSONVILLE, Ore. --(Business Wire)--
Mentor Graphics Corporation (NASDAQ: MENT) today announced financial
results for the company's fiscal second quarter ended July 31, 2014. The
company reported revenues of $260.2 million, non-GAAP earnings per share
of $0.23, and GAAP earnings per share of $0.13.
"System design strength, particularly with automotive customers, drove
the second quarter with earnings solidly beating guidance," said Walden
C. Rhines, chairman and CEO of Mentor Graphics. "The automotive industry
is in transition from mechanical to electronic differentiation and the
rate of change is accelerating. Electronic content in vehicles is about
40 percent of the cost of a car. This is yielding considerable
opportunities for Mentor. Second quarter automotive strength was broad,
with orders for wire harness, embedded software and AUTOSAR tools and
products."
During the quarter the company announced two acquisitions: XS Embedded,
which has automotive-grade software and hardware to accelerate the start
of production, and positions Mentor well to address integration of
advanced driver assistance systems, driver information and infotainment;
and Nimbic, Inc., whose leading 3D electromagnetic simulation technology
enhances the Mentor® IC packaging design portfolio.
During the quarter Mentor also launched the MicRed® Industrial Power
Tester 1500A. This new hardware product tests the reliability of power
electronic components used in automobiles, trains, power generators and
converters, and renewable energy applications such as wind turbines. In
addition, the company announced the Questa® PropGen formal-based
automated verification solution; and the Xpedition® Data Management
product suite, the newest addition to the Xpedition Enterprise platform
for PCB systems design. Other announcements covered several emulation
solutions that accelerate the verification of high-performance memory
products used in mobile multimedia devices and networking
infrastructure; and an embedded software solution for multi-core
system-on-chip architectures which combine two or more different types
of microprocessors or microcontrollers.
"The second quarter was strong for Mentor and as a result we exceeded
non-GAAP earnings guidance," said Gregory K. Hinckley, president of
Mentor Graphics. "A four percent revenue upside to guidance, along with
continued attention to expense control, drove an over 50 percent beat in
earnings per share. Automotive had an exceptional quarter, with record
quarterly bookings three times the level of last year and year-to-date
bookings already equal to all of fiscal 2014."
Outlook
For the third quarter of fiscal 2015, the company expects revenues of
about $275 million, non- GAAP earnings per share of about $0.21 and GAAP
earnings per share of approximately $0.07. For the full year fiscal
2015, the company expects revenues of about $1.237 billion, non-GAAP
earnings per share of about $1.75, and GAAP earnings per share of
approximately $1.37.
Dividend and Share Repurchase
The company announced a quarterly dividend of $0.05 per share. The
dividend is payable on September 30, 2014 to shareholders of record as
of the close of business on September 10, 2014.
During the quarter the company repurchased approximately 1.2 million
shares for $25 million. Year to date the company has repurchased 3.2
million shares for $70 million.
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 revenue, research and development, sales and marketing, 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:
-
Identified intangible assets consist primarily of purchased
technology, backlog, trade names, and customer relationships.
Amortization charges for our intangible assets can vary in frequency
and amount due to the timing and magnitude of acquisition
transactions. We consider our operating results without these charges
when evaluating our core performance due to the variability.
Generally, the most significant impact to inter-period comparability
of our net income is in the first twelve months following an
acquisition.
-
Special charges may include expenses related to certain litigation
costs, employee severance, acquisitions, excess facility costs, and
other asset related charges. Special charges are incurred based on
particular facts and circumstances and can vary in size and frequency.
Litigation costs classified as special charges consist of professional
service fees related to patent litigation involving us, EVE S.A., and
Synopsys, Inc. These costs are included in special charges because of
their unusual nature due to the significance in variability of timing
and amount. Restructuring costs included in special charges include
costs incurred for employee terminations, including severance and
benefits, driven by modification of business strategy or business
emphasis. Special charges are not ordinarily included in our annual
operating plan and related budget due to unpredictability, driven in
part by rapidly changing technology and the competitive environment in
our industry. We therefore exclude them when evaluating our managers'
performance internally.
-
Equity plan-related compensation expenses represent the fair value of
all share-based payments to employees, including grants of employee
stock options and restricted stock units, and purchases made as a
result of the employee stock purchase plan. We do not consider equity
plan-related compensation expense in evaluating our managers'
performance internally or our core operations in any given period.
-
Interest expense attributable to amortization of the original issuance
debt discount on convertible debt is excluded. Management does not
consider this charge as a part of our core operating performance. We
do not consider the amortization of the original issuance debt
discount on convertible debt to be a direct cost of operations.
-
Equity in earnings or losses of unconsolidated entities represents our
equity in the net income (loss) of common stock investments accounted
for under the equity method. The carrying amounts of our investments
are adjusted for our share of earnings or losses of the investee. We
report our equity in the earnings or losses of investments in other
income (expense), net (with the exception of our investment in
Frontline as discussed below). The amounts are excluded from our
non-GAAP results as we do not control the results of operations for
the investments and we do not participate in regular and periodic
operating activities; therefore, management does not consider these
investments as a part of our core operating performance.
-
The Company maintains a 50% interest in Frontline, a joint venture. We
report our equity in the earnings or losses of Frontline within
operating income. Although we do not exert control, we actively
participate in regular and periodic activities such as budgeting,
business planning, marketing and direction of research and development
projects. Accordingly, we do not exclude our share of Frontline's
earnings or losses from our non-GAAP results as management considers
the joint venture to be core to our operating performance.
