UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------------
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 29, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-21970
--------------------------------------
ACTEL CORPORATION
(Exact name of Registrant as specified in its charter)
California 77-0097724
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
955 East Arques Avenue
Sunnyvale, California 94086-4533
(Address of principal executive offices) (Zip Code)
(408) 739-1010
(Registrant's telephone number, including area code)
--------------------------------------
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
<PAGE>
PART I -- FINANCIAL INFORMATION
Item 1. Condensed Financial Statements.
ACTEL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
---------------------------------------- --------------------------
June 29, June 30, Mar. 30, June 29, June 30,
1997 1966 1997 1997 1966
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net revenues................................ $ 40,823 $ 36,694 $ 39,803 $ 80,626 $ 71,737
Costs and expenses:
Cost of revenues......................... 16,731 16,105 16,439 33,170 31,874
Research and development................. 6,461 5,650 6,547 13,008 11,661
Selling, general, and administrative..... 10,394 9,582 10,131 20,525 17,890
------------ ------------ ------------ ------------ ------------
Total costs and expenses........... 33,586 31,337 33,117 66,703 61,425
------------ ------------ ------------ ------------ ------------
Income from operations...................... 7,237 5,357 6,686 13,923 10,312
Interest income and other, net.............. 413 413 340 753 702
------------ ------------ ------------ ------------ ------------
Income before tax provision................. 7,650 5,770 7,026 14,676 11,014
Tax provision............................... 2,716 2,164 2,495 5,211 4,131
------------ ------------ ------------ ------------ ------------
Net income.................................. $ 4,934 $ 3,606 $ 4,531 $ 9,465 $ 6,883
============ ============ ============ ============ ============
Net income per share........................ $ 0.17 $ 0.21 $ 0.43 $ 0.32 $ 0.23
============ ============ ============ ============ ============
Shares used in computing net income per share 21,467 22,082 21,988 21,288 21,890
============ ============ ============ ============ ============
</TABLE>
<PAGE>
ACTEL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
June 29, Dec. 29,
1997 1966
------------ ------------
(1) (2)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........................................................... $ 21,014 $ 3,543
Short-term investments.............................................................. 23,482 25,626
Accounts receivable, net............................................................ 28,094 29,495
Inventories......................................................................... 22,911 26,848
Other current assets................................................................ 19,437 19,093
------------ ------------
Total current assets.......................................................... 114,938 104,605
Property and equipment, net............................................................ 15,528 15,973
Investment in Chartered Semiconductor.................................................. 10,680 10,680
Other assets........................................................................... 5,023 5,454
------------ ------------
$ 146,169 $ 136,712
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable.................................................................... $ 12,137 $ 9,933
Accrued salaries and employee benefits.............................................. 4,059 5,967
Other accrued liabilities........................................................... 2,218 5,922
Deferred income..................................................................... 28,850 27,386
------------ ------------
Total current liabilities..................................................... 47,264 49,208
Commitments
Redeemable convertible preferred stock................................................. -- 18,147
Shareholders' equity:
Common stock........................................................................ 21 18
Additional paid-in capital.......................................................... 83,213 63,133
Accumulated earnings................................................................ 15,671 6,206
------------ ------------
Total shareholders' equity.................................................... 98,905 69,357
------------ ------------
$ 146,169 $ 136,712
============ ============
- ---------------------------------------
<FN>
(1) Unaudited.
(2) Derived from the audited financial statements at December 29, 1996, but
does not include all the information and footnotes required by
generally accepted accounting principles for complete financial
statements.
