Non-GAAP net income, which excludes stock-based compensation, option investigation expenses and other adjustments, was $2.3 million for the fourth quarter of 2007 compared with $4.4 million for the fourth quarter of 2006 and $3.3 million for the third quarter of 2007. Non-GAAP earnings were $0.08 per diluted share for the fourth quarter of 2007 compared with $0.16 for the fourth quarter of 2006 and $0.12 for the third quarter of 2007.
Including stock-based compensation, option investigation expenses and other adjustments in accordance with generally accepted accounting principles (GAAP), Actel reported a net loss of $1.6 million, or ($0.06) per basic share, for the fourth quarter of 2007 compared with a net loss of $7.5 million, or ($0.28) per basic share, for the fourth quarter of 2006 and net income of $1.8 million, or $0.07 per diluted share, for the third quarter of 2007.
Gross margin was 54.6 percent for the fourth quarter of 2007 compared with 57.3 percent for the fourth quarter of 2006 and 59.7 percent for the third quarter of 2007.
A conference call to discuss fourth quarter results will be held Wednesday, February 20, 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.
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.
Business Outlook - First Quarter 2008
The Company believes that first quarter 2008 revenues will increase sequentially two percent to seven percent. Gross margin is expected to be about 61 percent. Operating expenses are anticipated to come in at approximately $31.4 million, which excludes an estimated $2.0 million of stock-based compensation expense and $0.5 million of stock option restatement expense. Other income is expected to be about $2.3 million. The tax rate for the quarter is expected to be around 30 percent. Outstanding fully diluted share count is expected to be about 27.3 million shares.
Common Stock Repurchase Program
The Company's stock repurchase program was instituted in 1998 for the purpose of replenishing some or all of the shares of Common Stock issued upon exercise of stock options and in connection with other stock compensation plans. The overall objective of the program is to reduce or eliminate earnings per share dilution caused by the issuance of such additional shares. Repurchases may be made in the open market or in privately negotiated transactions. To date, Actel's Board of Directors has authorized the repurchase of 5,000,000 shares under the program, and 3,389,197 shares of Common Stock have been repurchased on the open market. Now that it is again current in its regulatory filings, the Company will resume repurchasing shares of its Common Stock from time to time as market and business conditions warrant.
"We continue to believe that our Common Stock repurchase program provides an excellent opportunity to increase shareholder value," said John C. East, Actel president and CEO. "While any future stock repurchases are subject to market conditions and the consideration of alternative investment opportunities available from time to time, we remain committed to preserving and maximizing shareholder value." The Company has remaining authority to repurchase 1,610,803 shares under the program.
About Actel
Attacking power consumption from 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).
The statements in the paragraph under the heading "Business Outlook - First 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 or 10-K, 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
(in thousands except per share amounts)
Three Months Ended Fiscal Year Ended
------------------------------- --------------------
Jan. 6, Dec. 31, Sep. 30, Jan. 6, Dec. 31,
2008 2006 2007 2008 2006
--------- --------- ---------- --------- ---------
unaudited unaudited unaudited unaudited audited
Net revenues $ 51,102 $ 48,151 $ 47,880 $ 196,376 $ 191,499
Costs and expenses:
Cost of revenues 23,223 20,583 19,306 82,295 75,618
Research and
development 15,475 14,294 13,754 63,726 56,926
Selling, general,
and administrative 16,638 24,861 14,800 62,923 67,959
Amortization of
acquisition-
related
intangibles -- -- -- -- 15
--------- --------- ---------- --------- ---------
Total costs and
expenses 55,336 59,738 47,860 208,944 200,518
--------- --------- ---------- --------- ---------
Income (loss) from
operations (4,234) (11,587) 20 (12,568) (9,019)
Interest income and
other, net 2,230 2,103 2,156 8,606 7,128
--------- --------- ---------- --------- ---------
Income (loss) before
tax provision (2,004) (9,484) 2,176 (3,962) (1,891)
Tax (benefit)
provision (418) (1,961) 391 (769) 264
--------- --------- ---------- --------- ---------
Net income (loss) $ (1,586) $ (7,523) $ 1,785 $ (3,193) $ (2,155)
========= ========= ========== ========= =========
Net income (loss)
per share:
Basic $ (0.06) $ (0.28) $ 0.07 $ (0.12) $ (0.08)
========= ========= ========== ========= =========
Diluted $ (0.06) $ (0.28) $ 0.07 $ (0.12) $ (0.08)
========= ========= ========== ========= =========
Shares used in
computing net
income (loss) per
share:
Basic 27,026 26,515 26,935 26,888 26,106
========= ========= ========== ========= =========
Diluted 27,026 26,515 27,234 26,888 26,106
========= ========= ========== ========= =========
RECONCILIATION OF NON-GAAP STATEMENTS OF OPERATIONS
TO GAAP STATEMENTS OF OPERATIONS
(Unaudited, in thousands)
Three Months Ended Fiscal Year Ended
-------------------------- -----------------
Jan. 6, Dec. 31, Sep. 30, Jan. 6, Dec. 31,
