Actel Announces First Quarter 2009 Financial Results

MOUNTAIN VIEW, CA -- (MARKET WIRE) -- Apr 28, 2009 -- Actel Corporation (NASDAQ: ACTL) today announced net revenues of $48.5 million for the first quarter of 2009, down 12 percent from the first quarter of 2008 and down 8 percent from the fourth quarter of 2008.

Non-GAAP net income, which excludes stock-based compensation, expenses associated with a restructuring initiated during the first quarter, and other non-recurring adjustments, was $0.8 million for the first quarter of 2009 compared with $2.9 million for the first quarter of 2008 and $3.3 million for the fourth quarter of 2008.

Including stock-based compensation, expenses associated with the restructuring, and other non-recurring adjustments in accordance with generally accepted accounting principles (GAAP), Actel reported a net loss of ($3.0) million, or ($0.11) per basic share, for the first quarter of 2009 compared with a net income of $0.2 million, or $0.01 per diluted share, for the first quarter of 2008 and a net loss of ($12.5) million, or ($0.48) per basic share, for the fourth quarter of 2008. First quarter charges of $1.1 million for expenses associated with the restructuring adversely affected net income in accordance with GAAP for the first quarter of 2009.

Gross margin was 57.1 percent for the first quarter of 2009 compared with 58.5 percent for the first quarter of 2008 and 59.1 percent for the fourth quarter of 2008. Gross margin for the first quarter of 2009 was negatively impacted by a $1.5 million charge associated with low yield wafers.

Business Outlook - Second Quarter 2009

The Company believes that second quarter 2009 revenues will decline sequentially 1 percent to 7 percent. Gross margin is expected to be about 59 percent. Operating expenses are anticipated to come in at approximately $28 million, which excludes an estimated $1.8 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 $1.2 million. The 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 first quarter results will be held Tuesday, April 28, 2009, 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.

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 estimates that approximately $5.5 million of the quarterly reductions will be in operating spending and that the balance of savings will be in cost of goods sold. The Company expects to record aggregate charges of $4.0 million to $4.5 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 - Second 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 or 10-K, 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 second 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
               (In  thousands  except  per  share  amounts)



                                                 Three Months Ended
                                            Apr. 5,    Jan. 4,    Apr. 6,
                                             2009       2009       2008
                                           ---------  ---------  ---------
                                           unaudited  unaudited  unaudited
Net revenues                               $  48,459  $  52,786  $  54,756
Costs and expenses:
  Cost of revenues                            20,785     21,598     22,738
  Research and development                    16,393     14,851     16,709
  Selling, general, and administrative        13,490     15,714     16,780
  Restructuring charges                        1,119      2,424          -
  Amortization of
   acquisition-related
   intangibles                                                         193                338                    -
                                                                                      ---------    ---------    ---------
        Total  costs  and  expenses                                    51,980          54,925          56,227
                                                                                      ---------    ---------    ---------
Loss  from  operations                                                    (3,521)        (2,139)        (1,471)
Interest  income  and  other,  net                                  1,752            1,335            1,932
                                                                                      ---------    ---------    ---------
Income  (loss)  before  tax  provision
  (benefit)                                                                        (1,769)            (804)              461
Tax  provision                                                                    1,187          11,688                285
                                                                                      ---------    ---------    ---------
Net  income  (loss)                                                    $    (2,956)  $  (12,492)  $          176
                                                                                      =========    =========    =========

Net  income  (loss)  per  share:
    Basic                                                                        $      (0.11)  $      (0.48)  $        0.01
                                                                                      =========    =========    =========
    Diluted                                                                    $      (0.11)  $      (0.48)  $        0.01
                                                                                      =========    =========    =========

Shares  used  in  computing  net  income  (loss)
  per  share:
    Basic                                                                              26,027          25,784          26,487
                                                                                      =========    =========    =========
    Diluted                                                                          26,027          25,784          26,677
                                                                                      =========    =========    =========





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



                                                                                                          Three  Months  Ended
                                                                                                    Apr.  5,    Jan.  4,    Apr.  6,
                                                                                                      2009          2009          2008
                                                                                                  --------  --------  --------

Cost  and  expenses:
    Non-GAAP  research  and  development                            $  15,105  $  13,511  $  15,683
    Adjustments  related  to  stock  based
      compensation  and  other                                                      1,288        1,340        1,026
                                                                                                  --------  --------  --------
    GAAP  research  and  development                                    $  16,393  $  14,851  $  16,709
                                                                                                  ========  ========  ========

    Non-GAAP  restructuring  charges                                  $            -  $            -  $            -
    Adjustments  related  to  restructuring                            1,119        2,424                -
                                                                                                  --------  --------  --------
    GAAP  restructuring  charges                                          $    1,119  $    2,424  $            -
                                                                                                  ========  ========  ========

    Non-GAAP  amortization  of  acquisition-related
      intangibles                                                                      $            -  $            -  $            -
    Adjustments  related  to  amortization  of
      acquisition-related  intangibles                                        193            338                -
                                                                                                  --------  --------  --------
    GAAP  amortization  of
      acquisition-related  intangibles                              $        193  $        338  $            -
                                                                                                  ========  ========  ========

    Non-GAAP  selling,  general  and  administrative      $  12,454  $  14,347  $  14,189
    Adjustments  related  to  stock  based
      compensation,  option  investigation  and  other          1,036        1,367        2,591
                                                                                                  --------  --------  --------
    GAAP  selling,  general  and  administrative              $  13,490  $  15,714      16,780
                                                                                                  ========  ========  ========





