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, transformation activities, 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 |
|
Six Months Ended |
||||||||||||||
|
|
June 29, |
|
March 30, |
|
July 1, |
|
June 29, |
|
July 1, |
||||||||
|
|
2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Revenue |
|
$ |
124,076 |
|
$ |
140,815 |
|
|
$ |
190,079 |
|
|
$ |
264,891 |
|
$ |
374,389 |
|
Cost of sales |
|
|
39,325 |
|
|
44,607 |
|
|
|
57,518 |
|
|
|
83,932 |
|
|
113,227 |
|
| Gross margin |
|
|
84,751 |
|
|
96,208 |
|
|
|
132,561 |
|
|
|
180,959 |
|
|
261,162 |
|
| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
| Research and development |
|
|
38,733 |
|
|
40,591 |
|
|
|
41,946 |
|
|
|
79,324 |
|
|
77,935 |
|
| Selling, general, and administrative |
|
|
20,005 |
|
|
36,469 |
|
|
|
36,788 |
|
|
|
56,474 |
|
|
69,366 |
|
| Amortization of acquired intangible assets |
|
|
869 |
|
|
870 |
|
|
|
869 |
|
|
|
1,739 |
|
|
1,739 |
|
| Restructuring |
|
|
2,579 |
|
|
1,704 |
|
|
|
(112 |
) |
|
|
4,283 |
|
|
(82 |
) |
| Total operating expenses |
|
|
62,186 |
|
|
79,634 |
|
|
|
79,491 |
|
|
|
141,820 |
|
|
148,958 |
|
| Income from operations |
|
|
22,565 |
|
|
16,574 |
|
|
|
53,070 |
|
|
|
39,139 |
|
|
112,204 |
|
| Interest income (expense), net |
|
|
933 |
|
|
1,307 |
|
|
|
189 |
|
|
|
2,240 |
|
|
(366 |
) |
| Other income (expense), net |
|
|
254 |
|
|
(46 |
) |
|
|
(176 |
) |
|
|
208 |
|
|
(271 |
) |
| Income before income taxes |
|
|
23,752 |
|
|
17,835 |
|
|
|
53,083 |
|
|
|
41,587 |
|
|
111,567 |
|
| Income tax expense |
|
|
1,121 |
|
|
3,039 |
|
|
|
2,439 |
|
|
|
4,160 |
|
|
5,000 |
|
| Net income |
|
$ |
22,631 |
|
$ |
14,796 |
|
|
$ |
50,644 |
|
|
$ |
37,427 |
|
$ |
106,567 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
| Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
| Basic |
|
$ |
0.16 |
|
$ |
0.11 |
|
|
$ |
0.37 |
|
|
$ |
0.27 |
|
$ |
0.77 |
|
| Diluted |
|
$ |
0.16 |
|
$ |
0.11 |
|
|
$ |
0.36 |
|
|
$ |
0.27 |
|
$ |
0.76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
| Shares used in per share calculations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
| Basic |
|
|
137,548 |
|
|
137,475 |
|
|
|
137,735 |
|
|
|
137,480 |
|
|
137,573 |
|
| Diluted |
|
|
138,243 |
|
|
138,774 |
|
|
|
139,768 |
|
|
|
138,485 |
|
|
139,966 |
|
| Lattice Semiconductor Corporation Condensed Consolidated Balance Sheets (in thousands) (unaudited) |
||||||
|
|
|
June 29, |
|
December 30, |
||
|
|
|
2024 |
|
2023 |
||
| Assets |
|
|
|
|
|
|
| Current assets: |
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
109,216 |
|
$ |
128,317 |
| Accounts receivable, net |
|
|
103,442 |
|
|
104,373 |
| Inventories, net |
|
|
101,556 |
|
|
98,826 |
| Other current assets |
|
|
38,990 |
|
|
36,430 |
| Total current assets |
|
|
353,204 |
|
|
367,946 |
|
|
|
|
|
|
|
|
| Property and equipment, net |
|
|
50,801 |
|
|
49,546 |
| Operating lease right-of-use assets |
|
|
17,326 |
|
|
14,487 |
| Intangible assets, net |
|
|
19,016 |
|
|
20,974 |
| Goodwill |
|
|
315,358 |
|
|
315,358 |
| Deferred income taxes |
|
|
57,329 |
|
|
57,762 |
| Other long-term assets |
|
|
14,486 |
|
|
14,821 |
|
|
|
$ |
827,520 |
|
$ |
840,894 |
|
|
|
|
|
|
|
|
| Liabilities and Stockholders' Equity |
|
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
|
| Accounts payable |
|
$ |
34,957 |
|
$ |
34,487 |
| Accrued liabilities |
|
|
32,088 |
|
|
36,048 |
| Accrued payroll obligations |
