Lattice Semiconductor Reports First Quarter 2016 Results
First Quarter 2016 Financial Highlights*:
-
Revenue of
$96.5 million on both a GAAP and non-GAAP basis. -
Net loss of
$19.7 million or$0.17 per basic and diluted share on a GAAP basis, and$1.0 million or$0.01 per basic and diluted share on a non-GAAP basis. -
Operating expenses of
$70.5 million on a GAAP basis, and$51.9 million on a non-GAAP basis. - Gross margin of 59.2% on a GAAP basis and 60.0% on a non-GAAP basis.
* For a reconciliation of GAAP to non-GAAP results, see accompanying tables "Reconciliation of U.S. GAAP to Non-GAAP Financial Measures."
The Company reported revenues on a GAAP basis for the first quarter of
2016 of
Net loss for the first quarter on a GAAP basis was
Recent Business Highlights
- Expands Award-Winning MachXO3™ Product Family of FPGAs: Lattice announced the addition of the MachXO3L-9400 and MachXO3LF-9400 devices offer a 35% increase in LUTs and 15% more I/Os, while continuing to deliver on the promise of offering the lowest cost per I/O device. Built in response to customer demand, the new devices bring expanded I/O and logic support for control PLD applications, while increased on-chip memory improves picture clarity for low cost video bridging in large monitor applications. The MachXO3 family targets the server, communications, industrial and display markets.
-
World’s Most Power-Efficient 4K Video Solution Over USB Type-C:
MediaTek andLattice Semiconductor jointly released power-efficient reference designs that drive 4K UHD over a USB Type-C connector to deliver next-generation, low power video reference designs specifically for the growing 4K UHD, smartphone and accessory markets. -
Launched Multi-Gigabit Baseband Processor for Wireless Fiber
Applications:
Lattice Semiconductor's new baseband processor, the SB6541, combined with RF transceivers built on the Company's SiBEAM™ technology can deliver multi-gigabit speeds in the 60 GHz frequency band, to offer the industry’s first comprehensive solution for wireless access and backhaul markets. The high throughput architecture supports high sustained data rates required by advanced mobile and wireless access networks.
Business Outlook - Second Quarter 2016:
-
Revenue for the second quarter of 2016 is expected to be between
approximately
$97 million and$103 million . - Gross margin percentage for the second quarter of 2016 is expected to be approximately 57.0% plus or minus 2% on a non-GAAP basis.
-
Total operating expenses, excluding acquisition or restructuring
related charges, are expected to be approximately
$47.5 million plus or minus 3% on a non-GAAP basis for the second quarter of 2016.
Investor Conference Call / Webcast Details:
A replay of the call will be available approximately 2 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. Any statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. Such forward-looking statements include statements relating to: our expectation that the first quarter will represent a low point in revenue for the year, followed by a healthy uptick in the second half of 2016; that we are firmly on track to outpace expected overall industry growth; our expectation for the planned second half ramp of wins at major consumer OEM’s; our expectation that we are benefiting from diversification of Greenfield markets, as we build on the high value, high performance proposition only Lattice is delivering to customers; our belief that gross margin will be more in-line with our long-term, mid-50’s percent target, as the revenue contribution from our consumer business again rebounds during the year; and those statements under the heading “Business Outlook - Second Quarter 2016” 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,” “may,” “expect,” “plan,” “project,” “anticipate,” “intend,” “forecast,” “future,” “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™ and MachXO3L™ 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, the failure to achieve the anticipated benefits and synergies of
the Silicon Image transaction. In addition, actual results are subject
to other risks and uncertainties that relate more broadly to our overall
business, including those risks more fully described in Lattice’s
filings with the
You should not unduly rely on forward-looking statements because actual results could differ materially from those expressed in any forward-looking statements. In addition, any forward-looking statement applies only as of the date on which it is made. 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.
Non-GAAP Financial Measures:
Included within this press release and the accompanying tables and notes are non-GAAP financial measures that supplement the Company's consolidated financial information prepared under GAAP. The Company describes these non-GAAP financial measures and reconciles them to the most directly comparable GAAP measures in the tables and notes attached to this press release. The Company's management believes that these non-GAAP measures provide a more meaningful representation of the Company’s ongoing financial performance than GAAP measures alone. In addition, the Company uses Adjusted EBITDA to measure compliance with certain of its debt covenants. These non-GAAP measures are included solely for informational and comparative purposes and are not meant as a substitute for GAAP and should be considered together with the consolidated financial information located in the tables attached to this press release.
