Mentor Graphics Reports Fiscal Second Quarter Results

WILSONVILLE, Ore., August 20, 2009 – Mentor Graphics Corporation (NASDAQ: MENT) today announced results for the fiscal second quarter 2010, ending July 31, 2009. For the quarter, the company reported revenues of $182.6 million, non-GAAP earnings per share of $.02, and a GAAP loss per share of $.22. Bookings for the quarter rose 15% over the prior fiscal second quarter.

“The quarter’s strong bookings performance was driven by new customers and new products. Though the business climate is still difficult, we did see strong sequential increases in consulting and distributor bookings during the quarter, both signs we take as indicators of an improving customer environment,” said Walden C. Rhines, CEO and chairman of Mentor Graphics. “The company continues to build its strength in new markets, expanding its electronic system level design (ESL) and low-power product offerings during the quarter. Taiwan Semiconductor Manufacturing Company’s (TSMC) inclusion of a full Mentor low-power implementation flow in their Reference Flow 10.0 further strengthens the company’s position in the physical implementation market.”

During the quarter, Mentor released a new version of its Catapult® C synthesis tool enabling full chip synthesis, including control logic, and better power management. The company also released its PADS® 9.0 printed circuit board flow which incorporated new collaboration, manufacturing and analysis tools. At the Design Automation Conference (DAC) in July, Mentor advanced its full system low-power strategy by launching its Vista™ platform which enables engineers to model power early in the design cycle. Also at DAC, Mentor and its partners detailed the company’s multi-operating system, multicore embedded system strategy featuring Linux, Android, and Nucleus® operating systems. On Tuesday, the company closed its acquisition of LogicVision announced during the second quarter. The acquisition strengthens the company’s market-leading position in the design-for-test market by combining LogicVision’s strength in built-inself- test (BIST) with the company’s strength in automated test pattern generation (ATPG) and embedded test pattern compression technology.

“With a tight rein on costs and the beginnings of an improving economic climate, the company performed better than we were confident to predict,” said Gregory K. Hinckley, president of Mentor Graphics. “The contract renewals we had in the quarter were at similar levels to their previous contract values, which was an improvement from the first quarter’s renewal rates. And despite acquisitions, headcount and operating expenses are down from a year ago, as the company continued to attack costs like travel, facilities and outside services.”

Outlook

For the third quarter fiscal 2010, the company expects revenue of about $183 million, non-GAAP earnings per share of about $.01 and a GAAP loss per share of about $.19.

Financial Tables

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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 4,425 people worldwide. Corporate headquarters are located at 8005 S.W. Boeckman Road, Wilsonville, Oregon 97070- 7777. World Wide Web site: http://www.mentor.com/.