Lattice Semiconductor Reports First Quarter 2014 Results
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Lattice Semiconductor Reports First Quarter 2014 Results

HILLSBORO, OR -- (Marketwired) -- Apr 24, 2014 -- Lattice Semiconductor Corporation (NASDAQ: LSCC)

Financial Highlights:

Lattice Semiconductor Corporation (NASDAQ: LSCC) today announced financial results for the fiscal first quarter ended March 29, 2014.

For the first quarter, revenue was $96.6 million, an increase of nearly 8.0% from $89.5 million reported in the prior quarter, and an increase of 35.7% from the $71.2 million reported in the same quarter a year ago.

Net income for the first quarter was $12.0 million ($0.10 per basic and diluted share), compared to the prior quarter net income of $6.5 million ($0.06 per basic and diluted share) and net income of $1.9 million ($0.02 per basic and diluted share) reported in the same quarter a year ago.

Darin G. Billerbeck, President and Chief Executive Officer, said, "Q1 revenue and net income growth were led by continued momentum in revenue from new products. Consistent with our strategy, we achieved sustained growth in the Consumer market combined with strength in the China communications market, as well as broad market improvement in the European distribution channel. We remain focused on becoming the undisputed leader in providing low cost, low power, small footprint FPGAs to applications where time-to-market is crucial."

Joe Bedewi, Corporate Vice President and Chief Financial Officer, added, "We achieved Q1 revenue growth of nearly 8.0% compared to Q4, realizing five consecutive quarters of sustained growth. Gross margin for the quarter was 56.0%, above our earlier expectations for the quarter. Our increased scale, sustained product cost reductions and favorable mix all contributed to gross margin improvement in the quarter. We ended the first fiscal quarter with a debt-free balance sheet and approximately $219.5 million in cash, cash equivalents and short-term marketable securities."

Recent Business Highlights:

Business Outlook - Second Quarter 2014:

Investor Conference Call / Webcast Details:

Lattice Semiconductor will review the Company's financial results for the first quarter of 2014 and business outlook for the second quarter of 2014 on Thursday, April 24, 2014 at 5:00 p.m. Eastern Time. The conference call-in number is 1-888-286-6281 or 1-706-643-3761 with conference identification number 22510192. A live webcast of the conference call will also be available on Lattice's website at The Company's financial guidance will be limited to the comments on its public quarterly earnings call and the public business outlook statements contained in this press release.

A replay of the call will be available approximately two hours after the conclusion of the live call through 11:59 p.m. Eastern Time on May 8, 2014, by telephone at 1-404-537-3406. To access the replay, use conference identification number 22510192. A webcast replay will also be available on Lattice's investor relations website at

Forward-Looking Statements Notice:

The foregoing paragraphs contain forward-looking statements that involve estimates, assumptions, risks and uncertainties. Such forward-looking statements include statements relating to: our becoming the undisputed leader in providing low cost, low power, small footprint FPGAs to applications where time-to-market is crucial and those statements under the heading "Business Outlook - Second Quarter 2014" relating to expected revenue, gross margin and total operating expenses. Other forward-looking statements may be indicated by words such as "will," "could," "should," "would," "expect," "plan," "anticipate," "intend," "forecast," "believe," "estimate," "predict," "propose," "potential," "continue" or the negative of these terms or other comparable terminology. Lattice believes the factors identified below could cause actual results to differ materially from the forward-looking statements.

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 iCE™, 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 ultra-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 You can also follow Lattice via Twitter, Facebook, or RSS.

