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Actel Corp. Reports Operating Results (10-Q)

November 12, 2009 | About:
10qk

10qk

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Actel Corp. (ACTL) filed Quarterly Report for the period ended 2009-10-04.

Actel designs, develops, and markets field programmable gate array and associated development system software and programming hardware. Their product line consist of ten families of antifuse-based FPGAs; Designer Series Development System, DeskTOP, and CoreHDL software; SiliconExplorer debugging and diagnostic tools; Activator and Silicon Sculptor device programmers; and sockets. Actel Corp. has a market cap of $304 million; its shares were traded at around $11.63 with a P/E ratio of 105.7 and P/S ratio of 1.3.

Highlight of Business Operations:

R&D expenditures were $14.8 million, or 31% of net revenues, for the third quarter of 2009 compared with $15.3 million, or 34% of net revenues, for the second quarter of 2009 and $17.0 million, or 32% of net revenues, for the third quarter of 2008. R&D spending decreased $0.5 million in the third quarter of 2009 compared with the second quarter of 2009 due to a decrease in salaries, payroll taxes and benefits and decreases in outside services. R&D expenses decreased $2.2 million compared with the third quarter of 2008 due to decreases in salaries, payroll taxes and benefits as a result of the October 2008 and March 2009 reductions in force, coupled with decreases in contracted engineering fees and travel costs. Stock-based compensation expense was $1.1 million for the three month period ended October 4, 2009, compared with $0.9 million for the second quarter of 2009 and $1.2 million for the third quarter of 2008.

SG&A expenses were $13.2 million, or 28% of net revenues for the third quarter of 2009 compared with $13.7 million, or 30% of net revenues for the second quarter of 2009 and $15.0 million, or 28% of net revenues for the third quarter of 2008. The decrease of $0.5 million in SG&A expenses in the third quarter of 2009 as compared with the second quarter of 2009 was due to decreases in Board advisory and other professional fees and lower marketing related expenses. SG&A expenses in the third quarter of 2009 decreased $1.8 million as compared with the third quarter of 2008 due to decreases in salaries, payroll taxes and benefits as a result of the October 2008 and March 2009 reductions in force, decreases in outside services, primarily relating to information technology related projects expenditure in the third quarter of 2008 and lower marketing related expenses in the third quarter of 2009. Stock-

The provision for income taxes was based on an annual effective tax rate calculated in compliance with FASB ASC 740, Accounting for Income Taxes and FASB ASC 270, Interim Financial Reporting. During the third quarter of fiscal 2009, the Company recorded a tax benefit of $157,000 on a third quarter pre-tax income of $749,000, compared with a $23.8 million tax provision on a second quarter 2009 pretax loss of $21.4 million and a $0.2 million tax provision on pretax loss of $1.2 million for the third quarter of fiscal 2008. The difference in the tax provisions is primarily due to the valuation allowance recorded against 100% of the net deferred tax assets during the second quarter of 2009.

Cash used in operating activities was $0.1 million for the nine months ended October 4, 2009. Uses of cash included a net loss of $47.2 million, an increase in accounts receivable of $11.2 million, an increase in prepaid expenses and other current assets of $0.8 million, an increase in other assets, net of $6.6 million and a decrease in accounts payable, accrued compensation and employee benefits, and other accrued liabilities of $7.8 million. The net loss was partially offset by non-cash adjustments for depreciation and amortization, asset impairment charges, stock based compensation costs and deferred income taxes of approximately $45.5 million, decreases in inventories of $22.3 million and decreases in deferred income on sales to distributors of $5.8 million.

Cash provided by operating activities was $6.4 million for the nine months ended October 5, 2008. Cash provided by operating activities included net income of $0.8 million; non-cash adjustments related to depreciation, amortization, investment impairment, and stock-based compensation costs of approximately $16.4 million; decreases in prepaid and other current assets of $2.5 million; increases in other liabilities of $9.4 million; and increases in deferred income of $9.8 million. These were partially offset by cash used to fund increases in accounts receivable of $10.6 million, inventories of $20.2 million, and licenses and other assets of $2.1 million.

Net sales and maturities of available-for-sale securities of $35.5 million, which was partially offset by capital expenditures of $18.7 million and the acquisition of Pigeon Point Systems for $8.4 million, resulted in net cash provided by investing activities of approximately $8.4 million for the nine months ended October 5, 2008. Net cash used in financing activities of $19.1 million for the nine months ended October 5, 2008, related mainly to cash used to repurchase stock of $24.9 million and payroll tax deposits of $0.7 million associated with the vesting of restricted stock unit awards, which were partially offset by proceeds from the issuance of common stock of $6.5 million.

Read the The complete ReportACTL is in the portfolios of NWQ Managers of NWQ Investment Management Co.

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