Mindspeed (MSPD) 8-K Mindspeed(R) Reports Fiscal 2009 Second Quarter Results

Exhibit 99.1

Mindspeed(R) Reports Fiscal 2009 Second Quarter Results

Mindspeed Guides Third Quarter Product Revenues Up 13% to 21% Sequentially

NEWPORT BEACH, CA--(Marketwire - April 27, 2009) - Mindspeed Technologies, Inc. (NASDAQ: MSPD), a leading supplier of semiconductor solutions for network infrastructure applications, today reported results for the second quarter of fiscal 2009, which ended on April 3, 2009.

Revenues for the second quarter of fiscal 2009 were $28.5 million and were at the high end of the company's updated guidance range provided on March 18, 2009. Revenues for the second quarter declined sequentially by 7 percent from revenues of $30.7 million in the first quarter of fiscal 2009. Excluding patent sales, product revenues for the second quarter of fiscal 2009 declined by 4 percent sequentially.

The company's non-GAAP gross margin was $17.7 million, or 62 percent of revenues, for the second quarter of fiscal 2009, which included a 3 percent net benefit from patent sales. This is compared to the company's non-GAAP gross margin of $21.2 million, or 69 percent of revenues, for the first quarter of fiscal 2009, which included a 3 percent net benefit from patent sales. Presented on a GAAP basis, gross margin for the second quarter of fiscal 2009 was $14.0 million, or 49 percent of revenues, compared to $21.0 million, or 68% of revenues, for the first quarter of fiscal 2009. GAAP gross margin for the second quarter of fiscal 2009 included asset impairments of $3.7 million, primarily related to the assets of Ample Communications, Inc., which the company had previously acquired. The Ample assets are part of the company's WAN Carrier Ethernet business, of which Nortel Networks was the largest customer.

Consistent with the company's updated guidance, total non-GAAP operating expenses for the second quarter of fiscal 2009 were $23.2 million, down sequentially from the first quarter of fiscal 2009 level of $23.6 million. Total GAAP operating expenses for the second quarter of fiscal 2009 were $28.4 million and included asset impairments of $2.4 million related to the Ample assets and $1.7 million in restructuring charges related to the company's cost reduction efforts. Total GAAP operating expenses for the first quarter of fiscal 2009 were $26.8 million.

Non-GAAP operating loss for the second quarter of fiscal 2009 was $5.5 million compared to a non-GAAP operating loss of $2.4 million for the first quarter of fiscal 2009. On a GAAP basis, the operating loss for the second quarter of fiscal 2009 was $14.4 million compared to an operating loss of $5.8 million for the first quarter of fiscal 2009.

The company's non-GAAP net loss for the second quarter of fiscal 2009 was $5.7 million, or $0.24 per share. This compares to the non-GAAP net loss for the first quarter of fiscal 2009 of $3.0 million, or $0.13 per share. Presented on a GAAP basis, the company reported a net loss of $14.6 million, or $0.62 per share, for the second quarter of fiscal 2009, which includes, among other items, restructuring charges of $1.7 million and impairment charges of approximately $5.8 million related to the Ample assets. This compares to a GAAP net loss of $3.5 million, or $0.15 per share, for the first quarter of fiscal 2009. Reconciliations of the non-GAAP measures to GAAP measures are included in the accompanying financial data.

Excluding patent sales, revenues from multiservice access voice-over-IP (VoIP) processor solutions contributed 41 percent of second quarter fiscal 2009 product revenues and were flat sequentially, while revenues from high-performance analog products decreased 22 percent sequentially from the prior quarter and represented 31 percent of product revenues. Wide area networking communication revenues contributed the remaining 28 percent of second quarter fiscal 2009 product revenues and increased 18 percent sequentially.

Commentary

"Our 2009 second fiscal quarter was a tough quarter on many fronts, but we began to see positive business trends in the second half of the last quarter, which are continuing into our current quarter, particularly in China, where we are seeing strong demand for fiber-to-the-building (FTTB) and 3G wireless infrastructure," said Raouf Y. Halim, Mindspeed's chief executive officer.

