Lattice Semiconductor Reports Second Quarter 2013 Results; 19% Sales Increase Produces Record Revenue Quarter
HILLSBORO, OR -- (Marketwired) --
Financial Highlights:
- Revenue of
$84.7 million , an increase of 19.0% from$71.2 million in 1Q13 and an increase of 19.6% from$70.8 million in 2Q12. - Net income of
$0.04 per basic and diluted share, compared to net income of$0.02 per basic and diluted share in 1Q13 and a net loss of$0.11 per diluted share in 2Q12.- Gross margin of 53.3%, compared to 53.6% in 1Q13 and 52.3% in 2Q12.
- 2Q13 operating expenses of
$38.1 million , compared to operating expenses of$35.5 million in 1Q13 and$39.8 million in 2Q12. 2Q13 operating expenses included$1.4 million in R&D variable cost related to program timing,$0.7 million in variable spending primarily related to sales increases. 2Q13 financial results included a$1.9 million ($0.02 per basic and diluted share) income tax expense and$0.7 million of amortization expense from acquired intangibles.
For the second quarter, revenue was
Net income for the second quarter was
Recent Business Highlights:
- Signed Global Distribution Agreement with
Future Electronics : Lattice and Future jointly announced the companies have entered into an agreement wherebyFuture Electronics is now authorized to sell Lattice's complete portfolio of innovative low power, low cost FPGA, CPLD and programmable power management design solutions worldwide. This partnership will allow Lattice to expand its technically focused, global distribution network with Future's demand creation expertise and vast global footprint. - Introduced New Automotive Grade FPGAs to Accelerate Affordable Innovation: Lattice introduced AEC-Q100-certified "Lattice Automotive (LA)" devices in its award-winning LatticeECP3™ FPGA family. The six new devices leverage Lattice's expertise in low power, small size, and cost optimized FPGAs to deliver programmable technology that can be used for all classes of automobile, as well as automotive aftermarket products. The world's smallest automotive qualified FPGA with SERDES enables designers to rethink the automobile to improve fuel efficiency, safety, and access to entertainment.
Business Outlook -
- Revenue is expected to be flat plus or minus 2% on a sequential basis.
- Gross margin percentage is expected to be approximately 52% plus or minus 2%.
- Total operating expenses are expected to be approximately
$36.9 million , including approximately$0.8 million of expenses associated with our Q3San Jose office move.
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: rebounding of the broader communications market in
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
About
Lattice is a service-driven developer of innovative low cost, low power programmable design solutions. For more information about how our FPGA, CPLD and programmable power management devices help our customers unlock their innovation, visit www.latticesemi.com. You can also follow us via Twitter,
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 29, 2013 | March 30, 2013 | June 30, 2012 | June 29, 2013 | June 30, 2012 | |||||||||||
| Revenue | $ | 84,694 | $ | 71,158 | $ | 70,792 | $ | 155,852 | $ | 142,492 | |||||
| Costs and expenses: | |||||||||||||||
| Cost of products sold | 39,584 | 33,003 | 33,741 | 72,587 | 65,956 | ||||||||||
| Research and development | 20,267 | 18,114 | 19,363 | 38,381 | 38,509 | ||||||||||
| Selling, general and administrative | 17,072 | 16,498 | 19,405 | 33,570 | 37,328 | ||||||||||
| Acquisition related charges (1) | 737 | 749 | 982 | 1,486 | 2,689 | ||||||||||
| Restructuring (2) | 19 | 153 | 87 | 172 | 643 | ||||||||||
| 77,679 | 68,517 | 73,578 | 146,196 | 145,125 | |||||||||||
| Income (loss) from operations | 7,015 | 2,641 | (2,786 | ) | 9,656 | (2,633 | ) | ||||||||
| Other (expense) income, net | (54 | ) | (52 | ) | 694 | (106 | ) | 758 | |||||||
| Income (loss) before provision for income taxes | 6,961 | 2,589 | (2,092 | ) | 9,550 | (1,875 | ) | ||||||||
| Provision for income taxes (3) | 1,921 | 699 | 10,450 | 2,620 | 18,381 | ||||||||||
| Net Income (loss) | $ | 5,040 | $ | 1,890 | $ | (12,542 | ) | $ | 6,930 | $ | (20,256 | ) | |||
| Net Income (loss) per share (4): | |||||||||||||||
| Basic | $ | 0.04 | $ | 0.02 | $ | (0.11 | ) | $ | 0.06 | $ | (0.17 | ) | |||
| Diluted | $ | 0.04 | $ | 0.02 | $ | (0.11 | ) | $ | 0.06 | $ | (0.17 | ) | |||
| Shares used in per share calculations (4): | |||||||||||||||
| Basic | 115,733 | 115,391 | 117,874 | 115,562 | 118,024 | ||||||||||
| Diluted | 117,109 | 116,714 | 117,874 | 116,935 | 118,024 | ||||||||||
| ______________________ |
| Notes: |
| (1) | During the first six months of fiscal 2012, the Company recorded consulting, legal costs, severance related integration costs and amortization of intangible assets associated with the acquisition of SiliconBlue. During the first six months of 2013, Acquisition related charges consist of amortization of acquired intangible assets. | |
