WILSONVILLE, Ore., April 15, 2015 – Mentor Graphics Corporation (NASDAQ: MENT) today announced approximately 110 North American employees have elected to participate in a voluntary early retirement program. The purpose of the early retirement program previously announced and other selective workforce actions initiated in the first quarter of fiscal 2016 is to improve alignment of the Mentor Graphics workforce with targeted business initiatives and to balance global field investments with the available opportunity.
“Mentor Graphics has several high-growth opportunities including embedded software, the transportation market and the continued growth of the Pacific Rim, both as developers and consumers of advanced electronics,” said Walden C. Rhines, Chairman and CEO of Mentor Graphics. “These restructuring activities will enable Mentor to focus personnel and resources on priority opportunities and regions of the world, deliver long-term growth and build shareholder value."
Approximately 4 percent of the Mentor worldwide workforce is expected to be impacted by the early retirement program and other restructuring actions in the first half of fiscal 2016. These actions are anticipated to result in a restructuring charge reported as a GAAP expense of approximately $37 million. The majority of the charges are personnel related. Approximately $34 million is expected to be recorded as a restructuring expense in the company’s first quarter ending April 30, 2015. The remainder of the restructuring charges, approximately $3 million, is expected to be recorded in the second and third quarters of fiscal 2016. The workforce restructuring costs are not anticipated to have a material effect on the company’s revenue and non-GAAP earnings-per-share guidance for the first quarter or fiscal 2016. The impact of favorable foreign exchange rates and the restructuring is expected to modestly lower full-year fiscal 2016 expenses versus expenses embedded in the February 26, 2015 guidance. Fiscal 2016 cash flow from operations is expected to be approximately $200 million. The company will provide additional information regarding the restructuring and updated fiscal 2016 guidance in the first quarter earnings release and conference call. The release and conference call are scheduled for before market open on May 22. Specific conference call details will be announced approximately 2 weeks prior to the conference call.
(Mentor Graphics and Mentor are registered trademarks of Mentor Graphics Corporation. All other company and/or product names are the trademarks and/or registered trademarks of their respective owners.)
This press release includes forward-looking statements about expected restructuring expenses, guidance and cash flow from operations. These forward-looking statements are based on information available to us on the date of this release and we assume no obligation to update these forward-looking statements for any reason. Actual results may differ materially from those in the forward-looking statements. Risks and uncertainties that may affect the forward-looking statements include actual expenses associated with voluntary early retirement program and restructuring activities; other risks are discussed in more detail under the heading “Risk Factors” in the company’s most recent Form 10-K or Form 10-Q.