Lattice Semiconductor Reports Fourth Quarter and Full Year 2023 Results
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Lattice Semiconductor Reports Fourth Quarter and Full Year 2023 Results

- Record Full Year 2023 Revenue of $737 Million, up 12% Year Over Year

HILLSBORO, Ore. — (BUSINESS WIRE) — February 12, 2024 — Lattice Semiconductor Corporation (NASDAQ: LSCC), the low power programmable leader, announced financial results today for the fiscal fourth quarter and full year ended December 30, 2023.

Revenue for the fourth quarter of 2023 was $170.6 million, with GAAP gross margin of 69.7% and GAAP net income of $0.71 per diluted share, including a GAAP-only income tax benefit of $0.41 per diluted share associated with a valuation release. On a non-GAAP basis, gross margin was 70.4% with net income per diluted share of $0.45.

Revenue for the full year 2023 was $737.2 million, with GAAP gross margin of 69.8% and GAAP net income of $1.85 per diluted share, including a GAAP-only income tax benefit of $0.41 per diluted share associated with a valuation release. On a non-GAAP basis, gross margin was 70.4% with net income per diluted share of $2.01.

Jim Anderson, president and CEO, said, "We achieved double-digit annual revenue growth in 2023, with record gross margin and continued profit expansion. Despite near-term cyclical industry headwinds, we continue to be well positioned for the long-term with a rapidly expanding product portfolio and strong customer momentum."

Sherri Luther, CFO, said, "We achieved operating margin of 28.8% on a GAAP basis and a record 39.8% on a non-GAAP basis for the full year 2023, with gross margin expanding to 69.8% on a GAAP basis and 70.4% on a non-GAAP basis. We generated a record level of cash flow from operations in 2023, representing a 13% increase compared to the prior year, and exited the year with zero outstanding debt. In addition, in the fourth quarter, we repurchased approximately 900,000 shares, representing our thirteenth consecutive quarter of share repurchases."

Selected Fourth Quarter and Full Year 2023 Financial Results and Comparisons (in thousands, except per share data)

 

 

GAAP Financial Results (unaudited)

 

 

Q4 2023

 

Q3 2023

 

Q4 2022

 

Q/Q

 

Y/Y

 

FY 2023

 

FY 2022

 

FY/FY

Revenue

 

$ 170,596

 

$ 192,169

 

$ 175,960

 

(11.2)%

 

(3.0)%

 

$ 737,154

 

$ 660,356

 

11.6%

Gross Margin %

 

69.7%

 

70.0%

 

69.4%

 

(30) bps

 

30 bps

 

69.8%

 

68.5%

 

130 bps

R&D Expense %

 

23.3%

 

21.9%

 

19.8%

 

140 bps

 

350 bps

 

21.7%

 

20.6%

 

110 bps

SG&A Expense %

 

20.3%

 

17.3%

 

18.4%

 

300 bps

 

190 bps

 

18.6%

 

18.5%

 

10 bps

Operating Expenses

 

$ 75,798

 

$ 77,644

 

$ 68,050

 

(2.4)%

 

11.4%

 

$ 302,400

 

$ 264,683

 

14.2%

Income from Operations

 

$ 43,149

 

$ 56,917

 

$ 54,016

 

(24.2)%

 

(20.1)%

 

$ 212,270

 

$ 187,367

 

13.3%

Net Income

 

$ 98,706

 

$ 53,788

 

$ 51,913

 

83.5%

 

90.1%

 

$ 259,061

 

$ 178,882

 

44.8%

Net Income per Share - Basic

 

$ 0.72

 

$ 0.39

 

$ 0.38

 

$ 0.33

 

$ 0.34

 

$ 1.88

 

$ 1.30

 

$ 0.58

Net Income per Share - Diluted

 

$ 0.71

 

$ 0.38

 

$ 0.37

 

$ 0.33

 

$ 0.34

 

$ 1.85

 

$ 1.27

 

$ 0.58

Fourth quarter of 2023 GAAP net income includes an income tax benefit of $0.41 per diluted share associated with a valuation allowance release. Full year 2023 GAAP net income includes an income tax benefit of $0.41 per diluted share associated with a valuation allowance release.

