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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
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Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
July 23, 2004
Date of Report (Date of earliest event reported)
LATTICE SEMICONDUCTOR CORPORATION
Exact name of registrant as specified in its charter)
Delaware 000-18032 93-0835214
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
5555 NE Moore Court
Hillsboro, OR 97124-6421 (503) 268-8000
(Address of principal executive offices) (Registrant's telephone number,
including area code)
Item 7. Exhibits.
(c) Exhibits:
The following exhibit is filed with this report on Form 8-K:
Exhibit No. Description
- ----------- -----------
99.1 Press Release of Lattice Semiconductor Corporation, dated July
22, 2004
Item 9. Regulation FD Disclosure and Disclosure of Results of Operations and
Financial Condition (Item 12)*
The following information and exhibit relating thereto are furnished pursuant to
Items 9 and 12 of this Current Report on Form 8-K:
On July 22, 2004, Lattice Semiconductor Corporation (the "Company") issued a
press release announcing the Company's financial results for the fiscal quarter
ended June 30, 2004. A copy of the press release is attached hereto as Exhibit
99.1.
* The information furnished under Item 9 and Item 12 of this Current Report on
Form 8-K, including Exhibit 99.1, shall not be deemed to be "filed" for the
purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or
otherwise subject to the liabilities of that section.
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99.1 Press Release of Lattice Semiconductor Corporation, dated July
22, 2004.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LATTICE SEMICONDUCTOR CORPORATION
Date: July 23, 2004
By: /s/ Jan Johannessen
--------------------------------
Name: Jan Johannessen
Title: Chief Financial Officer
EXHIBIT 99.1
Lattice Semiconductor Reports Second Quarter Financial Results
HILLSBORO, Ore.--(BUSINESS WIRE)--July 22, 2004--Lattice
Semiconductor Corporation (Nasdaq:LSCC) today announced financial
results for the second quarter ended June 2004.
Revenue for the second quarter was $60.9 million, an increase of
three percent from last quarter's revenue of $59.1 million and up
eight percent from the $56.6 million reported in the same quarter a
year ago.
Quarterly revenue from PLD products was $49.8 million, or 82
percent of total revenue, and grew four percent sequentially.
Quarterly revenue from FPGA products was $11.1 million, or 18 percent
of total revenue, and declined two percent sequentially but increased
24 percent on a year over year basis. Quarterly revenue from New
products, now 16 percent of total revenue, grew 28 percent
sequentially and more than doubled on a year over year basis.
Net loss for the second quarter was $16.0 million ($0.14 per
share). This loss includes a $17.1 million charge for amortization of
intangible assets. Excluding these charges, income for the quarter was
$1.1 million ($0.01 per share). These non-cash amortization charges
have been highlighted as they are not expected to continue at these
levels and are currently expected to be entirely eliminated in 2007.
The Company believes exclusion of these charges more closely
approximates its cash earnings performance. A reconciliation of
non-GAAP income to GAAP loss accompanies the financial tables in this
earnings release.
"Last quarter we made two significant new product announcements,"
stated Cyrus Y. Tsui, chairman and chief executive officer. "First, we
launched the initial wave of our planned next generation FPGA products
with the introduction of the LatticeEC(TM) and LatticeECP-DSP(TM)
families. The first device of these new FPGA families will be
production released during the current quarter, ahead of schedule.
Both FPGA families were designed from the ground up in order to
optimally balance emerging customer requirements in terms of cost,
architectural features and performance. As the FPGA market is rapidly
transitioning from high-priced, low-volume devices to low-priced,
high-volume devices, we believe the timing of these new FPGA product
families is excellent. Second, we entered the timing IC market with
our revolutionary ispClock(TM) family of in-system programmable clock
management devices. Combining our proprietary programmable mixed
signal technology with high-performance programmable logic, ispClock
devices offer an unprecedented level of performance and flexibility in
support of advanced clock network design. We are pleased with the
customer reception to our recent announcements and expect these new
product families to open new avenues of revenue growth for Lattice
during 2005."
