Mentor Graphics Reports Fiscal Fourth Quarter Results

MENTOR GRAPHICS CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except earnings per share data)


	Three Months Ended January 31,						Twelve Months Ended January 31,
	2016			2015			2016			2015
Revenues:
System and software	$	213,790		$	323,327		$	700,621		$	799,151
Service and support		123,477			115,739			480,367			444,982
Total revenues		337,267			439,066			1,180,988			1,244,133
Cost of revenues: (1)
System and software		11,898			14,834			48,330			69,811
Service and support		33,750			33,719			134,025			127,403
Amortization of purchased technology		1,807			1,847			7,303			7,099
Total cost of revenues		47,455			50,400			189,658			204,313
Gross profit		289,812			388,666			991,330			1,039,820
Operating expenses:
Research and development (2)		103,203			112,863			381,440			381,125
Marketing and selling (3)		88,487			108,874			351,344			365,688
General and administration (4)		17,555			22,187			73,853			79,193
Equity in earnings of Frontline (5)		(1,873	)		(1,028	)		(5,849	)		(5,653	)
Amortization of intangible assets (6)		1,899			2,157			8,716			8,166
Special charges (7)		1,087			4,081			45,081			23,490
Total operating expenses		210,358			249,134			854,585			852,009
Operating income:		79,454			139,532			136,745			187,811
Other income (expense), net (8)		763			(34	)		1,612			(777	)
Interest expense (9)		(5,047	)		(4,950	)		(19,428	)		(19,276	)
Income before income tax		75,170			134,548			118,929			167,758
Income tax expense (10)		14,990			20,674			24,753			22,581
Net income		60,180			113,874			94,176			145,177
Less: Loss attributable to noncontrolling interest (11)		(91	)		(614	)		(2,101	)		(1,962	)
Net income attributable to Mentor Graphics shareholders	$	60,271		$	114,488		$	96,277		$	147,139
Net income per share attributable to Mentor Graphics
shareholders:
Basic ^a	$	0.52		$	0.98		$	0.83		$	1.28
Diluted ^a	$	0.51		$	0.96		$	0.81		$	1.26
Weighted average number of shares outstanding:
Basic		116,442			115,338			116,701			114,635
Diluted		118,066			117,466			119,263			117,078

^a We 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:

	$	-		$	(1,174	)	$	258		$	121

Refer to following page for a description of footnotes.

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