</FN>
</TABLE>
<PAGE>
ACTEL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited, in thousands)
<TABLE>
<CAPTION>
Six Months Ended
-----------------------------
June 29, June 30,
1977 1996
------------- -------------
<S> <C> <C>
Operating activities:
Net income........................................................................ $ 9,465 $ 6,883
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization................................................... 3,836 2,870
Changes in operating assets and liabilities:
Accounts receivable........................................................... 1,401 860
Inventories................................................................... 3,937 212
Other current assets.......................................................... (344) (2,001)
Accounts payable and accrued liabilities...................................... (3,408) (2,806)
Deferred income............................................................... 1,464 2,498
------------- -------------
Net cash provided by operating activities....................................... 16,351 8,516
------------- -------------
Investing activities:
Purchases of property and equipment............................................... (2,952) (5,013)
Purchases, sales, and maturities of short-term investments, net................... 2,144 2,292
Investment in Chartered Semiconductor............................................. -- (3,611)
Other assets...................................................................... (8) 631
------------- -------------
Net cash used in investing activities........................................... (816) (5,701)
------------- -------------
Financing activities:
Sale of common stock, net of repurchases.......................................... 1,936 1,522
Principal payments under notes payable and capital lease obligations.............. -- (66)
------------- -------------
Net cash provided by financing activities....................................... 1,936 1,456
------------- -------------
Net increase in cash and cash equivalents......................................... 17,471 4,271
Cash and cash equivalents, beginning of period.................................... 3,543 17,691
------------- -------------
Cash and cash equivalents, end of period.......................................... $ 21,014 $ 21,962
============= =============
Supplemental disclosures of cash flows information and non-cash investing and
financing activities:
Cash paid for interest............................................................ $ -- $ 3
Cash paid for taxes............................................................... 9,861 7,734
Conversion of preferred stock..................................................... 18,147 --
</TABLE>
<PAGE>
ACTEL CORPORATION
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited)
1. Basis of Presentation and Summary of Significant Accounting Policies
The accompanying unaudited consolidated financial statements of Actel
Corporation (the "Company") have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these
financial statements do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included.
The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All significant intercompany accounts
and transactions have been eliminated in consolidation.
The financial statements should be read in conjunction with the audited
financial statements included in the Company's Annual Report to Shareholders for
the year ended December 29, 1996.
The results of operations for the six months ended June 29, 1997, are
not necessarily indicative of results that may be expected for the entire year
ending December 28, 1997.
2. Inventories
Inventories consist of the following:
<TABLE>
<CAPTION>
June 29, Dec. 29,
1997 1966
------------ ------------
<S> <C> <C>
Inventories:
Purchased parts and raw materials.................................................. $ 1,856 $ 1,792
Work-in-process.................................................................... 15,297 17,080
Finished goods..................................................................... 5,758 7,976
------------ ------------
$ 22,911 $ 26,848
============ ============
</TABLE>
Inventories are stated at the lower of cost (first-in, first-out) or
market (net realizable value). Given the volatility of the market for the
Company's products, the Company makes inventory provisions for potentially
excess and obsolete inventory based on backlog and forecast demand. However,
such backlog demand is subject to revisions, cancellations, and rescheduling.
Actual demand will inevitably differ from such backlog and forecast demand, and
such differences may be material to the financial statements. Excess inventory
increases handling costs and the risk of obsolescence, is a non-productive use
of capital resources, and delays realization of the price and performance
benefits associated with more advanced manufacturing processes.
3. Provision for Taxes
The Company's effective tax rate for the three and six months ended
June 29, 1997, was 35.5%. This rate is based on the estimated annual tax rate
complying with Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes." This rate differs from the federal statutory rate due
primarily to state income taxes (net of federal benefit) and recognition of
certain deferred tax assets subject to valuation allowances as of June 29, 1996.
4. Earnings Per Share
Earnings per common and common equivalent share as presented on the
face of the statements of income represent primary earnings per share. Net
income per common and common equivalent share is based on the weighted average
common shares outstanding and dilutive common equivalent shares (using the
treasury stock or modified treasury stock method, whichever applies). Common
equivalent shares include stock options and warrants when appropriate. Dual
presentation of primary and fully diluted earnings per share has not been made
because the differences are insignificant.
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings per Share, which is required to be adopted by
December 31, 1997. At that time, the Company will be required to change the
method currently used to compute earnings per share and to restate all prior
periods. Under the new requirements for calculating primary earnings per share,
the dilutive effect of stock options will be excluded. The impact is expected to
result in an increase in primary earnings per share for the second quarters
ended June 29, 1997, and June 30, 1996, of $0.01 and $0.03, respectively, and
for the six months ended June 29, 1997, and June 30, 1996, of $0.03 and $0.09,
respectively. The impact of Statement No. 128 on the calculation of fully
diluted earnings per share for these periods is not expected to be material.
