[November 22, 2016] |
|
Mentor Graphics Reports Fiscal Third Quarter Results
Mentor Graphics Corporation (NASDAQ: MENT) today announced financial
results for the company's fiscal third quarter ended October 31, 2016.
The company reported revenues of $322.5 million, GAAP earnings per share
of $0.37 and non-GAAP earnings per share of $0.50.
Fiscal Third Quarter Performance
-
Book to bill was a record for a third quarter and solidly above 1.0
for the second consecutive quarter.
-
Annualized fee growth for top 10 renewals was 60 percent overall with
fees from systems customers growing over 160 percent and those from
integrated circuit (IC) customers growing 35 percent.
-
Average term length for renewals in the top 10 deals was 3.1 years.
-
Emulation product revenue, up 100 percent year over year, included 4
new customers for the second consecutive quarter.
-
GAAP gross margin was 84.1 percent. Non-GAAP gross margin of 84.9
percent is the highest for a Q3 in the last five years and 340 basis
points higher than last quarter.
-
GAAP operating expenses were $215 million. Non-GAAP operating expenses
of $202 million were on guidance and flat year over year.
"Mentor's third quarter results solidly exceeded revenue and
earnings-per-share guidance," said Walden C. Rhines, chairman and CEO of
Mentor Graphics. "Book to bill was significantly above one with strength
in both semiconductor and system accounts. Growth of the annual run-rate
in our top 10 customers was a strong 60 percent in the third fiscal
quarter. After quarter end, on November 14, we announced an agreement
whereby Siemens will acquire Mentor Graphics. Joining forces with
Siemens will enable Mentor to achieve the next level of success for our
customers and employees."
During the quarter Mentor Graphics acquired Galaxy Semiconductor, a
leading provider of test data analysis and defect reduction software for
the semiconductor industry. The company further extended its offerings
within the Calibre® and Analog FastSPICE (AFS™) platforms to support
TSMC 7 nm and 16 FFC FinFET process technologies. Mentor received two
Partner of the Year Awards from TSMC for joint delivery of the 7 nm
mobile design platform and the Integrated Fan-Out (INFO) design solution.
Mentor announced a partnership with embedded middleware vendor Real-Time
Innovations (RTI) for secure embedded systems communications in
industrial, medical and mil-aero applications. The company also released
the new Xpedition® multi-board system design solution enabling
multi-discipline team collaboration, as well as advanced technologies in
the Xpedition flow to enable design and verification of 3D rigid-flex
structures. In automotive news, the company announced a joint agreement
with Telemotive AG to provide smart charging technology for plug-in
vehicles.
"Bookings were up 50 percent over the same quarter a year ago," said
Gregory K. Hinckley, president of Mentor Graphics. "Revenue of $323
million is a record for a third quarter and up 11 percent from the same
period a year ago while non-GAAP earnings per share of $0.50 were up 78
percent year over year. Robust revenue combined with our continued
attention to expense control resulted in a GAAP operating margin of 18
percent. In addition non-GAAP operating margin of 22 percent drove
non-GAAP operating profits up over 60 percent year over year."
Outlook
On November 14, 2016, the company announced that it had entered into a
merger agreement under which Siemens will acquire Mentor Graphics. As
a result of the acquisition announcement, the company will not provide
an outlook for future financial results and is withdrawing all
previously issued financial guidance.
Dividend
The company announced a quarterly dividend of $0.055 per share. The
dividend is payable on January 3, 2017 to shareholders of record at the
close of business on December 8, 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:
-
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 their 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 employee severance,
certain litigation costs, acquisitions, excess facility costs, and
other asset related charges. Special charges are incurred based on
particular facts and circumstances and can vary in amount and
frequency. 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. 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 the significance in variability of timing and
amount. 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 our employee stock purchase plans. 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, 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, utilizing a
normalized effective tax rate. The normalized non-GAAP effective tax
rate of 19% considers our global tax posture, including the weighted
average tax rates applicable in the various jurisdictions in which we
operate; 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. tax loss
carryforwards and tax credits that were not previously recorded as a
benefit in our financial statements. Our non-GAAP effective tax rate
is subject to change over time for various reasons, including changes
in geographic business mix, statutory tax rates, foreign re-investment
expectations, and availability of U.S. tax loss carryforwards and tax
credits that were not previously recorded as a benefit. Our GAAP tax
rate for the nine months ended October 31, 2016 is 15% after
consideration of period specific items. Without period specific items
of ($1.5) million, our GAAP tax rate is 19%. Our full fiscal year 2017
GAAP tax rate, inclusive of period specific items recognized through
October 31, 2016, is projected to be 18%.
-
Our agreement with the former owners of noncontrolling interests in
one of our subsidiaries gave 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. The amount for
the three and nine months ended October 31, 2015 reflects our
adjustment to redemption value for this time period. In September 2015
we acquired the remaining noncontrolling interest in the subsidiary.
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,
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:
-
Amortization of intangible assets represents the loss in value as the
technology in our industry evolves, advances, 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 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.
-
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 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, Calibre and Xpedition are registered
trademarks and AFS is a trademark of Mentor Graphics Corporation. All
other company and/or product names are the trademarks and/or registered
trademarks of their respective owners.)
