SOURCE: Actel Corporation

October 27, 2009 16:03 ET

Actel Announces Third Quarter 2009 Financial Results

MOUNTAIN VIEW, CA--(Marketwire - October 27, 2009) - Actel Corporation (NASDAQ: ACTL) today announced net revenues of $47.2 million for the third quarter of 2009, up 4.5 percent from the second quarter of 2009 and down 11.2 percent from the third quarter of 2008.

Actel reported net income in accordance with generally accepted accounting principles (GAAP) of $0.9 million, or $0.03 per diluted share, for the third quarter of 2009 compared with a net loss of $(1.4) million, or $(0.05) per basic share, for the third quarter of 2008 and a net loss of $(45.1) million, or $(1.73) per basic share, for the second quarter of 2009.

Non-GAAP net income, which excludes stock-based compensation, certain excess inventory reserves, fixed asset impairment charges, expenses associated with the restructuring, adjustments to deferred tax valuation allowances and other non-recurring adjustments, was $2.4 million for the third quarter of 2009 compared with $1.9 million for the third quarter of 2008 and $14,000 for the second quarter of 2009.

Significant Developments

Significant developments during the third quarter included:

-- The availability of a free Mixed-Signal Power Manager (MPM) reference design and graphical user interface (GUI) tool included in the recently announced Fusion® Advanced Development Kit. This tool is key to enabling designers to control and reduce power at the system level, offering fully-verified, timing-closed, proven-in-hardware power supervision and management capabilities.

-- The availability of RTAX-DSP prototype FPGAs for demonstration and timing validation of designs targeted to Actel's RTAX-DSP space-flight FPGAs. These prototypes have the same pin assignment, mechanical footprint and timing properties across the full military temperature range (-55°C to 125°C) as their space-flight counterparts.

-- The continued performance of critical functions by Actel's radiation-tolerant RTAX-S FPGAs aboard the NASA Lunar Reconnaissance Orbiter (LRO) and Lunar Crater Observation and Sensing Satellite (LCROSS), which will return more data about the moon than any previous mission.

-- The opening of a new development and support center in Hyderabad, India. The facility will house engineering, operations and marketing employees as well as a 24-hour customer support center.

Business Outlook - Fourth Quarter 2009

The Company believes that fourth quarter 2009 revenues will be up two percent to six percent sequentially. Gross margin is expected to be about 59 or 60 percent. Operating expenses are anticipated to come in at approximately $26.9 million, which excludes an estimated $2.2 million of stock-based compensation expense, an estimated $1.2 million charge for the fourth quarter 2009 reduction in force, and $0.6 million associated with the acquisition of Pigeon Point Systems. Other income is expected to be about $0.7 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 26.3 million shares.

Conference Call

A conference call to discuss third quarter results will be held Tuesday, October 27, 2009, at 1:30 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.

Corporate Restructuring

Actel announced in January a company-wide restructuring plan to increase profitability. In conjunction with cost-reduction initiatives taken in the fourth quarter of 2008, the restructuring is expected to result in a quarterly reduction in expenses of approximately $6.5 million in the third quarter of 2010 compared with the third quarter of 2008. The Company expects to record aggregate charges of $5.0 million to $5.5 million for severance and other costs related to the restructuring by the beginning of the third quarter of 2010, when the restructuring will be substantially complete.

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, 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.

Forward-Looking Statements

The statements in the paragraphs under the headings "Corporate Restructuring" and "Business Outlook - Fourth Quarter 2009" 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, which can be found on Actel's web site, www.actel.com. Actel's anticipated results from its restructuring plan and its projected revenues and operating results for the fourth quarter of 2009 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 a failure to achieve the full projected results of the restructuring plan, 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. 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.

Editor's Note: The Actel name and logo are registered trademarks of Actel Corporation.