Outlook

Mindspeed expects fiscal 2009 third quarter revenues to grow between 13 and 21 percent, or to between $30.0 million and $32.0 million, from the fiscal 2009 second quarter, excluding patent sales in both periods. The company expects fiscal 2009 third quarter non-GAAP gross margin to be approximately 62 percent, excluding any potential patent sales. As a result of cost reduction actions initiated in the last two quarters, the company expects to reduce quarterly non-GAAP operating expenses to approximately $21.1 million in the fiscal third quarter of 2009, a reduction of 9 percent from the fiscal second quarter 2009 level of $23.2 million. Third quarter fiscal 2009 non-GAAP operating expense of $21.1 million would represent the lowest operating expense level in the company's history. Mindspeed also expects to reduce its cash consumption in the third quarter of fiscal 2009 by approximately 50 percent from the second quarter of fiscal 2009.

Second Quarter Fiscal 2009 Conference Call

Mindspeed will conduct a conference call announcing its second quarter of fiscal 2009 results on Monday, April 27, 2009, at 2:00 p.m. Pacific Time/5:00 p.m. Eastern Time.

To listen to the conference call via telephone, call 800-593-9968 (domestic) or 210-795-2680 (international); password: Mindspeed. To listen via the Internet, please visit the Investors section of Mindspeed's website at http://investors.mindspeed.com. Replay of the conference will be available via telephone one hour after it concludes for 30 days by calling 888-566-0613 (domestic) or 203-369-3075 (international). Replay will also be available on Mindspeed's website at http://investors.mindspeed.com.

About Mindspeed Technologies®

Mindspeed Technologies, Inc. designs, develops and sells semiconductor networking solutions for communications applications in enterprise, access, metropolitan and wide-area networks. The company's three key product families include high-performance analog transmission and switching solutions, multiservice access voice-over-IP processors designed to support voice and data services across wireline and wireless networks and WAN communication products such as T/E carrier transmission devices and ATM/MPLS network processors.

Mindspeed's products are used in a wide variety of network infrastructure equipment, including voice and media gateways, high-speed routers, switches, access multiplexers, cross-connect systems, add-drop multiplexers and digital loop carrier equipment.

To learn more, visit us at www.mindspeed.com.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include statements regarding the company's expectations, goals or intentions, including but not limited to, statements under the headings "Commentary" and "Outlook" regarding positive business trends, industry and economic cycles and trends, expected levels of revenues, gross margin, operating expenses and cash consumption and the source and amount of savings from and timing of cost reduction and restructuring measures. These forward-looking statements are based on management's current expectations, estimates, forecasts and projections about the company and are subject to risks and uncertainties that could cause actual results and events to differ materially from those stated in the forward-looking statements. These risks and uncertainties include, but are not limited to: cash requirements and terms and availability of financing; future operating losses; worldwide political and economic uncertainties, and specific conditions in the markets we address; fluctuations in the price of our common stock and our operating results; loss of or diminished demand from one or more key customers or distributors; our ability to attract and retain qualified personnel; constraints in the supply of wafers and other product components from our third-party manufacturers; doing business internationally; pricing pressures and other competitive factors; successful development and introduction of new products; our ability to successfully and cost effectively establish and manage operations in foreign jurisdictions; industry consolidation; order and shipment uncertainty; our ability to obtain design wins and develop revenues from them; lengthy sales cycles; the expense of and our ability to defend our intellectual property against infringement claims by others; product defects and bugs; possible future asset impairments; and business acquisitions and investments. Risks and uncertainties that could cause the company's actual results to differ from those set forth in any forward-looking statement are discussed in more detail under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the company's Quarterly Report on Form 10-Q for the quarter ended January 2, 2009, as well as similar disclosures in the company's subsequent SEC filings. Forward-looking statements contained in this press release are made only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

MINDSPEED TECHNOLOGIES, INC.

