SOURCE: Actel Corporation

February 20, 2008 16:15 ET

Actel Announces Fourth Quarter 2007 Financial Results

MOUNTAIN VIEW, CA--(Marketwire - February 20, 2008) - Actel Corporation (NASDAQ: ACTL) today announced net revenues of $51.1 million for the fourth quarter of 2007, up 6 percent from the fourth quarter of 2006 and up 7 percent from the third quarter of 2007.

Non-GAAP net income, which excludes stock-based compensation, option investigation expenses and other adjustments, was $2.3 million for the fourth quarter of 2007 compared with $4.4 million for the fourth quarter of 2006 and $3.3 million for the third quarter of 2007. Non-GAAP earnings were $0.08 per diluted share for the fourth quarter of 2007 compared with $0.16 for the fourth quarter of 2006 and $0.12 for the third quarter of 2007.

Including stock-based compensation, option investigation expenses and other adjustments in accordance with generally accepted accounting principles (GAAP), Actel reported a net loss of $1.6 million, or ($0.06) per basic share, for the fourth quarter of 2007 compared with a net loss of $7.5 million, or ($0.28) per basic share, for the fourth quarter of 2006 and net income of $1.8 million, or $0.07 per diluted share, for the third quarter of 2007.

Gross margin was 54.6 percent for the fourth quarter of 2007 compared with 57.3 percent for the fourth quarter of 2006 and 59.7 percent for the third quarter of 2007.

A conference call to discuss fourth quarter results will be held Wednesday, February 20, 2008, at 2:00 p.m. Pacific Time. A live web cast and replay of the call will be available. Web cast and replay access information as well as financial and other statistical information can be found on Actel's web site, www.actel.com.

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, in particular 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.

Business Outlook - First Quarter 2008

The Company believes that first quarter 2008 revenues will increase sequentially two percent to seven percent. Gross margin is expected to be about 61 percent. Operating expenses are anticipated to come in at approximately $31.4 million, which excludes an estimated $2.0 million of stock-based compensation expense and $0.5 million of stock option restatement expense. Other income is expected to be about $2.3 million. The tax rate for the quarter is expected to be around 30 percent. Outstanding fully diluted share count is expected to be about 27.3 million shares.

Common Stock Repurchase Program

The Company's stock repurchase program was instituted in 1998 for the purpose of replenishing some or all of the shares of Common Stock issued upon exercise of stock options and in connection with other stock compensation plans. The overall objective of the program is to reduce or eliminate earnings per share dilution caused by the issuance of such additional shares. Repurchases may be made in the open market or in privately negotiated transactions. To date, Actel's Board of Directors has authorized the repurchase of 5,000,000 shares under the program, and 3,389,197 shares of Common Stock have been repurchased on the open market. Now that it is again current in its regulatory filings, the Company will resume repurchasing shares of its Common Stock from time to time as market and business conditions warrant.

"We continue to believe that our Common Stock repurchase program provides an excellent opportunity to increase shareholder value," said John C. East, Actel president and CEO. "While any future stock repurchases are subject to market conditions and the consideration of alternative investment opportunities available from time to time, we remain committed to preserving and maximizing shareholder value." The Company has remaining authority to repurchase 1,610,803 shares under the program.

About Actel

Attacking power consumption from both the chip and the system levels, Actel Corporation's innovative FPGAs and programmable system chip solutions enable power-efficient design. The Company trades on the NASDAQ National Market under the symbol ACTL and is headquartered at 2061 Stierlin Court, Mountain View, Calif., 94043-4655. For more information about Actel, visit http://www.actel.com. Telephone: 888-99-ACTEL (992-2835).

The statements in the paragraph under the heading "Business Outlook - First Quarter 2008" 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-Q or 10-K, which can be found on Actel's web site, www.actel.com. Actel's quarterly revenues and operating results 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, and booking and shipment uncertainties. These and the other Risk Factors make it difficult for Actel to accurately project quarterly revenues and operating 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.

Editor's Note: The Actel name and logo are registered trademarks of Actel Corporation. All other trademarks and servicemarks are the property of their respective owners.

