Actel Announces Second Quarter 2008 Financial Results

MOUNTAIN VIEW, CA -- (MARKET WIRE) -- Jul 29, 2008 -- Actel Corporation (NASDAQ: ACTL) today announced net revenues of $57.6 million for the second quarter of 2008, up 5 percent from the first quarter of 2008 and up 18 percent from the second quarter of 2007.

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





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