Consolidated Condensed Statements of Operations

(unaudited, in thousands, except per share amounts)

	Three months ended									Six months ended
	Apr. 3,			Jan. 2,			Mar. 28,			Apr. 3,			Mar. 28,
	2009			2009			2008			2009			2008
Net revenues:
Product	$	26,533		$	27,731		$	34,548		$	54,264		$	67,199
Intellectual property		2,000			3,000			1,700			5,000			4,350
Total net revenues		28,533			30,731			36,248			59,264			71,549
Cost of goods sold:
Cost of goods sold, excluding asset impairments (a)(b)		10,863			9,749			11,799			20,612			22,141
Asset impairments (c)		3,667			—			—			3,667			—
Total cost of goods sold (a)(b)(c)		14,530			9,749			11,799			24,279			22,141
Gross margin		14,003			20,982			24,449			34,985			49,408
Operating expenses:
Research and development (a)		13,100			13,344			13,704			26,444			27,422
Selling, general and administrative (a)		10,702			11,123			11,674			21,825			23,180
Special charges (d)		4,582			2,305			93			6,887			174
Total operating expenses		28,384			26,772			25,471			55,156			50,776
Operating loss		(14,381	)		(5,790	)		(1,022	)		(20,171	)		(1,368	)
Other (expense) income, net		(18	)		2,332			(750	)		2,314			(1,151	)
Loss before income taxes		(14,399	)		(3,458	)		(1,772	)		(17,857	)		(2,519	)
Provision for income taxes		172			90			65			262			147
Net loss	$	(14,571	)	$	(3,548	)	$	(1,837	)	$	(18,119	)	$	(2,666	)
Net loss per share, basic	$	(0.62	)	$	(0.15	)	$	(0.08	)	$	(0.77	)	$	(0.12	)
Weighted-average number of shares used in basic per share computation (e)		23,573			23,407			23,045			23,490			22,900

(a) Includes stock-based compensation expense and employer taxes on stock-based compensation.

(b) Cost of goods sold includes the favorable effect of sales of certain inventories written down to a zero cost basis during fiscal 2001. The favorable effect of such sales, by quarter, was approximately $0.3 million (April 2009), $0.6 million (January 2009) and $0.4 million (March 2008).   For the six months ended April 3, 2009 and March 28, 2008, the favorable effect of such sales was $1.0 million and $0.9 million.

(c) Asset impairments include the write-down of the carrying value of technology developed by Ample Communications, Inc., which was previously acquired by the company ($2.3 million), certain Ample related inventory ($1.0 million) and certain manufacturing related fixed assets ($0.3 million).

(d) Special charges consist of tangible and intangible asset impairments and restructuring charges.

(e)   Per share information has been adjusted to reflect the 1-for-5 reverse stock split which the company effected on June 30, 2008.

MINDSPEED TECHNOLOGIES, INC.

Reconciliation of Non-GAAP Measures to GAAP Measures

(unaudited, in thousands, except per share amounts)

