For the fourth quarter, revenue was $50.0 million, a decrease of 13% from the $57.6 million reported in the prior quarter, and a decrease of six percent from the $53.1 million reported in the same quarter a year ago.
FPGA revenue for the fourth quarter was $14.3 million, down 13% from the $16.4 million reported in the prior quarter, and up ten percent from the $13.0 million reported in the same quarter a year ago. PLD revenue for the fourth quarter was $35.7 million, a decrease of 13% from the $41.2 million reported in the prior quarter, and an 11% decrease from the $40.1 million reported in the same quarter a year ago.
For fiscal year 2008, revenue was $222.3 million, a decrease of three percent from the $228.7 million reported in fiscal 2007. Revenue from FPGA products was $57.9 million, an increase of 11% over 2007. Revenue from PLD products was $164.4 million, a decrease of seven percent from 2007.
In the fourth quarter we recorded a charge of $2.0 million to cost of sales for the obsolescence of selected inventory parts.
Other (expense) income, net, for the fourth quarter was an expense of $7.6 million compared to an expense of $1.0 million reported in the prior quarter and income of $1.7 million reported in the same quarter a year ago. Other expense included an impairment charge of $8.0 million and $1.4 million for the fourth and third quarters of fiscal 2008, respectively, related to an other-than-temporary decline in fair value of auction rate securities held in Long-term marketable securities.
For fiscal year 2008, Other (expense) income, net, was an expense of $17.8 million compared to income of $12.5 million in fiscal 2007. Other expense included an impairment charge of $19.7 million related to an other-than-temporary decline in fair value of auction rate securities held in Long-term marketable securities. For fiscal year 2007, Other income included a $2.7 million gain related to the extinguishment of Zero Coupon Convertible Notes and a $1.6 million gain related to the sale of land.
Net loss for the fourth quarter was $14.4 million ($0.12 per share), as compared to a prior quarter net loss of $7.0 million ($0.06 per share), and a net loss of $229.5 million ($1.99 per share) reported in the same quarter a year ago. These results include amortization charges, stock-based compensation expense, restructuring charges, a Goodwill impairment charge and an impairment charge on marketable securities and foundry investments. Excluding these items, non-GAAP net loss for the fourth quarter of 2008 was $3.7 million ($0.03 per share) as compared to non-GAAP net income of $1.4 million ($0.01 per share) for the third quarter of 2008 and non-GAAP net loss of $1.7 million ($0.02 per share) for the same quarter a year ago. The Company believes exclusion of these items more closely approximates its ongoing operational performance.
Net loss for 2008 was $38.2 million ($0.33 per share) as compared to net loss of $239.8 million ($2.09 per share) reported in 2007. These results include amortization charges, gain on debt buyback, stock-based compensation expense, restructuring charges, a Goodwill impairment charge and an impairment charge on marketable securities and foundry investments. Excluding these items, non-GAAP net income for fiscal 2008 was $0.4 million as compared to non-GAAP net loss of $0.2 million for fiscal 2007. The Company believes exclusion of these items more closely approximates its ongoing operational performance.
Bruno Guilmart, Lattice's President and CEO, commented, "Though the direction of the market is unclear, we face it with a solid balance sheet -- with strong liquidity and no debt -- and with a demonstrated ability to manage our cash flow despite revenue challenges. It is our intent to capitalize on this downturn. Our key product lines offer strong value to customers. Our low density, Flash-based family leads the competition by a generation and has versatile features that are broadly attractive. We also offer the lowest power SERDES-capable FPGA family in its class at a robustly competitive price point. We believe our financial strength and product strategy will enable us to come out of this downturn stronger and more competitive."
Business Outlook - March 2009 Quarter:
-- Revenue is expected to be down by 10% to 20% on a sequential basis
-- Gross margin percentage is expected to be approximately 52% to 54% of
revenue
-- Total operating expenses are expected to be approximately $28.0
million
-- Intangible asset amortization is expected to be approximately $0.2
million
-- Interest and other income is expected to be approximately $0.5 million
Discussion of Non-GAAP Financial Measures:
Management evaluates and makes operating decisions using various performance measures. In addition to our GAAP results, we also consider adjusted net (loss) income, which we refer to as non-GAAP net (loss) income. This measure is generally based on the revenue from our products and the costs of those operations, such as cost of products sold, research and development, sales and marketing and general and administrative expenses, that management considers in evaluating our ongoing core operating performance. Non-GAAP net (loss) income excludes goodwill impairment charges, amortization of intangible assets, stock-based compensation, impairment of Long-term marketable securities and Other current assets, restructuring charges and the gain on sale of land. Goodwill impairment relates to an impairment charge recorded in the fourth quarter of fiscal 2007 when it was determined that goodwill related to acquisitions had no implied fair value. Intangible assets relate to assets acquired through acquisitions and consist of technology purchased in connection with the acquisitions. Stock-based compensation charges include expense for items such as stock options and restricted stock units granted to employees and purchases under the employee stock purchase plan. Impairment of Long-term marketable securities relates to an other-than-temporary decline in fair value of our auction rate securities that continue to experience unsuccessful auctions. Impairment of Other current assets relates to an other-than-temporary decline in fair value of common stock of one of our foundry partners. Restructuring charges consist of expenses and subsequent adjustments incurred under corporate restructuring plans that were initiated in the fourth quarter of 2005, the third quarter of 2007 and the third quarter of 2008, and include items such as severance costs, costs to vacate space under long-term lease arrangements, and other related expenses. Gain on sale of land relates to a gain resulting from the sale of real property during the relevant period.
Non-GAAP net (loss) income is a supplemental measure of our performance that is not required by and not presented in accordance with GAAP. Moreover, it should not be considered as an alternative to net loss, operating loss or any other performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities or as a measure of our liquidity. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures contained within this press release with our net loss, which is our most directly comparable GAAP financial result. For more information, see the Consolidated Statement of Operations contained in this earnings release.
Conference Call and Business Update:
On January 29, 2009, Lattice will hold a telephone conference call at 2:00 p.m. (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. Our financial guidance will be limited to the comments on our public quarterly earnings call and these public business outlook statements.
Forward-Looking Statements Notice:
The foregoing paragraphs contain forward-looking statements that involve estimates, assumptions, risks and uncertainties, including statements relating to our business outlook, including statements relating to our solid balance sheet, our ability to manage our cash flow despite revenue challenges, our intention to capitalize on the downturn, our belief that our financial strength and product strategy will enable us to come out of the downturn stronger and more competitive and the statements under the heading "Business Outlook-March 2009 Quarter." Lattice also believes the factors identified below in connection with each such statement could cause actual results to differ materially from the forward-looking statements.
Estimates of future revenue are inherently uncertain due to the high percentage of quarterly "turns" business. In addition, revenue is affected by such factors as current uncertainty in global macroeconomic conditions which may affect customer demand, pricing pressures, competitive actions, the demand for our Mature, Mainstream, and New products, and the ability to supply products to customers in a timely manner. Actual gross margin percentage and operating expenses could vary from the estimates contained herein on the basis of, among other things, changes in revenue levels, changes in product pricing and mix, changes in wafer, assembly and test costs, variations in manufacturing yields, and changes in stock-based compensation charges due to stock price changes. Actual Interest and other income could vary from the estimate contained herein due to adjustments in fair value of our auction rate securities as the result of changes in their underlying collateral, credit rating or continued unsuccessful auctions.
In addition to the foregoing, other factors that may cause actual results
to differ materially from the forward-looking statements herein 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
compromised liquidity of the Company's auction rate securities, the
transition to a new executive management team, and the other risks that are
described herein 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.