 

 

Non-GAAP* Financial Results (unaudited)

 

 

Q4 2023

 

Q3 2023

 

Q4 2022

 

Q/Q

 

Y/Y

 

FY 2023

 

FY 2022

 

FY/FY

Revenue

 

$ 170,596

 

$ 192,169

 

$ 175,960

 

(11.2)%

 

(3.0)%

 

$ 737,154

 

$ 660,356

 

11.6%

Gross Margin %

 

70.4%

 

70.6%

 

70.0%

 

(20) bps

 

40 bps

 

70.4%

 

69.1%

 

130 bps

R&D Expense %

 

18.7%

 

18.2%

 

16.8%

 

50 bps

 

190 bps

 

17.8%

 

17.4%

 

40 bps

SG&A Expense %

 

13.8%

 

12.1%

 

13.1%

 

170 bps

 

70 bps

 

12.8%

 

13.0%

 

(20) bps

Operating Expenses

 

$ 55,495

 

$ 58,206

 

$ 52,469

 

(4.7)%

 

5.8%

 

$ 225,702

 

$ 200,997

 

12.3%

Income from Operations

 

$ 64,563

 

$ 77,408

 

$ 70,653

 

(16.6)%

 

(8.6)%

 

$ 293,580

 

$ 255,363

 

15.0%

Net Income

 

$ 62,801

 

$ 73,578

 

$ 68,367

 

(14.6)%

 

(8.1)%

 

$ 280,660

 

$ 246,679

 

13.8%

Net Income per Share - Basic

 

$ 0.46

 

$ 0.53

 

$ 0.50

 

$ (0.07)

 

$ (0.04)

 

$ 2.04

 

$ 1.80

 

$ 0.24

Net Income per Share - Diluted

 

$ 0.45

 

$ 0.53

 

$ 0.49

 

$ (0.08)

 

$ (0.04)

 

$ 2.01

 

$ 1.75

 

$ 0.26

GAAP represents U.S. Generally Accepted Accounting Principles. Non-GAAP represents GAAP excluding the impact of certain activities which the Company's management excludes in analyzing the Company's operating results and in understanding trends in the Company's earnings. Additional information relating to these measures is included below in “Non-GAAP Financial Measures.” For a reconciliation of GAAP to non-GAAP results, see accompanying tables "Reconciliation of U.S. GAAP to Non-GAAP Financial Measures."

Fourth Quarter and Full Year 2023 Highlights:

Business Outlook - First Quarter of 2024:

Non-GAAP Financial Measures: In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), this earnings release makes reference to non-GAAP financial measures. With respect to the outlook for the first quarter of 2024, certain items that affect GAAP measurement of financial measures for gross margin percentage and total operating expenses are not accessible on a forward-looking basis because such items cannot be reasonably predicted without unreasonable efforts due to the unpredictability of the amounts and timing of events affecting the items we exclude from non-GAAP measures, including certain large and/or unpredictable charges such as stock-based compensation expense; litigation expense outside the ordinary course of business; and restructuring. Consequently, the Company is unable to provide a reasonable estimate of GAAP measurement for non-GAAP gross margin percentage or non-GAAP total operating expenses for quarterly guidance or a corresponding reconciliation to GAAP for the quarter. From a qualitative perspective, the differences between our GAAP measurement of financial measures for gross margin percentage and total operating expenses and our non-GAAP measure of those items will consist of items similar to those described in the financial tables later in this release for such items historically, including, for example and without limitation, certain large and/or unpredictable charges such as stock-based compensation expense; litigation expense outside the ordinary course of business; and restructuring. Additional information regarding the reasons the Company uses non-GAAP measures, a reconciliation of these measures to the most directly comparable GAAP measures, and other information relating to these measures are included in this press release.

Investor Conference Call / Webcast Details:

Lattice Semiconductor will review the Company's financial results for the fiscal fourth quarter and full year 2023, and business outlook on Monday, February 12 at 5:00 p.m. Eastern Time. The dial-in number for the live audio call is 1-877-407-3982 or 1-201-493-6780 with conference identification number 13743739. A live webcast of the conference call will also be available on the investor relations section of www.latticesemi.com. The Company's financial guidance will be limited to the comments on its public quarterly earnings call and the public business outlook statements contained in this press release.

Forward-Looking Statements Notice:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that involve estimates, assumptions, risks and uncertainties. Any statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are neither historical facts nor assurances of future performance and may be forward-looking. Such forward-looking statements include, but are not limited to, statements relating to our rapid product portfolio expansion; long-term position; near-term cyclical industry headwinds; accelerating customer momentum; and the statements under the heading “Business Outlook - First Quarter of 2024.” 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.