-
Income tax expense is adjusted by the amount of additional tax expense
or benefit that we would accrue if we used non-GAAP results instead of
GAAP results in the calculation of our tax liability, taking into
consideration our long-term tax structure. We use a normalized
effective tax rate of 17%, which reflects the weighted average tax
rate applicable under the various jurisdictions in which we operate.
This non-GAAP tax rate eliminates the effects of non-recurring and
period specific items which are often attributable to acquisition
decisions and can vary in size and frequency and considers our U.S.
loss carryforwards that have not been previously benefited. This rate
is subject to change over time for various reasons, including changes
in the geographic business mix and changes in statutory tax rates. Our
GAAP tax rate for the six months ended July 31, 2014 is (22%) after
consideration of period specific items. Without period specific items
of ($3.2 million), our GAAP tax rate is 14%. Our full fiscal year 2015
GAAP tax rate, inclusive of period specific items, is projected to be
10%. The GAAP tax rate considers certain mandatory and other
non-scalable tax costs which may adversely or beneficially affect our
tax rate depending upon our level of profitability in various
jurisdictions.
-
Our agreement with the owners of noncontrolling interests in one of
our subsidiaries gives them a right to require us to purchase their
interests for a price based on a formula defined in the agreement.
Under GAAP, increases (or decreases to the extent they offset previous
increases) in the calculated redemption value of the noncontrolling
interests are recorded directly to retained earnings and therefore do
not affect net income. However, as required by GAAP, these amounts are
applied to increase or decrease the numerator in the calculation of
basic and diluted earnings per share. Management does not consider
fluctuations in the calculated redemption value of noncontrolling
interests to be relevant to our core operating performance.
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,
and employee stock purchase plan shares 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:
-
Amortization of intangible assets represents the loss in value as the
technology in our industry evolves, is advanced, or is replaced over
time. The expense associated with this loss in value is not included
in the non-GAAP net income presentation and therefore does not reflect
the full economic effect of the ongoing cost of maintaining our
current technological position in our competitive industry, which is
addressed through our research and development program.
-
We regularly evaluate our business to determine whether any operations
should be eliminated or curtailed. Additionally, as part of our
ongoing business, we engage in acquisition and assimilation activities
and patent litigation. We therefore will continue to experience
special charges on a regular basis. These costs also directly impact
our available funds.
-
Our stock incentive and stock purchase plans are important components
of our incentive compensation arrangements and will be reflected as
expenses in our GAAP results.
-
Our income tax expense will be ultimately based on our GAAP taxable
income and actual tax rates in effect, which often differ
significantly from the 17% rate assumed in our non-GAAP presentation.
In addition, if we have a GAAP loss and non-GAAP net income, our
non-GAAP results will not reflect any projected GAAP tax benefits.
Similarly, in the event we were to have GAAP net income and a non-GAAP
loss, our GAAP tax expense would be replaced by a credit in our
non-GAAP presentation.
-
Other companies, including other companies in our industry, calculate
non-GAAP net income differently than we do, limiting its usefulness as
a comparative measure.
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 in excess of $1.15 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, MicRed, Questa, and Xpedition 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) weakness in the United States,
the European Union, China or other international economies, and the
potential adverse impact on the semiconductor and electronics
industries; (ii) the company's ability to successfully offer products
and services that compete in the highly competitive EDA industry,
including the risk of obsolescence for our hardware products; (iii)
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;(iv) effects of the volatility of foreign