	Three Months Ended									Six Months Ended
	Apr. 3,			Jan. 2,			Mar. 28,			Apr. 3,			Mar. 28,
	2009			2009			2008			2009			2008
Reconciliation of Non-GAAP Gross Margin to GAAP Gross Margin
Non-GAAP gross margin	$	17,684		$	21,173		$	24,597		$	38,857		$	49,795
Items excluded from non-GAAP gross margin:
Stock-based compensation		14			35			(2	)		49			78
Employer taxes on stock-based compensation		—			1			—			1			4
Amortization of intangible assets (f)		—			155			150			155			305
Asset impairments (g)		3,667			—			—			3,667			—
Gross margin	$	14,003		$	20,982		$	24,449		$	34,985		$	49,408
Reconciliation of Non-GAAP Operating Expenses to GAAP Operating Expenses
Non-GAAP operating expenses	$	23,233		$	23,565		$	24,037		$	46,798		$	47,278
Items excluded from non-GAAP operating expenses:
Stock-based compensation		513			932			1,249			1,445			2,823
Employer taxes on stock-based compensation		2			4			50			6			143
Amortization of intangible assets (f)		—			—			—			—			100
Employee separation costs (h)		(69	)		(15	)		42			(84	)		258
Special charges (i)		4,582			2,305			93			6,887			174
Reverse stock split costs (j)		—			(19	)		—			(19	)		—
Employee option exchange costs (k)		123			—			—			123			—
Operating expenses	$	28,384		$	26,772		$	25,471		$	55,156		$	50,776
Reconciliation of Non-GAAP Operating Income/(Loss) to GAAP Operating Loss
Non-GAAP operating income/(loss)	$	(5,549	)	$	(2,392	)	$	560		$	(7,941	)	$	2,517
Items excluded from non-GAAP operating income/(loss):
Stock-based compensation		527			967			1,247			1,494			2,901
Employer taxes on stock-based compensation		2	��		5			50			7			147
Amortization of intangible assets (f)		—			155			150			155			405
Asset impairments (g)		3,667			—			—			3,667			—
Employee separation costs (h)		(69	)		(15	)		42			(84	)		258
Special charges (i)		4,582			2,305			93			6,887			174
Reverse stock split costs (j)		—			(19	)		—			(19	)		—
Employee option exchange costs (k)		123			—			—			123			—
Operating loss	$	(14,381	)	$	(5,790	)	$	(1,022	)	$	(20,171	)	$	(1,368	)
Reconciliation of Non-GAAP Net Income/( Loss) to GAAP Net Loss
Non-GAAP net income/(loss)	$	(5,739	)	$	(3,030	)	$	(255	)	$	(8,769	)	$	1,219
Items excluded from non-GAAP net income/(loss):
Stock-based compensation		527			967			1,247			1,494			2,901
Employer taxes on stock-based compensation		2			5			50			7			147
Amortization of intangible assets (f)		—			155			150			155			405
Asset impairments (g)		3,667			—			—			3,667			—
Employee separation costs (h)		(69	)		(15	)		42			(84	)		258
Special charges (i)		4,582			2,305			93			6,887			174
Reverse stock split costs (j)		—			(19	)		—			(19	)		—
Employee option exchange costs (k)		123			—			—			123			—
Gain on debt extinguishment (l)		—			(2,880	)		—			(2,880	)		—
Net loss	$	(14,571	)	$	(3,548	)	$	(1,837	)	$	(18,119	)	$	(2,666	)
Reconciliation of Non-GAAP Net Income/(Loss) Per   Share to GAAP Net Loss Per Share
Loss per share, basic:
Non-GAAP net income/(loss) (m)	$	(0.24	)	$	(0.13	)	$	(0.01	)	$	(0.37	)	$	0.05
Adjustments (m)		(0.38	)		(0.02	)		(0.07	)		(0.40	)		(0.17	)
Net loss (m)	$	(0.62	)	$	(0.15	)	$	(0.08	)	$	(0.77	)	$	(0.12	)

(f)   Amortization of intangible assets reflects amortization expense on purchased intangibles from the acquisition of certain of the assets of Ample in the fourth quarter of fiscal 2007.

(g)  Asset impairments include the write-down of the carrying value of technology developed by Ample ($2.3 million), certain Ample related inventory ($1.0 million) and certain manufacturing related fixed assets ($0.3 million).

(h)  Employee separation costs consist of severance benefits payable to certain former employees of the company as a result   of organizational changes.

(i)   Special charges consist of asset impairments and restructuring charges.

(j)   Reverse stock split costs consist of the costs incurred to effect and account for the reverse stock split.

(k)  Employee option exchange costs consist of the costs incurred to implement and account for the employee option exchange program.

(l)   Gain on debt extinguishment represents the gain we recorded in connection with extinguishing portions of our convertible debt instrument.

(m) Per share information has been adjusted to reflect the 1-for-5 reverse stock split which the company effected on June 30, 2008.

Non-GAAP Measures

We provide non-GAAP measures as a supplement to financial results based on GAAP. A detailed reconciliation of the non-GAAP results to the most directly comparable GAAP measures is set forth above under the heading "Reconciliation of Non-GAAP Measures to GAAP Measures." Investors are encouraged to review this reconciliation. We believe the presentation of non-GAAP measures provides investors with additional insight into underlying operating results and prospects for the future by excluding stock-based compensation and related employer taxes, asset impairments, amortization of intangible assets, employee separation costs, costs related to our reverse stock split and employee option exchange program, the effects of special charges such as asset impairments and restructuring charges and/or gain on extinguishment of debt. We have historically reported similar financial measures and believe that the inclusion of comparative numbers provides consistency in our financial reporting.

