WILSONVILLE, Ore. — (BUSINESS WIRE) — May 5, 2011 — Mentor Graphics Corporation (Nasdaq: MENT) today reported preliminary results for its fiscal first quarter ended April 30, 2011. The company announced that it expects fiscal first quarter results to exceed prior revenues guidance with revenues of about $230 million, up over 25% from the prior fiscal first quarter ended April 30, 2010.

Non-GAAP earnings are expected to be in the range of $.18 to $.20 per share. The company expects a GAAP loss in the range of $.02 to $.06 per share driven primarily by non-cash charges associated with the retirement of the company’s previous convertible debt. For the prior fiscal year first quarter the company reported revenues of $180.6 million, a non-GAAP loss per share of $.02 and a GAAP loss per share of $.22. Bookings in the quarter grew about 7% over the prior fiscal first quarter.

“Our strategy is working. The momentum in our business from our last fiscal year continued into the first quarter with strong growth in revenues and bookings. We also achieved a non-GAAP operating margin of about 14%, and a GAAP operating margin of approximately 8% for the fiscal first quarter,” said Walden C. Rhines chairman and CEO of Mentor Graphics. “The strength of our first quarter gives us further confidence in our outlook for this fiscal year.”

For a reconciliation of GAAP to non-GAAP guidance, see “Discussion of Non-GAAP Financial Measures” below. These results are preliminary and subject to adjustment during the accounting close process. In particular, the preliminary GAAP income tax provision embedded in these results includes a number of assumptions subject to change in the normal course of the close process.

The company will report full fiscal first quarter results on May 27, 2011, before market open.

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 electronic, semiconductor and systems companies. Established in 1981, the company reported revenues over the last 12 months of about $915 million. Corporate headquarters are located at 8005 S.W. Boeckman Road, Wilsonville, Oregon 97070-7777. World Wide Web site: http://www.mentor.com/.

Fiscal Year Definition

Mentor Graphics’ fiscal year runs from February 1 to January 31. The fiscal year is dated by the calendar year in which the fiscal year ends. As a result, the first three fiscal quarters of any fiscal year will be dated with the next calendar year, rather than the current calendar year.

Important Information

On March 31, 2011, the company filed a definitive proxy statement with the Securities and Exchange Commission (the “SEC”) in connection with the company’s upcoming 2011 annual meeting of shareholders. Shareholders are advised to read the company’s definitive proxy statement and any other relevant documents filed by the company with the SEC, before making any voting or investment decision because they contain important information. The definitive proxy statement is, and any other relevant documents and other material filed with the SEC concerning the company will be, when filed, available free of charge at http://www.sec.gov and http://www.mentor.com/company/investor_relations. In addition, copies of the proxy materials may be requested from the company’s proxy solicitor, MacKenzie Partners, Inc., by telephone at 1-800-322-2885 or by email at Email Contact.

Forward-Looking Statements

Statements in this material regarding the company’s outlook for future periods constitute “forward-looking” statements based on current expectations within the meaning of the Securities Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the company or industry results to be materially different from any results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: (i) weakness or recession in the US, EU, Japan or other economies; (ii) the company’s ability to successfully offer products and services that compete in the highly competitive EDA industry; (iii) product bundling or discounting of products and services by competitors, which could force the company to lower its prices or offer other more favorable terms to customers; (iv) possible delayed or canceled customer orders, a loss of key personnel or other consequences resulting from the business disruption and uncertainty of prolonged proxy fights, offers to purchase the company’s securities or other actions of activist shareholders; (v) effects of the increasing volatility of foreign currency fluctuations on the company’s business and operating results; (vi) changes in accounting or reporting rules or interpretations; (vii) the impact of tax audits by the IRS or other taxing authorities, or changes in the tax laws, regulations or enforcement practices where the company does business; (viii) effects of unanticipated shifts in product mix on gross margin; and (ix) effects of customer seasonal purchasing patterns and the timing of significant orders, which may negatively or positively impact the company’s quarterly results of operations, all as may be discussed in more detail under the heading “Risk Factors” in the company’s most recent Form 10-K or Form 10-Q. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements. The company disclaims any obligation to update any such factors or to publicly announce the results of any revisions to any of the forward-looking statements to reflect future events or developments.