SOURCE: Actel Corporation

April 29, 2010 16:19 ET

Actel Announces First Quarter 2010 Financial Results

MOUNTAIN VIEW, CA--(Marketwire - April 29, 2010) - Actel Corporation (NASDAQ: ACTL) today announced net revenues of $52.3 million for the first quarter of 2010, up 7.8 percent from the first quarter of 2009, and up 5.2 percent from the fourth quarter of 2009.

Actel reported net income in accordance with U.S. generally accepted accounting principles (GAAP) of $2.9 million, or $0.11 per diluted share, for the first quarter of 2010 compared with a net loss of $(3.0) million, or $(0.11) per basic share, for the first quarter of 2009 and a net income of $1.0 million, or $0.04 per diluted share, for the fourth quarter of 2009.

Non-GAAP net income, which excludes stock-based compensation, expenses associated with the restructuring, and other non-recurring adjustments, was $3.8 million, or $0.14 per diluted share, for the first quarter of 2010 compared with $0.8 million, or $0.03 per diluted share, for the first quarter of 2009 and $3.3 million, or $0.12 per diluted share, for the fourth quarter of 2009.

Significant Developments

During the first quarter:

-- In March, Actel unveiled SmartFusion™, the world's first intelligent
   mixed signal FPGA. SmartFusion devices feature Actel's proven FPGA
   fabric, a complete microcontroller subsystem built around a hard ARM®
   Cortex™-M3 processor and programmable analog blocks.

-- Actel also announced in March a comprehensive development environment
   and ecosystem for SmartFusion Intelligent Mixed Signal FPGAs, including
   RTOS support from Micrium, compiler support from IAR Systems, a
   comprehensive training partnership with Doulos, and full production
   releases of Actel's own Libero and Soft Console IDE tools.

-- Pigeon Point Systems announced a new MMC management solution and IPMC
   and Carrier IPMC Starter Kits both using SmartFusion Intelligent Mixed
   Signal FPGAs.

-- Actel received a coveted supplier award in March from Mitsubishi
   Electric Corporation, a prime contractor on many of Japan's most
   important space programs. This award reflects Actel's continued
   dedication to quality, reliability and support of the
   worldwide space market.

-- In January, Actel announced that its low power ProASIC3® and
   ProASICPLUS® FPGA families have been designed into flight-critical
   applications on the new Boeing 787 Dreamliner commercial airliner. The
   commercial aircraft successfully completed its maiden test flight on
   December 15, 2009.

Business Outlook - Second Quarter 2010

The Company believes that second quarter 2010 revenues will be up 8 percent to 12 percent sequentially. Gross margin is expected to be about 60 percent. Operating expenses are anticipated to come in at approximately $27.8 million, which excludes an estimated $2.0 million of stock-based compensation expense and $0.6 million associated with the acquisition of Pigeon Point Systems. Other income is expected to be about $0.5 million. The non-GAAP tax rate for the quarter is expected to be about 30 percent. Outstanding fully diluted share count is expected to be about 26.4 million shares.

Conference Call

A conference call to discuss first quarter results will be held Thursday, April 29, 2010, at 1:30 p.m. PDT. A live webcast and replay of the call will be available. Webcast and replay access information as well as financial and other statistical information can be found on Actel's website, www.actel.com.

Non-GAAP Adjustments and Reconciliation

This release includes non-GAAP net income, non-GAAP net income per share data, and other non-GAAP line items from the Condensed Consolidated Statements of Operations, including total costs and expenses, income from operations, and income before tax provision. These measures are not in accordance with, or an alternative for, GAAP and may be different from non-GAAP measures used by other companies. These non-GAAP adjustments are provided to enhance the user's overall understanding of our operating performance. Actel believes that the presentation of these non-GAAP measures, when shown in conjunction with the corresponding GAAP measures, provides useful information to both management and investors regarding financial and business trends relating to Actel's financial condition and results of operations, particularly by excluding certain expense and income items that we believe are not indicative of our core operating results. Actel believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. In addition, since we have historically reported non-GAAP results to the investment community, we believe the inclusion of non-GAAP numbers provides consistency in our financial reporting.

Forward-Looking Statements

The statements in the paragraph under the heading "Business Outlook - Second Quarter 2010," are forward-looking statements made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and should be read with the "Risk Factors" in Actel's most recent Form 10-K, which can be found on Actel's website, www.actel.com. Actel's projected revenues and operating results for the second quarter of 2010, are subject to a multitude of risks, including general economic conditions and a variety of risks specific to Actel or characteristic of the semiconductor industry, such as fluctuating demand, intense competition, rapid technological change and related intellectual property and international trade issues, wafer and other supply shortages, booking and shipment uncertainties, and a failure to fully achieve the projected results of or to accurately estimate the charges for the restructuring. These and the other Risk Factors make it difficult for Actel to accurately project quarterly financial and restructuring results, and could cause actual results to differ materially from those projected in the forward-looking statements. Any failure to meet expectations could cause the price of Actel's stock to decline significantly. Actel undertakes no obligation to update any information contained in this press release.