We use non-GAAP gross margin, operating expenses, operating income/(loss), net income/(loss) and net income/(loss) per share internally to evaluate our operating performance and to determine certain components of management compensation. In addition, we use these non-GAAP measures for internal budgets and forecasts. We believe that these non-GAAP measures can be useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making.

Non-GAAP gross margin excludes stock-based compensation expense, employer taxes on stock-based compensation, amortization of intangible assets and asset impairments. Non-GAAP operating expenses exclude stock-based compensation expense, employer taxes on stock-based compensation, amortization of intangible assets, employee separation costs, special charges, reverse stock split costs and employee option exchange costs. Non-GAAP operating income/(loss) excludes stock-based compensation expense, employer taxes on stock-based compensation, amortization of intangible assets, asset impairments, employee separation costs, special charges, reverse stock split costs and employee option exchange costs. Non-GAAP net income/(loss) and non-GAAP net income/(loss) per share exclude stock-based compensation expense, employer taxes on stock-based compensation, amortization of intangible assets, asset impairments, employee separation costs, special charges, reverse stock split costs, employee option exchange costs and gain on extinguishment of debt.

As a result of our adoption of SFAS 123R, "Share-Based Payment" in the first quarter of fiscal 2006, our GAAP statements of operations for periods beginning in fiscal year 2006 include stock-based compensation expense. We believe that excluding stock-based compensation and employer taxes on stock-based compensation from non-GAAP measures facilitates a comparison of our results with prior periods and can enhance the understanding of our performance. We exclude the amortization of intangible assets and asset impairments from non-GAAP measures because we believe it provides a helpful perspective on our operating performance. We exclude employee separation costs, costs related to our reverse stock split and costs related to our employee option exchange program because they include significant discrete items that may not be indicative of our ongoing operations or economic performance. We exclude special charges from non-GAAP measures because it includes restructuring charges, asset impairments and other significant discrete items that may not be indicative of our ongoing operations and economic performance. We exclude gain on debt extinguishment because it is considered by management to be outside our core operating activities.

We do not provide forward-looking GAAP measures or a reconciliation of the forward-looking non-GAAP measures to GAAP measures because of our inability to project special charges, asset impairments, employee separation costs and stock-based compensation related expenses.

The non-GAAP financial measures we provide have certain limitations because they do not reflect all of the costs associated with the operation of our business as determined in accordance with GAAP. The non-GAAP measures are in addition to, and not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. We endeavor to compensate for the limitations of these non-GAAP measures by providing GAAP financial statements, descriptions of the reconciling items and a reconciliation of the non-GAAP measures to the most directly comparable GAAP measures so that investors can appropriately incorporate the non-GAAP measures and their limitations into their analyses. For complete information on stock-based compensation and related employer taxes, amortization of intangible assets, asset impairments, our reverse stock split, our employee option exchange program, employee separation costs, special charges and gain on extinguishment of debt, please see our financial statements and "Management's Discussion and Analysis of Results of Operations and Financial Condition" that will be included in the periodic report we expect to file with the SEC with respect to the financial periods discussed herein.

MINDSPEED TECHNOLOGIES, INC.

Consolidated Condensed Balance Sheets

(unaudited, in thousands)

	Apr. 3,		Oct. 3,
	2009		2008
ASSETS
Current Assets
Cash and cash equivalents	$	14,568	$	43,033
Receivables, net		7,161		14,398
Inventories		14,205		16,187
Prepaid expenses and other current assets		2,539		3,138
Total current assets		38,473		76,756
Property, plant and equipment, net		11,963		12,600
Intangible assets, net		—		4,909
License agreements		6,361		3,347
Other assets		2,739		2,992
Total assets	$	59,536	$	100,604
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	7,454	$	11,265
Deferred income on sales to distributors		3,745		4,869
Accrued compensation and benefits		5,875		6,778
Restructuring		1,827		8
Convertible senior notes – short term		10,433		—
Other current liabilities		3,828		3,559
Total current liabilities		33,162		26,479
Convertible senior notes – long term		15,000		45,648
Other liabilities		697		519
Total liabilities		48,859		72,646
Stockholders' equity		10,677		27,958
Total liabilities and stockholders' equity	$	59,536	$	100,604

MINDSPEED TECHNOLOGIES, INC.