                        ACTEL CORPORATION

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


                          Three Months Ended           Fiscal Year Ended
                     -------------------------------  --------------------
                      Jan. 6,   Dec. 31,   Sep. 30,    Jan. 6,   Dec. 31,
                       2008       2006       2007       2008       2006
                     ---------  ---------  ---------- ---------  ---------
                     unaudited  unaudited  unaudited  unaudited   audited
Net revenues         $  51,102  $  48,151  $   47,880 $ 196,376  $ 191,499
Costs and expenses:
  Cost of revenues      23,223     20,583      19,306    82,295     75,618
  Research and
   development          15,475     14,294      13,754    63,726     56,926
  Selling, general,
   and administrative   16,638     24,861      14,800    62,923     67,959
  Amortization of
   acquisition-
   related
   intangibles              --         --          --        --         15
                     ---------  ---------  ---------- ---------  ---------
    Total costs and
     expenses           55,336     59,738      47,860   208,944    200,518
                     ---------  ---------  ---------- ---------  ---------
Income (loss) from
 operations             (4,234)   (11,587)         20   (12,568)    (9,019)
Interest income and
 other, net              2,230      2,103       2,156     8,606      7,128
                     ---------  ---------  ---------- ---------  ---------
Income (loss) before
 tax provision          (2,004)    (9,484)      2,176    (3,962)    (1,891)
Tax (benefit)
 provision                (418)    (1,961)        391      (769)       264
                     ---------  ---------  ---------- ---------  ---------
Net income (loss)    $  (1,586) $  (7,523) $    1,785 $  (3,193) $  (2,155)
                     =========  =========  ========== =========  =========

Net income (loss)
 per share:
  Basic              $   (0.06) $   (0.28) $     0.07 $   (0.12) $   (0.08)
                     =========  =========  ========== =========  =========
  Diluted            $   (0.06) $   (0.28) $     0.07 $   (0.12) $   (0.08)
                     =========  =========  ========== =========  =========

Shares used in
 computing net
 income (loss) per
 share:
  Basic                 27,026     26,515      26,935    26,888     26,106
                     =========  =========  ========== =========  =========
  Diluted               27,026     26,515      27,234    26,888     26,106
                     =========  =========  ========== =========  =========



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

                                   Three Months Ended     Fiscal Year Ended
                               -------------------------- -----------------
                               Jan. 6,  Dec. 31, Sep. 30, Jan. 6,  Dec. 31,
                                 2008     2006     2007     2008     2006
                               -------- -------- -------- -------- --------

Cost and expenses:
  Non-GAAP cost of revenues    $ 21,006 $ 18,341 $ 19,306 $ 80,078 $ 73,376
  Adjustments related to
   inventory reserve              2,217    2,242       --    2,217    2,242
                               -------- -------- -------- -------- --------
  GAAP cost of revenues        $ 23,223 $ 20,583 $ 19,306 $ 82,295 $ 75,618
                               ======== ======== ======== ======== ========

  Non-GAAP research and
   development                 $ 14,660 $ 12,977 $ 12,917 $ 56,002 $ 51,278
  Adjustments related to stock
   based compensation and
   other                            815    1,317      837    7,724    5,648
                               -------- -------- -------- -------- --------
  GAAP research and
   development                 $ 15,475 $ 14,294 $ 13,754 $ 63,726 $ 56,926
                               ======== ======== ======== ======== ========

  Non-GAAP selling, general
   and administrative          $ 14,434 $ 12,645 $ 13,079 $ 54,156 $ 51,948
  Adjustments related to stock
   based compensation, option
   investigation and other        2,204   12,216    1,721    8,767   16,011
                               -------- -------- -------- -------- --------
  GAAP selling, general and
   administrative              $ 16,638 $ 24,861 $ 14,800 $ 62,923 $ 67,959
                               ======== ======== ======== ======== ========





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

                           Three Months Ended           Fiscal Year Ended
                     -------------------------------  --------------------
                      Jan. 6,   Dec. 31,   Sep. 30,    Jan. 6,   Dec. 31,
                       2008       2006       2007       2008       2006
                     ---------  ---------  ---------  ---------  ---------
Cost and expenses:
  Non-GAAP
   amortization of
   acquisition-
   related
   intangibles      $      --  $      --  $      --  $      --  $      --
  Adjustments
   related to
   amortization of
   acquisition-
   related
   intangibles              --         --         --         --         15
                     ---------  ---------  ---------  ---------  ---------
  GAAP amortization
   of
   acquisition-
   related
   intangibles       $      --  $      --  $      --  $      --  $      15
                     =========  =========  =========  =========  =========

Income (loss) from
 operations:
  Non-GAAP income
   from operations   $   1,002  $   4,188  $   2,578  $   6,140  $  14,897
  Adjustments
   related to stock
   based compensation,
   option investigation
   and other            (5,236)   (15,775)    (2,558)   (18,708)   (23,916)
                     ---------  ---------  ---------  ---------  ---------
  GAAP (loss) income
    from operations  $  (4,234) $ (11,587) $      20  $ (12,568) $  (9,019)
                     =========  =========  =========  =========  =========