| (2) | Represents costs and adjustments incurred primarily related to the corporate restructuring plans announced on October 12, 2012 and April 21, 2011. | |
| (3) | The tax provision for the three and six months ended June 30, 2012 reflects our new global tax structure and the resulting intercompany sale of inventory and fixed assets. | |
| (4) | For the three and six month periods in fiscal 2012, the computation of diluted earnings per share excludes the effects of stock options, restricted stock units and ESPP shares as they are antidilutive. For the three and six month periods in fiscal 2013, the computation of diluted earnings per share includes the effects of stock options and restricted stock units as they are dilutive. ESPP shares are included if dilutive. | |
| Lattice Semiconductor Corporation | ||||||
| Consolidated Balance Sheets | ||||||
| (in thousands) | ||||||
| (unaudited) | ||||||
| June 29, 2013 |
December 29, 2012 | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash, cash equivalents and short-term marketable securities | $ | 174,224 | 183,401 | |||
| Accounts receivable, net | 63,605 | 46,947 | ||||
| Inventories | 49,654 | 44,194 | ||||
| Other current assets (1) | 13,342 | 12,527 | ||||
| Total current assets | 300,825 | 287,069 | ||||
| Property and equipment, net | 41,733 | 40,384 | ||||
| Long-term marketable securities | 4,717 | 4,717 | ||||
| Other long-term assets | 8,503 | 6,854 | ||||
| Intangible assets, net of amortization | 13,957 | 15,430 | ||||
| Goodwill | 44,808 | 44,808 | ||||
| Deferred income taxes (1) | 13,757 | 15,357 | ||||
| $ | 428,300 | $ | 414,619 | |||
| Liabilities and Stockholders' Equity | ||||||
| Current liabilities: | ||||||
| Accounts payable and other accrued liabilities | $ | 42,013 | 42,540 | |||
| Deferred income and allowances on sales to sell-through distributors | 13,890 | 10,553 | ||||
| Total current liabilities | 55,903 | 53,093 | ||||
| Other long-term liabilities (1) | 5,222 | 3,976 | ||||
| Total liabilities | 61,125 | 57,069 | ||||
| Stockholders' equity | 367,175 | 357,550 | ||||
| $ | 428,300 | $ | 414,619 | |||
| ______________________ |
| Notes: |
| (1) | In June 2013 the company early adopted, with retrospective application, the requirements of ASU 2013-11 Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. Accordingly, previous periods have been revised to conform with current period presentation. This resulted in both long-term taxes payable and deferred tax assets declining by approximately $14 million for all periods presented. | |
| Lattice Semiconductor Corporation | ||||||
| - Supplemental Historical Financial Information - | ||||||
| 2Q13 | 1Q13 | 2Q12 | ||||
| Operations Information | ||||||
| Percent of Revenue | ||||||
| Gross Margin | 53.3% | 53.6% | 52.3% | |||
| R&D Expense | 23.9% | 25.5% | 27.4% | |||
| SG&A Expense | 20.2% | 23.2% | 27.4% | |||
| Depreciation and amortization (in thousands) | 4,894 | 5,066 | 5,243 | |||
| Capital expenditures (in thousands) | 3,783 | 3,054 | 4,632 | |||
| Stock compensation expense (in thousands) | 2,513 | 1,912 | 2,054 | |||
| Restructuring and severance related charges (in thousands) | 19 | 153 | 1,493 | |||
| Taxes paid (cash, in thousands) | 104 | 852 | 53 | |||
| Balance Sheet Information | ||||||
| Current Ratio | 5.4 | 5.1 | 5.8 | |||
| A/R Days Revenue Outstanding | 68 | 71 | 77 | |||
| Inventory Months | 3.8 | 4.0 | 3.3 | |||
| Revenue% (by Product Family) | ||||||
| PLD | 69% | 68% | 65% | |||
| FPGA | 31% | 32% | 35% | |||
| Revenue% (by Product Classification) (1) | ||||||
| New | 46% | 39% | 20% | |||
| Mainstream | 42% | 47% | 60% | |||
| Mature | 12% | 14% | 20% | |||
| Revenue% (by Geography) | ||||||
| Asia | 74% | 69% | 70% | |||
| Europe (incl. Africa) | 14% | 18% | 17% | |||
| Americas | 12% | 13% | 13% | |||
| Revenue% (by End Market) (2) | ||||||
| Communications | 38% | 39% | 46% | |||
| Industrial & Other | 23% | 26% | 33% | |||
| Computing | 8% | 10% | 13% | |||
| Consumer | 31% | 25% | 8% | |||
| Revenue% (by Channel) | ||||||
| Sell-through distribution | 44% | 49% | 56% | |||
| Direct | 56% | 51% | 44% | |||
| (1) | New: LatticeECP3, MachXO2, Power Manager II, and iCE40 Mainstream: ispMACH 4000ZE, ispMACH 4000/Z, LatticeSC, LatticeECP2/M, LatticeECP, LatticeXP2, LatticeXP, MachXO, ispClock A/D/S, Software and IP Mature: 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 2012 we reclassified our New, Mainstream and Mature product categories to better reflect our current product portfolio. | ||
| (2) | During the first quarter of 2013, the Company refined its methodology for assigning revenue to End Market categories. All periods presented have been revised to conform to this methodology. | |
For more information contact:
Chief Financial Officer
503-268-8000
Global IR Partners
914-337-8801
lscc@globalirpartners.com
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