5. Conversion of Preferred Stock
On March 12, 1997, Texas Instruments Incorporated converted all of the
outstanding shares of Series A Preferred Stock into 2,631,578 shares of Common
Stock.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
This Quarterly Report on Form 10-Q contains forward-looking statements
that involve risks and uncertainties. The Company's actual results may differ
significantly from the results discussed in such forward-looking statements.
Factors that might cause such a difference include, but are not limited to,
those discussed under the caption "Factors Affecting Future Operating Results."
Results of Operations
Net Revenues
The Company's net revenues for the second quarter of fiscal 1997 were
$40.8 million, which represents an increase of 3% compared with the Company's
net revenues for the first quarter of 1997 and an increase of 11% compared with
the Company's net revenues for the second quarter of 1996. Net revenues for the
first six months of fiscal 1997 were $80.6 million, which represents an increase
of 12% compared with the Company's net revenues for the first six months of
1996.
The sequential growth in quarterly net revenues resulted primarily from
an 11% increase in unit sales of field programmable gate arrays ("FPGAs") that
was partially offset by a decline of 7% in the overall average selling price of
FPGAs. Unit sales of the Company's mature product families (defined as ACT 1 and
ACT 2) and the Company's new product families (defined as ACT 3, XL, DX, and RH)
both increased sequentially, while the overall average selling price of the
Company's mature and new product families both declined sequentially.
The year-over-year growth in quarterly net revenues resulted primarily
from an 11% increase in the overall average selling price of FPGAs, while unit
sales were flat. The year-over-year growth in six-month net revenues resulted
primarily from a 1% decline in FPGA unit sales coupled with a 13% increase in
the overall average selling price of FPGAs. The overall average selling price of
FPGAs increased year-over-year principally because of proportionately greater
unit shipments of new products, which tend to have higher average selling prices
As is typical in the semiconductor industry, the average selling prices
of the Company's products generally decline over the lives of such products. To
increase revenues, the Company seeks to increase unit sales of existing
products, principally by reducing prices, and to introduce and sell new
products. No assurance can be given that these efforts will be successful.
Gross Margin
Gross margin for the second quarter of 1997 was 59.0% of net revenues,
compared with 58.7% of net revenues for the first quarter of 1997 and 56.1% of
net revenues for the second quarter of 1996. Gross margin for the first six
months of 1997 was 58.9% of net revenues, compared with 55.6% of net revenues
for the first six months of 1996.
The sequential and year-over-year improvement in quarterly gross
margin, and the year-over-year improvement in six-month gross margin, resulted
primarily from improved manufacturing yields and the generation of an increased
percentage of net revenues from sales of the Company's new product families,
which tend to command higher margins. The Company's year-over-year gross margin
also benefited from appreciation in the value of the United States dollar versus
the Japanese yen, in which some of the Company's wafer purchases are
denominated, foundry price concessions, and increased assembly and test
efficiencies.
As is typical in the semiconductor industry, margins on the Company's
products generally decline as the average selling prices of such products
decline. The Company seeks to offset margin erosion by selling a higher
percentage of new products, which tend to have higher margins than more mature
products, and by reducing costs. The Company seeks to reduce costs by improving
wafer yields, negotiating price reductions with suppliers, increasing the level
and efficiency of its testing and packaging operations, achieving economies of
scale by means of higher production levels, and increasing the number of die
produced per wafer by shrinking the die size of its products. No assurance can
be given that these efforts will be successful. The ability of the Company to
shrink the die size of its FPGAs is dependent on the availability of more
advanced manufacturing processes. Because of the custom steps involved in
manufacturing antifuse-based FPGAs, the Company typically obtains access to new
manufacturing processes later than its competitors using standard manufacturing
processes.
Research and Development
Research and development expenditures for the second quarter of 1997
were $6.5 million, or 16% of net revenues, compared with $6.5 million, or 16% of
net revenues, for the first quarter of 1997 and $5.7 million, or 15% of net
revenues, for the second quarter of 1996. Research and development expenditures
for the first six months of 1997 were $13.0 million, or 16% of net revenues,
compared with $11.7 million, or 16% of net revenues, for the first six months of
1996. While research and development expenditures for the first six months of
1997 increased by 12% compared with the first six months of 1996, research and
development expenditures remained stable as a percentage of net revenues. The
Company may boost the level of its research and development expenditures over
the next several quarters to accelerate the introduction of new products and, as
a consequence, research and development expenditures might increase as a
percentage of net revenues for any or all of such quarters.
