Actel Corp 10-Q Quarterly Report August 2010

MOUNTAIN VIEW, Calif., July 29, 2010 – Actel Corporation (NASDAQ: ACTL) today announced net revenues of $57.8 million for the second quarter of 2010, up 27.7 percent from the second quarter of 2009 and up 10.5 percent from the first quarter of 2010.

Actel reported net income in accordance with U.S. generally accepted accounting principles (GAAP) of $4.8 million, or $0.18 per diluted share, for the second quarter of 2010 compared with a net loss of $(45.1) million, or $(1.73) per basic and diluted share, for the second quarter of 2009 and a net income of $2.9 million, or $0.11 per diluted share, for the first quarter of 2010.

Non-GAAP net income, which excludes stock-based compensation, expenses associated with restructuring activities, and other non-recurring adjustments, was $6.6 million, or $0.25 per diluted share, for the second quarter of 2010 compared with $14 thousand, or $0.0 per diluted share, for the second quarter of 2009 and $3.8 million, or $0.14 per diluted share, for the first quarter of 2010.

Significant Developments

During the second quarter:

•

Actel announced a comprehensive motor control solution for its SmartFusion family of devices. The combination of an embedded ARM Cortex-M3, FPGA fabric, and programmable analog make SmartFusion very well suited for complex, single chip motor control applications. As part of the motor control offering, Actel announced a partnership with Trinamic, the industry leader in embedded motion control systems.

•

Actel continues to grow the SmartFusion ecosystem with support from Keil, Synopsys and Aplix. The latest release of the Keil MDK-ARM Microcontroller Development Kit supports SmartFusion devices and includes set-up files, device-specific views and example projects. Synopsys’ Synplify Pro® FPGA synthesis tools have been enhanced to offer advanced support and timing optimization. With Aplix Corporation’s picoJBlend™ platform, Actel and its customers are now able to quickly develop and bring to market intelligent smart grid power management solutions.

•

Continuing its commitment to the avionics industry, Actel introduced a new ARINC 429 development kit, leveraging the proven aviation flight heritage of the Core429 IP Core from Actel. The Core429 Development Kit is a hardware development platform designed to simplify the design and debug of a customer’s system incorporating the Core429 IP Core.

Appointment of Chairman

Actel also today announced that J. Daniel McCranie was appointed to serve as Chairman of the Board. Mr. McCranie is an “independent director” as defined in Rule 5605(a)(2) of The Nasdaq Global Market. The Company’s Board of Directors previously did not have a Chairman.

Of the nine publicly-traded companies for which Mr. McCranie has served on the Board of Directors, Actel will be the fourth for which he has served as Chairman. He has also served as the Chairman of Audit, Compensation, Executive, and Nominating and Corporate Governance Committees, been the Chief Executive Officer of two publicly-traded companies and the Executive Vice President of a third publicly-traded company, and managed sales, marketing, mergers and acquisitions, investor relations, and operations. Mr. McCranie’s experience as a member of the Company’s Board of Directors since 2004, in combination with his extensive executive and managerial experience in the semiconductor industry, gives him a deep understanding of the Company and its business and makes him extraordinarily well qualified to serve as Chairman of the Company’s Board of Directors.

“In accordance with good corporate governance practices, the Board decided some time ago to appoint an independent Chairman,” said Robert G. Spencer, Chairman of the Board’s Nominating and Corporate Governance Committee, “and Dan is a great choice. We are pleased that Dan has agreed to lead the Board.” Mr. Spencer served as Lead Independent Director from July 2007 until Mr. McCranie was appointed Chairman on July 27, 2010.

“I’ve known Dan for 30 years,” said John C. East, President and Chief Executive Officer. “I know him to be a guy with extraordinary capabilities. His experience and track record of success speak for themselves. We’re lucky to have him!” Mr. East announced in February 2010 that he will retire as President and Chief Executive Officer of the Company and as a member of the Board of Directors. He will remain in his current roles until a new Chief Executive Officer is in place, and will then serve as a consultant until August 2, 2011. Mr. East is participating in the ongoing search for his successor.

Business Outlook – Third Quarter 2010

The Company believes that revenues in third quarter of 2010 will be up 3 percent to 7 percent sequentially. Gross margin is expected to be about 65 percent. Operating expenses are anticipated to come in at approximately $25.5 million, which excludes an estimated $2.3 million of stock-based compensation expense, $0.2 million associated with the acquisition of Pigeon Point Systems and restructuring charges of $1.7 million. Other income is expected to be about $0.5 million. The non-GAAP tax rate for the quarter is expected to be about 30 percent. Outstanding fully diluted share count is expected to be about 26.3 million shares.

Conference Call

A conference call to discuss second quarter results will be held Thursday, July 29, 2010, at 2:00 p.m. PDT. A live webcast and replay of the call will be available. Webcast and replay access information as well as financial and other statistical information can be found on Actel’s website, www.actel.com.

