Mentor Graphics Reports Fourth Quarter Earnings; Exceeds Estimates on Strong Bookings Growth

1/28/2003 - Mentor Graphics Corporation (nasdaq: MENT) reported fourth quarter 2002 earnings-per-share before goodwill and special charges of $.29 on revenues of $180.1 million. First Call® consensus estimates had been for $.27 per share. GAAP earnings-per-share were $.28, up from a loss of $.07 in the fourth quarter of 2001. Bookings rose 15 percent over the fourth quarter of 2001, and 40 percent sequentially.

"Driven by the strong fourth quarter bookings, and continued strength through January, our first quarter revenue is now essentially booked," said Gregory K. Hinckley, president of Mentor Graphics. "Book-to-bill for the quarter was significantly greater than 1.0, and backlog exiting 2002 was up 25 percent over the prior year. Acquired businesses performed well."

Revenues of $180.1 million were up 10 percent over the year ago quarter, and 20 percent sequentially. Gross margin was 85 percent, ahead of expectations on stronger than expected margins in the hardware emulation business. Special charges were primarily acquisition related.

"The fourth quarter saw the return of our systems business," said Walden C. Rhines, chairman and CEO of Mentor Graphics. "Led by our strong penetration of the military-aerospace and consumer electronics segments, our systems business bookings were up 85 percent over the fourth quarter of 2001. Other systems-related bookings like programmable logic synthesis, emulation and embedded software were all up greater than 40 percent. Programmable logic bookings were a new record. Traditional integrated circuit design tools were relatively weaker in the quarter, though up 5 percent for the year."

Mentor gained 219 new customers in the quarter, with more than half of the growth coming from the Pacific Rim. By region, Europe and the Pacific Rim bookings were strongest, up 25 percent, with North America up 10 percent and Japan down 35 percent.

About Mentor Graphics
Mentor Graphics Corporation (Nasdaq: MENT) 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 electronics and semiconductor companies. Established in 1981, the company reported revenues over the last 12 months of about $600 million and employs approximately 3,500 people worldwide. Corporate headquarters are located at 8005 S.W. Boeckman Road, Wilsonville, Oregon 97070-7777; Silicon Valley headquarters are located at 1001 Ridder Park Drive, San Jose, California 95131-2314. World Wide Web site:

Mentor Graphics is a registered trademark of Mentor Graphics Corporation.

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