Actel Announces Fourth Quarter 2007 Financial Results

MOUNTAIN VIEW, CA -- (MARKET WIRE) -- Feb 20, 2008 -- Actel Corporation (NASDAQ: ACTL) today announced net revenues of $51.1 million for the fourth quarter of 2007, up 6 percent from the fourth quarter of 2006 and up 7 percent from the third quarter of 2007.

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





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