Actel Announces Third Quarter 2005 Financial Results
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Actel Announces Third Quarter 2005 Financial Results

MOUNTAIN VIEW, CA -- (MARKET WIRE) -- Oct 24, 2005 -- Actel Corporation (NASDAQ: ACTL) today announced net revenues of $46.4 million for the third quarter of 2005, up 18 percent from the third quarter of 2004 and up 2 percent from the second quarter of 2005.

Pro-forma net income, which excludes amortization of acquisition-related intangibles, was $2.8 million for the third quarter of 2005 compared with $1.2 million for the third quarter of 2004 and $2.8 million for the second quarter of 2005. Pro-forma earnings were $0.11 per diluted share compared with $0.05 for the third quarter of 2004 and $0.11 for the second quarter of 2005.

Including all amortization and other costs in accordance with generally accepted accounting principles (GAAP), Actel reported net income of $2.2 million, or $0.09 per diluted share, for the third quarter of 2005 compared with net income of $0.5 million, or $0.02 per diluted share, for the third quarter of 2004 and net income of $2.2 million, or $0.09 per diluted share, for the second quarter of 2005.

Gross margin was 59.0 percent for the third quarter of 2005 compared with 59.3 percent for the third quarter of 2004 and 59.1 percent for the second quarter of 2005.

During the third quarter, the company unveiled its Fusion technology, launching the era of the Programmable System Chip (PSC). Leveraging its leadership position in flash-based field-programmable gate arrays (FPGAs), the company developed the industry's first technology designed to bring true programmability to mixed-signal solutions. The Actel Fusion™ technology is the first to integrate mixed-signal analog capabilities with flash memory and FPGA fabric in a monolithic PSC, bringing the benefits of programmable logic to application areas that until now have only been served by discrete analog component and mixed-signal ASIC suppliers.

In addition, the company announced today the immediate availability of CoreMP7, a soft ARM7 family processor optimized for use in Actel FPGAs, bringing the flexibility and fast time-to-market of programmable logic to this industry-standard processor technology. Exploiting the benefits of Actel's flash-based architecture, CoreMP7 may be used at no additional charge in ARM-ready versions of the company's low-cost ProASIC3 family of FPGAs. The devices are optimal solutions for many value-based consumer, industrial, automotive, and high-reliability applications.

Business Outlook - Fourth Quarter 2005

The company believes that fourth quarter revenues will be flat sequentially to slightly down. Gross margin is expected to be about 58 percent. Operating expenses are anticipated to come in at approximately $25.2 million. Other income is expected to be around $1.0 million. The tax rate for the quarter is anticipated to be approximately 25 percent. Share count is expected to be around 25.7 million shares.

A conference call to discuss third quarter results will be held Tuesday, October 25, 2005, at 8:30 a.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. In addition, the company expects to issue a press release providing a financial update in early December 2005.

Actel Corporation is the leader in single-chip FPGA solutions. 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 under the heading "Business Outlook - Fourth Quarter 2005" 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

                          CONSOLIDATED STATEMENTS OF INCOME
                 (unaudited, in thousands except per share amounts)

                               Three Months Ended      Nine Months Ended
                               ------------------      -----------------
                             Oct. 2,  Oct. 3,  July 3,  Oct. 2,   Oct. 3,
                              2005     2004     2005     2005      2004
                             -------  -------  -------  --------  --------
Net revenues                 $46,378  $39,439  $45,327  $135,689  $125,280
  Costs and expenses:
  Cost of revenues            19,033   16,036   18,560    55,509    49,587
  Research and development    12,166   11,959   11,759    35,783    34,200
  Selling, general, and
   administrative             12,204   11,637   12,667    37,708    35,300
  Amortization of acquisition-
   related intangibles           540      662      552     1,650     1,988
                             -------  -------  -------  --------  --------
      Total costs and
       expenses               43,943   40,294   43,538   130,650   121,075
                             -------  -------  -------  --------  --------
Income (loss) from
 operations                    2,435     (855)   1,789     5,039     4,205
Interest income and other,
 net                           1,019      821      926     2,725     2,153
                             -------  -------  -------  --------  --------
Income (loss) before tax
 (benefit) provision           3,454      (34)   2,715     7,764     6,358
Tax (benefit) provision        1,216     (551)     508     1,882       797
                             -------  -------  -------  --------  --------
Net income                   $ 2,238  $   517  $ 2,207  $  5,882  $  5,561
                             =======  =======  =======  ========  ========