                            ACTEL CORPORATION

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

                               Three Months Ended       Nine Months Ended
                          ----------------------------  ------------------
                          Oct. 4,   July 5,   Oct. 5,   Oct. 4,   Oct. 5,
                            2009      2009      2008      2009      2008
                          --------  --------  --------  --------  --------


Net revenues              $ 47,248  $ 45,227  $ 53,215  $140,934  $165,620
Costs and expenses:
  Cost of revenues          18,760    32,595    22,343    72,140    68,116
  Research and development  14,839    15,326    16,995    46,558    50,807
  Selling, general,
   and administrative       13,196    13,659    15,038    40,345    47,431
  Restructuring and asset
   impairment charges          175     5,594         -     6,888         -
  Amortization of
   acquisition-related
   intangibles                 193       192       458       578       458
                          --------  --------  --------  --------  --------
    Total costs and
     expenses               47,163    67,366    54,834   166,509   166,812
                          --------  --------  --------  --------  --------
Income (loss) from
 operations                     85   (22,139)   (1,619)  (25,575)   (1,192)
Interest income and
 other, net                    664       776       465     3,192     4,098
                          --------  --------  --------  --------  --------
Income (loss) before tax
 provision                     749   (21,363)   (1,154)  (22,383)    2,906
Tax provision (benefit)       (157)   23,778       219    24,808     2,139
                          --------  --------  --------  --------  --------
Net income (loss)         $    906  $(45,141) $ (1,373) $(47,191) $    767
                          ========  ========  ========  ========  ========

Net income (loss) per
 share:
  Basic                   $   0.03  $  (1.73) $  (0.05) $  (1.81) $   0.03
                          ========  ========  ========  ========  ========
  Diluted                 $   0.03  $  (1.73) $  (0.05) $  (1.81) $   0.03
                          ========  ========  ========  ========  ========

Shares used in computing
 net income (loss) per
 share:
  Basic                     26,160    26,146    25,726    26,111    25,873
                          ========  ========  ========  ========  ========
  Diluted                   26,247    26,146    25,726    26,111    26,267
                          ========  ========  ========  ========  ========





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

                                   Three Months Ended     Nine Months Ended
                               -------------------------- -----------------
                               Oct. 4,  July 5,  Oct. 5,  Oct. 4,  Oct. 5,
                                 2009     2009     2008     2009     2008
                               -------- -------- -------- -------- --------
Cost and expenses:
  Non-GAAP cost of revenues    $ 18,760 $ 19,339 $ 22,343 $ 58,884 $ 68,116
  Adjustments related to excess
   inventory                          -   13,256        -   13,256        -
                               -------- -------- -------- -------- --------
  GAAP cost of revenues        $ 18,760 $ 32,595 $ 22,343 $ 72,140 $ 68,116
                               ======== ======== ======== ======== ========

  Non-GAAP research and
   development                 $ 13,378 $ 14,056 $ 15,408 $ 42,539 $ 47,250
  Adjustments related to stock
   based compensation and other   1,461    1,270    1,587    4,019    3,557
                               -------- -------- -------- -------- --------
  GAAP research and
   development                 $ 14,839 $ 15,326 $ 16,995 $ 46,558 $ 50,807
                               ======== ======== ======== ======== ========

  Non-GAAP restructuring and
   asset impairment charges    $      - $      - $      - $      - $      -
  Adjustments related to
   restructuring and asset
   impairments                      175    5,594        -    6,888        -
                               -------- -------- -------- -------- --------
  GAAP restructuring and asset
   impairment charges          $    175 $  5,594 $      - $  6,888 $      -
                               ======== ======== ======== ======== ========

  Non-GAAP amortization of
   acquisition-related
   intangibles                 $      - $      - $      - $      - $      -
  Adjustments related to
   amortization of
   acquisition-related
   intangibles                      193      192      458      578      458
                               -------- -------- -------- -------- --------
  GAAP amortization of
   acquisition-related
   intangibles                 $    193 $    192 $    458 $    578 $    458
                               ======== ======== ======== ======== ========

