Actel Announces Second Quarter 2008 Financial Results
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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