Additional Information and Where to Find It
In connection with the proposed transaction, the Company will file with
the U.S. Securities and Exchange Commission (the "SEC") and mail or
otherwise provide to its stockholders a proxy statement regarding the
proposed transaction. BEFORE MAKING ANY VOTING DECISION, THE COMPANY'S
STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT IN ITS ENTIRETY WHEN
IT BECOMES AVAILABLE AND ANY OTHER DOCUMENTS FILED WITH THE SEC IN
CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED BY REFERENCE THEREIN
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION. Investors and
security holders may obtain a free copy of the proxy statement and other
documents that the Company files with the SEC (when available) from the
SEC's website at www.sec.gov
and the Company's website at www.mentor.com.
In addition, the proxy statement and other documents filed by the
Company with the SEC (when available) may be obtained from the Company
free of charge by directing a request to Mentor Graphics Corporation,
Investor Relations, 8005 SW Boeckman Rd., Wilsonville, OR 97070,
1-503-685-1462.
Participants in Solicitation
The Company and its directors, executive officers and certain employees
may be deemed, and Siemens Industry, Inc. and its managing board,
officers and employees may be deemed, under SEC rules, to be
participants in the solicitation of proxies from the Company's
shareholders with respect to the proposed acquisition of the Company by
Siemens Industry, Inc. With respect to Siemens Industry, Inc. and its
managing board, officers and employees, certain additional information
is available and has been prepared in accordance with the German
Commercial Code. Information concerning the ownership of the Company's
securities by the Company's directors and executive officers is included
in their SEC filings on Forms 3, 4 and 5, and additional information
regarding the names, affiliations and interests of such individuals is
available in the Company's Annual Report on Form 10-K for the fiscal
year ended January 31, 2016 and its definitive proxy statement for the
2016 annual meeting of shareholders filed with the SEC on May 18, 2016.
Information regarding the Company's directors, executive officers and
certain other employees who may be deemed, under SEC rules, to be
participants in the solicitation of proxies from the Company's
shareholders with respect to the proposed acquisition of the Company by
Siemens Industry, Inc., including their respective interests by security
holdings or otherwise, also will be included in the proxy statement
relating to such acquisition when it is filed with the SEC. These
documents will be available free of charge from the SEC's website at www.sec.gov
and the Company's website at www.mentor.com.
Forward-Looking Statements
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) uncertainty associated with
the announcement and pendency of our agreement to be acquired by
U.S.-based entities affiliated with Siemens AG could adversely affect
our business and relationships with customers; (ii) 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; (iii) 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; (iv) 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; (v) effects of the volatility of foreign currency
fluctuations on the company's business and operating results; (vi)
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; (vii)
changes in accounting or reporting rules or interpretations, including
new rules affecting revenue recognition; (viii) the impact of audits by
taxing authorities, or changes in applicable tax laws, regulations or
enforcement practices; (ix) political and economic uncertainty regarding
Britain's exit from the EU; (x) effects of unanticipated shifts in
product mix on gross margin; and (x) 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
|
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
|
(In thousands, except earnings per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended October 31,
|
|
|
Nine Months Ended October 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
System and software
|
|
|
$
|
198,605
|
|
|
|
$
|
168,699
|
|
|
|
$
|
439,064
|
|
|
|
$
|
486,831
|
|
Service and support
|
|
|
|
123,911
|
|
|
|
|
121,817
|
|
|
|
|
365,435
|
|
|
|
|
356,890
|
|
Total revenues
|
|
|
|
322,516
|
|
|
|
|
290,516
|
|
|
|
|
804,499
|
|
|
|
|
843,721
|
|
Cost of revenues: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
System and software
|
|
|
|
13,713
|
|
|
|
|
9,759
|
|
|
|
|
37,375
|
|
|
|
|
36,432
|
|