Business Outlook -- September 2004 Quarter:
-- Revenue is expected to be flat, plus or minus two percent;
-- Gross margin percentage is expected to be approximately flat;
-- Total operating expenses are expected to be approximately
flat;
-- Intangible asset amortization is expected to decline by
$11.1 million to approximately $6 million; and
-- Other Income is expected to be approximately $3 million.
On July 23, 2004, Lattice will hold a telephone conference call at
5:30 am (Pacific Time) with financial analysts. Investors may listen
to our conference call live via the web at www.lscc.com. Replays of
the call will also be available at www.lscc.com. On September 9, 2004,
we plan to publish a "Business Update Statement" on our website. Our
financial guidance will be limited to the comments on our public
quarterly earnings call and these public business outlook statements.
Additionally, during the September 2004 quarter, Lattice plans to
participate in an investor conference sponsored by Schwab Soundview
Capital. Specific presentation dates and times are posted on our
website at www.lscc.com.
The foregoing paragraphs contain forward-looking statements within
the meaning of the federal securities laws including statements about
future quarterly financial results, revenues, customers, product
offerings and the Company's ability to compete. Investors are
cautioned that actual events and results could differ materially from
these statements as a result of a number of factors, including the
possibility that further accounting adjustments may be required and
the effectiveness of changes to the Company's internal controls, as
well as overall semiconductor market conditions, market acceptance and
demand for the Company's new products, the Company's dependencies on
our silicon wafer suppliers, the impact of competitive products and
pricing, technological and product development risks. 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.
Lattice Semiconductor Corporation, the inventor of in-system
programmable (ISP(TM)) logic products, designs, develops and markets
the broadest range of Field Programmable Gate Arrays (FPGA), Field
Programmable System Chips (FPSCs) and high-performance ISP
Programmable Logic Devices (PLDs), including Complex Programmable
Logic Devices (CPLD), Programmable Analog Components (PAC), and
Programmable Digital Interconnect (GDX). Lattice also offers industry
leading SERDES products. Lattice offers total solutions for today's
system designs by delivering the most innovative programmable silicon
products that embody leading-edge system expertise.
Lattice products are sold worldwide through an extensive network
of independent sales representatives and distributors, primarily to
OEM customers in the communications, computing, industrial and
military end markets. Company headquarters are located at 5555 N.E.
Moore Court, Hillsboro, Oregon 97124 USA. For more information access
our web site at www.latticesemi.com.
Lattice Semiconductor Corporation, L (& design), Lattice (&
design) ISP 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.
Lattice Semiconductor Corporation
Consolidated Statement of Operations
(in thousands, except per share data)
(unaudited)
Three months ended Six months ended
---------------------------- -------------------
June 30, Mar. 31, June 30, June 30, June 30,
Description 2004 2004 2003 2004 2003
- -------------------------------------------------- -------------------
Revenue $60,939 $59,071 $56,575 $120,010 $113,872
Costs and expenses:
Costs of products sold 26,232 24,719 22,993 50,951 46,021
Research and
development 22,599 22,259 21,702 44,858 43,534
Selling, general and
administrative 14,069 13,087 12,614 27,156 25,097
Amortization of
intangible assets
(1)(2) 17,051 18,654 18,687 35,705 39,801
