Mentor Graphics Corporation (MENT) has reported an 184.50 percent jump in profit for the quarter ended Oct. 31, 2016. The company has earned $41.76 million, or $0.37 a share in the quarter, compared with $14.68 million, or $0.12 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $56 million, or $0.50 a share compared with $34.48 million or $0.28 a share, a year ago.
Revenue during the quarter grew 11.01 percent to $322.52 million from $290.52 million in the previous year period. Gross margin for the quarter expanded 27 basis points over the previous year period to 84.13 percent. Total expenses were 82.54 percent of quarterly revenues, down from 91.16 percent for the same period last year. This has led to an improvement of 862 basis points in operating margin to 17.46 percent.
Operating income for the quarter was $56.31 million, compared with $25.69 million in the previous year period.
However, the adjusted operating income for the quarter stood at $72.20 million compared to $44.75 million in the prior year period. At the same time, adjusted operating margin improved 698 basis points in the quarter to 22.38 percent from 15.40 percent in the last year period.
"Mentor’s third quarter results solidly exceeded revenue and earnings-per-share guidance," said Walden C. Rhines, chairman and CEO of Mentor Graphics. "Book to bill was significantly above one with strength in both semiconductor and system accounts. Growth of the annual run-rate in our top 10 customers was a strong 60 percent in the third fiscal quarter. After quarter end, on November 14, we announced an agreement whereby Siemens will acquire Mentor Graphics. Joining forces with Siemens will enable Mentor to achieve the next level of success for our customers and employees."
Operating cash flow improves
Mentor Graphics Corporation has generated cash of $143.71 million from operating activities during the nine month period, up 17.53 percent or $21.43 million, when compared with the last year period.
The company has spent $55.34 million cash to meet investing activities during the nine month period as against cash outgo of $37.97 million in the last year period.
The company has spent $163.32 million cash to carry out financing activities during the nine month period as against cash outgo of $34.58 million in the last year period.
Cash and cash equivalents stood at $262.76 million as on Oct. 31, 2016, down 5.82 percent or $16.24 million from $279 million on Oct. 31, 2015.
Working capital drops significantly
Mentor Graphics Corporation has witnessed a decline in the working capital over the last year. It stood at $161.87 million as at Oct. 31, 2016, down 33.47 percent or $81.44 million from $243.30 million on Oct. 31, 2015. Current ratio was at 1.27 as on Oct. 31, 2016, down from 1.42 on Oct. 31, 2015.
Days sales outstanding went down to 127 days for the quarter compared with 148 days for the same period last year.
At the same time, days payable outstanding went up to 22 days for the quarter from 20 for the same period last year.
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