Non-GAAP net income, which excludes stock-based compensation, option restatement expenses, and other nonrecurring adjustments, was $4.0 million for the second quarter of 2008 compared with $2.9 million for the first quarter of 2008 and $2.6 million for the second quarter of 2007. Non-GAAP earnings were $0.15 per diluted share for the second quarter of 2008 compared with $0.11 for the first quarter of 2008 and $0.10 for the second quarter of 2007.
Including stock-based compensation, option restatement expenses, and other adjustments in accordance with generally accepted accounting principles (GAAP), Actel reported net income of $2.0 million, or $0.08 per diluted share, for the second quarter of 2008 compared with net income of $0.2 million, or $0.01 per diluted share, for the first quarter of 2008 and net loss of $2.6 million, or ($0.10) per basic share, for the second quarter of 2007.
Gross margin was 60.0 percent for the second quarter of 2008 compared with 58.5 percent for the first quarter of 2008 and 59.2 percent for the second quarter of 2007.
Business Outlook - Third Quarter 2008
The Company believes that third quarter 2008 revenues will be one percent up to three percent down sequentially. Gross margin is expected to be around 57 percent. Operating expenses are anticipated to come in at approximately $30.7 million, which excludes an estimated $2.0 million of stock-based compensation expense. Other income is expected to be about $1.8 million. The tax rate for the quarter is expected to be about 30 percent. Outstanding fully diluted share count is expected to be about 26.2 million shares. This guidance does not include any one-time charges for the Pigeon Point Systems acquisition, which will be determined during the third quarter.
Conference Call
A conference call to discuss second quarter results will be held Tuesday, July 29, 2008, 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.
Non-GAAP Financial Measures
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.
About Actel
Attacking power consumption at both the chip and the system levels, Actel Corporation's innovative FPGAs and programmable system chip solutions enable power-efficient design. The Company trades on the NASDAQ National Market under the symbol ACTL and is headquartered at 2061 Stierlin Court, Mountain View, Calif., 94043-4655. For more information about Actel, visit http://www.actel.com. Telephone: 888-99-ACTEL (992-2835).
Forward-Looking Statement Safe Harbor
The statements in the paragraph under the heading "Business Outlook - Third Quarter 2008" 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 quarterly revenues and operating results 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 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.
Editor's Note: The Actel name and logo are registered trademarks of Actel Corporation. All other trademarks and servicemarks 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 6, April 6, July 1, July 6, July 1,
2008 2008 2007 2008 2007
--------- -------- -------- --------- --------
Net revenues $ 57,649 $ 54,756 $ 48,790 $ 112,405 $ 97,394
Costs and expenses:
Cost of revenues 23,035 22,738 19,928 45,773 39,766
Research and
development 17,103 16,709 18,778 33,812 34,497
Selling, general, and
administrative 15,613 16,780 15,400 32,393 31,485
--------- -------- -------- --------- --------
Total costs and
expenses 55,751 56,227 54,106 111,978 105,748
--------- -------- -------- --------- --------
Income (loss) from
operations 1,898 (1,471) (5,316) 427 (8,354)
Interest income and
other, net 1,701 1,932 2,092 3,633 4,220
--------- -------- -------- --------- --------
Income (loss) before tax
provision (benefit) 3,599 461 (3,224) 4,060 (4,134)
Tax provision (benefit) 1,635 285 (579) 1,920 (742)
--------- -------- -------- --------- --------
Net income (loss) $ 1,964 $ 176 $ (2,645) $ 2,140 $ (3,392)
========= ======== ======== ========= ========
Net income (loss) per
share:
Basic $ 0.08 $ 0.01 $ (0.10) $ 0.08 $ (0.13)
========= ======== ======== ========= ========
Diluted $ 0.08 $ 0.01 $ (0.10) $ 0.08 $ (0.13)
========= ======== ======== ========= ========
Shares used in computing
net income (loss) per
share:
Basic 25,408 26,487 26,845 25,947 26,796
========= ======== ======== ========= ========
Diluted 26,155 26,677 26,845 26,416 26,796
========= ======== ======== ========= ========
RECONCILIATION OF NON-GAAP STATEMENTS OF OPERATIONS TO GAAP
STATEMENTS OF OPERATIONS
(Unaudited, in thousands)
Three Months Ended Six Months Ended
-------------------------- -----------------