---------------------------- -------------------
Total costs and
expenses 79,951 78,719 75,996 158,670 154,453
---------------------------- -------------------
Loss from operations (19,012) (19,648) (19,421) (38,660) (40,581)
Other income
(expense), net 3,136 3,107 (1,365) 6,243 126
---------------------------- -------------------
Loss before (benefit)
provision for
income taxes (15,876) (16,541) (20,786) (32,417) (40,455)
Provision (benefit)
for income taxes 100 -- (2,554) 100 (2,554)
---------------------------- -------------------
Net loss ($15,976) ($16,541) ($18,232) ($32,517) ($37,901)
============================ ===================
Basic net loss per
share ($0.14) ($0.15) ($0.16) ($0.29) ($0.34)
============================ ===================
Diluted net loss per
share ($0.14) ($0.15) ($0.16) ($0.29) ($0.34)
============================ ===================
Shares used in per
share calculations:
Basic 112,812 112,627 111,507 112,728 111,473
============================ ===================
Diluted (3) 112,812 112,627 111,507 112,728 111,473
============================ ===================
Notes:
(1) Intangible assets subject to amortization aggregate $51.1 million,
net, at June 30, 2004 and relate to the acquisition of Cerdelinx
Technologies, Inc. on August 26, 2002, the acquisition of the FPGA
business of Agere Systems, Inc. on January 18, 2002 and the
acquisition of Integrated Intellectual Property Inc. on March 16,
2001. These intangible assets are amortized to expense generally
over three to seven years on a straight-line basis. Intangible
asset amortization will decline to approximately $5.8 million in
the September 2004 quarter as amortization of intangible assets
related to the June 1999 Vantis acquisition was completed in the
June 2004 quarter.
(2) Includes $1.3 million, $0.8 million and $0.8 million of deferred
stock compensation expense for the quarters ended June 30, 2004,
March 31, 2004 and June 30, 2003, respectively, attributable to
Research and Development activities. Includes $2.1 million, and
$4.1 million of deferred stock compensation expense for the
six-month periods ended June 30, 2004, and June 30, 2003,
respectively, attributable to Research and Development activities.
(3) For all periods presented, the computation of diluted net loss per
share excludes the effect of stock options and our convertible
notes as they are antidilutive.
Lattice Semiconductor Corporation
Consolidated Balance Sheet
(in thousands)
(unaudited)
June 30, Dec. 31,
Description 2004 2003
- ------------------------------------------------------------ ---------
Assets
Current assets:
Cash and short-term investments $310,834 $277,750
Accounts receivable, net 28,937 26,796
Inventories 40,770 46,630
Other current assets 51,118 51,537
--------- ---------
Total current assets 431,659 402,713
Property and equipment, net 51,774 53,800
Foundry investments, advances and other assets 55,733 86,883
Goodwill and other intangible assets, net (1) 274,652 308,232
--------- ---------
$813,818 $851,628
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and other accrued liabilities $28,013 $28,500
Deferred income on sales to distributors 15,939 10,564
Income taxes payable -- 37
--------- ---------
Total current liabilities 43,952 39,101
Zero Coupon Convertible notes due in 2010 184,000 184,000
Other long-term liabilities 23,090 22,415
--------- ---------
207,090 206,415
Stockholders' equity 562,776 606,112
--------- ---------
$813,818 $851,628
========= =========
Note:
(1) At June 30, 2004, includes approximately $223.6 million in
Goodwill and $51.1 million of other intangible assets, net,
related to previous acquisitions. The other intangible assets will
be amortized to expense generally over three to seven years.
Goodwill is not amortized effective with the March 2002 quarter.