currency fluctuations on the company's business and operating results;
(v) litigation; (vi) changes in accounting or reporting rules or
interpretations; (vii) the impact of tax audits by the IRS or other
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) effects of customer mergers or
divestitures, customer seasonal purchasing patterns and the timing of
significant orders which may negatively or positively impact the
company's quarterly results of operations; 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
|
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
|
(In thousands, except earnings per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
Revenues:
|
|
|
|
|
|
|
|
|
System and software
|
|
$
|
149,480
|
|
|
$
|
150,203
|
|
|
$
|
297,709
|
|
|
$
|
273,487
|
|
Service and support
|
|
|
110,753
|
|
|
|
103,013
|
|
|
|
214,675
|
|
|
|
206,244
|
|
Total revenues
|
|
|
260,233
|
|
|
|
253,216
|
|
|
|
512,384
|
|
|
|
479,731
|
|
Cost of revenues: (1)
|
|
|
|
|
|
|
|
|
System and software
|
|
|
16,185
|
|
|
|
15,236
|
|
|
|
43,156
|
|
|
|
24,135
|
|
Service and support
|
|
|
30,903
|
|
|
|
28,909
|
|
|
|
60,014
|
|
|
|
58,984
|
|
Amortization of purchased technology
|
|
|
1,841
|
|
|
|
712
|
|
|
|
3,202
|
|
|
|
1,919
|
|
Total cost of revenues
|
|
|
48,929
|
|
|
|
44,857
|
|
|
|
106,372
|
|
|
|
85,038
|
|
Gross profit
|
|
|
211,304
|
|
|
|
208,359
|
|
|
|
406,012
|
|
|
|
394,693
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Research and development (2)
|
|
|
87,542
|
|
|
|
80,307
|
|
|
|
171,993
|
|
|
|
160,024
|
|
Marketing and selling (3)
|
|
|
82,305
|
|
|
|
79,811
|
|
|
|
166,939
|
|
|
|
158,918
|
|
General and administration (4)
|
|
|
19,473
|
|
|
|
17,198
|
|
|
|
37,155
|
|
|
|
33,535
|
|
Equity in earnings of Frontline (5)
|
|
|
(2,062
|
)
|
|
|
(950
|
)
|
|
|
(3,441
|
)
|
|
|
(1,347
|
)
|
Amortization of intangible assets (6)
|
|
|
2,026
|
|
|
|
1,556
|
|
|
|
3,776
|
|
|
|
3,210
|
|
Special charges (7)
|
|
|
5,108
|
|
|
|
3,859
|
|
|
|
11,034
|
|
|
|
7,882
|
|
Total operating expenses
|
|
|
194,392
|
|
|
|
181,781
|
|
|
|
387,456
|
|
|
|
362,222
|
|
Operating income
|
|
|
16,912
|
|
|
|
26,578
|
|
|
|
18,556
|
|
|
|
32,471
|
|
Other income (expense), net (8)
|
|
|
(104
|
)
|
|
|
(272
|
)
|
|
|
(362
|
)
|
|
|
(1,231
|
)
|
Interest expense (9)
|
|
|
(4,807
|
)
|
|
|
(4,897
|
)
|
|
|
(9,392
|
)
|
|
|
(9,682
|
)
|
Income before income tax
|
|
|
12,001
|
|
|
|
21,409
|
|
|
|
8,802
|
|
|
|
21,558
|
|
Income tax benefit (10)
|
|
|
(1,768
|
)
|
|
|
(2,338
|
)
|
|
|
(1,942
|
)
|
|
|
(1,770
|
)
|
Net income
|
|
|
13,769
|
|
|
|
23,747
|
|
|
|
10,744
|
|
|
|
23,328
|
|
Less: Loss attributable to noncontrolling interest (11)
|
|
|
(403
|
)
|
|
|
(235
|
)
|
|
|
(877
|
)
|
|
|
(859
|
)
|
Net income attributable to Mentor Graphics
|
|
|
|
|
|
|
|
|
shareholders
|
|
$
|
14,172
|
|
|
$
|
23,982
|
|
|
$
|
11,621
|
|
|
$
|
24,187
|
|
Net income per share attributable to Mentor Graphics
|
|
|
|
|
|
|
|
|
shareholders:
|
|
|
|
|
|
|
|
|
Basica
|
|
$
|
0.13
|
|
|
$
|
0.19
|
|
|
$
|
0.12
|
|
|
$
|
0.20
|
|
Diluteda
|
|
$
|
0.13
|
|
|
$
|
0.19
|
|
|
$
|
0.11
|
|
|
$
|
0.19
|
|
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
113,868
|
|
|
|
112,988
|
|
|
|
114,396
|
|
|
|
112,851
|
|
Diluted
|
|
|
116,551
|
|
|
|
116,295
|
|
|
|
116,960
|
|
|
|
116,014
|
|
|
|
|
|
|
|
|
|
|
aWe have increased (decreased) the numerator of our basic
and diluted earnings per share calculation for the adjustment of the
noncontrolling interest with redemption feature to its calculated
redemption value, recorded directly to retained earnings, as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
895
|
|
|
$
|
(2,349
|
)
|
|
$
|
1,562
|
|
|
$
|
(1,881
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MENTOR GRAPHICS CORPORATION
|
FOOTNOTES TO UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Listed below are the items included in net income 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 July 31,
|
Six Months Ended July 31,
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
(1) Cost of revenues:
|
|
|
|
|
|
|
|
|
Equity plan-related compensation
|
|
$
|
544
|
|
|
$
|
458
|
|
|
$
|
1,079
|
|
|
$
|
918
|
|
Amortization of purchased technology
|
|
|
1,841
|
|
|
|
712
|
|
|
|
3,202
|
|
|
|
1,919
|
|
|
|
$
|
2,385
|
|
|
$
|
1,170
|
|
|
$
|
4,281
|
|
|
$
|
2,837
|
|
|
|
|
|
|
|
|
|
|
(2) Research and development:
|
|
|
|
|
|
|
|
|
Equity plan-related compensation
|
|
$
|
3,311
|
|
|
$
|
2,543
|
|
|
$
|
6,552
|
|
|
$
|
5,153
|
|
|
|
|
|
|
|
|
|
|
(3) Marketing and selling:
|
|