The Company's research and development consists of circuit design,
software development, and process technology activities. The Company believes
that continued substantial investment in research and development is critical to
maintaining a strong technological position in the industry and, therefore,
expects to continue increasing its research and development expenditures. Since
the Company's antifuse FPGAs are manufactured using a customized process, the
Company's research and development expenditures will probably always be higher
as a percentage of net revenues than that of its major competitors.
Selling, General, and Administrative
Selling, general, and administrative expenses for the second quarter of
1997 were $10.4 million, or 25% of net revenues, compared with $10.1 million, or
25% of net revenues, for the first quarter of 1997 and $9.6 million, or 26% of
net revenues, for the second quarter of 1996. Selling, general, and
administrative expenditures for the first six months of 1997 were $20.5 million,
or 25% of net revenues, compared with $17.9 million, or 25% of net revenues, for
the first six months of 1996. The Company may boost its level of sales and
marketing activity in support of new products over the next several quarters
and, as a consequence, selling, general, and administrative expenditures might
increase as a percentage of net revenues for any or all of such quarters.
Tax Provision
The Company's effective tax rate for the three and six months ended
June 29, 1997, was 35.5%. This rate is based on the estimated annual tax rate
complying with Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes." This rate differs from the federal statutory rate due
primarily to state income taxes (net of federal benefit) and the recognition of
certain deferred tax assets subject to valuation allowances as of June 29, 1997.
Liquidity and Capital Resources
At the end of the first six months of 1997, the Company's cash, cash
equivalents, and short-term investments were $44.5 million, compared with $29.2
million at the beginning of 1997. The amount of cash, cash equivalents, and
short-term investments increased principally because of cash provided by
operations.
The Company believes that existing cash, cash equivalents, and short
term investments, together with cash from operations, will be sufficient to meet
its cash requirements for 1997. A portion of available cash may be used for
investment in or acquisition of complementary businesses, products, or
technologies.
The Company has a line of credit with a bank that provides for
borrowings not to exceed $10,000,000. The agreement contains covenants that
require the Company to maintain certain financial ratios and levels of net
worth. As of June 29, 1997, the Company was in compliance with the covenants for
the line of credit. Borrowing against the line of credit bear interest at the
bank's prime rate. There were no borrowings against the line of credit at June
29, 1997. The line of credit, which expires in May 1998, may be terminated by
either party upon not less than thirty days' prior written notice.
The Company believes that the availability of adequate financial
resources is a substantial competitive factor. To take advantage of
opportunities as they arise, or to withstand adverse business conditions should
they occur, it may become prudent or necessary for the Company to raise
additional capital. The Company intends to continue monitoring the availability
and cost of potential capital resources, including equity, debt, and off-balance
sheet financing arrangements, with a view toward raising additional capital on
terms that are acceptable to the Company. No assurance can be given that
additional capital will become available on acceptable terms.
Additional Unaudited Quarterly Information
The following table presents certain unaudited quarterly results for
each of the eight quarters in the period ended June 29, 1997. In the opinion of
management, all necessary adjustments (consisting only of normal recurring
accruals) have been included in the amounts stated below to present fairly the
unaudited quarterly results when read in conjunction with the audited
consolidated financial statements of the Company and notes thereto included in
the Company's Annual Report to Shareholders for the year ended December 29,
1996. These quarterly operating results are not necessarily indicative of the
results for any future period.
