[April 30, 2013]

Mindspeed Reports Preliminary Fiscal Second Quarter 2013 Results

Mindspeed Technologies, Inc. (NASDAQ: MSPD), a leading supplier of semiconductor solutions for communications infrastructure applications, today reported preliminary results for its fiscal second quarter of 2013. The preliminary results are subject to change based on the conclusion of goodwill and asset impairment testing being undertaken by Mindspeed. For the quarter ended March 29, 2013, Mindspeed recorded net revenue of $35.4 million, a loss per share of $0.02 on a non-GAAP basis, and a loss per share of $1.00 on a GAAP basis (assuming a preliminary estimate of $33.5 million in goodwill and asset impairment charges, as discussed below).

Revenue from high-performance analog (HPA) products was $15.7 million, or 44 percent of fiscal second quarter 2013 net revenue, and was approximately flat in the same period year-over-year. Revenue from communications processors was $17.1 million, or 49 percent of net revenue, and was approximately flat in the same period year-over-year. Wireless infrastructure revenue contributed $2.6 million in the quarter, or approximately 7 percent of total revenue, and was up 16 percent over the same period year-over-year.

Non-GAAP operating loss for the fiscal second quarter of 2013 was approximately $541,000, compared to a non-GAAP operating loss of $4.9 million for the same period in the prior fiscal year. GAAP operating loss for the fiscal second quarter of 2013 was $39.4 million (assuming preliminarily estimated goodwill and asset impairment charges), compared to a GAAP operating loss of $13.8 million for the same period in the prior fiscal year. Non-GAAP net loss for the fiscal second quarter of 2013 was $978,000, or $0.02 per share, compared to a non-GAAP net loss of $5.2 million, or $0.14 per share, for the same period in the prior fiscal year. GAAP net loss in the fiscal second quarter of 2013 was $40.1 million (assuming preliminarily estimated goodwill and asset impairment charges), or $1.00 per share, compared to a GAAP net loss of $14.2 million, or $0.39 per share, for the same period in the prior fiscal year.

In the fiscal second quarter of 2013, Mindspeed performed a review of its goodwill, long-lived assets and indefinite-lived assets to determine if any of these assets were impaired. As a result of this review, Mindspeed currently estimates that it will record an impairment charge of $33.5 million in the fiscal second quarter of 2013 related to its wireless infrastructure reporting unit. Mindspeed expects the impairment testing to be complete prior to filing its Form 10-Q for the fiscal second quarter of 2013. Final goodwill and asset impairment charges as reflected in the Form 10-Q could differ materially from Mindspeed's preliminary estimates. Any change in goodwill and asset impairment charges would be expected to result in a corresponding change in Mindspeed's GAAP net loss compared to the preliminary results reported today. Revenue, non-GAAP metrics and our cash and cash equivalents balance will not change as a result of any change in the company's current estimates of goodwill and asset impairment charges.

"While we were disappointed with our financial performance in the fiscal second quarter, the weakness was primarily within the 3G wireless market. In turn, we have had to reconsider our views of how and when that market will develop. Our other product lines for high performance analog and communications processors performed consistently with our expectations, and 4G/LTE met our goal of doubling in the quarter," commented Raouf Y. Halim, chief executive officer at Mindspeed. "We believe our diverse product families for HPA, communications processors and wireless infrastructure are well positioned in their respective markets, and we remain committed to maximizing value to our customers, partners, employees and shareholders."

Non-GAAP results exclude preliminary goodwill and asset impairment charges, stock-based compensation and related payroll costs, restructuring charges, acquisition-related costs, amortization of intangible assets and non-cash interest expense on convertible senior notes, among other items. Reconciliations of the non-GAAP measures to GAAP measures are included in the accompanying financial data.

Outlook

Mindspeed forecasts total net product revenue in the fiscal third quarter of 2013 to be approximately flat versus the fiscal second quarter of 2013. The company expects fiscal third quarter of 2013 non-GAAP gross margin to be approximately 60 percent and anticipates non-GAAP operating expenses to be approximately $21.5 million in the fiscal third quarter of 2013.

Fiscal Second Quarter 2013 Conference Call

Mindspeed will conduct a conference call announcing its fiscal second quarter of 2013 results today at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time. To listen to the conference call via telephone, call 877-303-3204 (domestic) or 253-237-1154 (international); password: Mindspeed. To listen via the Internet, please visit the Investors section of Mindspeed's web site at http://www.mindspeed.com. A replay of the conference call will be available via telephone for a period of five days, beginning one hour after the conference call concludes by calling 855-859-2056 (domestic) or 404-537-3406 (international). Conference ID # 30341105 is required to access the replay. The replay will also be available in the Investors section of Mindspeed's web site at http://www.mindspeed.com for a period of thirty days after the call.