About Actel

Actel is the leader in low power FPGAs and mixed signal FPGAs, offering the most comprehensive portfolio of system and power management solutions. Power Matters. Learn more at www.actel.com.

Actel, Actel Fusion, IGLOO, Libero, Pigeon Point, ProASIC, SmartFusion and the associated logos are trademarks or registered trademarks of Actel Corporation. All other trademarks and service marks are the property of their respective owners.

                             ACTEL CORPORATION

              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
            (Unaudited, in thousands except per share amounts)



                                                   Three Months Ended
                                              -----------------------------

                                               Apr 4,    Jan 3,    Apr 5,
                                                2010      2010      2009
                                              --------- --------- --------

Net revenues                                  $  52,263 $  49,699 $ 48,459
Costs and expenses:
  Cost of revenues                               19,741    18,715   20,785
  Research and development                       14,727    14,160   16,393
  Selling, general, and
   administrative                                15,013    14,401   13,490
  Restructuring and asset impairment charges         14     1,202    1,119
  Amortization of acquisition-related
   intangibles                                      193       193      193
                                              --------- --------- --------
     Total costs and expenses                    49,688    48,671   51,980
                                              --------- --------- --------
Income (loss) from operations                     2,575     1,028   (3,521)
Interest income and other, net                      597        71    1,752
                                              --------- --------- --------
Income (loss) before tax provision                3,172     1,099   (1,769)
Tax provision                                       234       137    1,187
                                              --------- --------- --------
Net income (loss)                             $   2,938 $     962 $ (2,956)
                                              ========= ========= ========

Net income (loss) per share:
  Basic                                       $    0.11 $    0.04 $  (0.11)
                                              ========= ========= ========
  Diluted                                     $    0.11 $    0.04 $  (0.11)
                                              ========= ========= ========

Shares used in computing net income (loss)
 per share:
  Basic                                          26,313    26,203   26,027
                                              ========= ========= ========
  Diluted                                        26,527    26,362   26,027
                                              ========= ========= ========




RECONCILIATION OF NON-GAAP STATEMENTS OF OPERATIONS TO GAAP STATEMENTS OF
                                OPERATIONS
                        (Unaudited, in thousands)

                                                   Three Months Ended
                                              -----------------------------

                                               Apr 4,    Jan 3,     Apr 5,
                                                2010      2010      2009
                                              --------- --------- ---------
Cost and expenses:
  Non-GAAP research and development           $  13,590 $  12,915 $  15,105
  Adjustments related to stock based
   compensation and other                         1,137     1,245     1,288
                                              --------- --------- ---------
  GAAP research and development               $  14,727 $  14,160 $  16,393
                                              ========= ========= =========

  Non-GAAP restructuring and asset impairment
   charges                                    $       - $       - $       -
  Adjustments related to restructuring and
   asset impairments                                 14     1,202     1,119
                                              --------- --------- ---------
  GAAP restructuring and asset impairment
   charges                                    $      14 $   1,202 $   1,119
                                              ========= ========= =========

  Non-GAAP amortization of
   acquisition-related intangibles            $       - $       - $       -
  Adjustments related to amortization of
   acquisition-related intangibles                  193       193       193
                                              --------- --------- ---------
  GAAP amortization of acquisition-related
   intangibles                                $     193 $     193 $     193
                                              ========= ========= =========

  Non-GAAP selling, general and
   administrative                             $  14,158 $  13,487 $  12,454
  Adjustments related to stock based
   compensation, option investigation and
   other                                            855       914     1,036
                                              --------- --------- ---------
  GAAP selling, general and administrative    $  15,013 $  14,401 $  13,490
                                              ========= ========= =========




RECONCILIATION OF NON-GAAP STATEMENTS OF OPERATIONS TO GAAP STATEMENTS OF
                                OPERATIONS
                        (Unaudited, in thousands)

                                                   Three Months Ended
                                              ----------------------------
                                               Apr 4,    Jan 3,    Apr 5,
                                                2010      2010      2009
                                              --------  --------  --------

Income (loss) from operations:
  Non-GAAP income from operations             $  4,774  $  4,582  $    115
  Adjustments related to restructuring and
   stock based compensation, and other          (2,199)   (3,554)   (3,636)
                                              --------  --------  --------
  GAAP income (loss) from operations          $  2,575  $  1,028  $ (3,521)
                                              ========  ========  ========

Interest income and other, net:
  Non-GAAP interest income and other, net     $    597  $     71  $  1,036
  Adjustments related to insurance
   reimbursement                                     -         -       716
                                              --------  --------  --------
  GAAP interest income and other, net         $    597  $     71  $  1,752
                                              ========  ========  ========

Income (loss) before tax provision:
  Non-GAAP income before tax provision        $  5,371  $  4,653  $  1,151
  Adjustments related to restructuring and
   stock based compensation, and other          (2,199)   (3,554)   (2,920)
                                              --------  --------  --------
  GAAP income (loss) before tax provision     $  3,172  $  1,099  $ (1,769)
                                              ========  ========  ========




