News Release from: Mentor Graphics UK
Edited by the Electronicstalk Editorial Team on 28 January 2002

Record fourth quarter for Mentor

Mentor Graphics has reported record fourth-quarter 2001 earnings of $0.48, before goodwill and special charges, ahead of the First Call estimate of $0.42.

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Mentor Graphics has reported record fourth-quarter 2001 earnings of $0.48, before goodwill and special charges, ahead of the First Call estimate of $0.42. Revenues were in line with expectations at $165 million. Earnings, before goodwill and special charges, grew more than 10% for the year 2001 to $1.13, up from $1.01 in the prior year.

"Our young product portfolio did well in the fourth quarter, confirming our view that newer tools will lead the rebound", said Walden C Rhines, CEO and chairman of Mentor Graphics.

"We now believe the EDA market as a whole will rebound in the first half of 2002.

Furthermore, we see a strong and continuing demand for EDA tools in this recovery cycle, driven by the availability of leading-edge capacity, which should last at least through 2003".

Gross margin climbed to a record 85% in the quarter based on product mix, as sales of higher margin software strengthened.

During the quarter, the company sold to about 180 new customers, continuing its trend of expanding its customer base.

"During the quarter, we launched TestKompress, a huge new design-for-test technology", said Gregory K Hinckley, president of Mentor Graphics.

"The product can save major manufacturers hundreds of millions of dollars in test costs.

The value proposition is extremely compelling, and it uses existing methodologies, making it easy for customers to adopt.

We've gotten great customer interest and, in fact, received our first order for the product.

We think there is great potential for upside here in 2002".

Mentor also announced an expansion to its Calibre product line with mask data preparation, and booked its first order for the product from a major photomask manufacturer.

The Calibre product line also had its best bookings quarter on record.

In the systems business, Mentor's next-generation router expanded its competitive wins versus older product.

A major European consumer electronics company accelerated its router replacement programme based on the quality of its results.

Similarly, a medical equipment manufacturer replaced its entire board design flow based on the strength of the Mentor solution.

For the quarter, bookings for the PCB router were up over 40% year on year.

The company also shipped DMS 2000.5 in the fourth quarter, its first packaged version of its Data Management System.

Mentor's FPGA synthesis product continues to gain momentum in the marketplace, winning competitive replacements in the fourth quarter at key Japanese accounts.

Additionally, customers are increasingly adopting Mentor's FPGA synthesis solutions for ASIC prototyping with wins from the prototyping groups of a US ASIC house, a European systems company, and a European consumer electronics company.

Similarly, Mentor's Modelsim product had its strongest booking quarter ever as it continued to take share in the Verilog market.

The company reported one-time charges in quarter of $45 million, mostly relating to write-offs of intangible assets and excess leased facilities.

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