|
|
13,239 |
|
|
26,865 |
| Total current liabilities |
|
|
80,284 |
|
|
97,400 |
|
|
|
|
|
|
|
|
| Long-term operating lease liabilities, net of current portion |
|
|
11,975 |
|
|
10,739 |
| Other long-term liabilities |
|
|
36,412 |
|
|
40,735 |
| Total liabilities |
|
|
128,671 |
|
|
148,874 |
|
|
|
|
|
|
|
|
| Stockholders' equity |
|
|
698,849 |
|
|
692,020 |
|
|
|
$ |
827,520 |
|
$ |
840,894 |
| Lattice Semiconductor Corporation Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) |
||||||||
|
|
|
Six Months Ended |
||||||
|
|
|
June 29, |
|
July 1, |
||||
|
|
|
2024 |
|
2023 |
||||
| Cash flows from operating activities: |
|
|
|
|
|
|
||
| Net income |
|
$ |
37,427 |
|
|
$ |
106,567 |
|
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
||
| Stock-based compensation expense |
|
|
21,713 |
|
|
|
35,744 |
|
| Depreciation and amortization |
|
|
18,385 |
|
|
|
16,578 |
|
| Change in deferred income tax provision |
|
|
(969 |
) |
|
|
(882 |
) |
| Other non-cash adjustments |
|
|
4,329 |
|
|
|
3,427 |
|
| Net changes in assets and liabilities |
|
|
(29,443 |
) |
|
|
(45,976 |
) |
| Net cash provided by (used in) operating activities |
|
|
51,442 |
|
|
|
115,458 |
|
| Cash flows from investing activities: |
|
|
|
|
|
|
||
| Capital expenditures |
|
|
(10,581 |
) |
|
|
(11,943 |
) |
| Other investing activities |
|
|
(7,607 |
) |
|
|
(5,799 |
) |
| Net cash provided by (used in) investing activities |
|
|
(18,188 |
) |
|
|
(17,742 |
) |
| Cash flows from financing activities: |
|
|
|
|
|
|
||
| Repayment of long-term debt |
|
|
— |
|
|
|
(85,000 |
) |
| Repurchase of common stock |
|
|
(29,999 |
) |
|
|
(20,006 |
) |
| Net cash flows related to stock compensation exercises |
|
|
(21,734 |
) |
|
|
(34,439 |
) |
| Net cash provided by (used in) financing activities |
|
|
(51,733 |
) |
|
|
(139,445 |
) |
| Effect of exchange rate change on cash |
|
|
(622 |
) |
|
|
(220 |
) |
| Net increase (decrease) in cash and cash equivalents |
|
|
(19,101 |
) |
|
|
(41,949 |
) |
| Beginning cash and cash equivalents |
|
|
128,317 |
|
|
|
145,722 |
|
| Ending cash and cash equivalents |
|
$ |
109,216 |
|
|
$ |
103,773 |
|
|
|
|
|
|
|
|
|
||
| Supplemental disclosure of cash flow information and non-cash investing and financing activities: |
|
|
|
|
|
|
||
| Interest paid |
|
$ |
— |
|
|
$ |
2,962 |
|
| Income taxes paid, net of refunds |
|
$ |
3,886 |
|
|
$ |
6,837 |
|
| Operating lease payments |
|
$ |
4,564 |
|
|
$ |
4,082 |
|
| Lattice Semiconductor Corporation Supplemental Historical Financial Information (unaudited) |
||||||||||||
|
|
|
Three Months Ended |
||||||||||
|
|
|
June 29, |
|
March 30, |
|
July 1, |
||||||
|
|
|
2024 |
|
2024 |
|
2023 |
||||||
| Balance Sheet Information |
|
|
|
|
|
|
|
|
|
|
|
|
| A/R Days Revenue Outstanding (DSO) |
|
|
76 |
|
|
|
64 |
|
|
|
46 |
|
| Inventory Days (DIO) |
|
|
236 |
|
|
|
195 |
|
|
|
177 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue % (by Geography) |
|
|
|
|
|
|
|
|
|
|
|
|
| Asia |
|
|
67 |
% |
|
|
66 |
% |
|
|
63 |
% |
| Americas |
|
|
19 |
% |
|
|
22 |
% |
|
|
17 |
% |
| Europe (incl. Africa) |
|
|
14 |
% |
|
|
12 |
% |
|
|
20 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue % (by End Market) |
|
|
|
|
|
|
|
|
|
|
|
|
| Communications and Computing |
|
|
44 |
% |
|
|
39 |
% |
|
|
34 |
% |
| Industrial and Automotive |
|
|
47 |
% |
|
|
53 |
% |
|
|
61 |
% |
| Consumer |
|
|
9 |
% |
|
|
8 |
% |
|
|