Lattice Semiconductor Corporation, Lattice (& design), L (& design), ECP5 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)                    
                                                Three Months Ended          
                                        March 29,  December 28,  March 30,  
                                           2014        2013         2013    
                                       ----------- ------------  ---------- 
Revenue                                $    96,637 $     89,519  $   71,158 
                                       ----------- ------------  ---------- 
Costs and expenses:                                                         
Cost of products sold                       42,499       40,916      33,003 
Research and development                    21,239       22,331      18,114 
Selling, general and administrative         18,749       17,189      16,498 
Acquisition related charges                    737          737         749 
Restructuring                                   11          131         153 
                                       ----------- ------------  ---------- 
                                            83,235       81,304      68,517 
                                       ----------- ------------  ---------- 
Income from operations                      13,402        8,215       2,641 
Other income (loss), net                       309         (540)        (52)
                                       ----------- ------------  ---------- 
Income before provision for income                                          
 taxes                                      13,711        7,675       2,589 
Provision for income taxes                   1,727        1,128         699 
                                       ----------- ------------  ---------- 
Net income                             $    11,984 $      6,547  $    1,890 
                                       =========== ============  ========== 
Net income per share:                                                       
Basic                                  $      0.10 $       0.06  $     0.02 
                                       =========== ============  ========== 
Diluted                                $      0.10 $       0.06  $     0.02 
                                       =========== ============  ========== 
Shares used in per share calculations:                                      
Basic                                      116,436      115,718     115,391 
                                       =========== ============  ========== 
Diluted                                    118,917      117,156     116,714 
                                       =========== ============  ========== 
                      Lattice Semiconductor Corporation                     
                         Consolidated Balance Sheets                        
                               (in thousands)                               
                                                 March 29,     December 28, 
                                                    2014           2013     
                                               -------------- --------------
Current assets:                                                             
Cash, cash equivalents and short-term                                       
 marketable securities                         $      219,515 $      215,815
Accounts receivable, net                               66,674         50,085
Inventories                                            58,180         46,222
Other current assets                                   12,945         13,679
                                               -------------- --------------
Total current assets                                  357,314        325,801
Property and equipment, net                            41,432         41,719
Long-term marketable securities                         5,241          5,241
Other long-term assets                                  5,336          6,120
Intangible assets, net of amortization                 11,747         12,484
Goodwill                                               44,808         44,808
Deferred income taxes                                  10,651         11,703
                                               -------------- --------------
                                               $      476,529 $      447,876
                                               ============== ==============
     Liabilities and Stockholders' Equity                                   
Current liabilities:                                                        
Accounts payable and other accrued liabilities $       51,542 $       51,113
Deferred income and allowances on sales to                                  
 sell-through distributors                             16,980          7,495
                                               -------------- --------------
Total current liabilities                              68,522         58,608
Other long-term liabilities                             3,264          3,588
                                               -------------- --------------
Total liabilities                                      71,786         62,196
Stockholders' equity                                  404,743        385,680
                                               -------------- --------------
                                               $      476,529 $      447,876
                                               ============== ==============
                     Lattice Semiconductor Corporation                      
             - Supplemental Historical Financial Information -              
                                                  Three Months Ended        
                                           3/29/2014  12/28/2013  3/30/2013 
                                           ---------  ----------  --------- 
Operations Information                                                      
  Percent of Revenue                                                        
  Gross Margin                                  56.0%       54.3%      53.6%
  R&D Expense                                   22.0%       24.9%      25.5%
  SG&A Expense                                  19.4%       19.2%      23.2%
  Depreciation and amortization (in                                         
   thousands)                                  5,860       5,634      5,066 
  Capital expenditures (in thousands)          2,395       2,263      3,054 
  Stock compensation expense (in                                            
   thousands)                                  3,090       2,537      1,912 
  Restructuring and severance related                                       
   charges (in thousands)                         90         167        153 
  Taxes paid (cash, in thousands)                380         289        852 
Balance Sheet Information                                                   
  Current Ratio                                  5.2         5.6        5.1 
  A/R Days Revenue Outstanding                    62          50         71 
  Inventory Months                               4.1         3.4        4.0 
Revenue% (by Product Family)                                                
  PLD                                             65%         68%        68%
  FPGA                                            35%         32%        32%
Revenue% (by Product Classification) (1)                                    
  New                                             53%         46%        39%
  Mainstream                                      34%         40%        44%
  Mature                                          13%         14%        17%
Revenue% (by Geography)                                                     
  Asia                                            75%         76%        69%
  Europe (incl. Africa)                           15%         12%        18%
  Americas                                        10%         12%        13%
Revenue% (by End Market) (2)                                                
  Communications                                  41%         41%        39%
  Consumer                                        31%         27%        25%
  Industrial, Scientific, Medical and                                       
   Computing                                      28%         32%        36%
Revenue% (by Channel)                                                       
  Sell-through distribution                       39%         45%        49%
  Direct                                          61%         55%        51%

(1) New: LatticeECP5, MachXO3, LatticeECP3, MachXO2, Power Manager II, and iCE40 Mainstream: ispMACH 4000ZE, ispMACH 4000/Z, LatticeSC, LatticeECP2/M, LatticeXP2, MachXO, ispClock A/D/S, Software and IP Mature: LatticeECP, LatticeXP, ispXPLD, ispXPGA, FPSC, ORCA 2, ORCA 3, ORCA 4, ispPAC, isplsi 8000V, ispMACH 5000B, ispMACH 2LV, ispMACH 5LV, ispLSI 2000V, ispLSI 5000V, ispMACH 5000VG, all 5-volt CPLDs, ispGDX2, GDX/V, ispMACH 4/LV, iCE65, ispClock, Power Manager I, all SPLDs

* Product categories are modified as appropriate relative to our portfolio of products and the generation within each major product family. New products consist of our latest generation of products, while Mainstream and Mature are older or based on unique late stage customer-based production needs. Generally, product categories are adjusted every two to three years, at which time prior periods are reclassified to conform to the new categorization. In the first fiscal quarter 2014 we reclassified our New, Mainstream and Mature product categories to better reflect our current product portfolio.

(2) During the first quarter of fiscal 2014, the Company condensed its End Market categories. All periods presented have been revised accordingly.

For more information contact: 
Joe Bedewi 
Chief Financial Officer 
Lattice Semiconductor Corporation 

David Pasquale 
Global IR Partners