Estimates of future revenue are inherently uncertain due to such factors such as global economic conditions which may affect customer demand, the cyclical nature of the semiconductor industry, pricing and inflationary pressures, competitive actions, international trade disputes and sanctions, and potential impact of global pandemics. 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, variations in manufacturing yields, the failure to sustain operational improvements, and the actual amount of compensation charges due to stock price changes. Actual results may differ materially from our expectations and are subject to risks and uncertainties that relate more broadly to our overall business, including those described in Item 1A in Lattice’s most recent Annual Report on Form 10-K and as may be supplemented from time-to-time in Lattice’s other filings with the Securities and Exchange Commission, all of which are expressly incorporated herein by reference.

Lattice believes these and other risks and uncertainties could cause actual results to differ materially from the forward-looking statements. New risk factors emerge from time to time and it is not possible for Lattice’s management to predict all risk factors. You should not 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 and undertakes no obligation 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 certain non-GAAP financial measures that supplement the Company's consolidated financial information prepared in accordance with U.S. GAAP, including non-GAAP gross margin, gross margin percentage, R&D expense, SG&A expense, operating expenses, income from operations, other (expense) income, net, income tax expense, net income, net income per share – basic, and net income per share – diluted. The non-GAAP measures presented exclude charges and adjustments primarily related to stock-based compensation and related payroll tax effects, litigation expense outside the ordinary course of business, amortization of acquired intangible assets, restructuring plans and other charges, and the estimated tax effect of these items, non-cash changes in net deferred income taxes, change in tax law and other tax adjustments. These charges and adjustments are a result of periodic or non-core operating activities of the Company. 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 financial measures provide an additional and useful way of viewing aspects of our performance that, when viewed in conjunction with our GAAP results, provide a more comprehensive understanding of the various factors and trends affecting our ongoing financial performance and operating results than GAAP measures alone. Management also uses these non-GAAP measures for strategic and business decision-making, internal budgeting, forecasting, and resource allocation processes and believes that investors should have access to similar data. The non-GAAP financial information used by the Company may differ from that used by other companies. 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 Lattice Semiconductor Corporation:

Lattice Semiconductor (NASDAQ: LSCC) is the low power programmable leader. We solve customer problems across the network, from the Edge to the Cloud, in the growing communications, computing, industrial, automotive and consumer markets. Our technology, long-standing relationships, and commitment to world-class support let our customers quickly and easily unleash their innovation to create a smart, secure, and connected world.

For more information about Lattice, please visit www.latticesemi.com. You can also follow us via LinkedIn, Twitter, Facebook, YouTube, WeChat, or Weibo.

 

Lattice Semiconductor Corporation

Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 30,

 

 

September 30,

 

 

December 31,

 

 

December 30,

 

 

December 31,

 

 

 

2023

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenue

 

$

170,596

 

 

$

192,169

 

 

$

175,960

 

 

$

737,154

 

 

$

660,356

 

Cost of sales

 

 

51,649

 

 

 

57,608

 

 

 

53,894

 

 

 

222,484

 

 

 

208,306

 

Gross margin

 

 

118,947

 

 

 

134,561

 

 

 

122,066

 

 

 

514,670

 

 

 

452,050

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

39,787

 

 

 

42,048

 

 

 

34,779

 

 

 

159,770

 

 

 

135,767

 

Selling, general, and administrative

 

 

34,661

 

 

 

33,217

 

 

 

32,355

 

 

 

137,244

 

 

 

122,076

 

Amortization of acquired intangible assets

 

 

869

 

 

 

870

 

 

 

870

 

 

 

3,478

 

 

 

3,778

 

Restructuring

 

 

481

 

 

 

1,509

 

 

 

46

 

 

 

1,908

 

 

 

2,551

 

Acquisition related

 

 

 

 

 

 

 

 

 

 

 

 

 

 

511

 

Total operating expenses

 

 

75,798

 

 

 

77,644

 

 

 

68,050

 

 

 

302,400

 

 

 

264,683

 

Income from operations

 

 

43,149

 

 

 

56,917

 

 

 

54,016

 

 

 

212,270

 

 

 

187,367

 

Interest income (expense), net

 

 

1,453

 

 

 

954

 

 

 

(1,280

)

 

 

2,041

 

 

 

(4,146

)

Other income (expense), net

 

 

802

 

 

 