Income before tax
 provision:
  Non-GAAP income
   before tax
   provision         $   3,232  $   6,291  $   4,734  $  14,746  $  22,025
  Adjustments
   related to stock
   based compensation,
   option investigation
   and other            (5,236)   (15,775)    (2,558)   (18,708)   (23,916)
                     ---------  ---------  ---------  ---------  ---------
  GAAP (loss) income
   before tax
   provision         $  (2,004) $  (9,484) $   2,176  $  (3,962) $  (1,891)
                     =========  =========  =========  =========  =========




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

                               Three Months Ended       Fiscal Year Ended
                          ----------------------------  ------------------
                          Jan. 6,   Dec. 31,  Sep. 30,  Jan. 6,   Dec. 31,
                            2008      2006      2007      2008      2006
                          --------  --------  --------  --------  --------
Net income (loss):
  Non-GAAP net income     $  2,262  $  4,405  $  3,314  $ 10,322  $ 15,417
  Adjustments related to
   stock based
   compensation, option
   investigation, other
   and tax                  (3,848)  (11,928)   (1,529)  (13,515)  (17,572)
                          --------  --------  --------  --------  --------
  GAAP (loss) net income  $ (1,586) $ (7,523) $  1,785  $ (3,193) $ (2,155)
                          ========  ========  ========  ========  ========

Net income (loss) per
 share:
   Basic:
    Non-GAAP net income
     per share            $   0.08  $   0.16  $   0.12  $   0.38  $   0.56
    Adjustments related
     to stock based
     compensation, option
     investigation, other
     and tax                 (0.14)    (0.44)    (0.05)    (0.50)    (0.64)
                          --------  --------  --------  --------  --------
    GAAP (loss) net
     income per share     $  (0.06) $  (0.28) $   0.07  $  (0.12) $  (0.08)
                          ========  ========  ========  ========  ========

   Diluted:
    Non-GAAP net income
     per share            $   0.08  $   0.16  $   0.12  $   0.38  $   0.56
    Adjustments related
     to stock based
     compensation, option
     investigation, other
     and tax                 (0.14)    (0.44)    (0.05)    (0.50)    (0.64)
                          --------  --------  --------  --------  --------
    GAAP net income
     (loss) per share     $  (0.06) $  (0.28) $   0.07  $  (0.12) $  (0.08)
                          ========  ========  ========  ========  ========



                       ACTEL CORPORATION

                   CONSOLIDATED BALANCE SHEETS
                         (In thousands)


                                                      Jan. 6,    Dec. 31,
                                                       2008        2006
                                                    ----------- -----------
              ASSETS                                 (Unaudited) (Audited)
Current assets:
  Cash and cash equivalents                         $    30,119 $    33,699
  Short-term investments                                152,609     124,022
  Accounts receivable, net                               18,116      22,017
  Inventories                                            35,587      39,203
  Deferred income taxes                                  31,222      30,389
  Prepaid expenses and other current assets              10,259       9,492
                                                    ----------- -----------
    Total current assets                                277,912     258,822
Property and equipment, net                              25,417      22,770
Long-term investments, net                                6,442      34,234
Goodwill                                                 30,197      30,209
Deferred income taxes                                     4,210       3,055
Other assets, net                                        19,438      19,832
                                                    ----------- -----------
                                                    $   363,616 $   368,922
                                                    =========== ===========
     LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
  Accounts payable                                  $    16,972 $    15,799
  Accrued compensation and employee benefits              6,292       5,984
  Accrued licenses                                        4,927       9,098
  Other accrued liabilities                               3,519       7,366
  Deferred income on shipments to distributors           26,709      29,297
                                                    ----------- -----------
    Total current liabilities                            58,419      67,544
Deferred compensation plan liability                      5,479       4,428
Deferred rent liability                                   1,417       1,367
Accrued sabbatical compensation                           3,380          --
Other long-term liabilities, net                          3,718       4,967
                                                    ----------- -----------
    Total liabilities                                    72,413      78,306
Shareholders’ equity                                    291,203     290,616
                                                    ----------- -----------
                                                    $   363,616 $   368,922
                                                    =========== ===========

Contact Information

  • Contact:
    Jon Anderson
    Actel Corporation
    (650) 318-4445