Service and support
|
|
|
|
35,649
|
|
|
|
|
35,286
|
|
|
|
|
100,910
|
|
|
|
|
100,275
|
|
Amortization of purchased technology
|
|
|
|
1,828
|
|
|
|
|
1,844
|
|
|
|
|
5,400
|
|
|
|
|
5,496
|
|
Total cost of revenues
|
|
|
|
51,190
|
|
|
|
|
46,889
|
|
|
|
|
143,685
|
|
|
|
|
142,203
|
|
Gross profit
|
|
|
|
271,326
|
|
|
|
|
243,627
|
|
|
|
|
660,814
|
|
|
|
|
701,518
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development (2)
|
|
|
|
101,023
|
|
|
|
|
99,669
|
|
|
|
|
285,561
|
|
|
|
|
278,237
|
|
Marketing and selling (3)
|
|
|
|
91,646
|
|
|
|
|
93,165
|
|
|
|
|
259,816
|
|
|
|
|
262,857
|
|
General and administration (4)
|
|
|
|
20,015
|
|
|
|
|
19,665
|
|
|
|
|
56,777
|
|
|
|
|
56,298
|
|
Equity in earnings of Frontline
|
|
|
|
(634
|
)
|
|
|
|
(1,755
|
)
|
|
|
|
(2,311
|
)
|
|
|
|
(3,976
|
)
|
Amortization of intangible assets (5)
|
|
|
|
1,462
|
|
|
|
|
2,364
|
|
|
|
|
4,536
|
|
|
|
|
6,817
|
|
Special charges (6)
|
|
|
|
1,500
|
|
|
|
|
4,831
|
|
|
|
|
5,936
|
|
|
|
|
43,994
|
|
Total operating expenses
|
|
|
|
215,012
|
|
|
|
|
217,939
|
|
|
|
|
610,315
|
|
|
|
|
644,227
|
|
Operating income:
|
|
|
|
56,314
|
|
|
|
|
25,688
|
|
|
|
|
50,499
|
|
|
|
|
57,291
|
|
Other income, net (7)
|
|
|
|
268
|
|
|
|
|
320
|
|
|
|
|
1,795
|
|
|
|
|
849
|
|
Interest expense (8)
|
|
|
|
(5,143
|
)
|
|
|
|
(4,915
|
)
|
|
|
|
(14,971
|
)
|
|
|
|
(14,381
|
)
|
Income before income tax
|
|
|
|
51,439
|
|
|
|
|
21,093
|
|
|
|
|
37,323
|
|
|
|
|
43,759
|
|
Income tax expense (9)
|
|
|
|
9,677
|
|
|
|
|
7,204
|
|
|
|
|
5,560
|
|
|
|
|
9,763
|
|
Net income
|
|
|
|
41,762
|
|
|
|
|
13,889
|
|
|
|
|
31,763
|
|
|
|
|
33,996
|
|
Less: Loss attributable to noncontrolling interest (10)
|
|
|
|
-
|
|
|
|
|
(790
|
)
|
|
|
|
-
|
|
|
|
|
(2,010
|
)
|
Net income attributable to Mentor Graphics shareholders
|
|
|
$
|
41,762
|
|
|
|
$
|
14,679
|
|
|
|
$
|
31,763
|
|
|
|
$
|
36,006
|
|
Net income per share attributable to Mentor Graphics shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basica
|
|
|
$
|
0.38
|
|
|
|
$
|
0.13
|
|
|
|
$
|
0.29
|
|
|
|
$
|
0.31
|
|
Diluteda,b
|
|
|
$
|
0.37
|
|
|
|
$
|
0.12
|
|
|
|
$
|
0.29
|
|
|
|
$
|
0.30
|
|
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
108,887
|
|
|
|
|
117,759
|
|
|
|
|
108,442
|
|
|
|
|
116,787
|
|
Diluted
|
|
|
|
114,112
|
|
|
|
|
120,141
|
|
|
|
|
110,931
|
|
|
|
|
121,963
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
aWe have increased 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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
133
|
|
|
|
|
|
|
$
|
258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
bWe have increased the numerator of our diluted earnings
per share calculation by $519 for the three months ended October 31,
2016 and the nine months ended October 31, 2015 for the dilutive
effect of our convertible debt. Corresponding dilutive shares of
2,496 for the three months ended October 31, 2016 and 2,565 for the
nine months ended October 31, 2015 are included in the diluted
weighted average number of shares outstanding.
|
|
Refer to following page for a description of footnotes.
|
|
|
MENTOR GRAPHICS CORPORATION
|
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 October 31,
|
|
|
Nine Months Ended October 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
(1) Cost of revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity plan-related compensation
|
|
|
$
|
785
|
|
|
|
$
|
665
|
|
|
|
$
|
2,277
|
|
|
|
$
|
1,981
|
|
Amortization of purchased technology
|
|
|
|
1,828
|
|
|
|
|
1,844
|
|
|
|
|
5,400
|
|
|
|
|
5,496
|
|
|
|
|
$
|
2,613
|
|
|
|
$
|
2,509
|
|
|
|
$
|
7,677
|
|
|
|
$
|
7,477
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Research and development:
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity plan-related compensation
|
|
|
$
|
4,708
|
|
|
|
$
|
4,095
|
|
|
|
$
|
13,598
|
|
|
|
$
|
12,213
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Marketing and selling:
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity plan-related compensation
|
|
|
$
|
2,911
|
|
|
|
$
|
2,468
|
|
|
|
$
|
8,612
|
|
|
|
$
|
7,314
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) General and administration:
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity plan-related compensation
|
|
|
$
|
2,687
|
|
|
|
$
|
2,797
|
|
|
|
$
|
9,031
|
|
|
|
$
|
9,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) Amortization of intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of other identified intangible assets
|
|
|
$
|
1,462
|
|
|
|
$
|
2,364
|
|
|
|
$
|
4,536
|
|
|
|
$
|