About
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|
Lattice Semiconductor Corporation Consolidated Statements of Operations (in thousands, except per share data) (unaudited) |
||||||||||||
| Three Months Ended | ||||||||||||
|
April 2, |
January 2, |
April 4, |
||||||||||
| Revenue | $ | 96,512 | $ | 101,194 | $ | 88,597 | ||||||
| Costs and expenses: | ||||||||||||
| Cost of sales | 39,408 | 47,092 | 40,765 | |||||||||
| Research and development | 32,608 | 32,055 | 27,642 | |||||||||
| Selling, general and administrative | 23,608 | 24,253 | 21,088 | |||||||||
| Amortization of acquired intangible assets | 8,721 | 8,756 | 2,942 | |||||||||
| Restructuring charges | 5,431 | 3,459 | 4,894 | |||||||||
| Acquisition related charges | 94 | 372 | 18,198 | |||||||||
| Impairment of goodwill and intangible assets | — | 21,655 | — | |||||||||
| 109,870 | 137,642 | 115,529 | ||||||||||
| Loss from operations | (13,358 | ) | (36,448 | ) | (26,932 | ) | ||||||
| Interest expense | (4,960 | ) | (5,519 | ) | (1,611 | ) | ||||||
| Other income (expense), net | 817 | 515 | (139 | ) | ||||||||
| Loss before income taxes and equity in net loss of an unconsolidated affiliate | (17,501 | ) | (41,452 | ) | (28,682 | ) | ||||||
| Income tax expense | 1,900 | 3,510 | 24,665 | |||||||||
| Equity in net loss of an unconsolidated affiliate, net of tax | (310 | ) | (492 | ) | — | |||||||
| Net loss | $ | (19,711 | ) | $ | (45,454 | ) | $ | (53,347 | ) | |||
| Net loss per share: | ||||||||||||
| Basic | $ | (0.17 | ) | $ | (0.38 | ) | $ | (0.46 | ) | |||
| Diluted | $ | (0.17 | ) | $ | (0.38 | ) | $ | (0.46 | ) | |||
| Shares used in per share calculations: | ||||||||||||
| Basic | 118,833 | 118,095 | 116,863 | |||||||||
| Diluted | 118,833 | 118,095 | 116,863 | |||||||||
|
Lattice Semiconductor Corporation Consolidated Balance Sheets (in thousands) (unaudited) |
|||||||
|
April 2, 2016 |
January 2, 2016 |
||||||
| Assets | |||||||
| Current assets: | |||||||
|
Cash, cash equivalents and short-term marketable securities |
$ | 116,474 | $ | 102,574 | |||
| Accounts receivable, net | 84,399 | 88,471 | |||||
| Inventories | 82,598 | 75,896 | |||||
| Other current assets | 17,030 | 18,922 | |||||
| Total current assets | 300,501 | 285,863 | |||||
| Property and equipment, net | 53,318 | 51,852 | |||||
| Intangible assets, net of amortization | 153,675 | 162,583 | |||||
| Goodwill | 269,766 | 267,549 | |||||
| Deferred income taxes | 578 | 578 | |||||
| Other long-term assets | 15,791 | 17,495 | |||||
| $ | 793,629 | $ | 785,920 | ||||
| Liabilities and Stockholders' Equity | |||||||
| Current liabilities: | |||||||
|
Accounts payable and other accrued liabilities |
$ | 96,835 | $ | 83,761 | |||
| Current portion of long-term debt | 2,308 | 7,557 | |||||
|
Deferred income and allowances on sales to sell-through
distributors and deferred |
26,607 | 19,859 | |||||
| Total current liabilities | 125,750 | 111,177 | |||||
| Long-term debt | 335,485 | 330,870 | |||||
| Other long-term liabilities | 41,226 | 38,353 | |||||
| Total liabilities | 502,461 | 480,400 | |||||
| Stockholders' equity | 291,168 | 305,520 | |||||
| $ | 793,629 | $ | 785,920 | ||||
|
Lattice Semiconductor Corporation - Supplemental Historical Financial Information - (unaudited) |
|||||||||
| Three Months Ended | |||||||||
|
April 2, 2016 |
January 2, 2016 |
April 4, 2015 |
|||||||
| Operations Information | |||||||||
| Percent of Revenue | |||||||||
| Gross Margin | 59.2 | % | 53.5 | % | 54.0 | % | |||
| R&D Expense | 33.8 | % | 31.7 | % | 31.2 | % | |||
| SG&A Expense | 24.5 | % | 24.0 | % | 23.8 | % | |||
| Depreciation and amortization (in thousands) | 17,331 | 17,892 | 7,904 | ||||||
| Capital expenditures (in thousands) | 5,700 | 6,624 | 2,878 | ||||||
| Stock-based compensation (in thousands) | 4,556 | 4,788 | 3,384 | ||||||
|
Stock-based compensation included in acquisition related charges
(in |
— | — | 3,891 | ||||||
|
