( ESNUG 489 Item 5 ) -------------------------------------------- [03/11/11]
Subject: 100% of MENT employees rate Wally's Mentor as "Generally Positive"
COMRADE WALLY: Gosh golly, 100% of MENT employees rated Wally's Mentor as
"Generally Positive". My cyncism aside, Wally's MENT employees genuinely
like working at Mentor. It's not just a job, but a place that many of them
really like working at and they would hate to see MENT get Mike Fistered by
Wall Street hucksters.
In a CNBC interview on Tuesday, Carl Icahn said that Mentor Graphics
"should be acquired, or at the very least, be put up for sale." The
NY Times reports that Icahn owns 14.7% of the company and he plans
to nominate at least 3 new directors to the Mentor board next week.
I feel Mentor's present management and how Mentor is currently
run as an EDA company is (CHOOSE ONE):
A. Generally positive.
: ################################################## 100%
B. Generally neutral.
: 0%
C. Generally negative.
: 0%
Comments? What's your reasoning for your choice?
Of the 13 MENT employees in this survey, 9 commented on this question.
---- ---- ---- ---- ---- ---- ----
A. Generally positive.
Serving a customer-based business, which by its very nature has to be
pushing limits, requires a boatload of innovation and customer listening.
That takes lots of very smart, and expensive, resources. Lots of effort
for a so-so payback.
It's why Wall Street has ignored EDA for so long. Why invest in a $4
billion industry that's really hard when you can invest in easy stuff
like social media or selling food?
Any EDA company that has survived more than 5 years must be managed
well. Mentor has been around since bell bottom pants were "cool".
- [ An Anon Mentor Employee ]
A. Generally positive. (X)
Mentor has consistently invested to create new technologies and products.
MGC Management has assumed risks to provide their customers with the
technology edge that will provide competitive differentiation.
- [ An Anon Mentor Employee ]
A. Generally positive.
Business is about more than short term shareholder profits. It's about:
1. Delivering value to customers
2. Giving employees jobs and the chance to be part of a bigger vision
3. Shareholders and growth
- [ An Anon Mentor Employee ]
A. Generally positive.
I am not a finance person and has no idea on the "right" way to run the
company from the perspective of maximizing stock holder's benefit. But
as an engineer working for Mentor, I feel it is fair for me to give a 'A'
considering how Mentor is doing compared to others in the same industry.
I think Mentor is heading in the right direction overall in its new
products and market segment investments.
- [ An Anon Mentor Employee ]
A. Generally positive.
Company is managed conservatively.
- [ An Anon Mentor Employee ]
A. Generally positive.
Stock has held steady while competitors have declined. Competitive and
leading edge products. Highly motivated workforce due to humane culture.
- [ An Anon Mentor Employee ]
A. Generally positive.
I see Mentor investing in key technologies to drive to #1 positions and
investing in other key areas that are or will be critical to the design
community. This is evidenced by significant #1 positions in Physical
Verification and RET, Test, and PCB - over 50% market share in there.
In addition, they have been leaders in Functional Verification with
Questa, and the ancillary technologies such as InFact, Formal, as well
as leaders in the ESL arena. Mentor is also investing in areas outside
the traditional EDA space. This gives Mentor Graphics the broadest
product portfolio of the top 3 or 4 EDA vendors.
The results of these investments is that Mentor Graphics has increased
market share in almost every year for the past 12 years.
Annual Revenues have been increasing, excluding the dip in 2008 that
everyone suffered. The Mentor management has been trimming costs through
a number of measures - cutting benefits, reducing staffing in certain
areas, moving remote offices to smaller and less expensive facilities, and
altering compensation packages. In the latest earnings call in November,
Mentor raised expectations for the year yet again. And the stock has gone
from $4 to $14 in 2 years - a greater ROI than either SNPS or CDNS in the
same time period.
Isn't this what shareholders want? Are these not signs of a well run
company? When I invest in companies I look for:
- increasing revenues
- increasing market share
- flat expenses
- increasing profits
- investment in product lines to fuel additional increases in revenue
in the future
Mentor Graphics has all of these.
- [ An Anon Mentor Employee ]
A. Generally positive.
As an employee I feel that Mentor is a customer- and employee-friendly
company. The management though looks conservative but has a long term
focus on growth. This is evident from the different verticals Mentor
is entering (like thermal analysis)!
- [ An Anon Mentor Employee ]
A. Generally positive.
The activist investors are correct that Mentor's SG&A costs are high.
But that's the cost of doing business in their industry. John, I
think you and everyone who is familiar with the sales and support
process for EDA knows that this is normal. We're not selling donuts!
Tool vendors typically have to invest months (sometimes years) of effort
and resources to work with customers on tool evaluations before they see
any return (and sometimes they come up empty). There has been a move to
work more efficiently (web based meetings, desktop sharing etc.), but
the gains there are limited. You can't completely eliminate face time
with your customer, and many customers are very sensitive about sharing
information that way so it's not an option. Then, once you get the
business, you have to stay involved to ensure customer success and grow
the business.
It's about learning where their challenges and bottlenecks are and coming
up with solutions. If you don't keep a finger on the pulse of things,
you'll get left out. So, it requires many hours on-site (travel $$$).
Cadence has about the same level of revenue as Mentor and SG&A costs are
in line with Mentor also. So, Mentor is not unique in that.
- [ An Anon Mentor Employee ]
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