Mentor Graphics Reports Fiscal Fourth Quarter Results

WILSONVILLE, Ore. --  February 26, 2009 – Mentor Graphics Corporation (NASDAQ: MENT) today announced fiscal fourth quarter revenues of $242.6 million, non-GAAP earnings per share of $.35, and GAAP earnings per share of $.33. For full fiscal 2009, the company reported revenues of $789.1 million, non-GAAP earnings per share of $.20, and a GAAP loss per share of $.97.

“Large accounts fared well in the quarter, with modest growth in the company’s top ten renewal contracts. This strength was significantly offset, however, by weakness in smaller transactions,” said Walden C. Rhines, chairman and CEO of Mentor Graphics. “For the year, our diversity of product line and breadth of served markets, as well as growth in newer product segments, helped sustain the business. In particular, automotive and design for manufacturing both showed solid growth for the year. Looking forward, we see the opportunity to take advantage of this period of weakness to help customers consolidate on Mentor’s leading design platforms.”

During the quarter, the company launched an expansion of capacity to 512 million gates for its Veloce® emulation product line, now double the capacity of competitive offerings. The company qualified its Olympus-SoC™ place-and-route solution for Taiwan Semiconductor Manufacturing Company’s (TSMC) 40nm processes in record time, winning an award from TSMC for the speed of its qualification. Olympus-SoC place-and- route also won the 2009 DesignVision award in the IC design tools category at the DesignCon tradeshow. Olympus-SoC place-and-route and the company’s printed circuit board radio frequency (RF) design solution are both finalists in the EDN innovation awards.

The company extended its leadership in electronic system level (ESL) design by acquiring the high level synthesis assets of Agility Design Solutions as well as with its announcement of a scalable design methodology with its Vista™ design tools based on the new 2.0 transaction level modeling standard. In functional verification, the company announced the availability of an open source solution that allows users of the industry standard open verification methodology (OVM) to incorporate their legacy verification methodology manual (VMM) code. The company also launched Capital® Architect, an extension to its cabling product line, which helps automotive manufacturers and their suppliers develop lighter and more cost-effective electrical distribution systems in vehicles. In analog simulation, the company released a multiprocessor version of its ELDO® simulator that can increase the speed of circuit simulation by 3 to 10 times. “Given the environment, the company has further strengthened its existing cost control efforts with new reductions in compensation and travel, targeted personnel reductions and strict hiring limits. We will continue to assess our cost envelope as the year unfolds,” said Gregory K. Hinckley, president of Mentor Graphics. “Our relatively strong balance sheet will also allow us to consider opportunities this market is presenting.”

Financial Tables

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GUIDANCE

For fiscal first quarter 2010 ending April 30, 2009, the company expects revenues of $200 to $210 million, non-GAAP earnings per share between $.05 and $.10, and a GAAP loss per share between $.08 and $.13.

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 $800 million and employs approximately 4,500 people worldwide. Corporate headquarters are located at 8005 S.W. Boeckman Road, Wilsonville, Oregon 97070- 7777. World Wide Web site: http://www.mentor.com/.