14

 

 

 

(24

)

 

 

545

 

 

 

(1,109

)

Income before income taxes

 

 

45,404

 

 

 

57,885

 

 

 

52,712

 

 

 

214,856

 

 

 

182,112

 

Income tax (benefit) expense

 

 

(53,302

)

 

 

4,097

 

 

 

799

 

 

 

(44,205

)

 

 

3,230

 

Net income

 

$

98,706

 

 

$

53,788

 

 

$

51,913

 

 

$

259,061

 

 

$

178,882

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.72

 

 

$

0.39

 

 

$

0.38

 

 

$

1.88

 

 

$

1.30

 

Diluted

 

$

0.71

 

 

$

0.38

 

 

$

0.37

 

 

$

1.85

 

 

$

1.27

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in per share calculations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

137,686

 

 

 

137,948

 

 

 

137,095

 

 

 

137,694

 

 

 

137,321

 

Diluted

 

 

139,114

 

 

 

139,828

 

 

 

139,631

 

 

 

139,790

 

 

 

140,667

 

 

Lattice Semiconductor Corporation

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

December 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

128,317

 

 

$

145,722

 

Accounts receivable, net

 

 

104,373

 

 

 

94,018

 

Inventories, net

 

 

98,826

 

 

 

110,375

 

Other current assets

 

 

36,430

 

 

 

29,052

 

Total current assets

 

 

367,946

 

 

 

379,167

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

49,546

 

 

 

47,614

 

Operating lease right-of-use assets

 

 

14,487

 

 

 

17,590

 

Intangible assets, net

 

 

20,974

 

 

 

25,070

 

Goodwill

 

 

315,358

 

 

 

315,358

 

Deferred income taxes

 

 

57,762

 

 

 

1,022

 

Other long-term assets

 

 

14,821

 

 

 

12,892

 

 

 

$

840,894

 

 

$

798,713

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

34,487

 

 

$

42,036

 

Accrued liabilities

 

 

36,048

 

 

 

48,467

 

Accrued payroll obligations

 

 

26,865

 

 

 

36,870

 

Total current liabilities

 

 

97,400

 

 

 

127,373

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

 

 

 

128,752

 

Long-term operating lease liabilities, net of current portion

 

 

10,739

 

 

 

13,618

 

Other long-term liabilities

 

 

40,735

 

 

 

41,807

 

Total liabilities

 

 

148,874

 

 

 

311,550

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

692,020

 

 

 

487,163

 

 

 

$

840,894

 

 

$

798,713

 

 

Lattice Semiconductor Corporation

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

Year Ended

 

 

 

December 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

259,061

 

 

$

178,882

 

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

70,197

 

 

 

55,530

 

Depreciation and amortization

 

 

34,432

 

 

 

29,323

 

Change in deferred income tax provision

 

 

(58,614

)

 

 

(1,420

)

Other non-cash adjustments

 

 

7,017

 

 

 

8,415

 

Net changes in assets and liabilities

 

 

(42,505

)

 

 

(31,924

)

Net cash provided by (used in) operating activities

 

 

269,588

 

 

 

238,806

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(20,098

)

 

 

(23,338

)

Other investing activities

 

 

(13,152

)

 

 

(11,594

)

Net cash provided by (used in) investing activities

 

 

(33,250

)

 

 

(34,932

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from long-term debt, net of issuance costs

 

 

 

 

 

148,597

 

Repayment of long-term debt

 

 

(130,000

)

 

 

(178,750

)

Repurchase of common stock

 

 

(80,004

)

 

 

(110,132

)

Net cash flows related to stock compensation exercises

 

 

(43,713

)

 

 

(47,787

)

Net cash provided by (used in) financing activities

 

 

(253,717

)

 

 

(188,072

)

Effect of exchange rate change on cash

 

 

(26

)

 

 

(1,650

)

Net increase (decrease) in cash and cash equivalents

 

 

(17,405

)

 

 

14,152

 

Beginning cash and cash equivalents

 

 

145,722

 

 

 

131,570

 

Ending cash and cash equivalents

 

$

128,317

 

 

$

145,722

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information and non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Interest paid

 

$

3,240

 

 

$

3,973

 

Income taxes paid, net of refunds

 

$

15,754

 

 

$

4,621

 

Operating lease payments

 

$

8,344

 

 

$

7,419

 

 

Lattice Semiconductor Corporation

Supplemental Historical Financial Information

(unaudited)