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------------------------------------------------------------------
June 29, Mar. 30, Dec. 29, Sept. 29, June 30, Mar. 31, Dec. 31, Oct. 1
1997 1997 1996 1996 1996 1996 1995 1995
---------- --------- ---------- ---------- --------- ---------- --------- ----------
(unaudited, in thousands except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Unaudited
Statements of Operations Data:
Net revenues.......................... $ 40,823 $ 39,803 $ 39,027 $ 38,014 $ 36,694 $ 35,043 $ 32,553 $ 29,834
Cost of revenues...................... 16,731 16,439 16,381 16,164 16,105 15,769 15,234 14,416
---------- --------- ---------- ---------- --------- ---------- --------- ----------
Gross profit.......................... 24,092 23,364 22,646 21,850 20,589 19,274 17,319 15,418
Research and development.............. 6,461 6,547 5,855 6,417 5,650 6,011 5,802 5,430
Selling, general, and administrative.. 10,394 10,131 10,651 9,854 9,582 8,308 7,849 7,244
---------- --------- ---------- ---------- --------- ---------- --------- ----------
Income from operations................ 7,237 6,686 6,140 5,579 5,357 4,955 3,668 2,744
Net income............................ $ 4,934 $ 4,531 $ 4,153 $ 3,905 $ 3,606 $ 3,277 $ 3,878 $ 2,935
Net income per share.................. $ 0.23 $ 0.21 $ 0.19 $ 0.18 $ 0.17 $ 0.16 $ 0.19 $ 0.14
========== ========= ========== ========== ========= ========== ========= ==========
Shares used in computing net income
per share........................... 22,082 21,893 21,475 21,068 20,808 21,082 21,890 21,467
========== ========= ========== ========== ========= ========== ========= ==========
Three Months Ended
-------------------------------------------------------------------------------------------
June 29, Mar. 30, Dec. 29, Sept. 29, June 30, Mar. 31, Dec. 31, Oct. 1,
1997 1997 1996 1996 1996 1996 1995 1995
---------- --------- ---------- ---------- --------- ---------- --------- ----------
As a Percentage of Net Revenues:
Net revenues.......................... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of revenues...................... 41.0 41.3 42.0 42.5 43.9 45.0 46.8 48.3
---------- --------- ---------- ---------- --------- ---------- --------- ----------
Gross margin.......................... 59.0 58.7 58.0 57.5 56.1 55.0 53.2 51.7
Research and development.............. 15.8 16.4 15.0 16.9 15.4 17.2 17.8 18.2
Selling, general, and administrative.. 25.5 25.5 27.3 25.9 26.1 23.7 24.1 24.3
---------- --------- ---------- ---------- --------- ---------- --------- ----------
Income from operations................ 17.7 16.8 15.7 14.7 14.6 14.1 11.3 9.2
Net income............................ 12.1 11.4 10.6 10.3 9.8 9.4 11.9 9.8
</TABLE>
<PAGE>
Factors Affecting Future Operating Results
The Company's operating results are subject to general economic
conditions and a variety of risks characteristic of the semiconductor industry
(including booking and shipment uncertainties, wafer supply fluctuations, and
price erosion) or specific to the Company, any of which could cause the
Company's operating results to differ materially from past results. For a
discussion of such risks, see "Risk Factors" in Part I of the Company's Annual
Report on Form 10-K for 1996, which is incorporated herein by this reference.
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is engaged in litigation before the United States District
Court for the Northern District of California (the "Court") against QuickLogic
Corporation ("QuickLogic"). In the litigation, the Company has asserted claims
for infringement of six United States patents (including the `705 Patent)
against QuickLogic, which has denied infringement and asserted invalidity
defenses. The Company has also asserted causes of action for trade secret
misappropriation, breach of contract, breach of confidential business
relationship, and unfair competition against QuickLogic and John Birkner, who
have denied all allegations. Prior to the events described in the next
paragraph, QuickLogic had asserted counterclaims against the Company for
infringement of two United States patents. The Company denies that it infringes
QuickLogic's patents and has asserted numerous invalidity defenses. The Company
seeks declaratory and injunctive relief, treble damages in an unspecified
amount, attorneys' fees, and an assignment to the Company of QuickLogic's two
patents-in-suit. QuickLogic seeks declaratory and injunctive relief and treble
damages in an unspecified amount.