|
|
|
|
|
|
|
Equity plan-related compensation
|
|
$
|
2,143
|
|
|
$
|
1,771
|
|
|
$
|
4,321
|
|
|
$
|
3,653
|
|
|
|
|
|
|
|
|
|
|
(4) General and administration:
|
|
|
|
|
|
|
|
|
Equity plan-related compensation
|
|
$
|
3,162
|
|
|
$
|
2,505
|
|
|
$
|
5,337
|
|
|
$
|
4,119
|
|
|
|
|
|
|
|
|
|
|
(5) Equity in earnings of Frontline:
|
|
|
|
|
|
|
|
|
Amortization of purchased technology and other identified intangible
assets
|
|
|
|
$
|
-
|
|
|
$
|
231
|
|
|
$
|
116
|
|
|
$
|
968
|
|
|
|
|
|
|
|
|
|
|
(6) Amortization of intangible assets:
|
|
|
|
|
|
|
|
|
Amortization of other identified intangible assets
|
|
$
|
2,026
|
|
|
$
|
1,556
|
|
|
$
|
3,776
|
|
|
$
|
3,210
|
|
|
|
|
|
|
|
|
|
|
(7) Special charges:
|
|
|
|
|
|
|
|
|
Rebalance, restructuring, certain litigation, and other costs
|
|
$
|
5,108
|
|
|
$
|
3,859
|
|
|
$
|
11,034
|
|
|
$
|
7,882
|
|
|
|
|
|
|
|
|
|
|
(8) Other income (expense), net:
|
|
|
|
|
|
|
|
|
Net income (loss) of unconsolidated entities
|
|
$
|
55
|
|
|
$
|
(42
|
)
|
|
$
|
68
|
|
|
$
|
(93
|
)
|
|
|
|
|
|
|
|
|
|
(9) Interest expense:
|
|
|
|
|
|
|
|
|
Amortization of original issuance debt discount
|
|
$
|
1,521
|
|
|
$
|
1,416
|
|
|
$
|
3,015
|
|
|
$
|
2,807
|
|
|
|
|
|
|
|
|
|
|
(10) Income tax benefit:
|
|
|
|
|
|
|
|
|
Non-GAAP income tax effects
|
|
$
|
(7,158
|
)
|
|
$
|
(8,529
|
)
|
|
$
|
(9,983
|
)
|
|
$
|
(10,626
|
)
|
|
|
|
|
|
|
|
|
|
(11) Loss attributable to noncontrolling interest:
|
|
|
|
|
|
|
Amortization of intangible assets, equity-plan related compensation,
and income tax effects
|
|
$
|
(204
|
)
|
|
$
|
(169
|
)
|
|
$
|
(404
|
)
|
|
$
|
(562
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MENTOR GRAPHICS CORPORATION
|
UNAUDITED RECONCILIATION OF NON-GAAP
ADJUSTMENTS
|
(In thousands, except earnings per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
GAAP net income attributable to Mentor Graphics shareholders
|
|
$
|
14,172
|
|
|
$
|
23,982
|
|
|
$
|
11,621
|
|
|
$
|
24,187
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
Equity plan-related compensation: (1)
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
544
|
|
|
|
458
|
|
|
|
1,079
|
|
|
|
918
|
|
Research and development
|
|
|
3,311
|
|
|
|
2,543
|
|
|
|
6,552
|
|
|
|
5,153
|
|
Marketing and selling
|
|
|
2,143
|
|
|
|
1,771
|
|
|
|
4,321
|
|
|
|
3,653
|
|
General and administration
|
|
|
3,162
|
|
|
|
2,505
|
|
|
|
5,337
|
|
|
|
4,119
|
|
Acquisition - related items:
|
|
|
|
|
|
|
|
|
Amortization of purchased assets
|
|
|
|
|
|
|
|
|
Cost of revenues (2)
|
|
|
1,841
|
|
|
|
712
|
|
|
|
3,202
|
|
|
|
1,919
|
|
Frontline purchased technology and intangible assets (3)
|
|
|
-
|
|
|
|
231
|
|
|
|
116
|
|
|
|
968
|
|
Amortization of intangible assets (4)
|
|
|
2,026
|
|
|
|
1,556
|
|
|
|
3,776
|
|
|
|
3,210
|
|
Special charges (5)
|
|
|
5,108
|
|
|
|
3,859
|
|
|
|
11,034
|
|
|
|
7,882
|
|
Other income (expense), net (6)
|
|
|
55
|
|
|
|
(42
|
)
|
|
|
68
|
|
|
|
(93
|
)
|
Interest expense (7)
|
|
|
1,521
|
|
|
|
1,416
|
|
|
|
3,015
|
|
|
|
2,807
|
|
Non-GAAP income tax effects (8)
|
|
|
(7,158
|
)
|
|
|
(8,529
|
)
|
|
|
(9,983
|
)
|
|
|
(10,626
|
)
|
Noncontrolling interest (9)
|
|
|
(204
|
)
|
|
|
(169
|
)
|
|
|
(404
|
)
|
|
|
(562
|
)
|
Total of non-GAAP adjustments
|
|
|
12,349
|
|
|
|
6,311
|
|
|
|
28,113
|
|
|
|
19,348
|
|
Non-GAAP net income attributable to Mentor Graphics shareholders
|
|
$
|
26,521
|
|
|
$
|
30,293
|
|
|
$
|
39,734
|
|
|
$
|
43,535
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP and non-GAAP weighted average shares (diluted)
|
|
|
116,551
|
|
|
|
116,295
|
|
|
|
116,960
|
|
|
|
116,014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share attributable to Mentor Graphics shareholders:
|
|
|
|
|
GAAP (diluted)
|
|
$
|
0.13
|
|
|
$
|
0.19
|
|
|
$
|
0.11
|
|
|
$
|
0.19
|
|
Noncontrolling interest adjustment (10)
|
|
|
(0.01
|
)
|
|
|
0.02
|
|
|
|
(0.01
|
)
|
|
|
0.02
|
|
Non-GAAP adjustments detailed above
|
|
|
0.11
|
|
|
|
0.05
|
|
|
|
0.24
|
|
|
|
0.17
|
|
Non-GAAP (diluted)
|
|
$
|
0.23
|
|
|
$
|
0.26
|
|
|
$
|
0.34
|
|
|
$
|
0.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
(2)
|
|
Amount represents amortization of purchased technology resulting
from acquisitions. Purchased technology is amortized over two to
five years.
|
(3)
|
|
Amount represents amortization of purchased technology and other
identified intangible assets identified as part of the fair value of
the Frontline P.C.B. Solutions Limited Partnership (Frontline) joint
venture investment. Mentor Graphics has a 50% interest in Frontline.