RECONCILIATION OF NON-GAAP STATEMENTS OF OPERATIONS TO GAAP STATEMENTS OF
                                OPERATIONS
      (Unaudited, in thousands except per share amounts)

                                                   Three Months Ended
                                              ----------------------------

                                               Apr 4,    Jan 3,    Apr 5,
                                                2010      2010      2009
                                              --------  --------  --------
Net income (loss):
  Non-GAAP net income                         $  3,760  $  3,257  $    806
  Adjustments related to restructuring and
   stock based compensation, other and tax        (822)   (2,295)   (3,762)
                                              --------  --------  --------
  GAAP net income (loss)                      $  2,938  $    962  $ (2,956)
                                              ========  ========  ========

Net income (loss) per share:
  Basic:
  Non-GAAP net income per share               $   0.14  $   0.12  $   0.03
  Adjustments related to restructuring and
   stock based compensation, other and tax       (0.03)    (0.08)    (0.14)
                                              --------  --------  --------
  GAAP net income (loss) per share            $   0.11  $   0.04  $  (0.11)
                                              ========  ========  ========

  Diluted:
  Non-GAAP net income per share               $   0.14  $   0.12  $   0.03
  Adjustments related to restructuring,
   stock based compensation, other and tax       (0.03)    (0.08)    (0.14)
                                              --------  --------  --------
  GAAP net income (loss) per share            $   0.11  $   0.04  $  (0.11)
                                              ========  ========  ========




                            ACTEL CORPORATION

                  CONDENSED CONSOLIDATED BALANCE SHEETS
                              (In thousands)

                                                          Apr 4,   Jan 3,
                                                           2010     2010
                                                        --------- ---------

                            ASSETS                     (Unaudited)(Audited)

Current assets:
  Cash and cash equivalents                             $  30,297 $  45,994
  Short-term investments                                  118,336   106,007
  Accounts receivable, net                                 33,166    19,112
  Inventories, net                                         38,380    37,324
  Deferred income taxes                                     1,729     1,729
  Prepaid expenses and other current assets                 7,056     8,166
                                                        --------- ---------
     Total current assets                                 228,964   218,332
Long-term investments                                         656       663
Property and equipment, net                                21,977    22,969
Goodwill and other intangible assets, net                  34,746    34,939
Deferred income taxes                                           -         -
Other assets, net                                          29,839    30,099
                                                        --------- ---------
                                                        $ 316,182 $ 307,002
                                                        ========= =========

             LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                      $  11,988 $  10,262
  Accrued compensation and employee benefits                6,824     8,206
  Accrued licenses                                          6,016     4,996
  Other accrued liabilities                                 3,777     5,422
  Deferred income on shipments to distributors             30,158    22,867
                                                        --------- ---------
     Total current liabilities                             58,763    51,753
  Deferred compensation plan liability                      5,807     5,470
  Deferred rent liability                                   1,345     1,590
  Accrued sabbatical compensation                           2,743     2,805
  Other long-term liabilities, net                         11,250    11,921
                                                        --------- ---------
     Total liabilities                                     79,908    73,539
  Shareholders' equity                                    236,274   233,463
                                                        --------- ---------
                                                        $ 316,182 $ 307,002
                                                        ========= =========




                            ACTEL CORPORATION

              SUPPLEMENTAL HISTORICAL FINANCIAL INFORMATION
                                (Unaudited)

                                                    Three Months Ended
                                              ----------------------------
                                               Apr 4,    Jan 3,    Apr 5,
                                                2010      2010      2009
                                              --------  --------  --------
Non-GAAP Operations Information
  Percent of Revenue
  Gross Margin                                    62.2%     62.3%     57.1%
  R&D Expense                                     26.0%     26.0%     31.2%
  SG&A Expense                                    27.1%     27.1%     25.7%

Depreciation and Amortization
  Expense (000's)                                2,995     3,063     3,497
  Capital Expenditures (000's)                   1,817     1,044     2,145

Revenue by Technology
  Flash                                             24%       24%       24%
  Other                                             76%       76%       76%

Revenue by Geographic Region
  North America                                     54%       55%       52%
  Europe                                            20%       23%       27%
  Asia Pacific/Rest of World                        26%       22%       21%

Revenue by Channel
  OEM                                               37%       28%       33%
  Distribution                                      63%       72%       67%

Revenue by Market Segment
  Communication                                      7%        8%        7%
  Consumer                                          16%       20%       16%
  Industrial                                        31%       30%       37%
  Aero/Military                                     46%       42%       40%

Market segment numbers are based on our estimate of end uses by our
customers.

Flash technology products are defined as the ProASIC, ProASICPLUS,
ProASIC3, ProASIC3 Low Power, IGLOO, IGLOO PLUS, Fusion, and
SmartFusion product families.

Contact Information

  • Investor Contact:
    Maurice Carson
    (650) 318-4700

    Media Contact:
    Anna del Rosario
    (650) 318-4500