Microsemi Reports Second Quarter 2010 Results

IRVINE, Calif., April 22, 2010 (GLOBE NEWSWIRE) -- Microsemi Corporation
(Nasdaq:MSCC) today reported unaudited results for its second quarter of fiscal
year 2010 ended March 28, 2010.

-- Net Sales for Second Quarter Totaled $118.2 Million, Up 11.9 Percent
Over Prior Year
-- Gross Margin Increased 110 Basis Points Over Prior Quarter
-- Gross Margin Increased 1,640 Basis Points Over Prior Year
-- Operating Margin Increased 310 Basis Points Over Prior Quarter
-- Operating Margin Increased 2,830 Basis Points Over Prior Year
-- Operating Cash Flow Totaled $28.8 Million
-- Book-to-Bill Ratio Greater than 1:1

Net sales for Microsemi's second quarter of 2010 were $118.2 million, up 11.9
percent from the second quarter of 2009 and up 4.8 percent from the first
quarter of 2010. Gross margin in the second quarter of 2010 was 47.4 percent, up
1,640 basis points from the second quarter of 2009 and up 110 basis points from
the first quarter of 2010.

On a non-GAAP basis, operating margin was 21.8 percent in the second quarter of
2010, up 1,060 basis points from the second quarter of 2009 and up 210 basis
points from the first quarter of 2010. Non-GAAP net income for the second
quarter of 2010 was $21.4 million or $0.26 per diluted share compared $9.8
million or $0.12 per diluted share for the second quarter of 2009 and $18.0
million or $0.22 per diluted share in the first quarter of 2010. For the second
quarter of 2010, the non-GAAP effective tax rate was 16.8 percent.

On a GAAP basis, operating margin was 12.4 percent in the second quarter of
2010, up 2,830 basis points from the second quarter of 2009 and up 310 basis
points from the first quarter of 2010. GAAP net income for the second quarter of
2010 was $11.5 million or $0.14 per diluted share compared to a GAAP net loss of
$16.6 million or a loss of $0.20 per diluted share for the second quarter of
2009 and GAAP net income of $8.0 million or $0.10 per diluted share in the first
quarter of 2010. For the second quarter of 2010, the GAAP effective tax rate was
20.9 percent.

GAAP results are reconciled to non-GAAP results in the accompanying tables and
for the second quarter of 2010, include $1.0 million in acquisition-related
expenses, restructuring and other special charges. Also included in the second
quarter of 2010 were non-cash charges of $6.2 million related to stock based
compensation and $3.9 million in amortization of acquisition-related
intangibles. In the second quarter of 2010, we ceased reporting the effect of
transitional idle capacity and for comparability, its effect has been removed
from all periods reported.

James J. Peterson, President and Chief Executive Officer, stated, "We are
extremely pleased with our second quarter results. As anticipated, we had
increases in net sales for all of our end markets accompanied by notable
improvements in our gross, operating and net margins. These results, along with
an incremental operating cash flow of $28.8 million, continue to demonstrate
rock-solid execution in delivering to our shareholders consistently profitable
results."

Business Outlook

Microsemi expects that for the third quarter of fiscal year 2010, our net sales
will increase between a range of 3 percent and 5 percent, sequentially. On a
non-GAAP basis, we expect earnings for the third quarter of fiscal year 2010 to
be $0.28 to $0.30 per diluted share.

Microsemi regularly announces a quarterly outlook in the form of issuing a news
release and does not undertake to update any of this information between such
public announcements. Please refer to the "SAFE HARBOR" STATEMENT below for
risks that may affect future actual results.

About Microsemi Corporation

Microsemi, with corporate headquarters in Irvine, California, is a leading
designer, manufacturer and marketer of high performance analog and mixed signal
integrated circuits and high reliability semiconductors. Microsemi's
semiconductors manage and control or regulate power, protect against transient
voltage spikes and transmit, receive, and amplify signals.

