Fourth Quarter 2017 Financial Highlights*:

• Revenue of $95.3 million.
• On a GAAP basis, net loss of $7.2 million or $0.06 per basic and diluted share.
• On a Non-GAAP basis, net income of $1.0 million or $0.01 per basic and diluted share.
• Gross margin of 53.8% on a GAAP basis and 54.0% on a non-GAAP basis.

Full Year 2017 Financial Highlights*:

• Revenue of $386.0 million.
• On a GAAP basis, net loss of $70.6 million or $0.58 per basic and diluted share.
• On a Non-GAAP basis, net income of $13.6 million or $0.11 per basic and diluted share.
• Gross margin of 56.1% on a GAAP basis and 56.3% on a non-GAAP basis.

* 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. For a reconciliation of GAAP to non-GAAP results, see accompanying tables "Reconciliation of U.S. GAAP to Non-GAAP Financial Measures."

PORTLAND, Ore. — (BUSINESS WIRE) — February 13, 2018 — Lattice Semiconductor Corporation (NASDAQ: LSCC), the leading provider of customizable smart connectivity solutions, announced financial results today for the fiscal fourth quarter and full year ended December 31, 2017.

The Company reported revenue for the fourth quarter of 2017 of $95.3 million, which increased 3.6% sequentially, as compared to the third quarter 2017 revenue of $92.0 million, and decreased 19.3% as compared to the fourth quarter 2016 revenue of $118.1 million.

Gross margin on a GAAP basis was 53.8% for the fourth quarter of 2017, as compared to the third quarter of 2017 gross margin of 58.0% and 53.7% for the fourth quarter of 2016. Gross margin in the fourth quarter of 2017 declined compared to the third quarter of 2017 largely as the result of a reduction in the Company's inventory valuation of lower wafer and overhead costs. On a non-GAAP basis, gross margin for the fourth quarter of 2017 was 54.0%, as compared to 58.1% for the third quarter of 2017 and 53.9% for the fourth quarter of 2016.

Total operating expenses for the fourth quarter of 2017 were $51.9 million on a GAAP basis, including an intangible asset impairment credit of $3.8 million, as compared to $90.8 million for the third quarter of 2017, including an intangible asset impairment charge of $36.2 million and the gain on sale of a building of $4.6 million, and $64.4 million for the fourth quarter of 2016, including $6.2 million in acquisition related expenses. On a non-GAAP basis, total operating expenses were $44.1 million for the fourth quarter of 2017, as compared to $44.6 million for the third quarter of 2017, and $45.1 million for the fourth quarter of 2016.

GAAP net loss for the fourth quarter of 2017 was $7.2 million ($0.06 per basic and diluted share), as compared to a net loss on a GAAP basis in the prior quarter of $43.1 million ($0.35 per basic and diluted share), and a net loss on a GAAP basis in the year ago period of $8.2 million ($0.07 per basic and diluted share). Non-GAAP net income for the fourth quarter of 2017 was $1.0 million ($0.01 per basic and diluted share), as compared to $5.3 million ($0.04 per basic and diluted share) in the prior quarter, and $11.8 million ($0.10 per basic and diluted share) in the year ago period. For a reconciliation of U.S. GAAP to Non-GAAP please see the table titled, “Reconciliation of U.S. GAAP to Non-GAAP Financial Measures” provided as part of this press release.

For the fiscal year 2017, revenue was $386.0 million, a decrease of 9.6% from $427.1 million in the fiscal year 2016. Revenue growth from the Computing, Industrial and Automotive end markets was offset by a non-recurrence of product demand related to the tin-lead and line item reduction program in 2016, a delay in the HDMI royalty sharing agreement, and year-over-year declines in DTV demand. Net loss on a GAAP basis for fiscal year 2017 was $70.6 million ($0.58 per basic and diluted share), compared to a net loss of $54.1 million ($0.45 per basic and diluted share) reported in fiscal year 2016. Total operating expenses for the fiscal year 2017 were $264.2 million on a GAAP basis, including a net intangible asset impairment charge of $32.4 million, as compared to $273.1 million for the fiscal year 2016, including intangible asset impairment of $7.9 million. On a non-GAAP basis, total operating expenses were $182.3 million for the fiscal year 2017, as compared to $200.8 million for the fiscal year 2016. On a non-GAAP Basis, net income for the fiscal year 2017 was $13.6 million ($0.11 per basic and diluted share), compared to net income of $17.0 million ($0.14 per basic and diluted share) for the fiscal year 2016. For a reconciliation of U.S. GAAP to Non-GAAP please see the table titled, “Reconciliation of U.S. GAAP to Non-GAAP Financial Measures” provided as part of this press release.