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MENTOR GRAPHICS REPORTS THIRD QUARTER PROFIT

 WILSONVILLE, Ore., Oct. 20 /PRNewswire/ -- Mentor Graphics Corp. (NASDAQ: MENT) today announced that worldwide revenues for the third quarter ending Sept. 30, 1993 were $84,950,000, compared to $77,540,000 for the third quarter of 1992. Earnings for the quarter were $1,490,000 (3 cents per share), compared with a net loss of $45,550,000 ($1.01 per share loss) for the third quarter of 1992, which had included special restructuring charges. Revenues for the second quarter of 1993 were $88,416,000. Net earnings for the second quarter of 1993 were $290,000 (1 cent per share).
 "It was a quarter that included many significant accomplishments," said Thomas H. Bruggere, Mentor Graphics chairman of the board. "Financially, we continued to make progress in what has historically been a seasonally weak quarter for the industry. We also landed several large customer contracts, most notably a $6.3 million contract for MCM design tools with the Advanced Research Projects Agency (ARPA) of the U.S. government. On the product side, we introduced and shipped a significant new product line, our QuickVHDL simulation series. This is probably the best VHDL simulator available on the market today and it greatly enhances our position in Top Down Design."
 "Maybe most significantly, we successfully concluded our search for a new chief executive officer," said Bruggere. Walden (Wally) C. Rhines, a twenty-one year veteran of Texas Instruments and most recently the executive vice president of TI's Semiconductor Group was named as president and chief executive officer of Mentor Graphics on Oct. 18, 1993. He was also elected to the board of directors. "Wally has distinguished himself as both a leader and technologist in his years with TI," Bruggere said, "and his many years of involvement as a customer of the EDA industry provide a great foundation for his new role at Mentor Graphics. We are very happy to have him aboard."
 In other financial news, the company announced today it was ending its practice of paying 6 cents per share in quarterly dividend payments, effective immediately. "Mentor Graphics has worked very hard to transform itself into a software company," said Douglas Norby, Mentor Graphics' new chief financial officer. "Having accomplished this, we believe our shareholders no longer match the profile of investors who are interested in cash dividends. We now believe we can provide better value to our shareholders by putting the cash to
work investing in future opportunities for growth." The company's cash position remains very strong at over $134,000,000.
 Mentor Graphics Corp., Wilsonville, was established in 1981 to design, manufacture, market and support electronic design automation (EDA) systems. The company is a leader in worldwide EDA sales, with revenues of $340,031,000 over the last reported 12 months. The company currently employs approximately 2,100 people worldwide. In addition to its corporate offices, Mentor Graphics has sales and support offices in locations worldwide. The company's headquarters are located at 8005 S.W. Boeckman Rd., Wilsonville, OR 97070-7777.
 MENTOR GRAPHICS CORP.
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited; In thousands, except net income (loss) per share)
 Three Months Ended Nine Months Ended
 Sept. 30, 1993 1992 1993 1992
 Revenues:
 System and software $46,208 $42,285 $146,477 $165,420
 Service and support 38,742 35,255 109,528 101,320
 Total revenues 84,950 77,540 256,005 266,740
 Cost of revenues:
 System and software 12,161 17,664 39,618 65,371
 Service and support 16,411 20,491 51,424 55,634
 Total cost of revenues 28,572 38,155 91,042 121,005
 Gross margin 56,378 39,385 164,963 145,735
 Expenses:
 Research and development 19,203 20,781 58,284 58,094
 Marketing, general and
 administration 35,287 39,824 107,475 115,189
 Restructure costs 0 14,500 0 14,500
 Total expenses 54,490 75,105 165,759 187,783
 Operating income (loss) 1,888 (35,720) (796) (42,048)
 Other income (expense), net 502 (7,222) (22) (6,347)
 Income (loss) before
 income taxes 2,390 (42,942) (818) (48,395)
 Provision for income taxes 900 2,608 1,700 2,813
 Net income (loss) $ 1,490 $(45,550) $ (2,518) $(51,208)
 Net income (loss) per
 share $ 0.03 $ (1.01) $ (0.05) $ (1.14)
 Weighted average number
 of common shares
 outstanding 47,507 45,308 46,126 44,996
 MENTOR GRAPHICS CORP.
 CONSOLIDATED BALANCE SHEETS
 (Unaudited; In thousands)
 As of Sept. 30, 1993 Dec. 31, 1992
 ASSETS
 Current assets:
 Cash and short-term investments $104,505 $108,783
 Trade accounts receivable, net 77,306 75,604
 Other receivables 3,309 4,678
 Inventory 4,078 9,683
 Prepaid expenses and other 9,841 9,239
 Total current assets 199,039 207,987
 Property, plant and equipment, net 108,336 109,580
 Cash and investments, long-term 30,000 30,000
 Other assets 24,948 30,998
 Total $362,323 $378,565
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities:
 Short-term borrowings $ 3,671 $ 5,548
 Accounts payable 13,107 17,185
 Income taxes payable 8,338 9,079
 Accrued and other liabilities 34,433 41,435
 Deferred revenue 20,959 25,848
 Total current liabilities 80,508 99,095
 Long-term debt 58,020 55,709
 Other long-term deferrals 2,999 2,355
 Total liabilities 141,527 157,159
 Stockholders' equity:
 Common stock 237,204 231,354
 Accumulated deficit (26,224) (15,415)
 Foreign currency translation adjustment 9,816 5,467
 Total stockholders' equity 220,796 221,406
 Total $362,323 $378,565
 Call Mentor Graphics' fax-on-demand hotline at 800-546-4628 for the latest financial information.
 -0- 10/20/93
 /CONTACT: Marge Breya, Public Relations, of KVO Inc., 503-221-1551, for Mentor Graphics; or Dottie Wanat, Corporate Marketing, 503-685-7760, or Jackie Kraybill, corporate treasurer, 503-685-1462, both of Mentor Graphics/
 (MENT)


CO: Mentor Graphics Corp. ST: Oregon IN: CPR SU: ERN

JH -- SE011 -- 4812 10/20/93 17:28 EDT
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Date:Oct 20, 1993
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