Microsemi's products include individual components as well as integrated circuit
solutions that enhance customer designs by improving performance and
reliability, optimizing battery performance, reducing size or protecting
circuits. The principal markets Microsemi serves include defense, commercial
air, satellite, medical, notebook computers, LCD TVs, mobile, and connectivity
applications. More information may be obtained by contacting Microsemi directly
or by visiting its website at http://www.microsemi.com.

The Microsemi Corporation logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=1233

Information for Second Quarter 2010 Earnings Conference Call and Webcast

Date: Thursday, April 22, 2010

Time: 4:45 pm Eastern Daylight Time (1:45 pm Pacific Daylight Time)

To access the webcast, please log on to: www.microsemi.com and go to Investors
and then to Events and Presentations. To listen to the live webcast, please go
to this website approximately fifteen minutes prior to the start of the call to
register, download, and install any necessary audio software. For those unable
to participate during the live webcast, a replay will be available shortly after
the call on the website for 90 days.

To participate in the conference call by telephone, please call: (877) 264-1110
or (706) 634-1357 at approximately 4:35 pm EDT (1:35 pm PDT). Please provide the
following ID Number: 68849589.

A telephonic replay will be available from 6:00 pm EDT (3:00 pm PDT) on
Thursday, April 22, 2010 through 11:59 pm EST (8:59 pm PST) on Thursday, April
29th. To access the replay, please call (800) 642-1687, or (706) 645-9291.
Please enter the following ID Number: 68849589.

PLEASE READ THE FOLLOWING FACTORS THAT CAN MATERIALLY AFFECT MICROSEMI'S FUTURE
RESULTS.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: Any statements set forth in the news release that are not entirely
historical and factual in nature are forward-looking statements, including
without limitation statements concerning Microsemi's revenue and earnings
guidance, continued execution in delivering consistently profitable results, and
any other statements of belief or about the company's plans or expectations.
These forward-looking statements are based on Microsemi's current expectations
and are inherently subject to risks and uncertainties that could cause actual
results to differ materially from those expressed in the forward-looking
statements. The potential risks and uncertainties include, but are not limited
to, such factors as continued negative or worsening worldwide economic
conditions or market instability; downturns in the highly cyclical semiconductor
industry; intense competition in the semiconductor industry and resultant
downward price pressure; inability to develop new technologies and products to
satisfy changes in customer demand or the development by the company's
competitors of products that decrease the demand for Microsemi's products;
unfavorable conditions in end markets; inability of Microsemi's compound
semiconductor products to compete successfully with silicon-based products;
production delays related to new compound semiconductors; variability of the
company's manufacturing yields; the concentration of the factories that service
the semiconductor industry; delays in beginning production, implementing
production techniques, resolving problems associated with technical equipment
malfunctions, or issues related to government or customer qualification of
facilities; potential effects of system outages; inability by Microsemi to
fulfill customer demand and resulting loss of customers; variations in customer
order preferences; difficulties foreseeing future demand; rises in inventory
levels and inventory obsolescence; potential non-realization of expected orders
or non-realization of backlog; failure to make sales indicated by the company's
book-to-bill ratio; Microsemi's reliance on government contracts for a portion
of its sales; risks related to the company's international operations and sales,
including availability of transportation services, political instability and
currency fluctuations; increases in the costs of credit and the availability of
credit or additional capital only under more restrictive conditions or not at
all; unanticipated changes in Microsemi's tax provisions or exposure to
additional income tax liabilities; changes in generally accepted accounting
principles; principal, liquidity and counterparty risks related to Microsemi's
holdings in securities, including auction rate securities; environmental or
other regulatory matters or litigation, or any matters involving contingent
liabilities or other claims; the uncertainty of litigation, the costs and
expenses of litigation, the potential material adverse effect litigation could
have on Microsemi's business and results of operations if an adverse
determination in litigation is made, and the time and attention required of
management to attend to litigation; difficulties in determining the scope of,
and procuring and maintaining, adequate insurance coverage; difficulties and
costs of protecting patents and other proprietary rights; the hiring and
retention of qualified personnel in a competitive labor market; acquiring,
managing and integrating new operations, businesses or assets, and the
associated diversion of management attention; uncertainty as to the future
profitability of acquired businesses, and delays in the realization of, or the
failure to realize, any accretion from acquisition transactions; any
circumstances that adversely impact the end markets of acquired businesses; and
difficulties in closing or disposing of operations or assets or transferring
work from one plant to another. In addition to these factors and any other
factors mentioned elsewhere in this news release, the reader should refer as
well to the factors, uncertainties or risks identified in Microsemi's most
recent Form 10-K and all subsequent Form 10-Q reports filed by Microsemi with
the SEC. Additional risk factors may be identified from time to time in
Microsemi's future filings. The forward-looking statements included in this
release speak only as of the date hereof, and Microsemi does not undertake any
obligation to update these forward-looking statements to reflect subsequent
events or circumstances. Amounts reported in this release are preliminary and
subject to finalization prior to the filing of our next Form 10-Q.