On February 14, 1997, the Company filed a motion for separate trial on
the issue of whether QuickLogic's patents-in-suit are invalid because the
Company's FPGAs accused of infringing those patents were offered for sale more
than one year prior to the date on which QuickLogic first applied for patent
rights. On February 28, 1997, QuickLogic filed a motion with the Special Master
seeking leave to assert claims for infringement of a recently-issued United
States patent against the Company. In rulings dated June 20, 1997, the Special
Master denied the Company's motion for separate trial of the "on-sale bar" issue
and granted QuickLogic's motion to file an amended answer and supplemental
complaint and counterclaim for patent infringement. In the latter ruling, the
Special Master also granted the Company leave to file an amended and
supplemental complaint to assert additional claims of patent infringement
against QuickLogic based on a recently-issued United States patent.
After considering the facts currently known, management does not
believe that the ultimate outcome of the litigation will have a materially
adverse effect on the Company's business, financial condition, or operating
results, although no assurance can be given to that effect.
As is typical in the semiconductor industry, the Company has been and
expects to be notified from time to time of claims that it may be infringing
patents owned by others. No assurance can be given that such claims against the
Company will not result in litigation. All litigation, whether or not determined
in favor of the Company, can result in significant expense to the Company and
can divert the time and attention of the Company's technical and managerial
personnel from operational matters.
Although the Company has obtained patents covering elements of its
circuit architecture and certain techniques for manufacturing its antifuse, no
assurance can be given that the Company's patents will be determined to be valid
or that the claims of QuickLogic or any assertions of infringement by other
parties (or claims for indemnity from customers resulting from any infringement
claims) will not succeed. In the event of an adverse ruling in the QuickLogic
case or any other litigation involving intellectual property, the Company could
suffer significant (and possibly treble) monetary damages. The Company may also
be required to discontinue the use of certain processes; cease the manufacture,
use, and sale of infringing products; expend significant resources to develop
non-infringing technology; or obtain licenses under patents that it is
infringing. Any of these outcomes could have a materially adverse effect on the
Company's business, financial condition, and/or results of operations.
There are no other pending legal proceedings of a material nature to
which the Company is a party or of which any of its property is the subject.
There are no such legal proceedings known by the Company to be contemplated by
any governmental authority.
Item 4. Submission of Matters to a Vote of Security Holders.
At the Annual Meeting of Shareholders of the Company held on May 2,
1997, at the principal executive offices of the Company, the Company's
shareholders (i) elected directors to serve until the next Annual Meeting of
Shareholders and until their successors are elected; (ii) approved an amendment
to the Company's 1993 Employee Stock Purchase Plan ("ESPP") increasing the
number of shares of Common Stock reserved for issuance under the ESPP by
250,000; (iii) approved an amendment to the Company's 1993 Directors' Stock
Option Plan ("Directors' Plan") increasing the number of shares of Common Stock
reserved for issuance under the Directors' Plan by 90,000; and (iv) ratified the
appointment of Ernst & Young LLP as the Company's independent auditors for the
fiscal year ending December 28, 1997.
The vote for nominated directors was as follows:
<TABLE>
<CAPTION>
Nominee For Withheld Broker Nonvotes
- -------------------------------- --------------------------- ------------------------- -------------------------
<S> <C> <C> <C>
John C. East.................... 6,788,904 21,416 0
Keith B. Geeslin................ 6,788,904 21,416 0
Jos C. Henkens.................. 6,787,904 22,416 0
Frederic N. Schwettmann......... 6,786,491 23,829 0
Robert G. Spencer............... 6,788,904 21,416 0
</TABLE>
The vote on the amendment to the ESPP increasing by 250,000 the number
of shares of Common Stock reserved for issuance under the ESPP (bringing the
total number of shares reserved for issuance under the ESPP to 1,150,000) was as
follows:
<TABLE>
<CAPTION>
For Against Abstain Broker Nonvotes
- -------------------------- ------------------------- -------------------------- ---------------------------
<S> <C> <C> <C> <C>