5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue $M (by End Market) |
|
|
|
|
|
|
|
|
|
|
|
|
| Communications and Computing |
|
$ |
54.6 |
|
|
$ |
54.6 |
|
|
$ |
64.2 |
|
| Industrial and Automotive |
|
$ |
58.2 |
|
|
$ |
75.3 |
|
|
$ |
115.5 |
|
| Consumer |
|
$ |
11.3 |
|
|
$ |
10.9 |
|
|
$ |
10.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue % (by Channel) |
|
|
|
|
|
|
|
|
|
|
|
|
| Distribution |
|
|
91 |
% |
|
|
87 |
% |
|
|
89 |
% |
| Direct |
|
|
9 |
% |
|
|
13 |
% |
|
|
11 |
% |
| Lattice Semiconductor Corporation Reconciliation of U.S. GAAP to Non-GAAP Financial Measures (in thousands, except per share data) (unaudited) |
||||||||||||
|
|
|
Three Months Ended |
||||||||||
|
|
|
June 29, |
|
March 30, |
|
July 1, |
||||||
|
|
|
2024 |
|
2024 |
|
2023 |
||||||
| Gross Margin Reconciliation |
||||||||||||
| GAAP Gross margin |
|
$ |
84,751 |
|
|
$ |
96,208 |
|
|
$ |
132,561 |
|
| Stock-based compensation - gross margin (1) |
|
|
805 |
|
|
|
888 |
|
|
|
1,425 |
|
| Non-GAAP Gross margin |
|
$ |
85,556 |
|
|
$ |
97,096 |
|
|
$ |
133,986 |
|
| Gross Margin % Reconciliation |
||||||||||||
| GAAP Gross margin % |
|
|
68.3 |
% |
|
|
68.3 |
% |
|
|
69.7 |
% |
| Stock-based compensation - gross margin (1) |
|
|
0.7 |
% |
|
|
0.7 |
% |
|
|
0.8 |
% |
| Non-GAAP Gross margin % |
|
|
69.0 |
% |
|
|
69.0 |
% |
|
|
70.5 |
% |
| Research and Development Expense % (R&D Expense %) Reconciliation |
||||||||||||
| GAAP R&D Expense % |
|
|
31.2 |
% |
|
|
28.8 |
% |
|
|
22.1 |
% |
| Stock-based compensation - R&D (1) |
|
|
(4.5 |
)% |
|
|
(5.7 |
)% |
|
|
(4.1 |
)% |
| Non-GAAP R&D Expense % |
|
|
26.7 |
% |
|
|
23.1 |
% |
|
|
18.0 |
% |
| Selling, General, and Administrative Expense % (SG&A Expense %) Reconciliation |
|
|
|
|
|
|||||||
| GAAP SG&A Expense % |
|
|
16.1 |
% |
|
|
25.9 |
% |
|
|
19.4 |
% |
| Stock-based compensation - SG&A (1) |
|
|
2.7 |
% |
|
|
(7.1 |
)% |
|
|
(6.7 |
)% |
| Litigation expense (2) |
|
|
(0.9 |
)% |
|
|
(2.7 |
)% |
|
|
(0.2 |
)% |
| Non-GAAP SG&A Expense % |
|
|
17.9 |
% |
|
|
16.1 |
% |
|
|
12.5 |
% |
| Operating Expenses Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP Operating expenses |
|
$ |
62,186 |
|
|
$ |
79,634 |
|
|
$ |
79,491 |
|
| Stock-based compensation - operations (1) |
|
|
(2,343 |
) |
|
|
(18,117 |
) |
|
|
(20,277 |
) |
| Litigation expense (2) |
|
|
(1,065 |
) |
|
|
(3,832 |
) |
|
|
(439 |
) |
| Amortization of acquired intangible assets |
|
|
(869 |
) |
|
|
(870 |
) |
|
|
(869 |
) |
| Restructuring, transformation, and other (3) |
|
|
(3,879 |
) |
|
|
(1,957 |
) |
|
|
112 |
|
| Non-GAAP Operating expenses |
|
$ |
54,030 |
|
|
$ |
54,858 |
|
|
$ |
58,018 |
|
| Income from Operations Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP Income from operations |
|
$ |
22,565 |
|
|
$ |
16,574 |
|
|
$ |
53,070 |
|
| Stock-based compensation - gross margin (1) |
|
|
805 |
|
|
|
888 |
|
|
|
1,425 |
|
| Stock-based compensation - operations (1) |
|
|
2,343 |
|
|
|
18,117 |
|
|
|
20,277 |
|
| Litigation expense (2) |
|
|
1,065 |
|
|
|
3,832 |
|
|
|
439 |
|
| Amortization of acquired intangible assets |
|
|
869 |
|
|
|
870 |
|
|
|
869 |
|
| Restructuring, transformation, and other (3) |
|
|
3,879 |
|
|
|
1,957 |
|
|
|
(112 |
) |
| Non-GAAP Income from operations |
|
$ |
31,526 |
|
|
$ |
42,238 |
|
|
$ |
75,968 |
|
| Income from Operations % Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP Income from operations % |
|
|
18.2 |
% |
|
|
11.8 |