6,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6) Special charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
Rebalance, restructuring, certain litigation, and other costs
|
|
|
$
|
1,500
|
|
|
|
$
|
4,831
|
|
|
|
$
|
5,936
|
|
|
|
$
|
43,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7) Other income, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss of unconsolidated entities
|
|
|
$
|
36
|
|
|
|
$
|
72
|
|
|
|
$
|
81
|
|
|
|
$
|
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8) Interest expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of original issuance debt discount
|
|
|
$
|
1,786
|
|
|
|
$
|
1,663
|
|
|
|
$
|
5,263
|
|
|
|
$
|
4,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9) Income tax expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income tax effects
|
|
|
$
|
(3,460
|
)
|
|
|
$
|
(756
|
)
|
|
|
$
|
(11,931
|
)
|
|
|
$
|
(16,056
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10) Loss attributable to noncontrolling interest:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets, equity-plan related
compensation, and income tax effects
|
|
|
$
|
-
|
|
|
|
$
|
(238
|
)
|
|
|
$
|
-
|
|
|
|
$
|
(638
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MENTOR GRAPHICS CORPORATION
|
UNAUDITED RECONCILIATION OF NON-GAAP
ADJUSTMENTS
|
(In thousands, except earnings per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended October 31,
|
|
|
Nine Months Ended October 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
GAAP net income attributable to Mentor Graphics shareholders
|
|
|
$
|
41,762
|
|
|
|
$
|
14,679
|
|
|
|
$
|
31,763
|
|
|
|
$
|
36,006
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity plan-related compensation: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
|
785
|
|
|
|
|
665
|
|
|
|
|
2,277
|
|
|
|
|
1,981
|
|
Research and development
|
|
|
|
4,708
|
|
|
|
|
4,095
|
|
|
|
|
13,598
|
|
|
|
|
12,213
|
|
Marketing and selling
|
|
|
|
2,911
|
|
|
|
|
2,468
|
|
|
|
|
8,612
|
|
|
|
|
7,314
|
|
General and administration
|
|
|
|
2,687
|
|
|
|
|
2,797
|
|
|
|
|
9,031
|
|
|
|
|
9,381
|
|
Acquisition - related items:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of purchased assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues (2)
|
|
|
|
1,828
|
|
|
|
|
1,844
|
|
|
|
|
5,400
|
|
|
|
|
5,496
|
|
Amortization of intangible assets (3)
|
|
|
|
1,462
|
|
|
|
|
2,364
|
|
|
|
|
4,536
|
|
|
|
|
6,817
|
|
Special charges (4)
|
|
|
|
1,500
|
|
|
|
|
4,831
|
|
|
|
|
5,936
|
|
|
|
|
43,994
|
|
Other income, net (5)
|
|
|
|
36
|
|
|
|
|
72
|
|
|
|
|
81
|
|
|
|
|
33
|
|
Interest expense (6)
|
|
|
|
1,786
|
|
|
|
|
1,663
|
|
|
|
|
5,263
|
|
|
|
|
4,900
|
|
Non-GAAP income tax effects (7)
|
|
|
|
(3,460
|
)
|
|
|
|
(756
|
)
|
|
|
|
(11,931
|
)
|
|
|
|
(16,056
|
)
|
Noncontrolling interest (8)
|
|
|
|
-
|
|
|
|
|
(238
|
)
|
|
|
|
-
|
|
|
|
|
(638
|
)
|
Total of non-GAAP adjustments
|
|
|
|
14,243
|
|
|
|
|
19,805
|
|
|
|
|
42,803
|
|
|
|
|
75,435
|
|
Non-GAAP net income attributable to Mentor Graphics shareholders
|
|
|
$
|
56,005
|
|
|
|
$
|
34,484
|
|
|
|
$
|
74,566
|
|
|
|
$
|
111,441
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP weighted average shares (diluted)
|
|
|
|
114,112
|
|
|
|
|
120,141
|
|
|
|
|
110,931
|
|
|
|
|
121,963
|
|
Non-GAAP adjustment
|
|
|
|
-
|
|
|
|
|
2,695
|
|
|
|
|
1,071
|
|
|
|
|
-
|
|
Non-GAAP weighted average shares (diluted)
|
|
|
|
114,112
|
|
|
|
|
122,836
|
|
|
|
|
112,002
|
|
|
|
|
121,963
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share attributable to Mentor Graphics shareholders:
|
|
|
|
|
|
|
|
|
|
GAAP (diluted)
|
|
|
$
|
0.37
|
|
|
|
$
|
0.12
|
|
|
|
$
|
0.29
|
|
|
|
$
|
0.30
|
|
Non-GAAP adjustments detailed above
|
|
|
|
0.13
|
|
|
|
|
0.16
|
|
|
|
|
0.38
|
|
|
|
|
0.62
|
|
Non-GAAP (diluted) (9)
|
|
|
$
|
0.50
|
|
|
|
$
|
0.28
|
|
|
|
$
|
0.67
|
|
|
|
$
|
0.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 generally amortized over
two to five years.
|
(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.
|
(4)
|
|
|
Three months ended October 31, 2016: Special charges consist
of (i) $354 of costs incurred for employee rebalances which include
severance benefits and notice pay, (ii) $(19) for EVE litigation
costs, and (iii) $1,165 in other adjustments.
|
|
|
|
Three months ended October 31, 2015: Special charges consist
of (i) $3,485 of costs incurred for employee rebalances which
include severance benefits and notice pay, (ii) $1,122 for EVE
litigation costs, (iii) $(203) for severance costs incurred for the
voluntary early retirement program, and (iv) $427 in other
adjustments.