5,854,737 883,432 12,728 59,423
</TABLE>
The vote on the amendment to the Directors' Plan increasing by 90,000
the number of shares of Common Stock reserved for issuance under the Directors'
Plan (bringing the total number of shares reserved for issuance under the
Directors' Plan to 200,000) was as follows:
<TABLE>
<CAPTION>
For Against Abstain Broker Nonvotes
- -------------------------- ------------------------- -------------------------- ---------------------------
<S> <C> <C> <C> <C>
5,397,707 1,341,327 11,863 59,423
</TABLE>
The vote on ratifying the appointment of Ernst & Young LLP was as
follows:
<TABLE>
<CAPTION>
For Against Abstain Broker Nonvotes
- -------------------------- ------------------------- -------------------------- ---------------------------
<S> <C> <C> <C> <C>
6,792,419 11,986 6,215 0
</TABLE>
The Annual Meeting of Shareholders was adjourned until June 16, 1997,
at which time the Company's shareholders voted on, but did not approve, a
proposed change in the Company's state of incorporation from California to
Nevada. The vote on the proposed reincorporation into Nevada was as follows:
<TABLE>
<CAPTION>
For Against Abstain Broker Nonvotes
- -------------------------- ------------------------- -------------------------- ---------------------------
<S> <C> <C> <C> <C>
8,243,191 7,134,432 8,349 2,864,384
</TABLE>
The affirmative vote of a majority of the shares "entitled to vote" (whether or
not represented at the Annual Meeting of Shareholders) was required to approve
the proposed reincorporation into Nevada. Since approximately 20.8 million
shares were "entitled to vote" at the Annual Meeting of Shareholders,
approximately 10.4 million affirmative votes would have been required to approve
the proposed reincorporation.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
The following exhibits are filed as part of, or incorporated by
reference into, this Quarterly Report on Form 10-Q:
11. Statement re computation of per share earnings
(b) Reports on Form 8-K
None
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ACTEL CORPORATION
Date: August 13, 1997 /s/ Henry L. Perret
--------------------------------------------------------
Henry L. Perret
Vice President of Finance
and Chief Financial Officer
(as principal financial officer
and on behalf of Registrant)
ACTEL CORPORATION
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(unaudited, in thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------- -------------------------
June 29, June 30, June 29, June 30,
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Primary:
Average weighted common shares outstanding................ 20,834 17,761 19,747 17,714
Net effect of dilutive stock options, warrants, and
convertible preferred stock - based on the treasury
stock method using average market price................ 3,706 2,241 3,574 1,056
----------- ----------- ----------- -----------
Shares used in computing net income per share............. 21,890 21,467 21,988 21,288
=========== =========== =========== ===========
Net income................................................ $ 4,934 $ 3,606 $ 9,465 $ 6,883
=========== =========== =========== ===========
Net income per share...................................... $ 0.23 $ 0.17 $ 0.43 $ 0.32
=========== =========== =========== ===========
Fully diluted:
Average weighted common shares outstanding................ 20,834 17,761 19,747 17,714
Net effect of dilutive stock options, warrants, and
convertible preferred stock - based on the treasury
stock method........................................... 3,747 2,240 3,769 1,056
----------- ----------- ----------- -----------
Shares used in computing net income per share............. 21,890 21,508 21,987 21,483
=========== =========== =========== ===========
Net income................................................ $ 4,934 $ 3,606 $ 9,465 $ 6,883
=========== =========== =========== ===========
Net income per share...................................... $ 0.23 $ 0.17 $ 0.43 $ 0.32
=========== =========== =========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-28-1997
<PERIOD-START> DEC-29-1996
<PERIOD-END> JUN-29-1997
<CASH> 21,014
<SECURITIES> 23,482
<RECEIVABLES> 28,094
<ALLOWANCES> 2,542
<INVENTORY> 22,911
<CURRENT-ASSETS> 114,938
<PP&E> 36,789
<DEPRECIATION> 21,261
<TOTAL-ASSETS> 146,169
<CURRENT-LIABILITIES> 47,264
<BONDS> 0
<COMMON> 83,213
0
0
<OTHER-SE> 15,671
<TOTAL-LIABILITY-AND-EQUITY> 146,169
<SALES> 80,626
<TOTAL-REVENUES> 80,626
<CGS> 33,170
<TOTAL-COSTS> 33,170
<OTHER-EXPENSES> 33,533
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 753
<INCOME-PRETAX> 14,676
<INCOME-TAX> 5,211
<INCOME-CONTINUING> 9,465
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,465
<EPS-PRIMARY> .43
<EPS-DILUTED> .43
</TABLE>
