Actel Announces Fourth Quarter 2008 Financial Results And Corporate Restructuring

Restructuring Plan Expected to Reduce Quarterly Expenses by $6.5 Million

Mountain View, Calif. -- February 3, 2009 -- Actel Corporation (NASDAQ: ACTL) today announced net revenues of $52.8 million for the fourth quarter of 2008, up 2 percent from the fourth quarter of 2007 and down 1 percent from the third quarter of 2008. For the full fiscal year, net revenues were $218.4 million, up 11 percent from fiscal 2007.

Non-GAAP net income, which excludes stock-based compensation, adjustments to deferred tax valuation allowances, expenses associated with a reduction-in-force and other cost reduction initiatives taken during the fourth quarter, and other non-recurring adjustments, was $3.3 million for the fourth quarter of 2008 compared with $2.6 million for the fourth quarter of 2007 and $1.9 million for the third quarter of 2008. Non-GAAP net income was $12.0 million, or $0.46 per diluted share, for the 2008 fiscal year compared with $10.7 million, or $0.39 per diluted share, for the 2007 fiscal year.

Including stock-based compensation, adjustments to deferred tax valuation allowances, expenses associated with the fourth quarter reduction-in-force, and other non-recurring adjustments in accordance with generally accepted accounting principles (GAAP), Actel reported a net loss of ($12.5) million, or ($0.48) per basic share, for the fourth quarter of 2008 compared with a net loss of ($1.3) million, or ($0.05) per basic share, for the fourth quarter of 2007 and net loss of ($1.4) million, or ($0.05) per basic share, for the third quarter of 2008. Net loss in accordance with GAAP was ($11.7) million, or ($0.45) per basic share, for the 2008 fiscal year, compared with a net loss of ($2.9) million, or ($0.11) per basic share, for the 2007 fiscal year. The provision for income taxes for the 2008 fourth quarter and fiscal year includes non-cash charges of $13.3 million to increase the Company’s valuation allowance associated with its deferred income tax assets. The increase in the valuation allowance results from uncertainties surrounding the nature and timing of the taxable income required to realize certain tax credits and net operating loss carryforwards. Charges of $2.4 million for expenses associated with the fourth quarter reduction-in-force adversely affected net income in accordance with GAAP for the fourth quarter of 2008 and the 2008 fiscal year.

Gross margin was 59.1 percent for the fourth quarter of 2008 compared with 55.0 percent for the fourth quarter of 2007 and 58.0 percent for the third quarter of 2008. Gross margin was 58.9 percent for the 2008 fiscal year compared with 58.2 percent for the 2007 fiscal year.

Corporate Restructuring

Actel also today announced a company-wide restructuring plan that embodies a shift in corporate philosophy making profitability more important than sales growth. In conjunction with the 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 additional charges of $4.0 million to $4.5 million for severance and other costs related to the restructuring between now and the beginning of the third quarter of 2010, when the restructuring will be substantially complete.

Business Outlook – First Quarter 2009

The Company believes that first quarter 2009 revenues will decline sequentially 10 percent to 15 percent. Gross margin is expected to be about 59 percent or 60 percent. Operating expenses are anticipated to come in at approximately $29 million, which excludes an estimated $1.6 million of stock-based compensation expense. The operating expense outlook also does not include any restructuring charges that may be incurred during the first quarter of 2009 in connection with the restructuring plan. Other income is expected to be about $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.

Financial Tables

Click here to read financial tables

About Actel

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

Contact Microsemi Fill out this form for contacting a Microsemi representative. Your Name: Your E-mail address: Your Company address: Your Phone Number: Write your message: