Mentor Graphics Reports Fiscal Second Quarter Results
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MENTOR GRAPHICS CORPORATION
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UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
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(In thousands, except earnings per share data)
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Three Months Ended July 31,
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Six Months Ended July 31,
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2011
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2010
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2011
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2010
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Revenues:
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System and software
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$
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117,495
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$
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100,491
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$
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257,140
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$
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197,941
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Service and support
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96,245
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87,443
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186,635
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170,570
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Total revenues
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213,740
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187,934
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443,775
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368,511
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Cost of revenues: (1)
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System and software a
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14,294
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7,977
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30,371
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14,620
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Service and support a
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26,844
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23,633
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52,055
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46,800
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Amortization of purchased technology
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2,754
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3,560
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6,111
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7,129
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Total cost of revenues a
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43,892
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35,170
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88,537
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68,549
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Gross margin a
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169,848
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152,764
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355,238
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299,962
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Operating expenses:
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Research and development a (2)
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69,905
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67,792
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139,273
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134,436
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Marketing and selling a (3)
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75,758
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72,720
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153,682
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144,544
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General and administration a (4)
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17,348
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18,763
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34,133
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37,042
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Equity in earnings of Frontline (5)
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(1,139
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(1,162
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(2,156
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(1,346
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Amortization of intangible assets (6)
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1,455
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1,936
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3,065
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4,297
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Special charges (7)
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1,677
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3,206
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6,224
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6,474
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Total operating expenses a
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165,004
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163,255
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334,221
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325,447
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Operating income (loss) a
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4,844
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(10,491
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)
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21,017
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(25,485
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)
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Other income (expense), net (8)
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529
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(14
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54
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(1,155
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Interest expense (9)
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(4,634
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(4,727
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(22,074
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(9,054
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Income (loss) before income tax
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739
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(15,232
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(1,003
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(35,694
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Income tax expense (benefit) (10)
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(3,595
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(985
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(2,984
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1,578
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Net income (loss) a
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$
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4,334
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$
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(14,247
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$
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1,981
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$
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(37,272
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Net income (loss) per share:
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Basic
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$
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0.04
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$
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(0.13
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$
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0.02
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$
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(0.35
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Diluted
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$
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0.04
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$
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(0.13
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$
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0.02
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$
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(0.35
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Weighted average number of shares outstanding:
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Basic
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110,027
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107,629
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110,888
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105,717
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Diluted
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112,844
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107,629
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113,892
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105,717
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a
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Certain items have been reclassified between cost of revenues and
operating expenses, and within operating expenses for the six months
ended July 31, 2011, and the three and six months ended July 31,
2010. These reclassifications were made to conform to the current
period presentation, more closely align with other companies in our
industry, and provide a clearer depiction of where certain operating
costs are being utilized. While these reclassifications reduced
gross margin, they had no impact on operating income (loss) or net
income (loss) for the six months ended July 31, 2011, and the three
and six months ended July 31, 2010. Additional discussion regarding
the reclassifications will be provided in our Quarterly Report on
Form 10-Q for the quarter ended July 31, 2011.
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Refer to following page for a description of footnotes.
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