About Mindspeed Technologies

Mindspeed Technologies (NASDAQ: MSPD) is a leading provider of network infrastructure semiconductor solutions to the communications industry. The company's low-power system-on-chip (SoC) products are helping to drive video, voice and data applications in worldwide fiber-optic networks and enable advanced processing for 3G and long-term evolution (LTE) mobile networks. The company's high-performance analog products are used in a variety of optical, enterprise, industrial and video transport systems. Mindspeed's products are sold to original equipment manufacturers (OEMs) around the globe.

To learn more, please visit www.mindspeed.com. Company news and updates are also posted at www.twitter.com/mindspeed.

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 below under the heading "Reconciliation of Non-GAAP Measures to GAAP Measures." Investors are encouraged to review the accompanying press release reconciliations. We believe the presentation of non-GAAP measures provides investors with additional insight into underlying operating results and prospects for the future by excluding our preliminary estimates of goodwill and asset impairments, as well as stock-based compensation and related payroll costs, profit in acquired inventory, amortization of acquired intangible assets, non-recurring legal and settlement costs, employee separation costs, acquisition-related costs, integration costs, revaluation of contingent consideration, purchase price adjustments, restructuring charges and/or non-cash interest expense on our convertible senior notes. We have historically reported similar financial measures and believe that the inclusion of comparative numbers provides consistency in our financial reporting.

We also discuss certain non-GAAP measures excluding patent sales as a supplement to financial results based on GAAP. The sale of patents in the fiscal first quarter of 2013 impacted our net revenue, gross margin, operating income and net income.

We use non-GAAP gross margin, research and development expenses, selling, general and administrative expenses, operating expenses, operating income, other expense, net, net income and net income 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.

We exclude stock-based compensation and related payroll costs and non-cash interest expense on our convertible senior notes from non-GAAP measures because we believe that excluding these costs can enhance the understanding of our performance. We exclude profit in acquired inventory to facilitate comparability of gross profit between periods and to better reflect continuing operations of the acquired company. We exclude employee separation costs, non-recurring legal and settlement costs, restructuring charges, acquisition-related costs, and integration costs because they include significant discrete items that may not be indicative of our ongoing operations or economic performance. Similarly, we have excluded our preliminary estimates of goodwill and asset impairment charges related to our wireless infrastructure reporting unit because they involve non-cash items that relate to historic imputed valuations of the reporting unit's business and assets and are not indicative of its operating or economic performance.

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 restructuring charges, employee separation costs and stock-based compensation and related payroll costs.

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 goodwill and asset impairments, stock-based compensation and related payroll costs, profit in acquired inventory, amortization of acquired intangible assets, non-recurring legal and settlement costs, employee separation costs, restructuring charges, acquisition-related costs, integration costs, revaluation of contingent consideration and non-cash interest expense on our convertible senior notes, 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.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include statements regarding our expectations, goals or intentions, including, but not limited to: our market positions in HPA, communications processors and wireless infrastructure; our current expectations for fiscal third quarter 2013 net product revenue, non-GAAP gross margin and non-GAAP operating expenses; and our preliminary estimates of impairment charges related to our wireless infrastructure reporting unit. These forward-looking statements are based on management's current expectations, estimates, forecasts and projections 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. In particular, we are continuing to conduct testing relating to goodwill and asset impairment charges in our wireless infrastructure reporting unit. The charges included in the financial statements we have provided in this press release are preliminary and subject to change. The final impairment charges reported in our Form 10-Q for the fiscal second quarter of 2013 could differ materially from the preliminary estimates that we announced today. Any increase in the amount of impairment charges would result in a corresponding increase in our net losses for the fiscal second quarter of 2013. In addition, our business is subject to numerous risks and uncertainties that could adversely affect investors in our securities, including fluctuations in our operating results and the potential for future operating losses; loss of or diminished demand from one or more key distributors; our ability to successfully develop and introduce new products; pricing pressures; whether we continue to sustain losses and consume cash in our operations; and the potential for intellectual property or other litigation. Additional risks and uncertainties that could cause our actual results to differ from those set forth in any forward-looking statements are discussed in more detail under the caption "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended September 28, 2012, our most recent Quarterly Report on Form 10-Q and our future filings with the SEC.

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