Non-GAAP net income, which excludes stock-based compensation charges and amortization of acquisition-related intangibles, was $2.6 million for the first quarter of 2006 compared with $2.0 million for the first quarter of 2005 and $1.4 million for the fourth quarter of 2005. Non-GAAP earnings were $0.10 per diluted share for the first quarter of 2006 compared with $0.08 for the first quarter of 2005 and $0.06 for the fourth quarter of 2005.
Including stock-based compensation and amortization charges in accordance with generally accepted accounting principles (GAAP), Actel reported a loss of $0.2 million, or ($0.01) per basic share, for the first quarter of 2006 compared with net income of $1.4 million, or $0.06 per diluted share, for the first quarter of 2005 and net income of $1.2 million, or $0.05 per diluted share, for the fourth quarter of 2005.
Gross margin was 59.9 percent for the first quarter of 2006 compared with 59.3 percent for the first quarter of 2005 and 59.1 percent for the fourth quarter of 2005.
During the first quarter, the Actel Fusion™ Programmable System Chip (PSC), the industry's first mixed-signal field-programmable gate array (FPGA), was named the winner in the Digital IC and Programmable Logic category of EDN's 2005 Innovation of the Year competition. It was also named the winner of the International Engineering Consortium's DesignVision award in the category of Semiconductors and ICs. The Actel Fusion PSC offers the unprecedented integration of mixed-signal analog, embedded flash memory and FPGA fabric in a single chip, enabling designers to quickly move from concept to completed design and deliver feature-rich systems to market.
Business Outlook -- Second Quarter 2006
The company believes that second quarter revenues will be flat to up in the low single digit range. Gross margin is expected to be about 59 percent. Operating expenses are anticipated to come in at approximately $29.6 million, which includes an estimated $2.9 million of stock-based compensation expense. Other income is expected to be about $1.5 million. The tax provision for the quarter is expected to be approximately $0.2 million. Outstanding share count is expected to be about 25.8 million shares; fully diluted share count is expected to be about 27.3 million shares.
A conference call to discuss first quarter results will be held on Tuesday, April 25, 2006, 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. In addition, the company expects to issue a press release providing a financial update in early June 2006.
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 -- Second Quarter 2006" 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 and Actel Fusion names and logos are 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
------------------------------
Apr. 2, Apr. 3, Jan. 1,
2006 2005 2006
-------- -------- --------
Net revenues $ 46,268 $ 43,984 $ 43,708
Costs and expenses:
Cost of revenues 18,550 17,916 17,883
Research and development 13,779 11,858 12,390
Selling, general, and administrative 14,805 12,837 12,348
Amortization of acquisition-related
intangibles 8 558 258
-------- -------- --------
Total costs and expenses 47,142 43,169 42,879
-------- -------- --------
(Loss) income from operations (874) 815 829
Interest income and other, net 1,363 780 1,199
-------- -------- --------
Income before tax provision 489 1,595 2,028
Tax provision 641 158 874
-------- -------- --------
Net (loss) income $ (152) $ 1,437 $ 1,154
======== ======== ========
Net (loss) income per share:
Basic $ (0.01) $ 0.06 $ 0.05
======== ======== ========
Diluted $ (0.01) $ 0.06 $ 0.05
======== ======== ========
Shares used in computing net (loss)
income per share:
Basic 25,753 25,111 25,425
======== ======== ========
Diluted 25,753 25,652 25,577
======== ======== ========
ACTEL CORPORATION
NON-GAAP INFORMATION
EXCLUDING ACQUISITION-RELATED AMORTIZATION
AND STOCK-BASED COMPENSATION
(in thousands, except per share amounts)
The following Non-GAAP supplemental information adjusts for the effect
of acquisition-related amortization and stock-based compensation charges.
This Non-GAAP information is not prepared in accordance with generally
accepted accounting principles (GAAP).
Three Months Ended
------------------------------
Apr. 2, Apr. 3, Jan. 1,
2006 2005 2006
-------- -------- --------
Non-GAAP operating costs and expenses $ 25,792 $ 24,695 $ 24,738
Non-GAAP operating income $ 1,926 $ 1,373 $ 1,087
Non-GAAP net income $ 2,648 $ 1,995 $ 1,412
Non-GAAP basic earnings per share $ 0.10 $ 0.08 $ 0.06
Non-GAAP diluted earnings per share $ 0.10 $ 0.08 $ 0.06
NON-GAAP TO GAAP RECONCILIATION
(unaudited, in thousands)
Three Months Ended
------------------------------
Apr. 2, Apr. 3, Jan. 1,
2006 2005 2006
-------- -------- --------
Non-GAAP net income $ 2,648 $ 1,995 $ 1,412
Amortization of acquisition-related
intangibles $ (8) $ (558) $ (258)
Stock-based compensation charge (2,792) - -
-------- -------- --------
GAAP net (loss) income $ (152) $ 1,437 $ 1,154
======== ======== ========
ACTEL CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
Apr. 2, Jan. 1,
2006 2006
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 22,047 $ 24,033
Short-term investments 107,461 117,577
Accounts receivable, net 28,426 26,836
Inventories, net 36,988 37,372
Deferred income taxes 21,489 21,489
Prepaid expenses and other current assets 6,722 7,005
---------- ----------
Total current assets 223,133 234,312
Property and equipment, net 23,432 23,859
Long-term investments 42,023 26,706
Goodwill, net 32,142 32,142
Deferred tax asset 10,177 9,979
Other assets, net 15,873 13,391
---------- ----------
$ 346,780 $ 340,389
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 13,136 $ 14,503
Accrued salaries and employee benefits 5,626 4,994
Other accrued liabilities 10,795 10,196
Deferred income on shipments to distributors 32,501 29,238
---------- ----------
Total current liabilities 62,058 58,931
Deferred compensation plan liability 4,083 3,667
Deferred rent liability 1,278 1,242
Long-term royalty, net 3,385 3,828
---------- ----------
Total liabilities 70,804 67,668
Shareholders' equity 275,976 272,721
---------- ----------
$ 346,780 $ 340,389
========== ==========
Contact: Jon Anderson Actel Corporation (650) 318-4445