2008 2006 2007 2008 2006
-------- -------- -------- -------- --------
Cost and expenses:
Non-GAAP cost of revenues $ 21,006 $ 18,341 $ 19,306 $ 80,078 $ 73,376
Adjustments related to
inventory reserve 2,217 2,242 -- 2,217 2,242
-------- -------- -------- -------- --------
GAAP cost of revenues $ 23,223 $ 20,583 $ 19,306 $ 82,295 $ 75,618
======== ======== ======== ======== ========
Non-GAAP research and
development $ 14,660 $ 12,977 $ 12,917 $ 56,002 $ 51,278
Adjustments related to stock
based compensation and
other 815 1,317 837 7,724 5,648
-------- -------- -------- -------- --------
GAAP research and
development $ 15,475 $ 14,294 $ 13,754 $ 63,726 $ 56,926
======== ======== ======== ======== ========
Non-GAAP selling, general
and administrative $ 14,434 $ 12,645 $ 13,079 $ 54,156 $ 51,948
Adjustments related to stock
based compensation, option
investigation and other 2,204 12,216 1,721 8,767 16,011
-------- -------- -------- -------- --------
GAAP selling, general and
administrative $ 16,638 $ 24,861 $ 14,800 $ 62,923 $ 67,959
======== ======== ======== ======== ========
RECONCILIATION OF NON-GAAP STATEMENTS OF OPERATIONS
TO GAAP STATEMENTS OF OPERATIONS
(Unaudited, in thousands)
Three Months Ended Fiscal Year Ended
------------------------------- --------------------
Jan. 6, Dec. 31, Sep. 30, Jan. 6, Dec. 31,
2008 2006 2007 2008 2006
--------- --------- --------- --------- ---------
Cost and expenses:
Non-GAAP
amortization of
acquisition-
related
intangibles $ -- $ -- $ -- $ -- $ --
Adjustments
related to
amortization of
acquisition-
related
intangibles -- -- -- -- 15
--------- --------- --------- --------- ---------
GAAP amortization
of
acquisition-
related
intangibles $ -- $ -- $ -- $ -- $ 15
========= ========= ========= ========= =========
Income (loss) from
operations:
Non-GAAP income
from operations $ 1,002 $ 4,188 $ 2,578 $ 6,140 $ 14,897
Adjustments
related to stock
based compensation,
option investigation
and other (5,236) (15,775) (2,558) (18,708) (23,916)
--------- --------- --------- --------- ---------
GAAP (loss) income
from operations $ (4,234) $ (11,587) $ 20 $ (12,568) $ (9,019)
========= ========= ========= ========= =========
Income before tax
provision:
Non-GAAP income
before tax
provision $ 3,232 $ 6,291 $ 4,734 $ 14,746 $ 22,025
Adjustments
related to stock
based compensation,
option investigation
and other (5,236) (15,775) (2,558) (18,708) (23,916)
--------- --------- --------- --------- ---------
GAAP (loss) income
before tax
provision $ (2,004) $ (9,484) $ 2,176 $ (3,962) $ (1,891)
========= ========= ========= ========= =========
RECONCILIATION OF NON-GAAP STATEMENTS OF OPERATIONS TO
GAAP STATEMENTS OF OPERATIONS
(Unaudited, in thousands except per share amounts)
Three Months Ended Fiscal Year Ended
---------------------------- ------------------
Jan. 6, Dec. 31, Sep. 30, Jan. 6, Dec. 31,
2008 2006 2007 2008 2006
-------- -------- -------- -------- --------
Net income (loss):
Non-GAAP net income $ 2,262 $ 4,405 $ 3,314 $ 10,322 $ 15,417
Adjustments related to
stock based
compensation, option
investigation, other
and tax (3,848) (11,928) (1,529) (13,515) (17,572)
-------- -------- -------- -------- --------
GAAP (loss) net income $ (1,586) $ (7,523) $ 1,785 $ (3,193) $ (2,155)
======== ======== ======== ======== ========
Net income (loss) per
share:
Basic:
Non-GAAP net income
per share $ 0.08 $ 0.16 $ 0.12 $ 0.38 $ 0.56
Adjustments related
to stock based
compensation, option
investigation, other
and tax (0.14) (0.44) (0.05) (0.50) (0.64)
-------- -------- -------- -------- --------
GAAP (loss) net
income per share $ (0.06) $ (0.28) $ 0.07 $ (0.12) $ (0.08)
======== ======== ======== ======== ========
Diluted:
Non-GAAP net income
per share $ 0.08 $ 0.16 $ 0.12 $ 0.38 $ 0.56
Adjustments related
to stock based
compensation, option
investigation, other
and tax (0.14) (0.44) (0.05) (0.50) (0.64)
-------- -------- -------- -------- --------
GAAP net income
(loss) per share $ (0.06) $ (0.28) $ 0.07 $ (0.12) $ (0.08)
======== ======== ======== ======== ========
ACTEL CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
Jan. 6, Dec. 31,
2008 2006
----------- -----------
ASSETS (Unaudited) (Audited)
Current assets:
Cash and cash equivalents $ 30,119 $ 33,699
Short-term investments 152,609 124,022
Accounts receivable, net 18,116 22,017
Inventories 35,587 39,203
Deferred income taxes 31,222 30,389
Prepaid expenses and other current assets 10,259 9,492
----------- -----------
Total current assets 277,912 258,822
Property and equipment, net 25,417 22,770
Long-term investments, net 6,442 34,234
Goodwill 30,197 30,209
Deferred income taxes 4,210 3,055
Other assets, net 19,438 19,832
----------- -----------
$ 363,616 $ 368,922
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 16,972 $ 15,799
Accrued compensation and employee benefits 6,292 5,984
Accrued licenses 4,927 9,098
Other accrued liabilities 3,519 7,366
Deferred income on shipments to distributors 26,709 29,297
----------- -----------
Total current liabilities 58,419 67,544
Deferred compensation plan liability 5,479 4,428
Deferred rent liability 1,417 1,367
Accrued sabbatical compensation 3,380 --
Other long-term liabilities, net 3,718 4,967
----------- -----------
Total liabilities 72,413 78,306
Shareholders' equity 291,203 290,616
----------- -----------
$ 363,616 $ 368,922
=========== ===========
Contact: Jon Anderson Actel Corporation (650) 318-4445
