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Actel Corp (907687) SEC Filing 10-Q Quarterly report for the period ending Sunday, April 4, 2010

Actel Corp

CIK: 907687

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

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

For Release: April 29, 2010 @ 1:15 P.M. PDT

ACTEL ANNOUNCES FIRST QUARTER 2010 FINANCIAL RESULTS

MOUNTAIN VIEW, Calif. DATE – Actel Corporation (NASDAQ: ACTL) today announced net revenues of $52.3 million for the first quarter of 2010, up 7.8 percent from the first quarter of 2009 and up 5.2 percent from the fourth quarter of 2009.

Actel reported net income in accordance with U.S. generally accepted accounting principles (GAAP) of $2.9 million, or $0.11 per diluted share, for the first quarter of 2010 compared with a net loss of $(3.0) million, or $(0.11) per basic share, for the first quarter of 2009 and a net income of $1.0 million, or $0.04 per diluted share, for the fourth quarter of 2009.

Non-GAAP net income, which excludes stock-based compensation, expenses associated with the restructuring, and other non-recurring adjustments, was $3.8 million, or $0.14 per diluted share, for the first quarter of 2010 compared with $0.8 million, or $0.03 per diluted share, for the first quarter of 2009 and $3.3 million, or $0.12 per diluted share, for the fourth quarter of 2009.

Significant Developments

During the first quarter:

    In March, Actel unveiled SmartFusion™ , the world’s first intelligent mixed signal FPGA. SmartFusion devices feature Actel’s proven FPGA fabric, a complete microcontroller subsystem built around a hard ARM® Cortex™-M3 processor and programmable analog blocks.

    Actel also announced in March a comprehensive development environment and ecosystem for SmartFusion Intelligent Mixed Signal FPGAs, including RTOS support from Micrium, compiler support from IAR Systems, a comprehensive training partnership with Doulos, and full production releases of Actel’s own Libero and Soft Console IDE tools.

    Pigeon Point Systems announced a new MMC management solution and IPMC and Carrier IPMC Starter Kits both using SmartFusion Intelligent Mixed Signal FPGAs.

    Actel received a coveted supplier award in March from Mitsubishi Electric Corporation, a prime contractor on many of Japan’s most important space programs. This award reflects Actel’s continued dedication to quality, reliability and support of the worldwide space market.

    In January, Actel announced that its low power ProASIC3® and ProASICPLUS® FPGA families have been designed into flight-critical applications on the new Boeing 787 Dreamliner commercial airliner. The commercial aircraft successfully completed its maiden test flight on December 15, 2009.

Business Outlook – Second Quarter 2010

The Company believes that second quarter 2010 revenues will be up 8 percent to 12 percent sequentially. Gross margin is expected to be about 60 percent. Operating expenses are anticipated to come in at approximately $27.8 million, which excludes an estimated $2.0 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 $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 26.4 million shares.

Conference Call

A conference call to discuss first quarter results will be held Thursday, April 29, 2010, at 1:30 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 – Second 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-K, which can be found on Actel’s website, www.actel.com. Actel’s projected revenues and operating results for the second 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, booking and shipment uncertainties, and a failure to fully achieve the projected results of or to accurately estimate the charges for the restructuring. These and the other Risk Factors make it difficult for Actel to accurately project quarterly financial and restructuring 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.

