For the first quarter, revenue was $43.3 million, a decrease of 13% from the $50.0 million reported in the prior quarter, and a decrease of 23% from the $56.6 million reported in the same quarter a year ago.
FPGA revenue for the first quarter was $15.5 million, up 9 percent from the $14.3 million reported in the prior quarter, and up 14% from the $13.7 million reported in the same quarter a year ago. PLD revenue for the first quarter was $27.8 million, down 22% from the $35.7 million reported in the prior quarter, and down 35% from the $42.9 million reported in the same quarter a year ago.
Other (expense) income, net, for the first quarter was an expense of $0.5 million compared to an expense of $7.6 million reported in the prior quarter and income of $1.3 million reported in the same quarter a year ago. Other expense included an impairment charge of $0.7 million in the first quarter of 2009 compared to $8.0 million in the fourth quarter of 2008, related to an other-than-temporary decline in fair value of auction rate securities held in Long-term marketable securities.
Net loss for the first quarter was $5.8 million ($0.05 per share), compared to a prior quarter net loss of $14.4 million ($0.12 per share) and a net loss of $3.3 million ($0.03 per share) reported in the same quarter a year ago. These results include intangible asset amortization charges, stock-based compensation expense, restructuring charges and, for the first quarter of fiscal 2009 and fourth quarter of fiscal 2008, an impairment charge on marketable securities. Excluding these items, non-GAAP net loss for the first quarter of 2009 was $3.6 million ($0.03 per share) compared to non-GAAP net loss of $3.7 million ($0.03 per share) for the fourth quarter of 2008 and non-GAAP net income of $1.4 million ($0.01 per share) for the same quarter a year ago.
Bruno Guilmart, Lattice's President and CEO, commented, "In the past quarter we saw strong gains in the Chinese telecom market and our new products actually grew quarter on quarter. However, consistent with the global economic downturn, the balance of our business experienced continued weakness. Despite the drop in revenue and our lack of profitability we did, through careful management, generate $7.5 million of cash from operations. Profitability is still our highest priority and we continue to work on lowering our cost structure. This includes reducing cost out of our supply chain and examining the cost and location of resources we employ compared to the needs of our customers."
Michael G. Potter, Lattice's Corporate Vice President and Chief Financial Officer, added, "I am pleased that we reduced operating expenses 14.8% compared to the same quarter a year before as a result of our 2008 restructuring plan, but as Bruno indicated we will continue to look for and execute on opportunities to further improve our cost structure. In addition, we ended the quarter with $71.4 million of cash and cash equivalents, $60.0 million of other receivables from Fujitsu of which $30.0 million was received shortly after quarter-end and no long term debt. We expect to receive the remaining $30.0 million of other receivables in the fourth quarter of 2009. We believe that our balance sheet will allow us to continue investing and providing our customers with innovative solutions."
First Quarter Business Highlights:
-- Lattice launched the mid-range LatticeECP3 FPGA family that extends
the LatticeECP2M's value proposition of deep memories, powerful DSP blocks
and high data rate SerDes in an economical package by further accommodating
the market's demand for low power devices. The ECP3 is the lowest power
SerDes-enabled FPGA in production today. The ECP3 targets wireless and
wireline applications, and also PCI Express and broadcast video.
-- Lattice introduced the mixed-signal ispClock5400D, an ultra-low noise
clock distribution chip. The 5400D permits overall cost reduction by
enabling use of low cost CMOS oscillators instead of the expensive crystal
oscillators that are traditionally needed by high performance
communications and computing applications.
-- Lattice also re-emphasized our MachXO PLD family through stronger
distributor partnerships and the release of a new low cost evaluation kit
designed to encourage rapid adoption. Since the MachXO's introduction we
have shipped over 15 million devices. The MachXO is a highly versatile
programmable logic solution for those who need a low-density non-volatile
device for general purpose I/O expansion, interface bridging and power-up
management functions. Designed for a broad range of applications, the
MachXO is used in a variety of end markets including consumer, automotive,
communications, computing, industrial and medical.
Business Outlook - June 2009 Quarter:
-- Revenue is expected to be plus or minus 5% on a sequential basis
-- Gross margin percentage is expected to be approximately 50% to 52% of
revenue which includes the estimated effect of costs incurred to
restructure our distribution channels in the Greater China region
-- Total operating expenses are expected to be approximately $27.0
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 amortization of intangible assets, stock-based compensation, impairment of Long-term marketable securities and restructuring charges. 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. 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.
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 April 23, 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 the public business outlook statements contained in this press release.
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, statements relating to our efforts to improve our cost structure, our efforts to reduce cost out of our supply chain, our expectation that we will receive the remaining $30.0 million of other receivables from Fujitsu in the fourth quarter of 2009 and our belief that our balance sheet will allow us to continue investing and providing our customers with innovative solutions and the statements under the heading "Business Outlook-June 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.
We may be unable to improve our cost structure or reduce cost out of our
supply chain. Fujitsu may fail to pay some or all of the remaining
receivable owed to us on a timely basis, if at all. We may be unsuccessful
in utilizing our balance sheet to provide innovative solutions to our
customers, and unexpected events could impair our ability to make expected
investments. 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, the effects of increased
costs incurred to restructure our distribution channel in various regions
including Taiwan and China, and changes in stock-based compensation charges
due to stock price changes.