|
|
|
|
Nine months ended October 31, 2016: Special charges consist
of (i) $2,884 of costs incurred for employee rebalances which
include severance benefits and notice pay, (ii) $1,344 for EVE
litigation costs, and (iii) $1,708 in other adjustments.
|
|
|
|
Nine months ended October 31, 2015: Special charges consist
of (i) $25,232 of severance costs incurred for the voluntary early
retirement program, (ii) $14,188 of costs incurred for employee
rebalances which include severance benefits and notice pay, (iii)
$3,641 for EVE litigation costs, and (iv) $933 in other adjustments.
|
(5)
|
|
|
Amount represents loss for an investment accounted for under the
equity method of accounting.
|
(6)
|
|
|
Amount represents the amortization of original issuance debt
discount.
|
(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.
|
(8)
|
|
|
Adjustment for the impact of amortization of intangible assets,
equity plan-related compensation, and income tax expense on
noncontrolling interest.
|
(9)
|
|
|
We have increased the numerator of our diluted earnings per share
calculation by $519 for the three and nine months ended October 31,
2016 and 2015 for the dilutive effect of our convertible debt.
Corresponding dilutive shares of 2,695 for the three months ended
October 31, 2015 and 1,071 for the nine months ended October 31,
2016 are presented in the reconciliation above. Corresponding
dilutive shares of 2,496 for the three months ended October 31, 2016
and 2,565 for the nine months ended October 31, 2015 are already
included in the GAAP diluted weighted average number of shares
outstanding.
|
|
|
|
|
|
MENTOR GRAPHICS CORPORATION
|
UNAUDITED RECONCILIATION OF GAAP
FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES
|
(In thousands, except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended October 31,
|
|
|
Nine Months Ended October 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
GAAP gross profit
|
|
|
$
|
271,326
|
|
|
|
$
|
243,627
|
|
|
|
$
|
660,814
|
|
|
|
$
|
701,518
|
|
Reconciling items to non-GAAP gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity plan-related compensation
|
|
|
|
785
|
|
|
|
|
665
|
|
|
|
|
2,277
|
|
|
|
|
1,981
|
|
Amortization of purchased technology
|
|
|
|
1,828
|
|
|
|
|
1,844
|
|
|
|
|
5,400
|
|
|
|
|
5,496
|
|
Non-GAAP gross profit
|
|
|
$
|
273,939
|
|
|
|
$
|
246,136
|
|
|
|
$
|
668,491
|
|
|
|
$
|
708,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended October 31,
|
|
|
Nine Months Ended October 31,
|
|
|
|
|
2016
|
|
|
|
|
2015
|
|
|
|
|
2016
|
|
|
|
|
2015
|
|
GAAP gross profit as a percent of total revenues
|
|
|
|
84.1
|
%
|
|
|
|
83.9
|
%
|
|
|
|
82.1
|
%
|
|
|
|
83.1
|
%
|
Non-GAAP adjustments detailed above
|
|
|
|
0.8
|
%
|
|
|
|
0.8
|
%
|
|
|
|
1.0
|
%
|
|
|
|
0.9
|
%
|
Non-GAAP gross profit as a percent of total revenues
|
|
|
|
84.9
|
%
|
|
|
|
84.7
|
%
|
|
|
|
83.1
|
%
|
|
|
|
84.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended October 31,
|
|
|
Nine Months Ended October 31,
|
|
|
|
|
2016
|
|
|
|
|
2015
|
|
|
|
|
2016
|
|
|
|
|
2015
|
|
GAAP operating expenses
|
|
|
$
|
215,012
|
|
|
|
$
|
217,939
|
|
|
|
$
|
610,315
|
|
|
|
$
|
644,227
|
|
Reconciling items to non-GAAP operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity plan-related compensation
|
|
|
|
(10,306
|
)
|
|
|
|
(9,360
|
)
|
|
|
|
(31,241
|
)
|
|
|
|
(28,908
|
)
|
Amortization of other identified intangible assets
|
|
|
|
(1,462
|
)
|
|
|
|
(2,364
|
)
|
|
|
|
(4,536
|
)
|
|
|
|
(6,817
|
)
|
Special charges
|
|
|
|
(1,500
|
)
|
|
|
|
(4,831
|
)
|
|
|
|
(5,936
|
)
|
|
|
|
(43,994
|
)
|
Non-GAAP operating expenses
|
|
|
$
|
201,744
|
|
|
|
$
|
201,384
|
|
|
|
$
|
568,602
|
|
|
|
$
|
564,508
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended October 31,
|
|
|
Nine Months Ended October 31,
|
|
|
|
|
2016
|
|
|
|
|
2015
|
|
|
|
|
2016
|
|
|
|
|
