Lattice Semiconductor Reports Fourth Quarter and Full Year 2013 Results

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                     Lattice Semiconductor Corporation                      
                   Consolidated Statements of Operations                    
                   (in thousands, except per share data)                    
                                (unaudited)                                 
                                                                            
                             Three Months Ended             Year Ended      
                      -------------------------------  -------------------- 
                       December   September  December   December   December 
                       28, 2013   28, 2013   29, 2012   28, 2013   29, 2012 
                      ---------  ---------- ---------  ---------  --------- 
Revenue               $  89,519  $   87,154 $  65,875  $ 332,525  $ 279,256 
Costs and expenses:                                                         
Cost of products sold    40,916      40,778    30,202    154,281    128,499 
Research and                                                                
 development             22,331      20,254    18,655     80,966     77,610 
Selling, general and                                                        
 administrative          17,189      16,385    17,269     67,144     72,317 
Acquisition related                                                         
 charges (1)                737         737       760      2,960      4,178 
Restructuring (2)           131          85     5,375        388      6,018 
                      ---------  ---------- ---------  ---------  --------- 
                         81,304      78,239    72,261    305,739    288,622 
                      ---------  ---------- ---------  ---------  --------- 
Income (loss) from                                                          
 operations               8,215       8,915    (6,386)    26,786     (9,366)
Other (loss) income,                                                        
 net                       (540)        346      (341)      (300)       505 
                      ---------  ---------- ---------  ---------  --------- 
Income (loss) before                                                                                   
  provision  for  income                                                                                                              
  taxes                                        7,675              9,261        (6,727)        26,486          (8,861)
Provision  for  income                                                                                                                
  taxes  (3)                                1,128                  417              448            4,165          20,745  
                                            ---------    ----------  ---------    ---------    ---------  
Net  income  (loss)          $      6,547    $        8,844  $    (7,175)  $    22,321    $  (29,606)
                                            =========    ==========  =========    =========    =========  
                                                                                                                                                        
Net  income  (loss)  per                                                                                                              
  share  (4):                                                                                                                                  
Basic                                  $        0.06    $          0.08  $      (0.06)  $        0.19    $      (0.25)
                                            =========    ==========  =========    =========    =========  
Diluted                              $        0.06    $          0.08  $      (0.06)  $        0.19    $      (0.25)
                                            =========    ==========  =========    =========    =========  
                                                                                                                                                        
Shares  used  in  per                                                                                                                    
  share  calculations                                                                                                                  
  (4):                                                                                                                                              
Basic                                      115,718          116,055      115,943        115,701        117,194  
                                            =========    ==========  =========    =========    =========  
Diluted                                  117,156          117,349      115,943        117,081        117,194  
                                            =========    ==========  =========    =========    =========  
                                                                                                                                                        
Notes:                                                                                                                                            
                                                                                                                                                        
(1)  During  fiscal  2012,  the  Company  recorded  consulting,  legal  costs,              
        severance  related  integration  costs  and  amortization  of  intangible            
        assets  associated  with  the  acquisition  of  SiliconBlue.  During  fiscal        
        2013,  Acquisition  related  charges  consist  of  amortization  of  intangible  
        assets.                                                                                                                                  
                                                                                                                                                        
(2)  Represents  costs  and  adjustments  incurred  primarily  related  to  the            
        corporate  restructuring  plans  announced  on  October  12,  2012  and  April      
        21,  2011.                                                                                                                              
                                                                                                                                                        
(3)  The  tax  provision  for  the  year  ended  December  29,  2012  reflects  our  new  
        global  tax  structure  and  the  resulting  intercompany  sale  of  inventory      
        and  fixed  assets.                                                                                                              
                                                                                                                                                        
(4)  For  the  three  and  twelve  month  periods  in  fiscal  2013,  the  computation    
        of  diluted  earnings  per  share  includes  the  effects  of  stock  options  and  
        restricted  stock  units  as  they  are  dilutive.  For  the  three  and  twelve      
        month  periods  in  fiscal  2012,  the  computation  of  diluted  earnings  per      
        share  excludes  the  effects  of  stock  options,  restricted  stock  units  and  
        ESPP  shares  as  they  are  antidilutive.  ESPP  shares  are  included  if              
        dilutive.                                                                                                                              
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                            Lattice  Semiconductor  Corporation                                          
                                                  Consolidated  Balance  Sheets                                                
                                                              (in  thousands)                                                              
                                                                  (unaudited)                                                                
                                                                                                                                                        