  Non-GAAP selling, general
   and administrative          $ 12,354 $ 12,588 $ 14,126 $ 37,396 $ 42,752
  Adjustments related to stock
   based compensation, option
   investigation and other          842    1,071      912    2,949    4,679
                               -------- -------- -------- -------- --------
  GAAP selling, general and
   administrative              $ 13,196 $ 13,659 $ 15,038 $ 40,345 $ 47,431
                               ======== ======== ======== ======== ========





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

                               Three Months Ended       Nine Months Ended
                          ----------------------------  ------------------
                          Oct. 4,   July 5,   Oct. 5,   Oct. 4,   Oct. 5,
                            2009      2009      2008      2009      2008
                          --------  --------  --------  --------  --------
Income (loss) from
 operations:
  Non-GAAP income from
   operations             $  2,756  $   (756) $  1,338  $  2,115  $  7,502
  Adjustments related to
   excess inventory,
   restructuring and asset
   impairment charges,
   stock based
   compensation, and other  (2,671)  (21,383)   (2,957)  (27,690)   (8,694)
                          --------  --------  --------  --------  --------
  GAAP income (loss) from
   operations             $     85  $(22,139) $ (1,619) $(25,575) $ (1,192)
                          ========  ========  ========  ========  ========

Interest income and
 other, net:
  Non-GAAP interest income
   and other, net         $    664  $    776  $  1,338  $  2,476  $  4,971
  Adjustments related to
   investment impairment
   and insurance
   reimbursement                 -         -      (873)      716      (873)
                          --------  --------  --------  --------  --------
  GAAP interest income
   and other, net         $    664  $    776  $    465  $  3,192  $  4,098
                          ========  ========  ========  ========  ========

Income (loss) before tax
 provision:
  Non-GAAP income before
   tax provision          $  3,420  $     20  $  2,676  $  4,591  $ 12,473
  Adjustments related to
   excess inventory,
   restructuring and asset
   impairment charges,
   stock based
   compensation, and other  (2,671)  (21,383)   (3,830)  (26,974)   (9,567)
                          --------  --------  --------  --------  --------
  GAAP (loss) income
   before tax provision   $    749  $(21,363) $ (1,154) $(22,383) $  2,906
                          ========  ========  ========  ========  ========




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

                                 Three Months Ended      Nine Months Ended
                             --------------------------  -----------------
                             Oct. 4,  July 5,   Oct. 5,  Oct. 4,   Oct. 5,
                               2009     2009      2008     2009      2008
                             -------  --------  -------  --------  -------
Net income (loss):
  Non-GAAP net income        $ 2,394  $     14  $ 1,873  $  3,214  $ 8,731
  Adjustments related to
   excess inventory,
   restructuring and asset
   impairment charges, stock
   based compensation,
   deferred tax valuation
   allowances, other and tax  (1,488)  (45,155)  (3,246)  (50,405)  (7,964)
                             -------  --------  -------  --------  -------
  GAAP net income (loss)     $   906  $(45,141) $(1,373) $(47,191) $   767
                             =======  ========  =======  ========  =======

Net income (loss) per share:
 Basic:
  Non-GAAP net income per
   share                     $  0.09  $   0.00  $  0.07  $   0.12  $  0.34
  Adjustments related to
   excess inventory,
   restructuring and asset
   impairment charges, stock
   based compensation,
   deferred tax valuation
   allowances, other and tax   (0.06)    (1.73)   (0.12)    (1.93)   (0.31)
                             -------  --------  -------  --------  -------
  GAAP net income (loss) per
   share                     $  0.03  $  (1.73) $ (0.05) $  (1.81) $  0.03
                             =======  ========  =======  ========  =======

