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Actel Corp (907687) SEC Filing 10-Q Quarterly report for the period ending Sunday, October 4, 2009

Actel Corp

CIK: 907687

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

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

For Release: October 27, 2009 @ 1:00 P.M. PT

ACTEL ANNOUNCES THIRD QUARTER 2009 FINANCIAL RESULTS

Mountain View, Calif. – 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.

1

ACTEL CORPORATION

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

                                         
    Three Months Ended   Nine Months Ended
    Oct. 4, 2009   July 5, 2009   Oct. 5, 2008   Oct. 4, 2009   Oct. 5, 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
    193 458       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  
 
                                       

2

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

                                         
    Three Months Ended   Nine Months Ended
    Oct. 4, 2009   July 5, 2009   Oct. 5, 2008   Oct. 4, 2009   Oct. 5, 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 restruc-turing 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 amorti-zation 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  
 
                                       

3

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

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

4

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, 2009   July 5, 2009   Oct. 5, 2008   Oct. 4, 2009   Oct. 5, 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  
 
                                       

5


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  
 
               

6

ACTEL CORPORATION

SUPPLEMENTAL HISTORICAL FINANCIAL INFORMATION
(Unaudited)

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

7


The following information was filed by Actel Corp on Tuesday, October 27, 2009 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.

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SEC Filing Tools
CIK: 907687
Form Type: 10-Q Quarterly Report
Accession Number: 0000950123-09-061072
Submitted to the SEC: Thu Nov 12 2009 6:04:33 AM EST
Accepted by the SEC: Thu Nov 12 2009
Period: Sunday, October 4, 2009
Industry: Semiconductors And Related Devices

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