1

ACTEL CORPORATION

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

                         
    Three Months Ended
    Apr 4,   Jan 3,   Apr 5,
    2010   2010   2009
Net revenues
  $ 52,263     $ 49,699     $ 48,459  
Costs and expenses:
                       
Cost of revenues
    19,741       18,715       20,785  
Research and development
    14,727       14,160       16,393  
Selling, general, and administrative
    15,013       14,401       13,490  
Restructuring and asset impairment charges
    14       1,202       1,119  
Amortization of acquisition-related intangibles
    193       193       193  
 
                       
Total costs and expenses
    49,688       48,671       51,980  
 
                       
Income (loss) from operations
    2,575       1,028       (3,521 )
Interest income and other, net
    597       71       1,752  
 
                       
Income (loss) before tax provision
    3,172       1,099       (1,769 )
Tax provision
    234       137       1,187  
 
                       
Net income (loss)
  $ 2,938     $ 962     $ (2,956 )
 
                       
Net income (loss) per share:
                       
Basic
  $ 0.11     $ 0.04     $ (0.11 )
 
                       
Diluted
  $ 0.11     $ 0.04     $ (0.11 )
 
                       
Shares used in computing net income (loss) per share:
                       
Basic
    26,313       26,203       26,027  
 
                       
Diluted
    26,527       26,362       26,027  
 
                       

2

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

                         
    Three Months Ended
    Apr 4, 2010   Jan 3, 2010   Apr 5, 2009
Cost and expenses:
                       
Non-GAAP research and development
  $ 13,590     $ 12,915     $ 15,105  
Adjustments related to stock based compensation and other
    1,137       1,245       1,288  
 
                       
GAAP research and development
  $ 14,727     $ 14,160     $ 16,393  
 
                       
Non-GAAP restructuring and asset impairment charges
  $     $     $ -  
Adjustments related to restructuring and asset impairments
    14       1,202       1,119  
 
                       
GAAP restructuring and asset impairment charges
  $ 14     $ 1,202     $ 1,119  
 
                       
Non-GAAP amortization of acquisition-related intangibles
  $     $ -     $ -  
Adjustments related to amortization of acquisition-related intangibles
    193       193       193  
 
                       
GAAP amortization of acquisition-related intangibles
  $ 193     $ 193     $ 193  
 
                       
Non-GAAP selling, general and administrative
  $ 14,158     $ 13,487     $ 12,454  
Adjustments related to stock based compensation, option investigation and other
    855       914       1,036  
 
                       
GAAP selling, general and administrative
  $ 15,013     $ 14,401     $ 13,490  
 
                       

3

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

                         
    Three Months Ended
    Apr 4, 2010   Jan 3, 2010   Apr 5, 2009
Income (loss) from operations:
                       
Non-GAAP income from operations
  $ 4,774     $ 4,582     $ 115  
Adjustments related to restructuring and stock based compensation, and other
    (2,199 )     (3,554 )     (3,636 )
 
                       
GAAP income (loss) from operations
  $ 2,575     $ 1,028     $ (3,521 )
 
                       
Interest income and other, net:
                       
Non-GAAP interest income and other, net
  $ 597     $ 71     $ 1,036  
Adjustments related to insurance reimbursement
                716  
 
                       
GAAP interest income and other, net
  $ 597     $ 71     $ 1,752  
 
                       
Income (loss) before tax provision:
                       
Non-GAAP income before tax provision
  $ 5,371     $ 4,653     $ 1,151  
Adjustments related to restructuring and stock based compensation, and other
    (2,199 )     (3,554 )     (2,920 )
 
                       
GAAP income (loss) before tax provision
  $ 3,172     $ 1,099     $ (1,769 )
 
                       

4

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

                         
    Three Months Ended
    Apr 4, 2010   Jan 3, 2010   Apr 5, 2009
Net income (loss):
                       
Non-GAAP net income
  $ 3,760     $ 3,257     $ 806  
Adjustments related to restructuring and stock based compensation, other and tax
    (822 )     (2,295 )     (3,762 )
 
                       
GAAP net income (loss)
  $ 2,938     $ 962     $ (2,956 )
 
                       
Net income (loss) per share:
                       
Basic:
                       
Non-GAAP net income per share
  $ 0.14     $ 0.12     $ 0.03  
Adjustments related to restructuring and stock based compensation, other and tax
    (0.03 )     (0.08 )     (0.14 )
 