The purchased technology was amortized over three years from the
March 2010 acquisition date, other identified intangible assets were
amortized over three to four years, and are reflected in the income
statement in the equity in earnings of Frontline. This expense is
the same type as being adjusted for in note (2) above and (4) below.
|
(4)
|
|
Other identified intangible assets are amortized to operating
expense over two to five years. Other identified intangible assets
include trade names, customer relationships, and backlog which are
the result of acquisition transactions.
|
(5)
|
|
Three months ended July 31, 2014: Special charges consist of
(i) $4,231 for EVE litigation costs, (ii) $575 of costs incurred for
employee rebalances which includes severance benefits, notice pay,
and outplacement services, and (iii) $302 in other adjustments.
|
|
|
Three months ended July 31, 2013: Special charges consist of
(i) $3,231 of EVE litigation costs, (ii) $631 of costs incurred for
employee rebalances which
severance benefits, notice pay, and outplacement services, and
(iii) $(3) in other adjustments.
|
|
|
Six months ended July 31, 2014: Special charges consist of
(i) $8,189 for EVE litigation costs, (ii) $1,700 of costs incurred
for employee rebalances which includes severance benefits, notice
pay, and outplacement services, and (iii) $1,145 in other
adjustments.
|
|
|
Six months ended July 31, 2013: Special charges consist of
(i) $5,171 for EVE litigation costs, (ii) $2,710 of costs incurred
for employee rebalances which includes severance benefits, notice
pay, and outplacement services, and (iii) $1 in other adjustments.
|
(6)
|
|
Amount represents income (loss) on investment accounted for under
the equity method of accounting.
|
|
(7)
|
|
Amount represents the amortization of original issuance debt
discount.
|
|
|
|
|
(8)
|
|
Non-GAAP income tax expense adjustment reflects the application of
our assumed normalized effective 17% tax rate, instead of our GAAP
tax rate, to our non-GAAP pre-tax income.
|
(9)
|
|
Adjustment for the impact of amortization of intangible assets,
equity plan-related compensation, and income tax expense on
noncontrolling interest.
|
(10)
|
|
Non-GAAP EPS excludes from the numerator of our earnings per share
calculation the adjustment of the noncontrolling interest to the
calculated redemption value, recorded directly to retained earnings.
|
|
|
|
|
|
|
MENTOR GRAPHICS CORPORATION
|
UNAUDITED RECONCILIATION OF GAAP
FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES
|
(In thousands, except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
GAAP gross profit
|
|
$
|
211,304
|
|
|
$
|
208,359
|
|
|
$
|
406,012
|
|
|
$
|
394,693
|
|
Reconciling items to non-GAAP gross profit:
|
|
|
|
|
|
|
|
|
Equity plan-related compensation
|
|
|
544
|
|
|
|
458
|
|
|
|
1,079
|
|
|
|
918
|
|
Amortization of purchased technology
|
|
|
1,841
|
|
|
|
712
|
|
|
|
3,202
|
|
|
|
1,919
|
|
Non-GAAP gross profit
|
|
$
|
213,689
|
|
|
$
|
209,529
|
|
|
$
|
410,293
|
|
|
$
|
397,530
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
GAAP gross profit as a percent of total revenues
|
|
|
81.2
|
%
|
|
|
82.3
|
%
|
|
|
79.2
|
%
|
|
|
82.3
|
%
|
Non-GAAP adjustments detailed above
|
|
|
0.9
|
%
|
|
|
0.4
|
%
|
|
|
0.9
|
%
|
|
|
0.6
|
%
|
Non-GAAP gross profit as a percent of total revenues
|
|
|
82.1
|
%
|
|
|
82.7
|
%
|
|
|
80.1
|
%
|
|
|
82.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
GAAP operating expenses
|
|
$
|
194,392
|
|
|
$
|
181,781
|
|
|
$
|
387,456
|
|
|
$
|
362,222
|
|
Reconciling items to non-GAAP operating expenses:
|
|
|
|
|
|
|
|
|
Equity plan-related compensation
|
|
|
(8,616
|
)
|
|
|
(6,819
|
)
|
|
|
(16,210
|
)
|
|
|
(12,925
|
)
|
Amortization of Frontline purchased technology and other
|
|
|
|
|
|
|
|
|
identified intangible assets
|
|
|
-
|
|
|
|
(231
|
)
|
|
|
(116
|
)
|
|
|
(968
|
)
|
Amortization of other identified intangible assets
|
|
|
(2,026
|
)
|
|
|
(1,556
|
)
|
|
|
(3,776
|
)
|
|
|
(3,210
|
)
|
Special charges
|
|
|
(5,108
|
)
|
|
|
(3,859
|
)
|
|
|
(11,034
|
)
|
|
|
(7,882
|
)
|
Non-GAAP operating expenses
|
|
$
|
178,642
|
|
|
$
|
169,316
|
|
|
$
|
356,320
|
|
|
$
|
337,237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
GAAP operating income
|
|
$
|
16,912
|
|
|
$
|
26,578
|
|
|
$
|
18,556
|
|
|
$
|
32,471
|
|
Reconciling items to non-GAAP operating income:
|
|
|
|
|
|
|
|
|
Equity plan-related compensation
|
|
$
|
9,160
|
|
|
$
|
7,277
|
|
|
$
|
17,289
|
|
|
$
|
13,843
|
|
Amortization of purchased technology
|
|
|
1,841
|
|
|
|
712
|
|
|
|
3,202
|
|
|
|
1,919
|
|
Amortization of Frontline purchased technology and other
|
|
|
|
|
|
|
|
|
identified intangible assets
|
|
|
-
|
|
|
|
231
|
|
|
|
116
|
|
|
|
968
|
|
Amortization of other identified intangible assets
|
|
|
2,026
|
|
|
|
1,556
|
|
|
|
3,776
|
|
|
|
3,210
|
|
Special charges
|
|
|
5,108
|
|
|
|
3,859
|
|
|
|
11,034
|
|
|
|
7,882
|
|
Non-GAAP operating income
|
|
$
|
35,047
|
|
|
$
|
40,213
|
|
|
$
|
53,973
|
|
|
$
|
60,293
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
GAAP operating income as a percent of total revenues
|
|
|
6.5
|
%
|
|
|
10.5
|
%
|
|
|
3.6
|
%
|
|
|
6.8