2015
|
|
GAAP operating income
|
|
|
$
|
56,314
|
|
|
|
$
|
25,688
|
|
|
|
$
|
50,499
|
|
|
|
$
|
57,291
|
|
Reconciling items to non-GAAP operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity plan-related compensation
|
|
|
|
11,091
|
|
|
|
|
10,025
|
|
|
|
|
33,518
|
|
|
|
|
30,889
|
|
Amortization of purchased technology
|
|
|
|
1,828
|
|
|
|
|
1,844
|
|
|
|
|
5,400
|
|
|
|
|
5,496
|
|
Amortization of other identified intangible assets
|
|
|
|
1,462
|
|
|
|
|
2,364
|
|
|
|
|
4,536
|
|
|
|
|
6,817
|
|
Special charges
|
|
|
|
1,500
|
|
|
|
|
4,831
|
|
|
|
|
5,936
|
|
|
|
|
43,994
|
|
Non-GAAP operating income
|
|
|
$
|
72,195
|
|
|
|
$
|
44,752
|
|
|
|
$
|
99,889
|
|
|
|
$
|
144,487
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended October 31,
|
|
|
Nine Months Ended October 31,
|
|
|
|
|
2016
|
|
|
|
|
2015
|
|
|
|
|
2016
|
|
|
|
|
2015
|
|
GAAP operating income as a percent of total revenues
|
|
|
|
17.5
|
%
|
|
|
|
8.8
|
%
|
|
|
|
6.3
|
%
|
|
|
|
6.8
|
%
|
Non-GAAP adjustments detailed above
|
|
|
|
4.9
|
%
|
|
|
|
6.6
|
%
|
|
|
|
6.1
|
%
|
|
|
|
10.3
|
%
|
Non-GAAP operating income as a percent of total revenues
|
|
|
|
22.4
|
%
|
|
|
|
15.4
|
%
|
|
|
|
12.4
|
%
|
|
|
|
17.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended October 31,
|
|
|
Nine Months Ended October 31,
|
|
|
|
|
2016
|
|
|
|
|
2015
|
|
|
|
|
2016
|
|
|
|
|
2015
|
|
GAAP other income, net and interest expense
|
|
|
$
|
(4,875
|
)
|
|
|
$
|
(4,595
|
)
|
|
|
$
|
(13,176
|
)
|
|
|
$
|
(13,532
|
)
|
Reconciling items to non-GAAP other income, net and interest
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in losses of unconsolidated entities
|
|
|
|
36
|
|
|
|
|
72
|
|
|
|
|
81
|
|
|
|
|
33
|
|
Amortization of original issuance debt discount
|
|
|
|
1,786
|
|
|
|
|
1,663
|
|
|
|
|
5,263
|
|
|
|
|
4,900
|
|
Non-GAAP other income, net and interest expense
|
|
|
$
|
(3,053
|
)
|
|
|
$
|
(2,860
|
)
|
|
|
$
|
(7,832
|
)
|
|
|
$
|
(8,599
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MENTOR GRAPHICS CORPORATION
|
UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 31,
|
|
|
January 31,
|
|
|
|
2016
|
|
|
2016
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
262,762
|
|
|
|
$
|
334,826
|
|
Trade accounts receivable, net
|
|
|
|
125,453
|
|
|
|
|
176,021
|
|
Term receivables, short-term
|
|
|
|
304,081
|
|
|
|
|
317,188
|
|
Prepaid expenses and other
|
|
|
|
64,616
|
|
|
|
|
70,432
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
|
756,912
|
|
|
|
|
898,467
|
|
Property, plant, and equipment, net
|
|
|
|
200,781
|
|
|
|
|
182,092
|
|
Term receivables, long-term
|
|
|
|
251,416
|
|
|
|
|
268,657
|
|
Goodwill and intangible assets, net
|
|
|
|
645,461
|
|
|
|
|
644,288
|
|
Other assets
|
|
|
|
79,005
|
|
|
|
|
70,860
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
$
|
1,933,575
|
|
|
|
$
|
2,064,364
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Short-term borrowings
|
|
|
$
|
21,475
|
|
|
|
$
|
33,449
|
|
Notes Payable, current portion
|
|
|
|
240,865
|
|
|
|
|
-
|
|
Accounts payable
|
|
|
|
13,431
|
|
|
|
|
16,740
|
|
Income taxes payable
|
|
|
|
5,339
|
|
|
|
|
3,966
|
|
Accrued payroll and related liabilities
|
|
|
|
68,189
|
|
|
|
|
73,371
|
|
Accrued and other liabilities
|
|
|
|
32,114
|
|
|
|
|
37,059
|
|
Deferred revenue
|
|
|
|
213,630
|
|
|
|
|
258,725
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
595,043
|
|
|
|
|
423,310
|
|
Long-term notes payable
|
|
|
|
5,188
|
|
|
|
|
240,076
|
|
Deferred revenue, long-term
|
|
|
|
34,242
|
|
|
|
|
18,303
|
|
Other long-term liabilities
|
|
|
|
51,934
|
|
|
|
|
62,246
|
|
Total liabilities
|
|
|
|
686,407
|
|
|
|
|
743,935
|
|
|
|
|
|
|
|
|
Convertible notes
|
|
|
|
12,092
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
Common stock
|
|
|
|
708,128
|
|
|
|
|
818,683
|
|
Retained earnings
|
|
|
|
547,007
|
|
|
|
|