% |
|
|
27.9 |
% |
| Cumulative effect of non-GAAP Gross Margin and Operating adjustments |
|
|
7.2 |
% |
|
|
18.2 |
% |
|
|
12.1 |
% |
| Non-GAAP Income from operations % |
|
|
25.4 |
% |
|
|
30.0 |
% |
|
|
40.0 |
% |
| (1) |
|
The non-GAAP adjustments for Stock-based compensation include related payroll 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) |
|
Restructuring, transformation, and other for Q2 and YTD 2024 includes business transformation charges of $0.8 million. |
| Lattice Semiconductor Corporation Reconciliation of U.S. GAAP to Non-GAAP Financial Measures (in thousands, except per share data) (unaudited) |
||||||||||||
|
|
|
Three Months Ended |
||||||||||
|
|
|
June 29, |
|
March 30, |
|
July 1, |
||||||
|
|
|
2024 |
|
2024 |
|
2023 |
||||||
| Income Tax (Benefit) Expense Reconciliation |
|
|
|
|
|
|
|
|
|
|||
| GAAP Income tax (benefit) expense |
|
$ |
1,121 |
|
|
$ |
3,039 |
|
|
$ |
2,439 |
|
| Estimated tax effect of non-GAAP adjustments |
|
|
5,649 |
|
|
|
4,337 |
|
|
|
1,372 |
|
| Non-cash changes in net deferred income taxes (4) |
|
|
(1,090 |
) |
|
|
(2,754 |
) |
|
|
— |
|
| Change in tax law (5) |
|
|
(4,399 |
) |
|
|
(1,381 |
) |
|
|
(339 |
) |
| Non-GAAP Income tax expense |
|
$ |
1,281 |
|
|
$ |
3,241 |
|
|
$ |
3,472 |
|
| Net Income Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP Net income |
|
$ |
22,631 |
|
|
$ |
14,796 |
|
|
$ |
50,644 |
|
| Stock-based compensation - gross margin (1) |
|
|
805 |
|
|
|
888 |
|
|
|
1,425 |
|
| Stock-based compensation - operations (1) |
|
|
2,343 |
|
|
|
18,117 |
|
|
|
20,277 |
|
| Litigation expense (2) |
|
|
1,065 |
|
|
|
3,832 |
|
|
|
439 |
|
| Amortization of acquired intangible assets |
|
|
869 |
|
|
|
870 |
|
|
|
869 |
|
| Restructuring, transformation, and other (3) |
|
|
3,879 |
|
|
|
1,957 |
|
|
|
(112 |
) |
| Estimated tax effect of non-GAAP adjustments |
|
|
(5,649 |
) |
|
|
(4,337 |
) |
|
|
(1,372 |
) |
| Non-cash changes in net deferred income taxes (4) |
|
|
1,090 |
|
|
|
2,754 |
|
|
|
— |
|
| Change in tax law (5) |
|
|
4,399 |
|
|
|
1,381 |
|
|
|
339 |
|
| Non-GAAP Net income |
|
$ |
31,432 |
|
|
$ |
40,258 |
|
|
$ |
72,509 |
|
| Net Income Per Share Reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP Net income per share - basic |
|
$ |
0.16 |
|
|
$ |
0.11 |
|
|
$ |
0.37 |
|
| Cumulative effect of Non-GAAP adjustments |
|
|
0.07 |
|
|
|
0.18 |
|
|
|
0.16 |
|
| Non-GAAP Net income per share - basic |
|
$ |
0.23 |
|
|
$ |
0.29 |
|
|
$ |
0.53 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP Net income per share - diluted |
|
$ |
0.16 |
|
|
$ |
0.11 |
|
|
$ |
0.36 |
|
| Cumulative effect of Non-GAAP adjustments |
|
|
0.07 |
|
|
|
0.18 |
|
|
|
0.16 |
|
| Non-GAAP Net income per share - diluted |
|
$ |
0.23 |
|
|
$ |
0.29 |
|
|
$ |
0.52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares used in per share calculations: |
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
|
137,548 |
|
|
|
137,475 |
|
|
|
137,735 |
|
| Diluted |
|
|
138,243 |
|
|
|
138,774 |
|
|
|
139,768 |
|
| (1) |
|
The non-GAAP adjustments for Stock-based compensation include related payroll 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) |
|
Restructuring, transformation, and other for Q2 and YTD 2024 includes business transformation charges of $0.8 million. |
| (4) |
|
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. |
| (5) |
|
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. |