Restructuring and severance related charges (in thousands) |
5,431 | 3,459 | 4,894 | ||||||
|
Severance costs included in acquisition related charges (in thousands) |
— | — | 4,017 | ||||||
| Taxes paid (cash, in thousands) | 2,496 | 2,936 | 1,063 | ||||||
| Balance Sheet Information | |||||||||
| Current Ratio | 2.4 | 2.6 | 2.9 | ||||||
| A/R Days Revenue Outstanding | 80 | 80 | 82 | ||||||
| Inventory Months | 6.3 | 4.8 | 5.9 | ||||||
| Revenue% (by Geography) | |||||||||
| Asia | 68 | % | 75 | % | 70 | % | |||
| Europe (incl. Africa) | 17 | % | 12 | % | 19 | % | |||
| Americas | 15 | % | 13 | % | 11 | % | |||
| Revenue% (by End Market) (1) | |||||||||
| Communications and Computing | 34 | % | 35 | % | 45 | % | |||
| Mobile and Consumer | 26 | % | 30 | % | 22 | % | |||
| Industrial and Automotive | 31 | % | 23 | % | 30 | % | |||
| Licensing and Services | 9 | % | 12 | % | 3 | % | |||
| Revenue% (by Channel) | |||||||||
| Sell-through distribution | 53 | % | 44 | % | 48 | % | |||
| Direct | 47 | % | 56 | % | 52 | % | |||
(1) During the first quarter of fiscal 2016, the Company realigned its End Market categories; prior periods have been reclassified to match current period presentation.
|
Lattice Semiconductor Corporation - Reconciliation of U.S. GAAP to Non-GAAP Financial Measures - (in thousands, except per share data) (unaudited) |
||||||||||||
| Three Months Ended | ||||||||||||
|
April 2, 2016 |
January 2, 2016 |
April 4, 2015 |
||||||||||
| GAAP Revenue | $ | 96,512 | $ | 101,194 | $ | 88,597 | ||||||
| Fair value adjustment to deferred revenue from purchase accounting | — | 96 | 1,809 | |||||||||
| Non-GAAP Revenue | $ | 96,512 | $ | 101,290 | $ | 90,406 | ||||||
| GAAP Cost of products sold | $ | 39,408 | $ | 47,092 | $ | 40,765 | ||||||
| Fair value adjustment to deferred revenue from purchase accounting | — | — | 644 | |||||||||
| Inventory step-up expense | (523 | ) | (716 | ) | (3,041 | ) | ||||||
| Stock-based compensation - gross margin | (259 | ) | (372 | ) | (240 | ) | ||||||
| Non-GAAP Cost of products sold | $ | 38,626 | $ | 46,004 | $ | 38,128 | ||||||
| GAAP Gross margin | $ | 57,104 | $ | 54,102 | $ | 47,832 | ||||||
| Fair value adjustment to deferred revenue from purchase accounting | — | 96 | 1,165 | |||||||||
| Inventory step-up expense | 523 | 716 | 3,041 | |||||||||
| Stock-based compensation - gross margin | 259 | 372 | 240 | |||||||||
| Non-GAAP Gross margin | $ | 57,886 | $ | 55,286 | $ | 52,278 | ||||||
| Non-GAAP Gross margin % | 60.0 | % | 54.6 | % | 57.8 | % | ||||||
| GAAP Operating expenses | $ | 70,462 | $ | 90,550 | $ | 74,764 | ||||||
| Amortization of acquired intangible assets | (8,721 | ) | (8,756 | ) | (2,942 | ) | ||||||
| Restructuring charges | (5,431 | ) | (3,459 | ) | (4,894 | ) | ||||||
| Acquisition related charges (1) | (94 | ) | (372 | ) | (18,198 | ) | ||||||
| Impairment of goodwill and intangible assets | — | (21,655 | ) | — | ||||||||
| Stock-based compensation - operations | (4,297 | ) | (4,416 | ) | (3,144 | ) | ||||||
| Non-GAAP Operating expenses | $ | 51,919 | $ | 51,892 | $ | 45,586 | ||||||
| GAAP Loss from operations | $ | (13,358 | ) | $ | (36,448 | ) | $ | (26,932 | ) | |||
| Fair value adjustment to deferred revenue from purchase accounting | — | 96 | 1,165 | |||||||||
| Inventory step-up expense | 523 | 716 | 3,041 | |||||||||
| Stock-based compensation - gross margin | 259 | 372 | 240 | |||||||||
| Amortization of acquired intangible assets | 8,721 | 8,756 | 2,942 | |||||||||
| Restructuring charges | 5,431 | 3,459 | 4,894 | |||||||||
| Acquisition related charges (1) | 94 | 372 | 18,198 | |||||||||
| Impairment of goodwill and intangible assets | — | 21,655 | — | |||||||||
| Stock-based compensation - operations | 4,297 | 4,416 | 3,144 | |||||||||
| Non-GAAP Income from operations | $ | 5,967 | $ | 3,394 | $ | 6,692 | ||||||
(1) Includes stock-based compensation and severance costs related to change in control.