Non-GAAP Adjustments and Reconciliation

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

Forward-Looking Statements

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

About Actel

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

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

ACTEL CORPORATION

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


	Three Months Ended							Six Months Ended
	July 4, 2010		Apr. 4, 2010		July 5, 2009			July 4, 2010		July 5, 2009
Net revenues	$	57,776	$	52,263	$	45,227		$	110,039	$	93,686
Costs and expenses:
Cost of revenues		21,515		19,741		32,595			41,256		53,380
Research and development		15,244		14,727		15,326			29,971		31,719
Selling, general, and administrative		15,041		15,013		13,659			30,054		27,149
Restructuring and asset impairment charges		1,314		14		5,594			1,328		6,713
Amortization of acquisition- related intangibles		193 458		193		192			386		385

Total costs and expenses		53,307		49,688		67,366			102,995		119,346

Income (loss) from operations		4,469		2,575		(22,139	)		7,044		(25,660	)
Interest income and other, net		432		597		776			1,029		2,528

Income (loss) before tax provision		4,901		3,172		(21,363	)		8,073		(23,132	)
Tax provision		95		234		23,778			329		24,965

Net income (loss)	$	4,806	$	2,938	$	(45,141	)	$	7,744	$	(48,097	)

Net income (loss) per share:
Basic	$	0.18	$	0.11	$	(1.73	)	$	0.29	$	(1.84	)

Diluted	$	0.18	$	0.11	$	(1.73	)	$	0.29	$	(1.84	)

Shares used in computing net income (loss) per share:
Basic		26,218		26,313		26,146			26,265		26,087

Diluted		26,528		26,527		26,146			26,528		26,087

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


	Three Months Ended						Six Months Ended
	July 4, 2010		Apr. 4, 2010		July 5, 2009		July 4, 2010		July 5, 2009
Cost and expenses:
Non-GAAP cost of revenues	$	21,515	$	19,741	$	19,339	$	41,256	$	40,124
Adjustments related to excess inventory		—		—		13,256		—		13,256

GAAP cost of revenues	$	21,515	$	19,741	$	32,595	$	41,256	$	53,380

Non-GAAP research and development	$	13,633	$	13,590	$	14,056	$	27,223	$	29,161
Adjustments related to stock based compensation and other.		1,611		1,137		1,270		2,748		2,558

GAAP research and development	$	15,244	$	14,727	$	15,326	$	29,971	$	31,719

Non-GAAP restructuring and asset impairment charges	$	—	$	-	$	-	$	—	$	-
Adjustments related to restructuring and asset impairments		1,314		14		5,594		1,328		6,713

GAAP restructuring and asset impairment charges	$	1,314	$	14	$	5,594	$	1,328	$	6,713

Non-GAAP amortization of acquisition-related intangibles		—	$	—	$	—	$	—	$	-
Adjustments related amortization of acquisition-related intangibles		193		193		192		386		385

GAAP amortization of acquisition-related intangibles	$	193	$	193	$	192	$	386	$	385

Non-GAAP selling, general and administrative	$	13,666	$	14,158	$	12,588	$	27,824	$	25,042
Adjustments related stock based compensation, and other		1,375		855		1,071		2,230		2,107

GAAP selling, general and administrative	$	15,041	$	15,013	$	13,659	$	30,054	$	27,149

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


	Three Months Ended			Six Months Ended
	July 4, 2010	Apr. 4, 2010	July 5, 2009	July 4, 2010	July 5, 2009
Income (loss) from operations:
Non-GAAP income from operations.	$8,962	$4,774	$(756)	$13,736	$(641)
Adjustments related to excess inventory, restructuring, stock based compensation, and other.	(4,493)	(2,199)	(21,383)	(6,692)	(25,019)

GAAP income (loss) income from operations.	$4,469	$2,575	$(22,139)	$7,044	$(25,660)

Interest income and other, net:
Non-GAAP interest income and other, net	$432	$597	$776	$1,029	$1,812
Adjustments related to insurance reimbursement	-	-	-	-	716

GAAP interest income and other, net	$432	$597	$776	$1,029	$2,528

Income (loss) before tax provision:
Non-GAAP income before tax provision.	$9,394	$5,371	$20	$14,765	$1,171
Adjustments related to excess inventory, restructuring, stock based compensation, and other.	(4,493)	(2,199)	(21,383)	(6,692)	(24,303)

GAAP income (loss) income before tax provision.	$4,901	$3,172	$(21,363)	$8,073	$(23,132)

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


	Three Months Ended									Six Months Ended
	July 4, 2010			Apr. 4, 2010			July 5, 2009			July 4, 2010			July 5, 2009
Net income (loss):
Non-GAAP net income	$	6,576		$	3,760		$	14		$	10,336		$	820
Adjustments related to excess inventory, restructuring, stock based compensation, other and tax		(1,770	)		(822	)		(45,155	)		(2,592	)		(48,917	)