|
%
|
Non-GAAP adjustments detailed above
|
|
|
7.0
|
%
|
|
|
5.4
|
%
|
|
|
6.9
|
%
|
|
|
5.8
|
%
|
Non-GAAP operating income as a percent of total revenues
|
|
|
13.5
|
%
|
|
|
15.9
|
%
|
|
|
10.5
|
%
|
|
|
12.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
GAAP other income (expense), net and interest expense
|
|
$
|
(4,911
|
)
|
|
$
|
(5,169
|
)
|
|
$
|
(9,754
|
)
|
|
$
|
(10,913
|
)
|
Reconciling items to non-GAAP other income (expense), net
|
|
|
|
|
|
|
|
|
and interest expense:
|
|
|
|
|
|
|
|
|
Equity in earnings of unconsolidated entities
|
|
|
55
|
|
|
|
(42
|
)
|
|
|
68
|
|
|
|
(93
|
)
|
Amortization of original issuance debt discount
|
|
|
1,521
|
|
|
|
1,416
|
|
|
|
3,015
|
|
|
|
2,807
|
|
Non-GAAP other income (expense), net and interest expense
|
|
$
|
(3,335
|
)
|
|
$
|
(3,795
|
)
|
|
$
|
(6,671
|
)
|
|
$
|
(8,199
|
)
|
|
|
|
|
|
|
|
|
|
|
|
MENTOR GRAPHICS CORPORATION
|
UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 31,
|
|
January 31,
|
|
|
|
|
2014
|
|
|
2014
|
|
|
|
|
|
|
Assets
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash, cash equivalents and short-term investments
|
|
$
|
174,361
|
|
$
|
297,312
|
Trade accounts receivable, net
|
|
|
112,530
|
|
|
179,830
|
Term receivables, short-term
|
|
|
311,169
|
|
|
274,653
|
Prepaid expenses and other
|
|
|
65,570
|
|
|
64,658
|
Deferred income taxes
|
|
|
10,107
|
|
|
13,656
|
|
|
|
|
|
|
Total current assets
|
|
|
673,737
|
|
|
830,109
|
Property, plant, and equipment, net
|
|
|
158,474
|
|
|
160,165
|
Term receivables, long-term
|
|
|
236,743
|
|
|
270,365
|
Goodwill and intangible assets, net
|
|
|
650,879
|
|
|
571,843
|
Other assets
|
|
|
73,397
|
|
|
71,627
|
|
|
|
|
|
|
Total assets
|
|
$
|
1,793,230
|
|
$
|
1,904,109
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Short-term borrowings
|
|
$
|
3,640
|
|
$
|
9,590
|
Accounts payable
|
|
|
11,360
|
|
|
21,548
|
Income taxes payable
|
|
|
372
|
|
|
3,365
|
Accrued payroll and related liabilities
|
|
|
51,548
|
|
|
102,848
|
Accrued and other liabilities
|
|
|
40,455
|
|
|
42,457
|
Deferred revenue
|
|
|
223,610
|
|
|
231,179
|
|
|
|
|
|
|
Total current liabilities
|
|
|
330,985
|
|
|
410,987
|
Long-term notes payable
|
|
|
227,276
|
|
|
224,261
|
Deferred revenue, long-term
|
|
|
22,266
|
|
|
17,398
|
Other long-term liabilities
|
|
|
49,566
|
|
|
50,690
|
Total current liabilities
|
|
|
630,093
|
|
|
703,336
|
|
|
|
|
|
|
Noncontrolling interest with redemption feature
|
|
|
13,296
|
|
|
15,479
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
Common Stock
|
|
|
802,352
|
|
|
838,939
|
Retained Earnings
|
|
|
329,264
|
|
|
327,552
|
Accumulated other comprehensive income
|
|
|
18,025
|
|
|
18,803
|
Noncontrolling Interest
|
|
|
200
|
|
|
-
|
|
Total Stockholder's equity
|
|
|
1,149,841
|
|
|
1,185,294
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
1,793,230
|
|
$
|
1,904,109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MENTOR GRAPHICS CORPORATION
|
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS AND SUPPLEMENTAL INFORMATION
|
(In thousands, except days sales outstanding)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended July 31,
|
|
Six Months Ended July 31,
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
Operating activities
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
13,769
|
|
|
$
|
23,747
|
|
|
$
|
10,744
|
|
|
$
|
23,328
|
|
Depreciation and amortization
|
|
|
14,512
|
|
|
|
12,784
|
|
|
|
28,249
|
|
|
|
26,128
|
|
Other adjustments to reconcile:
|
|
|
|
|
|
|
|
|
Operating cash
|
|
|
11,298
|
|
|
|
6,594
|
|
|
|
17,820
|
|
|
|
17,404
|
|
Changes in working capital
|
|
|
9,944
|
|
|
|
(20,093
|
)
|
|
|
(18,251
|
)
|
|
|
(31,701
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
49,523
|
|
|
|
23,032
|
|
|
|
38,562
|
|
|
|
35,159
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(37,511
|
)
|
|
|
(6,299
|
)
|
|
|
(85,091
|
)
|
|
|
(21,457
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
|
|
Net cash used in financing activities
|
|
|
(13,443
|
)
|
|
|
(4,545
|
)
|
|
|
(72,736
|
)
|
|
|
(25,953
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
(33
|
)
|
|
|
(1,004
|
)
|
|
|
304
|
|
|
|
(1,968
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
|
(1,464
|
)
|
|
|
11,184
|
|
|
|
(118,961
|
)
|
|
|
(14,219
|
)
|
Cash and cash equivalents at beginning of perioda
|
|
|
175,825
|
|
|
|
198,380
|
|
|
|
293,322
|
|
|
|
223,783
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
174,361
|
|
|
$
|
209,564
|
|
|
$
|
174,361
|
|
|
$
|
209,564
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other data:
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
$
|
7,145
|
|
|
$
|
9,411
|
|
|
$
|
13,315
|
|
|
$
|
13,821
|
|
Days sales outstanding
|
|
|
147
|
|
|
|
130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
aThe condensed consolidated balance sheet at January 31,
2014 includes $3,990 of short-term investments in the "Cash, cash
equivalents, and short-term investments" line item. $3,990 should be
deducted from that line item to reconcile to the amount of "Cash and
cash equivalents at beginning of period" presented in this statement
for the six months ended July 31, 2014.