To supplement the consolidated financial results prepared in accordance with
Generally Accepted Accounting Principles ("GAAP"), this press release and its
attachments include non-GAAP financial measures that exclude items listed in the
footnotes below. Management excludes these items because it believes that the
non-GAAP measures enhance an investor's overall understanding of Microsemi's
financial performance and future prospects by being more reflective of
Microsemi's core operational activities and to be more comparable with the
results of the Company over various periods. Management uses non-GAAP financial
measures internally for strategic decision making, forecasting future results
and evaluating current performance. Guidance is provided only on a non-GAAP
basis due to the inherent difficulty of forecasting the timing or amount of
certain items that have been excluded from the forward-looking non-GAAP
measures, and a reconciliation to the comparable GAAP guidance has not been
provided because certain factors that are materially significant to Microsemi's
ability to estimate the excluded items are not accessible or estimable on a
forward-looking basis. By disclosing non-GAAP financial measures, management
intends to provide investors with additional measures of Microsemi's core
operating results and trends for the periods presented. Non-GAAP financial
measures are not prepared in accordance with GAAP; therefore, the information is
not necessarily comparable to other companies' financial information and should
be considered as a supplement to, not a substitute for, or superior to, the
corresponding measures calculated in accordance with GAAP.

Investor Inquiries: Robert C. Adams, Microsemi Corporation, Irvine, CA (949)
221-7100.

(Financial Tables Follow)

MICROSEMI CORPORATION

Selected GAAP and Non-GAAP Financial Measures

(Unaudited, in thousands except for percentages and per share amounts)

Quarter Ended Six Months
Ended
-----------------------------
------------------

Mar 28, Dec 27, Mar 29, Mar 28, Mar
29,
2010 2009 2009 2010 2009

-------- -------- --------- --------
--------

Net sales $118,218 $112,832 $105,693 $231,050
$236,287

Selected GAAP Financial

Measures

Gross margin $56,001 $52,268 $32,712 $108,269
$93,145
Gross margin percentage 47.4% 46.3% 31.0% 46.9%
39.4%
Operating income (loss) $14,672 $10,472 $(16,805) $25,144
$(2,893)
Operating margin 12.4% 9.3% (15.9%) 10.9%
(1.2%)
Net income (loss) $11,486 $7,960 $(16,612) $19,446
$(3,404)
Diluted earnings (loss) per

share $0.14 $0.10 $(0.20) $0.24
$(0.04)

Selected Non-GAAP Financial

Measures

Gross margin $56,001 $52,268 $43,506 $108,269
$104,182
Gross margin percentage 47.4% 46.3% 41.2% 46.9%
44.1%
Operating income $25,797 $22,232 $11,857 $48,029
$40,038
Operating margin 21.8% 19.7% 11.2% 20.8%
16.9%
Net income $21,356 $18,034 $9,762 $39,390
$32,923
Diluted earnings per share $0.26 $0.22 $0.12 $0.48
$0.40

Additional details reconciling the selected GAAP financial measure to the
selected non-GAAP financial measure may be found in the "Selected Non-GAAP
Financial Measures and Schedule Reconciling Selected Non-GAAP Financial Measures
to Comparable GAAP Financial Measures" table and in footnotes (a) -- (g) below.