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 30,

 

 

September 30,

 

 

December 31,

 

 

December 30,

 

 

December 31,

 

 

 

2023

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Balance Sheet Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A/R Days Revenue Outstanding (DSO)

 

 

56

 

 

 

50

 

 

 

49

 

 

 

 

 

 

 

 

 

Inventory Days (DIO)

 

 

175

 

 

 

165

 

 

 

187

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue % (by Geography)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asia

 

 

60

%

 

 

61

%

 

 

65

%

 

 

60

%

 

 

71

%

Americas

 

 

22

%

 

 

17

%

 

 

19

%

 

 

20

%

 

 

15

%

Europe (incl. Africa)

 

 

18

%

 

 

22

%

 

 

16

%

 

 

20

%

 

 

14

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue % (by End Market) *

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Communications and Computing

 

 

34

%

 

 

36

%

 

 

42

%

 

 

35

%

 

 

43

%

Industrial and Automotive

 

 

59

%

 

 

57

%

 

 

51

%

 

 

59

%

 

 

48

%

Consumer

 

 

7

%

 

 

7

%

 

 

7

%

 

 

6

%

 

 

9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue $M (by End Market) *

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Communications and Computing

 

$

58.7

 

 

$

68.4

 

 

$

73.2

 

 

$

257.6

 

 

$

282.9

 

Industrial and Automotive

 

$

99.8

 

 

$

109.9

 

 

$

89.6

 

 

$

433.5

 

 

$

319.4

 

Consumer

 

$

12.1

 

 

$

13.9

 

 

$

13.2

 

 

$

46.1

 

 

$

58.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue % (by Channel)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution

 

 

82

%

 

 

90

%

 

 

89

%

 

 

87

%

 

 

89

%

Direct

 

 

18

%

 

 

10

%

 

 

11

%

 

 

13

%

 

 

11

%

 

* During the first quarter of fiscal 2023, we realigned our 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

 

 

Year Ended

 

 

 

December 30,

 

 

September 30,

 

 

December 31,

 

 

December 30,

 

 

December 31,

 

 

 

2023

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Gross Margin Reconciliation

GAAP Gross margin

 

$

118,947

 

 

$

134,561

 

 

$

122,066

 

 

$

514,670

 

 

$

452,050

 

Stock-based compensation - gross margin (1)

 

 

1,111

 

 

 

1,053

 

 

 

1,056

 

 

 

4,612

 

 

 

4,310

 

Non-GAAP Gross margin

 

$

120,058

 

 

$

135,614

 

 

$

123,122

 

 

$

519,282

 

 

$

456,360

 

Gross Margin % Reconciliation

GAAP Gross margin %

 

 

69.7

%

 

 

70.0

%

 

 

69.4

%

 

 

69.8

%

 

 

68.5

%

Stock-based compensation - gross margin (1)

 

 

0.7

%

 

 

0.6

%

 

 

0.6

%

 

 

0.6

%

 

 

0.6

%

Non-GAAP Gross margin %

 

 

70.4

%

 

 

70.6

%

 

 

70.0

%

 

 

70.4

%

 

 

69.1

%

Research and Development Expense % (R&D Expense %) Reconciliation

GAAP R&D Expense %

 

 

23.3

%

 

 

21.9

%

 

 

19.8

%

 

 

21.7

%

 

 

20.6

%

Stock-based compensation - R&D (1)

 

 

(4.6

)%

 

 

(3.7

)%

 

 

(3.0

)%

 

 

(3.9

)%

 

 

(3.2

)%

Non-GAAP R&D Expense %

 

 

18.7

%

 

 

18.2

%

 

 

16.8

%

 

 

17.8

%

 

 

17.4

%

Selling, General, and Administrative Expense % (SG&A Expense %) Reconciliation

GAAP SG&A Expense %

 

 

20.3

%

 

 

17.3

%

 

 

18.4

%

 

 

18.6

%

 

 

18.5

%

Stock-based compensation - SG&A (1)

 

 

(5.3

)%

 

 

(4.6

)%

 

 

(4.7

)%

 

 

(5.3

)%

 

 

(5.1

)%

Litigation expense (2)

 

 

(1.2

)%

 

 

(0.6

)%

 

 

(0.6

)%

 

 

(0.5

)%

 

 

(0.4

)%

Non-GAAP SG&A Expense %

 

 

13.8

%

 