Net income (loss) per
 share:
    Basic                    $  0.09  $  0.02  $  0.09  $   0.23  $   0.22
                             =======  =======  =======  ========  ========
    Diluted                  $  0.09  $  0.02  $  0.09  $   0.23  $   0.21
                             =======  =======  =======  ========  ========

Shares used in computing net
 income (loss) per share:
    Basic                     25,388   25,600   25,183    25,227    25,656
                             =======  =======  =======  ========  ========
    Diluted                   25,596   25,930   25,400    25,549    26,613
                             =======  =======  =======  ========  ========


                               ACTEL CORPORATION

                             PRO-FORMA INFORMATION
                   EXCLUDING ACQUISITION-RELATED AMORTIZATION
                                AND OTHER ITEMS
                    (in thousands, except per share amounts)
The following Pro-Forma supplemental information adjusts for the effect of acquisition-related amortization and other non-operating items. Not all acquisition-related amortization charges are deductible for income tax purposes. The tax implications of these items have been included in the determination of pro forma net income. This pro forma information is not prepared in accordance with generally accepted accounting principles (GAAP).

                               Three Months Ended       Nine Months Ended
                          ----------------------------  ------------------
                           Oct. 2,   Oct. 3,   July 3,   Oct. 2,   Oct. 3,
                            2005      2004      2005      2005      2004
                          --------  --------  --------  --------  --------
Pro-Forma operating costs
 and expenses             $ 24,370  $ 23,596  $ 24,426  $ 73,491  $ 69,500
Pro-Forma operating
 income (loss)            $  2,975  $   (193) $  2,341  $  6,689  $  6,193
Pro-Forma net income      $  2,778  $  1,179  $  2,759  $  7,532  $  7,549
Pro-Forma basic earnings
 per share                $   0.11  $   0.05  $   0.11  $   0.30  $   0.29
Pro-Forma diluted earnings
 per share                $   0.11  $   0.05  $   0.11  $   0.29  $   0.28


                           PRO-FORMA TO GAAP RECONCILIATION
                               (unaudited, in thousands)

                               Three Months Ended       Nine Months Ended
                          ----------------------------  ------------------
                           Oct. 2,   Oct. 3,   July 3,   Oct. 2,   Oct. 3,
                            2005      2004      2005      2005      2004
                          --------  --------  --------  --------  --------

Pro-Forma net income      $  2,778  $  1,179  $  2,759  $  7,532  $  7,549
Amortization of acquisition-
 related intangibles          (540)     (662)     (552)   (1,650)   (1,988)
                          --------  --------  --------  --------  --------
GAAP net income (loss)    $  2,238  $    517  $  2,207  $  5,882  $  5,561
                          ========  ========  ========  ========  ========


                               ACTEL CORPORATION

                          CONSOLIDATED BALANCE SHEETS
                           (unaudited, in thousands)


                                                    Oct. 2,       Jan. 2,
                                                     2005          2005
                          ASSETS                  ----------    ----------
Current assets:
  Cash and cash equivalents                       $   17,288    $    6,405
  Short-term investments                             136,349       148,297
  Accounts receivable, net                            30,174        17,686
  Inventories, net                                    40,148        41,218
  Deferred income taxes                               22,124        22,230
  Prepaid expenses and other current assets            4,893         4,831
                                                  ----------    ----------
      Total current assets                           250,976       240,667
Property and equipment, net                           23,670        22,804
Goodwill, net                                         32,142        32,142
Other assets, net                                     25,939        19,677
                                                  ----------    ----------
                                                  $  332,727    $  315,290
                                                  ==========    ==========

          LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                $   11,202    $   11,397
  Accrued salaries and employee benefits               5,834         6,776
  Other accrued liabilities                            5,753         4,364
  Deferred income on shipments to distributors        29,332        23,658
                                                  ----------    ----------

      Total current liabilities                       52,121        46,195
Deferred compensation plan liability                   3,545         3,258
Deferred rent liability                                1,194         1,044
Long-term royalty, net                                 7,890             -
                                                  ----------    ----------
      Total liabilities                               64,750        50,497
Shareholders' equity                                 267,977       264,793
                                                  ----------    ----------
                                                  $  332,727    $  315,290
                                                  ==========    ==========

Contact:
Jon Anderson
Actel Corporation
(650) 318-4445