Actel Announces Third Quarter 2009 Financial Results

MOUNTAIN VIEW, CA -- (MARKET WIRE) -- Oct 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.
 

Investor Contact:
Maurice Carson
(650) 318-4700

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





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