 Diluted:
  Non-GAAP net income per
   share                     $  0.09  $   0.00  $  0.07  $   0.12  $  0.33
  Adjustments related to
   excess inventory,
   restructuring and asset
   impairment charges, stock
   based compensation,
   deferred tax valuation
   allowances, other and tax   (0.06)    (1.73)   (0.12)    (1.93)   (0.30)
                             -------  --------  -------  --------  -------
  GAAP net income (loss) per
   share                     $  0.03  $  (1.73) $ (0.05) $  (1.81) $  0.03
                             =======  ========  =======  ========  =======





                            ACTEL CORPORATION

                  CONDENSED CONSOLIDATED BALANCE SHEETS
                              (In thousands)



                                                  Oct. 4, 2009 Jan. 4, 2009
                                                  ------------ ------------
                      ASSETS                       (Unaudited)   (Audited)

Current assets:
  Cash and cash equivalents                       $     55,887 $     49,639
  Short-term investments                                86,612       89,111
  Accounts receivable, net                              22,837       11,596
  Inventories                                           38,392       60,630
  Deferred income taxes                                      -       11,313
  Prepaid expenses and other current assets              7,688        6,888
                                                  ------------ ------------
    Total current assets                               211,416      229,177
Long-term investments                                    3,245        7,807
Property and equipment, net                             24,778       34,747
Goodwill and other intangible assets, net               35,132       35,540
Deferred income taxes                                        -       13,968
Other assets, net                                       29,756       22,022
                                                  ------------ ------------
                                                  $    304,327 $    343,261
                                                  ============ ============
      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                $      9,006 $     14,672
  Accrued compensation and employee benefits             6,510       11,240
  Accrued licenses                                       4,279        3,952
  Other accrued liabilities                              4,909        5,274
  Deferred income on shipments to distributors          30,117       24,316
                                                  ------------ ------------
    Total current liabilities                           54,821       59,454
  Deferred compensation plan liability                   5,116        4,086
  Deferred rent liability                                1,391        1,449
  Accrued sabbatical compensation                        2,561        2,739
  Other long-term liabilities, net                      10,262        7,208
                                                  ------------ ------------
    Total liabilities                                   74,151       74,936
  Shareholders' equity                                 230,176      268,325
                                                  ------------ ------------
                                                  $    304,327 $    343,261
                                                  ============ ============



                            ACTEL CORPORATION

              SUPPLEMENTAL HISTORICAL FINANCIAL INFORMATION
                                (Unaudited)


                                    Three Months Ended    Nine Months Ended
                                -------------------------  ---------------
                                Oct. 4,  July 5,  Oct. 5,  Oct. 4,  Oct. 5,
                                  2009     2009     2008     2009    2008
                                -------  -------  -------  -------  ------

Non-GAAP Operations Information
  Percent of Revenue
  Gross Margin                     60.3%    57.2%    58.0%    58.2%   58.9%
  R&D Expense                      28.3%    31.1%    29.0%    30.2%   28.5%
  SG&A Expense                     26.1%    27.8%    26.5%    26.5%   25.8%

Depreciation and Amortization
  Expense (000's)                 3,079    3,257    3,465    9,833   8,896
Capital Expenditures (000's)      1,237    1,382    7,401    4,764  18,706

Revenue by Technology
  Flash                              26%      29%      29%      26%     25%
  Other                              74%      71%      71%      74%     75%

Revenue by Geographic Region
  North America                      49%      52%      49%      51%     48%
  Europe                             26%      25%      28%      26%     28%
  Asia Pacific/Rest of World         25%      23%      23%      23%     24%

Revenue by Channel
  OEM                                28%      29%      28%      30%     25%
  Distribution                       72%      71%      72%      70%     75%

Revenue by Market Segment
  Communication                       8%       7%       9%       7%      9%
  Consumer                           15%      20%      19%      17%     17%
  Industrial                         34%      34%      36%      35%     36%
  Aero/Military                      43%      39%      36%      41%     38%


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

FLASH Technology products are defined as - ProASIC, ProASIC Plus, ProASIC
3, ProASIC 3 Low Power, IGLOO, IGLOO Plus, and FUSION project families.

Contact Information

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

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