GAAP net income (loss)	$	4,806		$	2,938		$	(45,141	)	$	7,744		$	(48,097	)

Net income (loss) per share:
Basic:
Non-GAAP net income per share	$	0.25		$	0.14		$	-		$	0.39		$	0.03
Adjustments related to excess inventory, restructuring, stock based compensation, other and tax		(0.07	)		(0.03	)		(1.73	)		(0.10	)		(1.87	)

GAAP net income (loss) per share	$	0.18		$	0.11		$	(1.73	)	$	0.29		$	(1.84	)

Diluted:
Non-GAAP net income per share	$	0.25		$	0.14		$	-		$	0.39		$	0.03
Adjustments related to excess inventory, restructuring, stock based compensation, other and tax		(0.07	)		(0.03	)		(1.73	)		(0.10	)		(1.87	)

GAAP net income (loss) per share	$	0.18		$	0.11		$	(1.73	)	$	0.29		$	(1.84	)

ACTEL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)


	July 4, 2010		Jan. 3, 2010
ASSETS	(Unaudited)		(Audited)
Current assets:
Cash and cash equivalents	$	35,558	$	45,994
Short-term investments		124,454		106,007
Accounts receivable, net		44,121		19,112
Inventories, net		36,417		37,324
Deferred income taxes		1,729		1,729
Prepaid expenses and other current assets		6,237		8,166

Total current assets		248,516		218,332
Long-term investments		2,812		663
Property and equipment, net		20,651		22,969
Goodwill and other intangible assets, net		34,553		34,939
Deferred income taxes		—		-
Other assets, net		28,960		30,099

	$	335,492	$	307,002

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	16,334	$	10,262
Accrued compensation and employee benefits		8,826		8,206
Accrued licenses		4,298		4,996
Other accrued liabilities		4,859		5,422
Deferred income on shipments to distributors		39,917		22,867

Total current liabilities		74,234		51,753
Deferred compensation plan liability		5,428		5,470
Deferred rent liability		1,274		1,590
Accrued sabbatical compensation		2,844		2,805
Other long-term liabilities, net		10,897		11,921

Total liabilities		94,677		73,539
Shareholders’ equity		240,815		233,463

	$	335,492	$	307,002

ACTEL CORPORATION

SUPPLEMENTAL HISTORICAL FINANCIAL INFORMATION
(Unaudited)


	Three Months Ended									Six Months Ended
	July 4, 2010			Apr. 4, 2010			July 5, 2009			July 4, 2010			July 5, 2009
Non-GAAP Operations Information
Percent of Revenue
Gross Margin		62.8	%		62.2	%		57.2	%		62.5	%		57.2	%
R&D Expense		23.6	%		26.0	%		31.1	%		24.7	%		31.1	%
SG&A Expense		23.7	%		27.1	%		27.8	%		25.3	%		26.7	%
Depreciation and Amortization
Expense (000’s)		2,902			2,995			3,257			5,897			6,754
Capital Expenditures (000’s)		1,954			1,817			1,382			3,770			3,527
Revenue by Technology
Flash		29	%		24	%		29	%		27	%		26	%
Other		71	%		76	%		71	%		73	%		74	%
Revenue by Geographic Region
North America		46	%		54	%		52	%		50	%		52	%
Europe		33	%		20	%		25	%		27	%		26	%
Asia Pacific/Rest of World		21	%		26	%		23	%		23	%		22	%
Revenue by Channel
OEM		25	%		37	%		29	%		31	%		31	%
Distribution		75	%		63	%		71	%		69	%		69	%
Revenue by Market Segment
Communication		9	%		7	%		7	%		8	%		7	%
Consumer		12	%		16	%		20	%		14	%		18	%
Industrial		36	%		31	%		34	%		34	%		36	%
Aero/Military		43	%		46	%		39	%		44	%		39	%

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.

The following information was filed by Actel Corp on Thursday, July 29, 2010 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

Please wait while we load the requested 10-Q report or click the link below:

https://last10k.com/sec-filings/report/907687/000090768710000033/actel0704201010q.htm

View differences made from one quarter to another to evaluate Actel Corp's financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ) — *Sample 10-K Year-over-Year (YoY) Comparison*

Compare this 10-Q Quarterly Report to its predecessor by reading our highlights to see what text and tables were ~~removed~~ , added and changed by Actel Corp.

Continue

Assess how Actel Corp's management team is paid from their Annual Proxy

Actel Corp's Definitive Proxy Statement (Form DEF 14A) filed after their 2010 10-K Annual Report includes:

Voting Procedures
Board Members
Executive Team
Salaries, Bonuses, Perks
Peers / Competitors

Continue

CIK: 907687
Form Type: 10-Q Quarterly Report
Accession Number: 0000907687-10-000033
Submitted to the SEC: Fri Aug 13 2010 4:18:12 PM EST
Accepted by the SEC: Fri Aug 13 2010
Period: Sunday, July 4, 2010
Industry: Semiconductors And Related Devices