MICROSEMI CORPORATION

Selected Non-GAAP Financial Measures and Schedule Reconciling Selected
Non-GAAP Financial
Measures

to Comparable GAAP Financial Measures

(Unaudited, in thousands except for per share amounts)

Quarter Ended
Six Months Ended
-----------------------------
--------------------

Mar 28, Dec 27, Mar 29,
Mar 28, Mar 29,
2010 2009 2009
2010 2009
-------- -------- ---------
--------- ---------

GAAP gross margin $56,001 $52,268 $32,712
$108,269 $93,145
Inventory reserves due to restructuring

activities (a) -- -- 10,204
-- 10,204
Impairment of restructuring related fixed

assets (a) -- -- 590
-- 590
Manufacturing profit in acquired inventory

(b) -- -- --
-- 243
-------- -------- ---------
--------- ---------

Non-GAAP gross margin $56,001 $52,268 $43,506
$108,269 $104,182
-------- -------- ---------
--------- ---------

GAAP operating income (loss) $14,672 $10,472 $(16,805)
$25,144 $(2,893)
Inventory reserves due to restructuring

activities (a) -- -- 10,204
-- 10,204
Impairment of restructuring related fixed

assets (a) -- -- 590
-- 590
Manufacturing profit in acquired inventory

(b) -- -- --
-- 243
Restructuring and other special charges

(a) 380 388 5,219
768 7,640
Amortization of intangible assets (c) 3,884 3,883 3,562
7,767 6,806
Stock based compensation (d) 6,231 6,736 6,976
12,967 14,891
Exceptional legal matters (e) 211 753 2,111
964 2,557

Direct acquisition costs (f) 419 -- --
419 --
-------- -------- ---------
--------- ---------

Non-GAAP operating income $25,797 $22,232 $11,857
$48,029 $40,038
-------- -------- ---------
--------- ---------

GAAP net income (loss) $11,486 $7,960 $(16,612)
$19,446 $(3,404)
Inventory reserves due to restructuring

activities (a) -- -- 10,204
-- 10,204
Impairment of restructuring related fixed

assets (a) -- -- 590
-- 590
Manufacturing profit in acquired inventory

(b) -- -- --
-- 243
Restructuring and other special charges

(a) 380 388 5,219
768 7,640
Amortization of intangible assets (c) 3,884 3,883 3,562
7,767 6,806
Stock based compensation (d) 6,231 6,736 6,976
12,967 14,891
Exceptional legal matters (e) 211 753 2,111
964 2,557
Direct acquisition costs (f) 419 -- --
419 --
Income tax effect on non-GAAP adjustments

(g) (1,255) (1,686) (2,288)
(2,941) (6,604)
-------- -------- ---------
--------- ---------

Non-GAAP net income $21,356 $18,034 $9,762
$39,390 $32,923
-------- -------- ---------
--------- ---------

GAAP diluted earnings (loss) per share $0.14 $0.10 $(0.20)
$0.24 $(0.04)
Effect of non-GAAP adjustments on diluted

earnings (loss) per share 0.12 0.12 0.32
0.24 0.44
-------- -------- ---------
--------- ---------

Non-GAAP diluted earnings per share $0.26 $0.22 $0.12
$0.48 $0.40
-------- -------- ---------
--------- ---------

Weighted average diluted shares used in

calculating non-GAAP diluted earnings per

share 82,473 82,117 81,362
81,975 81,487

Additional details reconciling the selected GAAP financial measure to the
selected non-GAAP financial measure may be found in Notes Reconciling Non-GAAP
Financial Information to GAAP Financial Information and in footnotes (a) -- (g)
below.