                                                                                                  December  28,    December  29,  
                                                                                                            2013                    2012        
                                                                                                  -------------  -------------
                                          Assets                                                                                                  
Current  assets:                                                                                                                          
Cash,  cash  equivalents  and  short-term  marketable                                                        
  securities                                                                            $          215,815  $          183,401
Accounts  receivable,  net                                                                50,085                46,947
Inventories                                                                                          46,222                44,194
Other  current  assets  (1)                                                                13,679                12,527
                                                                                                  -------------  -------------
Total  current  assets                                                                      325,801              287,069
                                                                                                                                                        
Property  and  equipment,  net                                                          41,719                40,384
Long-term  marketable  securities                                                    5,241                  4,717
Other  long-term  assets                                                                      6,120                  6,854
Intangible  assets,  net  of  amortization                                    12,484                15,430
Goodwill                                                                                                44,808                44,808
Deferred  income  taxes  (1)                                                              11,703                15,357
                                                                                                  $          447,876  $          414,619
                                                                                                  =============  =============
                                                                                                                                                        
            Liabilities  and  Stockholders'  Equity                                                                    
Current  liabilities:                                                                                                                
Accounts  payable  and  other  accrued  liabilities      $            51,113  $            42,540
Deferred  income  and  allowances  on  sales  to  sell-                                                        
  through  distributors                                                                        7,495                10,553
                                                                                                  -------------  -------------
Total  current  liabilities                                                              58,608                53,093
                                                                                                                                                        
Other  long-term  liabilities  (1)                                                    3,588                  3,976
                                                                                                  -------------  -------------
Total  liabilities                                                                              62,196                57,069
                                                                                                                                                        
Stockholders'  equity                                                                      385,680              357,550
                                                                                                  -------------                            
                                                                                                  $          447,876  $          414,619
                                                                                                  =============  =============
                                                                                                                                                        
Notes:                                                                                                                                            
                                                                                                                                                        
(1)  In  June  2013  the  company  adopted,  with  retrospective  application,  the      
        requirements  of  ASU  2013-11  Presentation  of  an  Unrecognized  Tax  Benefit  
        When  a  Net  Operating  Loss  Carryforward,  a  Similar  Tax  Loss,  or  a  Tax        
        Credit  Carryforward  Exists.  Accordingly,  previous  periods  have  been          
        revised  to  conform  with  current  period  presentation.  This  resulted  in      
        both  long-term  taxes  payable  and  deferred  tax  assets  declining  by              
        approximately  $14  million  for  all  periods  presented.                                        
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                          Lattice  Semiconductor  Corporation                                            
                          -  Supplemental  Historical  Financial  Information  -                            
                                                                                                                                                        