| Lattice Semiconductor Corporation | ||||||||||||
| - Reconciliation of U.S. GAAP to Non-GAAP Financial Measures - | ||||||||||||
| (in thousands, except per share data) | ||||||||||||
| (unaudited) | ||||||||||||
| Three Months Ended | ||||||||||||
|
April 2, 2016 |
January 2, 2016 |
April 4, 2015 |
||||||||||
|
GAAP Loss before income taxes and equity in net loss of an |
$ | (17,501 | ) | $ | (41,452 | ) | $ | (28,682 | ) | |||
| Fair value adjustment to deferred revenue from purchase accounting | — | 96 | 1,165 | |||||||||
| Inventory step-up expense | 523 | 716 | 3,041 | |||||||||
| Stock-based compensation - gross margin | 259 | 372 | 240 | |||||||||
| Amortization of acquired intangible assets | 8,721 | 8,756 | 2,942 | |||||||||
| Restructuring charges | 5,431 | 3,459 | 4,894 | |||||||||
| Acquisition related charges (1) | 94 | 372 | 18,198 | |||||||||
| Impairment of goodwill and intangible assets | — | 21,655 | — | |||||||||
| Stock-based compensation - operations | 4,297 | 4,416 | 3,144 | |||||||||
|
Non-GAAP Income (loss) before income taxes and equity in net
loss of |
$ | 1,824 | $ | (1,610 | ) | $ | 4,942 | |||||
| GAAP Income tax expense | $ | 1,900 | $ | 3,510 | $ | 24,665 | ||||||
| Non-cash income tax expense | 596 | (574 | ) | (23,602 | ) | |||||||
| Non-GAAP Income tax expense | $ | 2,496 | $ | 2,936 | $ | 1,063 | ||||||
| GAAP Net Loss | $ | (19,711 | ) | $ | (45,454 | ) | $ | (53,347 | ) | |||
| Fair value adjustment to deferred revenue from purchase accounting | — | 96 | 1,165 | |||||||||
| Inventory step-up expense | 523 | 716 | 3,041 | |||||||||
| Stock-based compensation - gross margin | 259 | 372 | 240 | |||||||||
| Amortization of acquired intangible assets | 8,721 | 8,756 | 2,942 | |||||||||
| Restructuring charges | 5,431 | 3,459 | 4,894 | |||||||||
| Acquisition related charges (1) | 94 | 372 | 18,198 | |||||||||
| Impairment of goodwill and intangible assets | — | 21,655 | — | |||||||||
| Stock-based compensation - operations | 4,297 | 4,416 | 3,144 | |||||||||
| Non-cash income tax expense | (596 | ) | 574 | 23,602 | ||||||||
| Non-GAAP Net (loss) income | $ | (982 | ) | $ | (5,038 | ) | $ | 3,879 | ||||
(1) Includes stock-based compensation and severance costs related to change in control.
| Lattice Semiconductor Corporation | ||||||||||||
| - Reconciliation of U.S. GAAP to Non-GAAP Financial Measures - | ||||||||||||
| (in thousands, except per share data) | ||||||||||||
| (unaudited) | ||||||||||||
| Three Months Ended | ||||||||||||
|
April 2, |
January 2, |
April 4, |
||||||||||
| GAAP Net loss per share - basic | $ | (0.17 | ) | $ | (0.38 | ) | $ | (0.46 | ) | |||
| Cumulative effect of Non-GAAP adjustments | 0.16 | 0.34 | 0.49 | |||||||||
| Non-GAAP Net (loss) income per share - basic | $ | (0.01 | ) | $ | (0.04 | ) | $ | 0.03 | ||||
| GAAP Net loss per share - diluted | $ | (0.17 | ) | $ | (0.38 | ) | $ | (0.46 | ) | |||
| Cumulative effect of Non-GAAP adjustments | 0.16 | 0.34 | 0.49 | |||||||||
| Non-GAAP Net (loss) income per share - diluted | $ | (0.01 | ) | $ | (0.04 | ) | $ | 0.03 | ||||
| Shares used in per share calculations: | ||||||||||||
| Basic | 118,833 | 118,095 | 116,863 | |||||||||
| Diluted - GAAP | 118,833 | 118,095 | 116,863 | |||||||||
| Diluted - Non-GAAP | 118,833 | 118,095 | 120,049 | |||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20160509006406/en/
Source:
Global IR Partners
David Pasquale, 914-337-8801
lscc@globalirpartners.com