MICROSEMI CORPORATION

Consolidated Income Statements

(Unaudited, in thousands, except per share amounts)

Quarter Ended Six Months
Ended
-------------------------------
--------------------

Mar 28, Dec 27, Mar 29, Mar 28,
Mar 29,
2010 2009 2009 2010
2009
--------- --------- --------- ---------
---------

NET SALES $118,218 $112,832 $105,693 $231,050
$236,287

Cost of sales 62,217 60,564 72,981 122,781
143,142
--------- --------- --------- ---------
---------

GROSS MARGIN 56,001 52,268 32,712 108,269
93,145

Operating expenses:

Selling, general and

administrative 24,722 25,813 31,218 50,535
61,823
Research and development 12,054 11,805 10,209 23,859
20,976
Amortization of intangible

assets 3,884 3,883 3,562 7,767
6,806
Direct acquisition costs 419 -- -- 419
--

Restructuring charges 250 295 4,528 545
6,433
--------- --------- --------- ---------
---------

Total operating expenses 41,329 41,796 49,517 83,125
96,038
--------- --------- --------- ---------
---------

OPERATING INCOME (LOSS) 14,672 10,472 (16,805) 25,144
(2,893)

Interest and other income

(expense), net (144) (178) 270 (322)
943
--------- --------- --------- ---------
---------

INCOME (LOSS) BEFORE INCOME

TAXES 14,528 10,294 (16,535) 24,822
(1,950)

Provision for income taxes 3,042 2,334 77 5,376
1,454
--------- --------- --------- ---------
---------

NET INCOME (LOSS) $11,486 $7,960 $(16,612) $19,446
$(3,404)
========= ========= ========= =========
=========

Earnings (loss) per share

Basic $0.14 $0.10 $(0.20) $0.24
$(0.04)
========= ========= ========= =========
=========

Diluted $0.14 $0.10 $(0.20) $0.24
$(0.04)
========= ========= ========= =========
=========

Common and common equivalent

shares outstanding:

Basic 81,693 81,505 81,091 81,281
80,917
Diluted 82,473 82,117 81,091 81,975
80,917

MICROSEMI CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)

March September
28, 2010 27, 2009
-------- ---------
ASSETS

Current assets:
Cash and cash equivalents $260,940 $216,742
Investment in auction rate
securities 31,550 46,550
Accounts receivable, net 70,356 62,543
Inventories 98,135 95,372

Other current assets 25,309 33,515
-------- ---------
Total current assets 486,290 454,722

Non-current assets 346,099 356,408
-------- ---------

TOTAL ASSETS $832,389 $811,130
======== =========

LIABILITIES AND STOCKHOLDERS'
EQUITY

Auction rate securities
credit facility $31,550 $46,550
Other current liabilities 56,941 54,219
Long-term liabilities 32,835 34,010

Stockholders' equity 711,063 676,351
-------- ---------

TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $832,389 $811,130
======== =========

Balance Sheet Note

At March 28, 2010 and September 27, 2009, our investment in auction rate
securities consisted of auction rate bonds backed by student loans. During the
quarter ended March 29, 2009, we entered into a settlement agreement with the
financial institution where we hold our investment in auction rate securities
and, per the terms of the settlement agreement: a) on November 3, 2008, the
financial institution repurchased our $15,450,000 investment in auction rate
preferred shares at par plus accrued interest; b) we hold rights to sell our
remaining investment in auction rate bonds back to the financial institution at
par plus accrued interest beginning June 30, 2010 through July 2, 2012 ("ARS
Rights"); and c) we are permitted to borrow at "no net cost" the full par value
of our investment in auction rate bonds.

During the quarter ended March 29, 2009, we monetized all auction rate
securities at full par value via the "no net cost" auction rate securities
credit facility, which resulted in an increase in the balance of our cash and
cash equivalents and a corresponding increase in borrowing under our auction
rate securities credit facility. The credit facility, which is maintained by a
subsidiary of the financial institution where we hold our investment in auction
rate securities, is collateralized by any balances held in a collateral account
at the subsidiary. The only balances held in the collateral account since the
settlement date are the auction rate securities. The outstanding amounts under
the credit facility may become due and payable upon demand, provided that the
parent financial institution is required, either itself or through an affiliate,
to provide alternative financing on substantially the same terms as soon as
reasonably possible. While the financial institution may repurchase our
investment in auction rate securities prior to June 30, 2010, we intend to put
these auction rate securities back to the financial institution and use the
proceeds to repay the credit facility when permitted by the ARS Rights. As such,
at March 28, 2010, we have classified both the investment in auction rate
securities and auction rate securities credit facility as current.

