Lattice Semiconductor Reports Second Quarter 2014 Results

Estimates of future revenue are inherently uncertain due to, among other things, the high percentage of quarterly “turns” business. In addition, revenue is affected by such factors as global economic conditions, which may affect customer demand, pricing pressures, competitive actions, the demand for our Mature, Mainstream and New products, and in particular our iCE40™, MachXO™ and LatticeECP3™ devices, the ability to supply products to customers in a timely manner, changes in our distribution relationships, or the volatility of our consumer business. Actual gross margin percentage and operating expenses could vary from the estimates on the basis of, among other things, changes in revenue levels, changes in product pricing and mix, changes in wafer, assembly, test and other costs, including commodity costs, variations in manufacturing yields, the failure to sustain operational improvements, the actual amount of compensation charges due to stock price changes. Any unanticipated declines in revenue or gross margin, any unanticipated increases in our operating expenses or unanticipated charges could adversely affect our profitability.

In addition to the foregoing, other factors that may cause actual results to differ materially from the forward-looking statements in this press release include global economic uncertainty, overall semiconductor market conditions, market acceptance and demand for our new products, the Company's dependencies on its silicon wafer suppliers, the impact of competitive products and pricing, technological and product development risks, and the other risks that are described in this press release and that are otherwise described from time to time in our filings with the Securities and Exchange Commission. The Company does not intend to update or revise any forward-looking statements, whether as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

About Lattice Semiconductor:

Lattice Semiconductor (NASDAQ: LSCC) is the world's leading provider of low-power programmable IC solutions for makers of smartphones, mobile handheld devices, small-cell networking equipment, industrial control, automotive infotainment, and much more. With more than 1 billion units sold over the past 10 years, Lattice ships more FPGAs, CPLDs and Power Management solutions than any other programmable solutions vendor. For more information, visit www.latticesemi.com. You can also follow Lattice via Twitter, Facebook, or RSS.

Lattice Semiconductor Corporation, Lattice (& design), L (& design), iCE40 Ultra, iCE40, MachXO and LatticeECP3 and specific product designations are either registered trademarks or trademarks of Lattice Semiconductor Corporation or its subsidiaries in the United States and/or other countries.

GENERAL NOTICE: Other product names used in this publication are for identification purposes only and may be trademarks of their respective holders.

 
Lattice Semiconductor Corporation
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
   
Three Months Ended Six Months Ended

June 28,
2014

 

March 29,
2014

 

June 29,
2013

June 28,
2014

 

June 29,
2013

Revenue $ 99,320   $ 96,637   $ 84,694   $ 195,957   $ 155,852  
Costs and expenses:
Cost of products sold 44,345 42,499 39,584 86,844 72,587
Research and development 22,302 21,239 20,267 43,541 38,381

Selling, general and administrative

18,832 18,749 17,072 37,581 33,570
Acquisition related charges 737 737 737 1,474 1,486
Restructuring 3   11   19   14   172  
86,219   83,235   77,679   169,454   146,196  
Income from operations 13,101 13,402 7,015 26,503 9,656
Other income (loss), net 906   309   (54 ) 1,215   (106 )
Income before provision for income taxes 14,007 13,711 6,961 27,718 9,550
Provision for income taxes 2,236   1,727   1,921   3,963   2,620  
Net income $ 11,771   $ 11,984   $ 5,040   $ 23,755   $ 6,930  
 
Net income per share:
Basic $ 0.10   $ 0.10   $ 0.04   $ 0.20   $ 0.06  
Diluted $ 0.10   $ 0.10   $ 0.04   $ 0.20   $ 0.06  
 
Shares used in per share calculations:
Basic 117,904   116,436   115,733   117,170   115,562  
Diluted 120,944   118,917   117,109   120,041   116,935  
 
 
Lattice Semiconductor Corporation
Consolidated Balance Sheets
(in thousands)
(unaudited)
   

June 28,
2014

December 28,
2013

Assets
Current assets:
Cash, cash equivalents and short-term marketable securities $ 247,037 $ 215,815
Accounts receivable, net 66,289 50,085
Inventories 59,270 46,222
Other current assets 13,857   13,679
Total current assets 386,453 325,801
 
Property and equipment, net 41,132 41,719
Long-term marketable securities 5,241
Other long-term assets 8,921 6,120
Intangible assets, net of amortization 11,011 12,484
Goodwill 44,808 44,808
Deferred income taxes 9,325   11,703
$ 501,650   $ 447,876
 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and other accrued liabilities $ 48,274 $ 51,113
Deferred income and allowances on sales to sell-through distributors 23,631   7,495
Total current liabilities 71,905 58,608
 
Other long-term liabilities 7,195   3,588
Total liabilities 79,100 62,196
 
Stockholders' equity 422,550   385,680
$ 501,650   $ 447,876
 
 

Lattice Semiconductor Corporation

- Supplemental Historical Financial Information -

   
Three Months Ended Six Months Ended
6/28/2014   3/29/2014   6/29/2013 6/28/2014   6/29/2013
Operations Information
Percent of Revenue
Gross Margin 55.4 % 56.0 % 53.3 % 55.7 % 53.4 %
R&D Expense 22.5 % 22.0 % 23.9 % 22.2 % 24.6 %
SG&A Expense 19.0 % 19.4 % 20.2 % 19.2 % 21.5 %
Depreciation and amortization (in thousands) 5,773 5,860 4,894 11,633 9,962
Capital expenditures (in thousands) 2,480 2,395 3,783 4,875 6,837
Stock compensation expense (in thousands) 3,320 3,090 2,513 6,410 4,423
Restructuring and severance related charges (in thousands) 403 90 19 493 172
Taxes paid (cash, in thousands) 418 380 104 798 956
Balance Sheet Information
Current Ratio 5.4 5.2 5.4
A/R Days Revenue Outstanding 60 62 68
Inventory Months 4.0 4.1 3.8
Revenue% (by Product Family)
PLD 65 % 65 % 69 % 65 % 69 %
FPGA 35 % 35 % 31 % 35 % 31 %
Revenue% (by Product Classification) (1)
New 50 % 53 % 46 % 51 % 43 %
Mainstream 38 % 34 % 40 % 36 % 42 %
Mature 12 % 13 % 14 % 13 % 15 %
Revenue% (by Geography)
Asia 74 % 75 % 74 % 75 % 72 %
Europe (incl. Africa) 16 % 15 % 14 % 15 % 16 %
Americas 10 % 10 % 12 % 10 % 12 %
Revenue% (by End Market) (2)
Communications 44 % 41 % 38 % 43 % 38 %
Consumer 26 % 31 % 31 % 28 % 28 %
Industrial 30 % 28 % 31 % 29 % 34 %
Revenue% (by Channel)
Sell-through distribution 42 % 39 % 44 % 40 % 46 %
Direct 58 % 61 % 56 % 60 % 54 %
 




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