Mentor Graphics Reports Fiscal Fourth Quarter Results

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


			Three Months Ended January 31,						Twelve Months Ended January 31,
			2009			2008			2009			2008
Revenues:
	System and software		$	157,566		$	201,135		$	447,551		$	555,297
	Service and support			85,072			83,685			341,550			324,435
		Total revenues		242,638			284,820			789,101			879,732
Cost of revenues: (1)
	System and software			4,583			8,365			17,787			24,913
	Service and support			23,280			26,011			97,002			95,714
	Amortization of purchased technology			3,363			1,955			12,403			9,468
		Total cost of revenues		31,226			36,331			127,192			130,095
		Gross margin		211,412			248,489			661,909			749,637
Operating expenses:
	Research and development (2)(a)			66,572			60,242			260,351			247,870
	Marketing and selling (3)			91,338			87,152			317,473			309,431
	General and administration (4)			23,545			26,038			95,038			97,118
	Other general expense (income), net			245			(294	)		(24	)		(332	)
	Amortization of intangible assets (5)			3,014			2,575			11,113			8,936
	Special charges (6)			1,789			4,988			16,888			10,148
	Impairment of long-lived assets (7)			4,553			-			4,553			-
	In-process research and development (8)			-			-			22,075			4,100
		Total operating expenses		191,056			180,701			727,467			677,271
Operating income (loss)				20,356			67,788			(65,558	)		72,366
	Other income (expense), net (9)			(319	)		1,264			4,378			5,225
	Interest expense (10)			(4,674	)		(5,152	)		(16,904	)		(20,264	)
	Income (loss) before income tax			15,363			63,900			(78,084	)		57,327
	Income tax expense (benefit) (11)(a)			(16,174	)		29,006			10,850			28,556
	Minority interest in net loss of subsidiary			-			-			(132	)		-
		Net income (loss)	$	31,537		$	34,894		$	(88,802	)	$	28,771
	Net income (loss) per share:
		Basic	$	0.34		$	0.39		$	(0.97	)	$	0.33
		Diluted	$	0.33		$	0.38		$	(0.97	)	$	0.32
	Weighted average number of shares outstanding:
		Basic		92,859			89,978			91,829			88,086
		Diluted		94,452			92,490			91,829			89,981

	Refer to following page for a description of footnotes.


(a)		For the January 31, 2008 presentation, the research and development credit was reclassified from Income tax expense (benefit) to Research and development. The reclassifications were made for consistency in presentation with the current year.

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