                                                    Three  Months  Ended                              Year  Ended              
                                    ---------------------------------    ----------------------  
                                    12/28/2013    9/28/2013    12/29/2012    12/28/2013    12/29/2012  
                                    ----------    ---------    ----------    ----------    ----------  
Operations                                                                                                                                    
  Information                                                                                                                                
    Percent  of                                                                                                                                
      Revenue                                                                                                                                    
    Gross  Margin                    54.3%            53.2%              54.2%              53.6%              54.0%
    R&D  Expense                      24.9%            23.2%              28.3%              24.3%              27.8%
    SG&A  Expense                    19.2%            18.8%              26.2%              20.2%              25.9%
    Depreciation  and                                                                                                                    
      amortization                                                                                                                          
      (in  thousands)            5,634            5,210              5,987            20,807            22,149  
    Capital                                                                                                                                      
      expenditures                                                                                                                          
      (in  thousands)            2,263            3,400              2,363            12,500            13,593  
    Stock                                                                                                                                          
      compensation                                                                                                                          
      expense  (in                                                                                                                            
      thousands)                    2,537            2,562              1,757              9,522              7,510  
    Restructuring                                                                                                                          
      and  severance                                                                                                                        
      related  charges                                                                                                                    
      (in  thousands)                167                376              5,299                  797              8,515  
    Taxes  paid                                                                                                                                
      (cash,  in                                                                                                                                
      thousands)                        289                126                  172              1,370                  908  
Balance  Sheet                                                                                                                              
  Information                                                                                                                                
    Current  Ratio                    5.6                5.2                  5.4                                                  
    A/R  Days  Revenue                                                                                                                    
      Outstanding                        50                  55                    64                                                  
    Inventory  Months              3.4                3.1                  4.4                                                  
Revenue%  (by                                                                                                                                
  Product  Family)                                                                                                                        
    PLD                                          68%                70%                  68%                  69%                  66%
    FPGA                                        32%                30%                  32%                  31%                  34%
Revenue%  (by                                                                                                                                
  Product                                                                                                                                        
  Classification)                                                                                                                        
  (1)                                                                                                                                                
    New                                          46%                51%                  29%                  46%                  22%
    Mainstream                            43%                41%                  53%                  43%                  56%
    Mature                                    11%                  8%                  18%                  11%                  22%
Revenue%  (by                                                                                                                                
  Geography)                                                                                                                                  
    Asia                                        76%                76%                  69%                  74%                  68%
    Europe  (incl.                                                                                                                          
      Africa)                                12%                14%                  16%                  14%                  17%
    Americas                                12%                10%                  15%                  12%                  15%
Revenue%  (by  End                                                                                                                        
  Market)  (2)                                                                                                                                
    Communications                    41%                35%                  38%                  38%                  42%
    Industrial  &                                                                                                                            
      Other                                    23%                20%                  31%                  23%                  32%
    Computing                                9%                  9%                  13%                    9%                  13%
    Consumer                                27%                36%                  18%                  30%                  13%
Revenue%  (by                                                                                                                                
  Channel)                                                                                                                                      
    Sell-through                                                                                                                            
      distribution                      45%                41%                  55%                  45%                  55%
    Direct                                    55%                59%                  45%                  55%                  45%
                                                                                                                                                        
(1)  New:  MachXO3,  LatticeECP3,  MachXO2,  Power  Manager  II,  and  iCE40                  
        Mainstream:  ispMACH  4000ZE,  ispMACH  4000/Z,  LatticeSC,  LatticeECP2/M,      
        LatticeECP,  LatticeXP2,  LatticeXP,  MachXO,  ispClock  A/D/S,  Software  and  
        IP  Mature:  ispXPLD,  ispXPGA,  FPSC,  ORCA  2,  ORCA  3,  ORCA  4,  ispPAC,            
        isplsi  8000V,  ispMACH  5000B,  ispMACH  2LV,  ispMACH  5LV,  ispLSI  2000V,        
        ispLSI  5000V,  ispMACH  5000VG,  all  5-volt  CPLDs,  ispGDX2,  GDX/V,  ispMACH  
        4/LV,  iCE65,  ispClock,  Power  Manager  I,  all  SPLDs                                              
                                                                                                                                                        
        *  Product  categories  are  modified  as  appropriate  relative  to  our                
        portfolio  of  products  and  the  generation  within  each  major  product            
        family.  New  products  consist  of  our  latest  generation  of  products,  while
        Mainstream  and  Mature  are  older  or  based  on  unique  late  stage  customer-  
        based  production  needs.  Generally,  product  categories  are  adjusted  every
        two  to  three  years,  at  which  time  prior  periods  are  reclassified  to          
        conform  to  the  new  categorization.  In  the  first  fiscal  quarter  2012  we    
        reclassified  our  New,  Mainstream  and  Mature  product  categories  to  better
        reflect  our  current  product  portfolio.                                                                    
                                                                                                                                                        
(2)  During  the  first  quarter  of  2013,  the  Company  refined  its  methodology      
        for  assigning  revenue  by  End  Market  categories.  All  periods  presented      
        have  been  revised  to  conform  to  this  methodology.                                              
 

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