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



                                                                                                      Three  Months  Ended
                                                                                              Apr.  5,      Jan.  4,      Apr.  6,
                                                                                                2009            2009            2008
                                                                                            --------    --------    --------

Income  (loss)  from  operations:
    Non-GAAP  income  from  operations                          $        115    $    3,330    $    2,146
    Adjustments  related  to  stock  based
      compensation  and  other                                              (3,636)      (5,469)      (3,617)
                                                                                            --------    --------    --------
    GAAP  loss  from  operations                                      $  (3,521)  $  (2,139)  $  (1,471)
                                                                                            ========    ========    ========

Interest  income  and  other,  net:
    Non-GAAP  interest  income  and  other,  net          $    1,036    $    1,335    $    1,932
    Adjustments  related  to  insurance
      reimbursement                                                                      716                  -                  -
                                                                                            --------    --------    --------
    GAAP  interest  income  and  other,  net                  $    1,752    $    1,335    $    1,932
                                                                                            ========    ========    ========

Income  (loss)  before  tax  provision:
    Non-GAAP  income  before  tax  provision                $    1,151    $    4,665    $    4,078
    Adjustments  related  to  stock  based
      compensation  and  other                                              (2,920)      (5,469)      (3,617)
                                                                                            --------    --------    --------
    GAAP  (loss)  income  before  tax  provision          $  (1,769)  $      (804)  $        461
                                                                                            ========    ========    ========





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




                                                                                                  Three  Months  Ended
                                                                                        Apr.  5,        Jan.  4,        Apr.  6,
                                                                                          2009              2009              2008
                                                                                      ---------    ---------    ---------
Net  income  (loss):
    Non-GAAP  net  income                                            $          806    $      3,266    $      2,855
    Adjustments  related  to  stock  based
      compensation,  deferred  tax  valuation
      allowances,  other,  and  tax                                  (3,762)      (15,758)        (2,679)
                                                                                      ---------    ---------    ---------
    GAAP  net  income  (loss)                                      $    (2,956)  $  (12,492)  $          176
                                                                                      =========    =========    =========

Net  income  (loss)  per  share:
  Basic:
    Non-GAAP  net  income  per  share                        $        0.03    $        0.13    $        0.11
    Adjustments  related  to  stock  based
      compensation,  deferred  tax  valuation
      allowances,  other  and  tax                                      (0.14)          (0.61)          (0.10)
                                                                                      ---------    ---------    ---------
    GAAP  net  income  (loss)  per  share                  $      (0.11)  $      (0.48)  $        0.01
                                                                                      =========    =========    =========

  Diluted:
    Non-GAAP  net  income  per  share                        $        0.03    $        0.13    $        0.11
    Adjustments  related  to  stock  based
      compensation,  deferred  tax  valuation
      allowances,  other  and  tax                                      (0.14)          (0.61)          (0.10)
                                                                                      ---------    ---------    ---------
    GAAP  net  income  (loss)  per  share                  $      (0.11)  $      (0.48)  $        0.01
                                                                                      =========    =========    =========





                                                        ACTEL    CORPORATION

                                            CONSOLIDATED    BALANCE    SHEETS
                                                            (In    thousands)



                                                                                                            Apr.  5,          Jan.  4,
                                                                                                              2009                2009
                                                                                                        -----------  -----------

                                        ASSETS                                                    (Unaudited)    (Audited)

Current  assets:
    Cash  and  cash  equivalents                                                  $        46,036  $        49,639
    Short-term  investments                                                                  85,072            89,111
    Accounts  receivable,  net                                                              21,765            11,596
    Inventories                                                                                        56,030            60,630
    Deferred  income  taxes                                                                    11,313            11,313
    Prepaid  expenses  and  other  current  assets                              7,876              6,888
                                                                                                        -----------  -----------
        Total  current  assets                                                                228,092          229,177
Long-term  investments                                                                          8,764              7,807
Property  and  equipment,  net                                                            33,588            34,747
Goodwill  and  other  intangible  assets,  net                                35,347            35,540
Deferred  income  taxes                                                                        13,834            13,968
Other  assets,  net                                                                                20,745            22,022
                                                                                                        -----------  -----------
                                                                                                        $      340,370  $      343,261
                                                                                                        ===========  ===========

            LIABILITIES  AND  SHAREHOLDERS'  EQUITY

Current  liabilities:
    Accounts  payable                                                                    $        10,516  $        14,672
    Accrued  compensation  and  employee  benefits                            8,067            11,240
    Accrued  licenses                                                                                2,244              3,952
    Other  accrued  liabilities                                                              5,432              5,274
    Deferred  income  on  shipments  to  distributors                      30,506            24,316
                                                                                                        -----------  -----------
        Total  current  liabilities                                                        56,765            59,454
    Deferred  compensation  plan  liability                                        4,152              4,086
    Deferred  rent  liability                                                                  1,447              1,449
    Accrued  sabbatical  compensation                                                  2,561              2,739
    Other  long-term  liabilities,  net                                                6,539              7,208
                                                                                                        -----------  -----------
        Total  liabilities                                                                        71,464            74,936
    Shareholders'  equity                                                                    268,906          268,325
                                                                                                        -----------  -----------
                                                                                                        $      340,370  $      343,261
                                                                                                        ===========  ===========

 

Investor Contact:
Dirk Sodestrom
(650) 318-4795

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





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