522,846
|
|
Accumulated other comprehensive loss
|
|
|
|
(20,059
|
)
|
|
|
|
(21,100
|
)
|
Total stockholders' equity
|
|
|
|
1,235,076
|
|
|
|
|
1,320,429
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
|
$
|
1,933,575
|
|
|
|
$
|
2,064,364
|
|
|
|
|
|
|
|
|
|
MENTOR GRAPHICS CORPORATION
|
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS AND SUPPLEMENTAL INFORMATION
|
(In thousands, except days sales outstanding)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended October 31,
|
|
|
Nine Months Ended October 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
41,762
|
|
|
|
$
|
13,889
|
|
|
|
$
|
31,763
|
|
|
|
$
|
33,996
|
|
Depreciation and amortization
|
|
|
|
15,635
|
|
|
|
|
15,765
|
|
|
|
|
45,469
|
|
|
|
|
45,925
|
|
Other adjustments to reconcile:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating cash
|
|
|
|
15,336
|
|
|
|
|
6,609
|
|
|
|
|
39,527
|
|
|
|
|
27,976
|
|
Changes in working capital
|
|
|
|
(58,533
|
)
|
|
|
|
(8,799
|
)
|
|
|
|
26,947
|
|
|
|
|
14,379
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
|
14,200
|
|
|
|
|
27,464
|
|
|
|
|
143,706
|
|
|
|
|
122,276
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
|
(24,768
|
)
|
|
|
|
(15,801
|
)
|
|
|
|
(55,344
|
)
|
|
|
|
(37,969
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
|
7,491
|
|
|
|
|
(27,993
|
)
|
|
|
|
(163,317
|
)
|
|
|
|
(34,580
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
43
|
|
|
|
|
(116
|
)
|
|
|
|
2,891
|
|
|
|
|
(1,007
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
|
|
(3,034
|
)
|
|
|
|
(16,446
|
)
|
|
|
|
(72,064
|
)
|
|
|
|
48,720
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
265,796
|
|
|
|
|
295,447
|
|
|
|
|
334,826
|
|
|
|
|
230,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
262,762
|
|
|
|
$
|
279,001
|
|
|
|
$
|
262,762
|
|
|
|
$
|
279,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures, net
|
|
|
$
|
17,968
|
|
|
|
$
|
11,301
|
|
|
|
$
|
43,585
|
|
|
|
$
|
26,269
|
|
Days sales outstanding
|
|
|
|
120
|
|
|
|
|
139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MENTOR GRAPHICS CORPORATION
|
|
|
|
UNAUDITED SUPPLEMENTAL BOOKINGS AND
REVENUE INFORMATION
|
|
|
|
(Rounded to nearest 5%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
Product Category Bookings (a)
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Year
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
Year
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
Year
|
IC DESIGN TO SILICON
|
|
|
30%
|
|
|
50%
|
|
|
60%
|
|
|
50%
|
|
|
30%
|
|
|
40%
|
|
|
40%
|
|
|
50%
|
|
|
45%
|
|
|
20%
|
|
|
25%
|
|
|
45%
|
|
|
55%
|
|
|
45%
|
SCALABLE VERIFICATION
|
|
|
15%
|
|
|
20%
|
|
|
15%
|
|
|
20%
|
|
|
25%
|
|
|
30%
|
|
|
15%
|
|
|
15%
|
|
|
20%
|
|
|
25%
|
|
|
25%
|
|
|
20%
|
|
|
20%
|
|
|
20%
|
INTEGRATED SYSTEMS DESIGN
|
|
|
25%
|
|
|
15%
|
|
|
10%
|
|
|
15%
|
|
|
15%
|
|
|
15%
|
|
|
20%
|
|
|
15%
|
|
|
15%
|
|
|
30%
|
|
|
25%
|
|
|
15%
|
|
|
10%
|
|
|
15%
|
NEW & EMERGING MARKETS
|
|
|
5%
|
|
|
5%
|
|
|
5%
|
|
|
5%
|
|
|
10%
|
|
|
5%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
15%
|
|
|
10%
|
|
|
5%
|
|
|
10%
|
SERVICES / OTHER
|
|
|
25%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
20%
|
|
|
10%
|
|
|
15%
|
|
|
10%
|
|
|
10%
|
|
|
15%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
Total
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
Product Category Revenue (b)
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Year
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
Year
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
Year
|
IC DESIGN TO SILICON
|
|
|
30%
|
|
|
40%
|
|
|
45%
|
|
|
40%
|
|
|
35%
|
|
|
40%
|
|
|
40%
|
|
|
50%
|
|
|
40%
|
|
|
25%
|
|
|
30%
|
|
|
35%
|
|
|
55%
|
|
|
40%
|
SCALABLE VERIFICATION
|
|
|
20%
|
|
|
25%
|
|
|
20%
|
|
|
25%
|
|
|
30%
|
|
|
25%
|
|
|
25%
|
|
|
15%
|
|
|
25%
|
|
|
35%
|