Appendix 1
Lattice Semiconductor Corporation
Consolidated Operations Information- Non-GAAP Basis (1)
(in thousands, except per share data)
(unaudited)
Three months ended Six months ended
-------------------------- ------------------
June 30, Mar. 31, June 30, June 30, June 30,
Description 2004 2004 2003 2004 2003
- ----------------------------------------------------------------------
Revenue $60,939 $59,071 $56,575 $120,010 $113,872
Costs and expenses:
Costs of products sold 26,232 24,719 22,993 50,951 46,021
Research and
development 22,599 22,259 21,702 44,858 43,534
Selling, general and
administrative 14,069 13,087 12,614 27,156 25,097
-------------------------- ------------------
Total costs and
expenses 62,900 60,065 57,309 122,965 114,652
-------------------------- ------------------
Loss from operations (1,961) (994) (734) (2,955) (780)
Other income (expense), net 3,136 3,107 (1,365) 6,243 126
-------------------------- ------------------
Income (loss) before
provision (benefit)
for income taxes 1,175 2,113 (2,099) 3,288 (654)
Provision (benefit) for
income taxes 100 -- (2,554) 100 (2,554)
-------------------------- ------------------
Non-GAAP earnings $1,075 $2,113 $455 $3,188 $1,900
========================== ==================
Diluted Non-GAAP earnings
per share (2) $0.01 $0.02 $0.00 $0.03 $0.02
========================== ==================
Shares used in
calculations 114,125 117,795 113,405 115,921 113,268
========================== ==================
Notes:
(1) This table presents operating information which is consistent with
the information reported by First Call, Reuters and Zacks for
Lattice Semiconductor Corporation. A reconciliation to GAAP on a
per share basis is attached as Appendix 2.
(2) For all periods presented, the computation of diluted Non-GAAP
earnings includes the effect of stock options but excludes the
effect of our convertible notes as they are antidilutive.
Appendix 2
Lattice Semiconductor Corporation
Non-GAAP Earnings Reconciliation (1)
(unaudited)
Three months ended Six months ended
-------------------------- ------------------
June 30, Mar. 31, June 30, June 30, June 30,
Description 2004 2004 2003 2004 2003
- ----------------------------------------------------------------------
Net loss ($0.14) ($0.15) ($0.16) ($0.29) ($0.34)
Add:
Amortization of intangible
assets $0.15 $0.17 $0.16 $0.32 $0.36
-------------------------- ------------------
Non-GAAP income $0.01 $0.02 $0.00 $0.03 $0.02
========================== ==================
Notes:
(1) This table reconciles net loss to non-GAAP information, which is
presented in Appendix 1, on a per- share basis.
Appendix 3
LATTICE SEMICONDUCTOR CORPORATION
- Supplemental Historic Financial Information -
(Q2 2004)
Operations Information Q204 Q104 Q203
--------------------------------
Percent of Revenue
Gross Margin 57.0% 58.2% 59.4%
R&D Expense 37.1% 37.7% 38.4%
SG&A Expense 23.1% 22.2% 22.3%
Operating Loss -31.2% -33.3% -34.3%
Operating Loss (Non-GAAP) -3.2% -1.7% -1.3%
Depreciation Expense ($000) 4,366 4,498 4,603
Capital Expenditures ($000) 4,774 2,022 2,504
Balance Sheet Information
Current Ratio 9.8 9.3 13.2
A/R Days Revenue Outstanding 43 40 46
Inventory Months 4.6 5.4 6.3
Revenue % (by Product Family)
FPGA 18% 19% 15%
PLD 82% 81% 85%
Revenue % (by Product Classification (1))
New 16% 13% 8%
Mainstream 43% 43% 41%
Mature 41% 44% 51%
Revenue % (by Geography)
Americas 30% 36% 41%
Europe (incl. Africa) 23% 24% 26%
Asia (incl. ROW) 47% 40% 33%
Revenue % (by End Market)
Communications 51% 53% 52%
Computing 17% 19% 21%
Other 32% 28% 27%
Revenue % (by Channel)
Direct 63% 58% 54%
Distribution 37% 42% 46%
(1) Product Classification:
- ---------------------------
New: FPSC, XPLD, XPGA, GDX2, ORCA 4, ispMACH 4000,
ispMACH 4000 Z, ispPAC-PWR
Mainstream: ORCA 3, GDX/V, ispMACH L/V, ispLSI 2000V, ispLSI 5000V,
ispLSI 8000V, ispMACH 5000VG, Mixed Signal, Software
Mature: ORCA 2, All 5-Volt CPLDs, All SPLDs
CONTACT: Lattice Semiconductor Corporation
Roddy Sloss, 503-268-8000