                       
GAAP net income (loss) per share
  $ 0.11     $ 0.04     $ (0.11 )
 
                       
Diluted:
                       
Non-GAAP net income per share
  $ 0.14     $ 0.12     $ 0.03  
Adjustments related to restructuring, stock based compensation, other and tax
    (0.03 )     (0.08 )     (0.14 )
 
                       
GAAP net income (loss) per share
  $ 0.11     $ 0.04     $ (0.11 )
 
                       

5


ACTEL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

                 
    Apr 4, 2010   Jan 3, 2010
ASSETS
  (Unaudited)   (Audited)
Current assets:
               
Cash and cash equivalents
  $ 30,297     $ 45,994  
Short-term investments
    118,336       106,007  
Accounts receivable, net
    33,166       19,112  
Inventories, net
    38,380       37,324  
Deferred income taxes
    1,729       1,729  
Prepaid expenses and other current assets
    7,056       8,166  
 
               
Total current assets
    228,964       218,332  
Long-term investments
    656       663  
Property and equipment, net
    21,977       22,969  
Goodwill and other intangible assets, net
    34,746       34,939  
Deferred income taxes
           
Other assets, net
    29,839       30,099  
 
               
 
  $ 316,182     $ 307,002  
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
Current liabilities:
               
Accounts payable
  $ 11,988     $ 10,262  
Accrued compensation and employee benefits
    6,824       8,206  
Accrued licenses
    6,016       4,996  
Other accrued liabilities
    3,777       5,422  
Deferred income on shipments to distributors
    30,158       22,867  
 
               
Total current liabilities
    58,763       51,753  
Deferred compensation plan liability
    5,807       5,470  
Deferred rent liability
    1,345       1,590  
Accrued sabbatical compensation
    2,743       2,805  
Other long-term liabilities, net
    11,250       11,921  
 
               
Total liabilities
    79,908       73,539  
Shareholders’ equity
    236,274       233,463  
 
               
 
  $ 316,182     $ 307,002  
 
               

6

ACTEL CORPORATION

SUPPLEMENTAL HISTORICAL FINANCIAL INFORMATION
(Unaudited)

                         
    Three Months Ended
    Apr 4, 2010   Jan 3, 2010   Apr 5, 2009
Non-GAAP Operations Information
                       
Percent of Revenue
                       
Gross Margin
    62.2 %     62.3 %     57.1 %
R&D Expense
    26.0 %     26.0 %     31.2 %
SG&A Expense
    27.1 %     27.1 %     25.7 %
Depreciation and Amortization
                       
Expense (000’s)
    2,995       3,063       3,497  
Capital Expenditures (000’s)
    1,817       1,044       2,145  
Revenue by Technology
                       
Flash
    24 %     24 %     24 %
Other
    76 %     76 %     76 %
Revenue by Geographic Region
                       
North America
    54 %     55 %     52 %
Europe
    20 %     23 %     27 %
Asia Pacific/Rest of World
    26 %     22 %     21 %
Revenue by Channel
                       
OEM
    37 %     28 %     33 %
Distribution
    63 %     72 %     67 %
Revenue by Market Segment
                       
Communication
    7 %     8 %     7 %
Consumer
    16 %     20 %     16 %
Industrial
    31 %     30 %     37 %
Aero/Military
    46 %     42 %     40 %

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

Flash technology products are defined as the ProASIC, ProASICPLUS, ProASIC3, ProASIC3 Low Power, IGLOO, IGLOO PLUS, Fusion, and SmartFusion product families.

7


The following information was filed by Actel Corp on Thursday, April 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.

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SEC Filing Tools
CIK: 907687
Form Type: 10-Q Quarterly Report
Accession Number: 0000950123-10-049702
Submitted to the SEC: Fri May 14 2010 4:24:06 PM EST
Accepted by the SEC: Fri May 14 2010
Period: Sunday, April 4, 2010
Industry: Semiconductors And Related Devices

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