SAN FRANCISCOEDA vendor Mentor Graphics Corp. posted a profit of $31.5 million on revenue of $242.6 million for the quarter ended Jan. 31, in line with a revenue warning the company issued earlier this month. The company said it plans to cut an unspecified number of jobs as it trims costs amid the economic downturn.
The fiscal fourth quarter net income of $31.5 million, or 34 cents per share, based on generally accepted accounting principles (GAAP), declined nearly 10 percent compared to a GAAP net income of $34.9 million, or 39 cents per share, in the fourth quarter of fiscal 2008.
Revenue for the quarter declined by nearly 15 percent from $284.8 million in the fourth quarter of fiscal 2008.
"Large accounts fared well in the quarter, with modest growth in the company's top ten renewal contracts," said Walden Rhines, Mentor chairman and CEO, in a statement. "This strength was significantly offset, however, by weakness in smaller transactions."
For fiscal 2009, Mentor reported a GAAP net loss of $88.8 million, or 97 cents per share, on revenue of $789.1 million. The company posted a net income of $28.8 million on revenue of $879.7 million in fiscal 2008.
Mentor (Wilsonville, Ore.) said its fiscal fourth quarter pro-forma net income, excluding charges, was $32.4 million, down from $66.4 million in the fourth quarter of fiscal 2008.
For fiscal 2009. Mentor reported a pro-forma net income of $32.4 million, down from $66.4 million in fiscal 2008.
Gregory Hinckley, Mentor's president, said during an analyst conference call following the earnings announcement that the company was in the process of conducting business reviews that would lead to an unspecified reduction in the company's headcount. He did not specify when such a reduction would occur.
A spokesperson for Mentor said the company, as a matter of policy, does not engage in broad, across-the-board layoffs. The company conducts a full review of all of its businesses after each fiscal fourth quarter, the spokesperson said, and restructures the businesses based on the results. Since the review has not been completed, the spokesperson declined to speculate on how the restructuring may compare to previous years.
Customers see Mentor as one of the healthy, stable EDA vendors that can be counted on in the long term, Rhines said during the analyst call.
Rhines said adoption of EDA tools by companies outside the semiconductor industry is increasing due to cost pressures and other factors. Fiscal 2009 was a record for Mentor's automotive design platforms, with a growth of 70 percent in bookings, he said.
Mentor exited the quarter with a book-to-bill ratio of greater than 1.0, Hinckley said. Book-to-bill for fiscal 2009 was also greater than parity, Hinckley said.
Mentor said it expects revenue for the current quarter, which ends April 30, to be between $200 million and $210 million. The company expects to report a GAAP loss of between 8 and 13 cents per share. Citing lack of visibility, Mentor declined to provide guidance for the fiscal year.
Hinckley said the company further strengthened its existing cost control efforts with new reductions in compensation and travel, targeted personnel reductions and strict hiring limits.
"Our relatively strong balance sheet will also allow us to consider opportunities this market is presenting," he said.