July 6, April 6, July 1, July 6, July 1,
2008 2008 2007 2008 2007
-------- -------- -------- -------- --------
Cost and expenses:
Non-GAAP research and
development $ 16,159 $ 15,683 $ 13,791 $ 31,842 $ 28,425
Adjustments related to stock
based compensation and
other 944 1,026 4,987 1,970 6,072
-------- -------- -------- -------- --------
GAAP research and
development $ 17,103 $ 16,709 $ 18,778 $ 33,812 $ 34,497
======== ======== ======== ======== ========
Non-GAAP selling, general
and administrative $ 14,437 $ 14,189 $ 13,404 $ 28,626 $ 26,643
Adjustments related to stock
based compensation, option
investigation and other 1,176 2,591 1,996 3,767 4,842
-------- -------- -------- -------- --------
GAAP selling, general and
administrative $ 15,613 $ 16,780 $ 15,400 $ 32,393 $ 31,485
======== ======== ======== ======== ========
RECONCILIATION OF NON-GAAP STATEMENTS OF OPERATIONS
TO GAAP STATEMENTS OF OPERATIONS
(Unaudited, in thousands)
Three Months Ended Six Months Ended
---------------------------- ------------------
July 6, April 6, July 1, July 6, July 1,
2008 2008 2007 2008 2007
-------- -------- -------- -------- --------
Income (loss) from
operations:
Non-GAAP income from
operations $ 4,018 $ 2,146 $ 1,667 $ 6,164 $ 2,560
Adjustments related to
stock based
compensation, option
investigation and
other (2,120) (3,617) (6,983) (5,737) (10,914)
-------- -------- -------- -------- --------
GAAP income (loss)
from operations $ 1,898 $ (1,471) $ (5,316) $ 427 $ (8,354)
======== ======== ======== ======== ========
Income before tax
provision:
Non-GAAP income before
tax provision $ 5,719 $ 4,078 $ 3,759 $ 9,797 $ 6,780
Adjustments related to
stock based
compensation, option
investigation and
other (2,120) (3,617) (6,983) (5,737) (10,914)
-------- -------- -------- -------- --------
GAAP income (loss)
before tax provision $ 3,599 $ 461 $ (3,224) $ 4,060 $ (4,134)
======== ======== ======== ======== ========
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 6, April 6, July 1, July 6, July 1,
2008 2008 2007 2008 2007
-------- -------- -------- -------- --------
Net income (loss):
Non-GAAP net income $ 4,003 $ 2,855 $ 2,631 $ 6,858 $ 4,746
Adjustments related to
stock based
compensation, option
investigation, other
and tax (2,039) (2,679) (5,276) (4,718) (8,138)
-------- -------- -------- -------- --------
GAAP net income (loss) $ 1,964 $ 176 $ (2,645) $ 2,140 $ (3,392)
======== ======== ======== ======== ========
Net income (loss) per
share:
Basic:
Non-GAAP net income
per share $ 0.16 $ 0.11 $ 0.10 $ 0.26 $ 0.17
Adjustments related to
stock based
compensation, option
investigation, other
and tax (0.08) (0.10) (0.20) (0.18) (0.30)
-------- -------- -------- -------- --------
GAAP net income (loss)
per share $ 0.08 $ 0.01 $ (0.10) $ 0.08 $ (0.13)
======== ======== ======== ======== ========
Diluted:
Non-GAAP net income
per share $ 0.15 $ 0.11 $ 0.10 $ 0.26 $ 0.17
Adjustments related to
stock based
compensation, option
investigation, other
and tax (0.07) (0.10) (0.20) (0.18) (0.30)
-------- -------- -------- -------- --------
GAAP net income (loss)
per share $ 0.08 $ 0.01 $ (0.10) $ 0.08 $ (0.13)
======== ======== ======== ======== ========
ACTEL CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
July 6, Jan. 6,
2008 2008
----------- -----------
ASSETS (Unaudited) (Audited)
Current assets:
Cash and cash equivalents $ 12,973 $ 30,119
Short-term investments 135,895 152,609
Accounts receivable, net 37,069 18,116
Inventories 44,989 35,587
Deferred income taxes 19,331 19,350
Prepaid expenses and other current assets 9,476 10,259
----------- -----------
Total current assets 259,733 266,040
Property and equipment, net 31,053 25,417
Long-term investments 6,997 6,442
Goodwill 30,032 30,197
Deferred income taxes 16,361 16,082
Other assets, net 21,907 19,438
----------- -----------
$ 366,083 $ 363,616
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 21,085 $ 16,972
Accrued compensation and employee benefits 8,897 6,181
Accrued licenses 4,521 4,927
Other accrued liabilities 5,131 3,941
Deferred income on shipments to distributors 35,049 26,109
----------- -----------
Total current liabilities 74,683 58,130
Deferred compensation plan liability 5,178 5,479
Deferred rent liability 1,369 1,417
Accrued sabbatical compensation 3,380 3,380
Other long-term liabilities, net 5,402 3,718
----------- -----------
Total liabilities 90,012 72,124
Shareholders' equity 276,071 291,492
----------- -----------
$ 366,083 $ 363,616
=========== ===========
Contact: Jon Anderson Actel Corporation (650) 318-4445