Lattice Semiconductor Reports Second Quarter 2014 Results
Financial Highlights:
-
Revenue of
$99.3 million , an increase of 2.8% from$96.6 million in 1Q14 and an increase of 17.2% from$84.7 million in 2Q13. -
Net income of
$0.10 per basic and diluted share, compared to net income of$0.10 per basic and diluted share in 1Q14 and net income of$0.04 per basic and diluted share in 2Q13. - Gross margin of 55.4%, compared to 56.0% in 1Q14 and 53.3% in 2Q13.
For the second quarter, revenue was
Net income for the second quarter was
Recent Business Highlights:
- Major Product Launch: Lattice's new iCE40 Ultra™ FPGAs deliver 5x more functionality at 30% smaller size than competing solutions. Lattice has also reduced power by 75% over previous devices. Combined, these enable designers to give their systems more compact form factors and longer battery life, speeding customization of innovative features for mobile devices.
Business Outlook - Third Quarter 2014:
- Revenue is expected to be 8% to 12% lower on a sequential basis.
- Gross margin percentage is expected to be higher at approximately 56% plus or minus 2%.
-
Total operating expenses are expected to be lower by approximately
one million dollars on a sequential basis.
Investor Conference Call / Webcast Details:
A replay of the call will be available approximately two hours after the
conclusion of the live call through
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 continued acceleration of all new products to reaffirm our leadership in providing the lowest power, smallest footprint and affordably innovative programmable solutions; and those statements under the heading “Business Outlook - Third 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 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
About
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, |
March 29, |
June 29, |
June 28, |
June 29, |
||||||||||||||||
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, |
December 28, |
||||||
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 | % | |||||
(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 second quarter of fiscal 2014, the Company condensed its End Market categories. All periods presented have been revised accordingly.
Source:
Lattice Semiconductor Corporation
Joe Bedewi
Chief Financial
Officer
503-268-8000
or
Global IR Partners
David
Pasquale
914-337-8801
lscc@globalirpartners.com