 

12.1

%

 

 

13.1

%

 

 

12.8

%

 

 

13.0

%

Operating Expenses Reconciliation

GAAP Operating expenses

 

$

75,798

 

 

$

77,644

 

 

$

68,050

 

 

$

302,400

 

 

$

264,683

 

Stock-based compensation - operations (1)

 

 

(16,811

)

 

 

(15,956

)

 

 

(13,584

)

 

 

(67,340

)

 

 

(54,119

)

Litigation expense (2)

 

 

(2,098

)

 

 

(1,103

)

 

 

(1,081

)

 

 

(3,928

)

 

 

(2,727

)

Amortization of acquired intangible assets

 

 

(869

)

 

 

(870

)

 

 

(870

)

 

 

(3,478

)

 

 

(3,778

)

Restructuring and other

 

 

(525

)

 

 

(1,509

)

 

 

(46

)

 

 

(1,952

)

 

 

(3,062

)

Non-GAAP Operating expenses

 

$

55,495

 

 

$

58,206

 

 

$

52,469

 

 

$

225,702

 

 

$

200,997

 

Income from Operations Reconciliation

GAAP Income from operations

 

$

43,149

 

 

$

56,917

 

 

$

54,016

 

 

$

212,270

 

 

$

187,367

 

Stock-based compensation - gross margin (1)

 

 

1,111

 

 

 

1,053

 

 

 

1,056

 

 

 

4,612

 

 

 

4,310

 

Stock-based compensation - operations (1)

 

 

16,811

 

 

 

15,956

 

 

 

13,584

 

 

 

67,340

 

 

 

54,119

 

Litigation expense (2)

 

 

2,098

 

 

 

1,103

 

 

 

1,081

 

 

 

3,928

 

 

 

2,727

 

Amortization of acquired intangible assets

 

 

869

 

 

 

870

 

 

 

870

 

 

 

3,478

 

 

 

3,778

 

Restructuring and other

 

 

525

 

 

 

1,509

 

 

 

46

 

 

 

1,952

 

 

 

3,062

 

Non-GAAP Income from operations

 

$

64,563

 

 

$

77,408

 

 

$

70,653

 

 

$

293,580

 

 

$

255,363

 

(1)

 

The non-GAAP adjustments for Stock-based compensation include related tax expenses.

(2)

 

Legal expenses associated with the defense of claims that are outside the ordinary course of business that were brought against the Company by Steven A.W. De Jaray, Perienne De Jaray and Darrell R. Oswalde.

 

Lattice Semiconductor Corporation

Reconciliation of U.S. GAAP to Non-GAAP Financial Measures

(in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 30,

 

 

September 30,

 

 

December 31,

 

 

December 30,

 

 

December 31,

 

 

 

2023

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Income from Operations % Reconciliation

GAAP Income from operations %

 

 

25.3

%

 

 

29.6

%

 

 

30.7

%

 

 

28.8

%

 

 

28.4

%

Cumulative effect of non-GAAP Gross Margin and Operating adjustments

 

 

12.5

%

 

 

10.7

%

 

 

9.5

%

 

 

11.0

%

 

 

10.3

%

Non-GAAP Income from operations %

 

 

37.8

%

 

 

40.3

%

 

 

40.2

%

 

 

39.8

%

 

 

38.7

%

Other Income (Expense) Reconciliation

GAAP Other income (expense), net

 

$

802

 

 

$

14

 

 

$

(24

)

 

$

545

 

 

$

(1,109

)

Loss on re-financing of long-term debt

 

 

 

 

 

 

 

 

4

 

 

 

 

 

 

739

 

Non-GAAP Other income (expense), net

 

$

802

 

 

$

14

 

 

$

(20

)

 

$

545

 

 

$

(370

)

Income Tax (Benefit) Expense Reconciliation

GAAP Income tax (benefit) expense

 

$

(53,302

)

 

$

4,097

 

 

$

799

 

 

$

(44,205

)

 

$

3,230

 

Estimated tax effect of non-GAAP adjustments

 

 

1,170

 

 

 

1,467

 

 

 

187

 

 

 

5,679

 

 

 

938

 

Non-cash changes in net deferred income taxes (3)

 

 

56,913

 

 

 

 

 

 

 

 

 

56,913

 

 

 

 

Change in tax law (4)

 

 

(764

)

 

 

(766

)

 

 

 

 

 

(2,881

)