|
|
|
|
|
|
|
MENTOR GRAPHICS CORPORATION
|
UNAUDITED RECONCILIATION OF GAAP TO
NON-GAAP
|
EARNINGS PER SHARE
|
|
|
|
|
|
|
|
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 Q3'15 and fiscal year 2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
|
|
Estimated
|
|
|
|
|
Q3'15
|
|
FY'15
|
Diluted GAAP net income per share
|
|
$
|
0.07
|
|
$
|
1.37
|
|
Non-GAAP Adjustments:
|
|
|
|
|
Amortization of purchased technology (1)
|
|
|
0.02
|
|
|
0.06
|
|
Amortization of other identified intangible assets (2)
|
|
|
0.02
|
|
|
0.07
|
|
Equity plan-related compensation (3)
|
|
|
0.08
|
|
|
0.31
|
|
Special Charges (4)
|
|
|
-
|
|
|
0.09
|
|
Other income (expense), net and interest expense (5)
|
|
|
0.01
|
|
|
0.05
|
|
Non-GAAP income tax effects (6)
|
|
|
0.01
|
|
|
(0.18
|
)
|
Noncontrolling interest (7)
|
|
|
-
|
|
|
(0.01
|
)
|
Other (8)
|
|
|
-
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
Diluted non-GAAP net income per share
|
|
$
|
0.21
|
|
$
|
1.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Excludes amortization of purchased technology resulting from
acquisitions. Purchased technology is amortized over two to five
years.
|
(2)
|
Excludes amortization of other identified intangible assets
including trade names, customer relationships, and backlog resulting
from acquisition transactions. Other identified intangible assets
are amortized over two to five years.
|
(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.
|
(4)
|
Excludes special charges consisting primarily of costs incurred for
certain litigation costs, and employee rebalances, which includes
severance benefits, notice pay and outplacement services. Full year
adjustment represents the impact of actual special charges for the
six months ended July 31, 2014 as we do not provide guidance for
special charges.
|
(5)
|
Excludes income (loss) from an investment accounted for under the
equity method of accounting, and amortization of original issuance
debt discount.
|
(6)
|
Non-GAAP income tax expense adjustment reflects the application of
our assumed normalized effective 17% tax rate, instead of our GAAP
tax rate, to our non-GAAP pre-tax income.
|
(7)
|
Adjustment for the impact of amortization of intangible assets,
equity plan-related compensation, and income tax expense on
noncontrolling interest. Full year adjustment represents the impact
of the adjustment for the six months ended July 31, 2014, as we do
not provide guidance for this adjustment.
|
(8)
|
Excludes the adjustment to the calculated redemption value of the
noncontrolling interest, recorded directly to retained earnings.
Full year adjustment represents the impact of the adjustment to the
redemption value as of July 31, 2014, as we do not provide guidance
for this adjustment.
|
|
|
|
MENTOR GRAPHICS CORPORATION
|
|
UNAUDITED SUPPLEMENTAL BOOKINGS AND
REVENUE INFORMATION
|
|
(Rounded to nearest 5%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
Product Category Bookings (a)
|
|
Q1
|
Q2
|
Year
|
|
|
Q1
|
Q2
|
Q3
|
Q4
|
Year
|
|
|
Q1
|
Q2
|
Q3
|
Q4
|
Year
|
IC DESIGN TO SILICON
|
|
20%
|
25%
|
20%
|
|
|
60%
|
35%
|
40%
|
30%
|
40%
|
|
|
35%
|
25%
|
30%
|
35%
|
30%
|
SCALABLE VERIFICATION
|
|
25%
|
25%
|
25%
|
|
|
15%
|
45%
|
25%
|
30%
|
30%
|
|
|
15%
|
30%
|
20%
|
25%
|
25%
|
INTEGRATED SYSTEMS DESIGN
|
|
30%
|
25%
|
30%
|
|
|
10%
|
10%
|
20%
|
30%
|
20%
|
|
|
25%
|
25%
|
25%
|
25%
|
25%
|
NEW & EMERGING MARKETS
|
|
10%
|
15%
|
10%
|
|
|
5%
|
5%
|
5%
|
5%
|
5%
|
|
|
5%
|
10%
|
15%
|
5%
|
10%