|
|
25%
|
|
|
20%
|
|
|
20%
|
|
|
25%
|
INTEGRATED SYSTEMS DESIGN
|
|
|
25%
|
|
|
20%
|
|
|
20%
|
|
|
20%
|
|
|
20%
|
|
|
20%
|
|
|
20%
|
|
|
20%
|
|
|
20%
|
|
|
25%
|
|
|
25%
|
|
|
25%
|
|
|
15%
|
|
|
20%
|
NEW & EMERGING MARKETS
|
|
|
10%
|
|
|
5%
|
|
|
5%
|
|
|
5%
|
|
|
5%
|
|
|
5%
|
|
|
5%
|
|
|
5%
|
|
|
5%
|
|
|
5%
|
|
|
10%
|
|
|
10%
|
|
|
5%
|
|
|
5%
|
SERVICES / OTHER
|
|
|
15%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
5%
|
|
|
10%
|
Total
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
Bookings by Geography
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Year
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
Year
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
Year
|
North America
|
|
|
30%
|
|
|
40%
|
|
|
30%
|
|
|
35%
|
|
|
35%
|
|
|
35%
|
|
|
45%
|
|
|
40%
|
|
|
40%
|
|
|
50%
|
|
|
40%
|
|
|
50%
|
|
|
40%
|
|
|
45%
|
Europe
|
|
|
25%
|
|
|
20%
|
|
|
10%
|
|
|
15%
|
|
|
25%
|
|
|
30%
|
|
|
20%
|
|
|
20%
|
|
|
25%
|
|
|
15%
|
|
|
25%
|
|
|
15%
|
|
|
15%
|
|
|
15%
|
Japan
|
|
|
30%
|
|
|
5%
|
|
|
5%
|
|
|
10%
|
|
|
15%
|
|
|
5%
|
|
|
10%
|
|
|
5%
|
|
|
5%
|
|
|
15%
|
|
|
5%
|
|
|
10%
|
|
|
5%
|
|
|
5%
|
Pac Rim
|
|
|
15%
|
|
|
35%
|
|
|
55%
|
|
|
40%
|
|
|
25%
|
|
|
30%
|
|
|
25%
|
|
|
35%
|
|
|
30%
|
|
|
20%
|
|
|
30%
|
|
|
25%
|
|
|
40%
|
|
|
35%
|
Total
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
Revenue by Geography
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Year
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
Year
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
Year
|
North America
|
|
|
40%
|
|
|
40%
|
|
|
45%
|
|
|
45%
|
|
|
50%
|
|
|
40%
|
|
|
40%
|
|
|
40%
|
|
|
45%
|
|
|
50%
|
|
|
45%
|
|
|
50%
|
|
|
40%
|
|
|
45%
|
Europe
|
|
|
25%
|
|
|
20%
|
|
|
20%
|
|
|
20%
|
|
|
15%
|
|
|
25%
|
|
|
25%
|
|
|
20%
|
|
|
20%
|
|
|
25%
|
|
|
20%
|
|
|
20%
|
|
|
15%
|
|
|
20%
|
Japan
|
|
|
15%
|
|
|
10%
|
|
|
5%
|
|
|
10%
|
|
|
10%
|
|
|
5%
|
|
|
10%
|
|
|
5%
|
|
|
5%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
5%
|
|
|
5%
|
Pac Rim
|
|
|
20%
|
|
|
30%
|
|
|
30%
|
|
|
25%
|
|
|
25%
|
|
|
30%
|
|
|
25%
|
|
|
35%
|
|
|
30%
|
|
|
15%
|
|
|
25%
|
|
|
20%
|
|
|
40%
|
|
|
30%
|
Total
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
Bookings by Business Model (c)
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Year
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
Year
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
Year
|
Perpetual
|
|
|
20%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
20%
|
|
|
15%
|
|
|
15%
|
|
|
10%
|
|
|
15%
|
|
|
35%
|
|
|
20%
|
|
|
15%
|
|
|
10%
|
|
|
15%
|
Term Ratable
|
|
|
15%
|
|
|
10%
|
|
|
5%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
20%
|
|
|
10%
|
|
|
5%
|
|
|
5%
|
|
|
10%
|
Term Up Front
|
|
|
65%
|
|
|
80%
|
|
|
85%
|
|
|
80%
|
|
|
70%
|
|
|
75%
|
|
|
75%
|
|
|
80%
|
|
|
75%
|
|
|
45%
|
|
|
70%
|
|
|
80%
|
|
|
85%
|
|
|
75%
|
Total
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
Revenue by Business Model (c)
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Year
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
Year
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
Year
|
Perpetual
|
|
|
20%
|
|
|
20%
|
|
|
10%
|
|
|
15%
|
|
|
15%
|
|
|
15%
|
|
|
10%
|
|
|
15%
|
|
|
15%
|
|
|
35%
|
|
|
30%
|
|
|
15%
|
|
|
10%
|
|
|
20%
|
Term Ratable
|
|
|
15%
|
|
|
15%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
5%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
10%
|
|
|
5%
|
|
|
5%
|
Term Up Front
|
|
|
65%
|
|
|
65%
|
|
|
80%
|
|
|
75%
|
|
|
75%
|
|
|
75%
|
|
|
80%
|
|
|
80%
|
|
|
75%
|
|
|
55%
|
|
|
60%
|
|
|
75%
|
|
|
85%
|
|
|
75%
|
Total
|
|
|
100%
|
|
|
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).
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20161122006036/en/
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|