 

 

 

Non-GAAP Income tax expense

 

$

4,017

 

 

$

4,798

 

 

$

986

 

 

$

15,506

 

 

$

4,168

 

Net Income Reconciliation

GAAP Net income

 

$

98,706

 

 

$

53,788

 

 

$

51,913

 

 

$

259,061

 

 

$

178,882

 

Stock-based compensation - gross margin (1)

 

 

1,111

 

 

 

1,053

 

 

 

1,056

 

 

 

4,612

 

 

 

4,310

 

Stock-based compensation - operations (1)

 

 

16,811

 

 

 

15,956

 

 

 

13,584

 

 

 

67,340

 

 

 

54,119

 

Litigation expense (2)

 

 

2,098

 

 

 

1,103

 

 

 

1,081

 

 

 

3,928

 

 

 

2,727

 

Amortization of acquired intangible assets

 

 

869

 

 

 

870

 

 

 

870

 

 

 

3,478

 

 

 

3,778

 

Restructuring and other

 

 

525

 

 

 

1,509

 

 

 

46

 

 

 

1,952

 

 

 

3,062

 

Loss on re-financing of long-term debt

 

 

 

 

 

 

 

 

4

 

 

 

 

 

 

739

 

Estimated tax effect of non-GAAP adjustments

 

 

(1,170

)

 

 

(1,467

)

 

 

(187

)

 

 

(5,679

)

 

 

(938

)

Non-cash changes in net deferred income taxes (3)

 

 

(56,913

)

 

 

 

 

 

 

 

 

(56,913

)

 

 

 

Change in tax law (4)

 

 

764

 

 

 

766

 

 

 

 

 

 

2,881

 

 

 

 

Non-GAAP Net income

 

$

62,801

 

 

$

73,578

 

 

$

68,367

 

 

$

280,660

 

 

$

246,679

 

(1)

 

The non-GAAP adjustments for Stock-based compensation include related tax expenses.

(2)

 

Legal expenses associated with the defense of claims that are outside the ordinary course of business that were brought against the Company by Steven A.W. De Jaray, Perienne De Jaray and Darrell R. Oswalde.

(3)

 

Non-cash changes in net deferred income taxes associated with the release of the valuation allowance against $56.9 million of our U.S. deferred tax assets in the fourth quarter of fiscal 2023.

(4)

 

Adjustments for Change in tax law reflect an increase in our provision for U.S. tax on foreign operations resulting from The 2017 Tax Cuts and Jobs Act and is related to the capitalization and subsequent amortization of R&D costs for tax purposes.

 

Lattice Semiconductor Corporation

Reconciliation of U.S. GAAP to Non-GAAP Financial Measures

(in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 30,

 

 

September 30,

 

 

December 31,

 

 

December 30,

 

 

December 31,

 

 

 

2023

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net Income Per Share Reconciliation

GAAP Net income per share - basic

 

$

0.72

 

 

$

0.39

 

 

$

0.38

 

 

$

1.88

 

 

$

1.30

 

Cumulative effect of Non-GAAP adjustments

 

 

(0.26

)

 

 

0.14

 

 

 

0.12

 

 

 

0.16

 

 

 

0.50

 

Non-GAAP Net income per share - basic

 

$

0.46

 

 

$

0.53

 

 

$

0.50

 

 

$

2.04

 

 

$

1.80

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net income per share - diluted

 

$

0.71

 

 

$

0.38

 

 

$

0.37

 

 

$

1.85

 

 

$

1.27

 

Cumulative effect of Non-GAAP adjustments

 

 

(0.26

)

 

 

0.15

 

 

 

0.12

 

 

 

0.16

 

 

 

0.48

 

Non-GAAP Net income per share - diluted

 

$

0.45

 

 

$

0.53

 

 

$

0.49

 

 

$

2.01

 

 

$

1.75

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in per share calculations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

137,686

 

 

 

137,948

 

 

 

137,095

 

 

 

137,694

 

 

 

137,321

 

Diluted

 

 

139,114

 

 

 

139,828

 

 

 

139,631

 

 

 

139,790

 

 

 

140,667

 

 



Contact:

MEDIA:
Sophia Hong
Lattice Semiconductor Corporation
503-268-8786
Sophia.Hong@latticesemi.com

INVESTORS:
Rick Muscha
Lattice Semiconductor Corporation
408-826-6000
Rick.Muscha@latticesemi.com