|
SERVICES / OTHER
|
|
15%
|
10%
|
15%
|
|
|
10%
|
5%
|
10%
|
5%
|
5%
|
|
|
20%
|
10%
|
10%
|
10%
|
10%
|
Total
|
|
100%
|
100%
|
100%
|
|
|
100%
|
100%
|
100%
|
100%
|
100%
|
|
|
100%
|
100%
|
100%
|
100%
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
Product Category Revenue (b)
|
|
Q1
|
Q2
|
Year
|
|
|
Q1
|
Q2
|
Q3
|
Q4
|
Year
|
|
|
Q1
|
Q2
|
Q3
|
Q4
|
Year
|
IC DESIGN TO SILICON
|
|
25%
|
30%
|
25%
|
|
|
35%
|
50%
|
35%
|
35%
|
40%
|
|
|
40%
|
35%
|
25%
|
35%
|
35%
|
SCALABLE VERIFICATION
|
|
35%
|
25%
|
30%
|
|
|
20%
|
20%
|
25%
|
30%
|
25%
|
|
|
25%
|
25%
|
30%
|
30%
|
25%
|
INTEGRATED SYSTEMS DESIGN
|
|
25%
|
25%
|
25%
|
|
|
30%
|
20%
|
25%
|
25%
|
20%
|
|
|
20%
|
25%
|
25%
|
20%
|
25%
|
NEW & EMERGING MARKETS
|
|
5%
|
10%
|
10%
|
|
|
5%
|
5%
|
5%
|
5%
|
5%
|
|
|
5%
|
5%
|
10%
|
5%
|
5%
|
SERVICES / OTHER
|
|
10%
|
10%
|
10%
|
|
|
10%
|
5%
|
10%
|
5%
|
10%
|
|
|
10%
|
10%
|
10%
|
10%
|
10%
|
Total
|
|
100%
|
100%
|
100%
|
|
|
100%
|
100%
|
100%
|
100%
|
100%
|
|
|
100%
|
100%
|
100%
|
100%
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
Bookings by Geography
|
|
Q1
|
Q2
|
Year
|
|
|
Q1
|
Q2
|
Q3
|
Q4
|
Year
|
|
|
Q1
|
Q2
|
Q3
|
Q4
|
Year
|
North America
|
|
50%
|
40%
|
45%
|
|
|
35%
|
55%
|
60%
|
40%
|
50%
|
|
|
35%
|
40%
|
50%
|
35%
|
40%
|
Europe
|
|
15%
|
25%
|
20%
|
|
|
10%
|
15%
|
15%
|
30%
|
20%
|
|
|
20%
|
35%
|
20%
|
30%
|
25%
|
Japan
|
|
15%
|
5%
|
10%
|
|
|
10%
|
5%
|
5%
|
10%
|
5%
|
|
|
10%
|
5%
|
5%
|
10%
|
10%
|
Pac Rim
|
|
20%
|
30%
|
25%
|
|
|
45%
|
25%
|
20%
|
20%
|
25%
|
|
|
35%
|
20%
|
25%
|
25%
|
25%
|
Total
|
|
100%
|
100%
|
100%
|
|
|
100%
|
100%
|
100%
|
100%
|
100%
|
|
|
100%
|
100%
|
100%
|
100%
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
Revenue by Geography
|
|
Q1
|
Q2
|
Year
|
|
|
Q1
|
Q2
|
Q3
|
Q4
|
Year
|
|
|
Q1
|
Q2
|
Q3
|
Q4
|
Year
|
North America
|
|
50%
|
45%
|
45%
|
|
|
45%
|
40%
|
50%
|
45%
|
45%
|
|
|
50%
|
45%
|
50%
|
40%
|
45%
|
Europe
|
|
25%
|
20%
|
25%
|
|
|
20%
|
20%
|
20%
|
20%
|
20%
|
|
|
20%
|
20%
|
20%
|
30%
|
25%
|
Japan
|
|
10%
|
10%
|
10%
|
|
|
10%
|
5%
|
10%
|
15%
|
10%
|
|
|
10%
|
15%
|
10%
|
10%
|
10%
|
Pac Rim
|
|
15%
|
25%
|
20%
|
|
|
25%
|
35%
|
20%
|
20%
|
25%
|
|
|
20%
|
20%
|
20%
|
20%
|
20%
|
Total
|
|
100%
|
100%
|
100%
|
|
|
100%
|
100%
|
100%
|
100%
|
100%
|
|
|
100%
|
100%
|
100%
|
100%
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
Bookings by Business Model (c)
|
|
Q1
|
Q2
|
Year
|
|
|
Q1
|
Q2
|
Q3
|
Q4
|
Year
|
|
|
Q1
|
Q2
|
Q3
|
Q4
|
Year
|
Perpetual
|
|
35%
|
20%
|
25%
|
|
|
15%
|
50%
|
20%
|
10%
|
25%
|
|
|
25%
|
20%
|
20%
|
15%
|
20%
|
Term Ratable
|
|
20%
|
10%
|
15%
|
|
|
10%
|
5%
|
5%
|
5%
|
5%
|
|
|
25%
|
15%
|
10%
|
5%
|
10%
|
Term Up Front
|
|
45%
|
70%
|
60%
|
|
|
75%
|
45%
|
75%
|
85%
|
70%
|
|
|
50%
|
65%
|
70%
|
80%
|
70%
|
Total
|
|
100%
|
100%
|
100%
|
|
|
100%
|
100%
|
100%
|
100%
|
100%
|
|
|
100%
|
100%
|
100%
|
100%
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
Revenue by Business Model (c)
|
|
Q1
|
Q2
|
Year
|
|
|
Q1
|
Q2
|
Q3
|
Q4
|
Year
|
|
|
Q1
|
Q2
|
Q3
|
Q4
|
Year
|
Perpetual
|
|
35%
|
30%
|
30%
|
|
|
20%
|
25%
|
20%
|
20%
|
20%
|
|
|
20%
|
25%
|
25%
|
15%
|
20%
|
Term Ratable
|
|
10%
|
10%
|
10%
|
|
|
10%
|
10%
|
5%
|
5%
|
10%
|
|
|
10%
|
10%
|
10%
|
5%
|
10%
|
Term Up Front
|
|
55%
|
60%
|
60%
|
|
|
70%
|
65%
|
75%
|
75%
|
70%
|
|
|
70%
|
65%
|
65%
|
80%
|
70%
|
Total
|
|
100%
|
100%
|
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).
|
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