Mentor Graphics Corporation (MENT) saw its loss widen to $9.88 million, or $0.08 a share for the quarter ended Apr. 30, 2015. In the previous year period, the company reported a loss of $2.55 million, or $0.02 a share. On the other hand, adjusted net income for the quarter stood at $33.54 million, or $0.28 a share compared with $13.21 million or $0.11 a share, a year ago. Revenue during the quarter grew 7.93 percent to $272.14 million from $252.15 million in the previous year period. Gross margin for the quarter expanded 476 basis points over the previous year period to 81.98 percent. Operating margin for the quarter stood at negative 2.82 percent as compared to a positive 0.65 percent for the previous year period.
Operating loss for the quarter was $7.66 million, compared with an operating income of $1.64 million in the previous year period.
However, the adjusted operating income for the quarter stood at $43.67 million compared to $18.93 million in the prior year period. At the same time, adjusted operating margin improved 854 basis points in the quarter to 16.05 percent from 7.51 percent in the last year period.
"The first quarter was strong for Mentor Graphics, substantially exceeding financial guidance," said Walden C. Rhines, chairman and chief executive officer. "In addition to more than 50% bookings growth in three of our four product categories, our automotive business was very strong, driven by a major win with a leading automotive OEM. We also initiated a strategic and geographic realignment of resources. First quarter results provide a solid start to the year."
For the second-quarter, Mentor Graphics Corp projects revenue to be $250 million. Mentor Graphics Corp projects revenue to be $1,282 million for financial year 2016. For the second-quarter, Mentor Graphics Corp forecasts revenue to grow in the range of percent to percent. The company forecasts diluted earnings per share to be $0.03 for the second-quarter. On an adjusted basis, the company forecasts diluted earnings per share to be $0.14 for the second-quarter. For financial year 2016, the company forecasts diluted earnings per share to be $1.88 on adjusted basis.
Operating cash flow turns positive
Mentor Graphics Corp has generated cash of $45.95 million from operating activities during the quarter as against cash outgo of $10.96 million in the last year period.
The company has spent $11.93 million cash to meet investing activities during the quarter as against cash outgo of $47.58 million in the last year period.
The company has spent $14.78 million cash to carry out financing activities during the quarter as against cash outgo of $59.29 million in the last year period.
Cash and cash equivalents stood at $249.77 million as on Apr. 30, 2015, up 42.06 percent or $73.95 million from $175.82 million on Apr. 30, 2014.
Working capital increases sharply
Mentor Graphics Corp has recorded an increase in the working capital over the last year. It stood at $439.81 million as at Apr. 30, 2015, up 30.73 percent or $103.37 million from $336.43 million on Apr. 30, 2014. Current ratio was at 2.27 as on Apr. 30, 2015, up from 1.99 on Apr. 30, 2014.
Days sales outstanding went down to 148 days for the quarter compared with 160 days for the same period last year.
At the same time, days payable outstanding was almost stable at 28 days for the quarter, when compared with the previous year period.
Debt moves up marginally
Mentor Graphics Corp has witnessed an increase in total debt over the last one year. It stood at $237.67 million as on Apr. 30, 2015, up 4.65 percent or $10.56 million from $227.11 million on Apr. 30, 2014. Total debt was 12.19 percent of total assets as on Apr. 30, 2015, compared with 12.68 percent on Apr. 30, 2014. Debt to equity ratio was at 0.19 as on Apr. 30, 2015, down from 0.20 as on Apr. 30, 2014. Interest coverage ratio deteriorated to 1.63 for the quarter from 0.36 for the same period last year.
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