Notes Reconciling Non-GAAP Financial Information to GAAP Financial Information

To supplement the consolidated financial results prepared in accordance with
Generally Accepted Accounting Principles ("GAAP"), this press release and its
attachments include non-GAAP financial measures that exclude items listed in the
footnotes below. Management excludes these items because it believes that the
non-GAAP measures enhance an investor's overall understanding of Microsemi's
financial performance and future prospects by being more reflective of
Microsemi's core operational activities and to be more comparable with the
results of the Company over various periods. Management uses non-GAAP financial
measures internally for strategic decision making, forecasting future results
and evaluating current performance. Guidance is provided only on a non-GAAP
basis due to the inherent difficulty of forecasting the timing or amount of
certain items that have been excluded from the forward-looking non-GAAP
measures, and a reconciliation to the comparable GAAP guidance has not been
provided because certain factors that are materially significant to Microsemi's
ability to estimate the excluded items are not accessible or estimable on a
forward-looking basis. By disclosing non-GAAP financial measures, management
intends to provide investors with a more meaningful, consistent comparison of
Microsemi's core operating results and trends for the periods presented.
Non-GAAP financial measures are not prepared in accordance with GAAP; therefore,
the information is not necessarily comparable to other companies' financial
information and should be considered as a supplement to, not a substitute for,
or superior to, the corresponding measures calculated in accordance with GAAP.

The items excluded from GAAP financial results in calculating non-GAAP financial
measures, are set forth below:

(a) Restructuring activities involve the closure and consolidation of certain
of our manufacturing facilities. As these facilities are not expected to have a
continuing contribution to operations or are expected to have a diminishing
contribution during the transition phase, management believes excluding such
items from Microsemi's operations provides investors with a means of evaluating
Microsemi's on-going operations. Restructuring activities also include cost
reduction measures to balance our operations to meet customer demand. Inventory
reserves due to restructuring activities and impairment of fixed assets relate
to the exiting of product that do not meet profitability metrics, products with
recent substantial declines in projected demand or actions to improve overall
cost structure. Restructuring and other special charges include severance and
other costs related to facilities in the process of closing or already closed.
Management excludes these expenses when evaluating core operating activities and
for strategic decision making, forecasting future results and evaluating current
performance.

(b) Manufacturing profit in acquired inventory resulted from
purchase-accounting adjustments to increase the value of inventory acquired to
its fair value. As the acquired inventory is sold, the associated manufacturing
profit in acquired inventory increases cost of goods sold and reduces gross
margin. The manufacturing profit in acquired inventory has been excluded to
facilitate comparability of gross margin between periods. In addition,
management excludes the impact of manufacturing profit in acquired inventory in
internal measurements of gross margin as it does not reflect continuing
operations at acquired operations.

(c) While amortization of acquisition related intangible assets is expected to
continue in the future, for internal analysis of Microsemi's operations,
management does not view this expense as reflective of the business' current
performance.

(d) Stock based compensation has been excluded as management excludes these
expenses when evaluating core operating activities and for strategic decision
making, forecasting future results and evaluating current performance.

(e) Amounts are related to expenses from previously disclosed matters and
actions related to the Department of Justice, International Trade Commission and
an independent inquiry conducted by our Board of Directors, as well as gains on
litigation settlement net of settlement costs. Management excludes these
expenses when evaluating core operating activities and for strategic decision
making, forecasting future results and evaluating current performance.

(f) Under recently adopted accounting guidance, direct acquisition costs are
expensed as incurred rather than capitalized into the purchase price of an
acquisition. These costs have been excluded as management excludes these
expenses when evaluating core operating activities and for strategic decision
making, forecasting future results and evaluating current performance.

(g) The tax effect on non-GAAP adjustments represent the difference in the
provision for income taxes that resulted from non-GAAP adjustments to pretax
income and also certain acquisition-related and nondeductible stock-based
compensation items.

CONTACT: Microsemi Corporation
FINANCIAL CONTACT:
John W. Hohener, Executive Vice President and Chief
Financial Officer
INVESTORS:
Robert C. Adams, Vice President of Corporate Development
(949) 221-7100