Consolidated Condensed Statements of Cash Flows

(unaudited, in thousands)

	Six months ended
	Apr. 3,			Mar. 28,
	2009			2008
Cash Flows From Operating Activities
Net loss	$	(18,119	)	$	(2,666	)
Adjustments required to reconcile net loss to the net
cash provided by (used in) operating activities, net of effects of acquisitions:
Depreciation and amortization		3,124			3,115
Asset impairments		5,498			—
Restructuring charges		4,022			—
Stock compensation		1,494			3,027
Inventory provisions		1,279			(1,064	)
Gain on debt extinguishment		(2,880	)		—
Other non-cash items, net		170			258
Changes in assets and liabilities:
Receivables		7,245			(3,917	)
Inventories		703			6,425
Accounts payable		(5,662	)		1,265
Deferred income on sales to distributors		(1,124	)		(716	)
Restructuring		(1,937	)		—
Accrued expenses and other current liabilities		(1,378	)		147
Other		291			2,335
Net cash (used in) provided by operating activities		(7,274	)		8,209
Cash Flows From Investing Activities
Capital expenditures		(3,592	)		(4,127	)
Acquisition of assets, net of cash acquired		—			(1,172	)
Net cash used in investing activities		(3,592	)		(5,299	)
Cash Flows From Financing Activities
Extinguishment of convertible debt		(17,320	)		—
Debt issuance costs		(256	)		—
Exercise of options and warrants		—			111
Net cash (used in) provided by financing activities		(17,576	)		111
Effect of foreign currency exchange rates on cash		(23	)		(127	)
Net (decrease) increase in cash and cash equivalents		(28,465	)		2,894
Cash and cash equivalents at beginning of period		43,033			25,796
Cash and cash equivalents at end of period	$	14,568		$	28,690

MINDSPEED TECHNOLOGIES, INC.

Selected Corporate Data

(unaudited, in thousands)

	Three months ended									Six months ended
	Apr. 3,			Jan. 2,			Mar. 28,			Apr. 3,			Mar. 28,
	2009			2009			2008			2009			2008
Gross margin %		49	%		68	%		67	%		59	%		69	%
Cash provided by (used in):
Operating activities	$	(4,007	)	$	(3,267	)	$	3,421		$	(7,274	)	$	8,209
Investing activities		(1,417	)		(2,175	)		(2,131	)		(3,592	)		(5,299	)
Financing activities		(12	)		(17,564	)		10			(17,576	)		111
Effect of foreign currency on cash		(26	)		3			(124	)		(23	)		(127	)
Net increase (decrease) in cash	$	(5,462	)	$	(23,003	)	$	1,176		$	(28,465	)	$	2,894
Depreciation	$	1,271		$	1,303		$	1,202		$	2,574		$	2,400
Capital expenditures		1,186			1,784			984			2,970			2,310
Revenues by region:
Americas	$	8,734		$	12,319		$	12,462		$	21,053		$	26,088
Europe		3,533			3,481			5,620			7,014			9,624
Asia-Pacific		16,266			14,931			18,166			31,197			35,837
	$	28,533		$	30,731		$	36,248		$	59,264		$	71,549
Revenues by product line:
Multiservice access DSP products	$	10,781		$	10,789		$	11,365		$	21,570		$	19,457
High-performance analog products		8,162			10,519			10,154			18,681			20,728
WAN communications products		7,590			6,423			13,029			14,013			27,014
Total net product revenues		26,533			27,731			34,548			54,264			67,199
Intellectual property		2,000			3,000			1,700			5,000			4,350
Total net revenues	$	28,533		$	30,731		$	36,248		$	59,264		$	71,549

Contact:

Andrea Williams

Mindspeed Technologies, Inc.

(949) 579-3111