Lattice Semiconductor Reports Fourth Quarter and Full Year 2014

Lattice Semiconductor Reports Fourth Quarter and Full Year 2014 Results

You should not unduly 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 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.

About Lattice Semiconductor:

Lattice Semiconductor (NASDAQ: LSCC) is the leader in low power, small form factor, low cost, customizable solutions for a quickly changing connected world. From making smart consumer devices smarter, to enabling intelligent automation in industrial, or connecting anything to everything in communications, electronics manufacturers around the world use Lattice’s solutions for fast time to market, product innovation, and competitive differentiation. For more information, visit www.latticesemi.com. You can also follow us via LinkedIn, Twitter, Facebook or RSS.

Lattice Semiconductor Corporation, Lattice (& design), L (& design), iCE40 and MachXO3L and specific product designations are either registered trademarks or trademarks of Lattice Semiconductor Corporation or its subsidiaries in the United States and/or other countries.

GENERAL NOTICE: Other product names used in this publication are for identification purposes only and may be trademarks of their respective holders.


Lattice Semiconductor Corporation Consolidated Statements of Operations (in thousands, except per share data) (unaudited)

	Three Months Ended								Year Ended
	January 3, 2015			September 27, 2014		December 28, 2013			January 3, 2015			December 28, 2013
Revenue	$	83,600		$	86,570	$	89,519		$	366,127		$	332,525
Costs and expenses:
Cost of products sold	37,337			35,759		40,916			159,940			154,281
Research and development	22,485			22,053		22,331			88,079			80,966
Selling, general and administrative	18,301			17,645		17,189			73,527			67,144
Amortization of intangible assets	737			737		737			2,948			2,960
Restructuring	1			2		131			17			388
	78,861			76,196		81,304			324,511			305,739
Income from operations	4,739			10,374		8,215			41,616			26,786
Other income (loss), net	57			53		(540		)	1,325			(300		)
Income before taxes	4,796			10,427		7,675			42,941			26,486
Income tax (benefit) expense	(10,623		)	1,021		1,128			(5,639		)	4,165
Net income	$	15,419		$	9,406	$	6,547		$	48,580		$	22,321

Net income per share:
Basic	$	0.13		$	0.08	$	0.06		$	0.41		$	0.19
Diluted	$	0.13		$	0.08	$	0.06		$	0.40		$	0.19

Shares used in per share calculations:
Basic	117,931			118,643		115,718			117,708			115,701
Diluted	119,486			120,970		117,156			120,245			117,081


Lattice Semiconductor Corporation Consolidated Balance Sheets (in thousands) (unaudited)

	January 3, 2015		December 28, 2013
Assets
Current assets:
Cash, cash equivalents and short-term marketable securities	$	254,844	$	215,815
Accounts receivable, net	62,372		50,085
Inventories	64,925		46,222
Other current assets	16,281		13,679
Total current assets	398,422		325,801

Property and equipment, net	27,796		41,719
Long-term marketable securities	—		5,241
Other long-term assets	9,862		6,120
Intangible assets, net of amortization	9,537		12,484
Goodwill	44,808		44,808
Deferred income taxes	20,105		11,703
	$	510,530	$	447,876

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and other accrued liabilities	$	45,800	$	51,113
Deferred income and allowances on sales to sell-through distributors	14,946		7,495
Total current liabilities	60,746		58,608

Other long-term liabilities	8,809		3,588
Total liabilities	69,555		62,196

Stockholders' equity	440,975		385,680
	$	510,530	$	447,876


Lattice Semiconductor Corporation - Supplemental Historical Financial Information -

	Three Months Ended						Year Ended
	1/3/2015		9/27/2014		12/28/2013		1/3/2015		12/28/2013
Operations Information
Percent of Revenue
Gross Margin	55.3	%	58.7	%	54.3	%	56.3	%	53.6	%
R&D Expense	26.9	%	25.5	%	24.9	%	24.1	%	24.3	%
SG&A Expense	21.9	%	20.4	%	19.2	%	20.1	%	20.2	%
Depreciation and amortization (in thousands)	5,375		5,240		5,634		22,248		20,807
Capital expenditures (in thousands)	3,394		1,998		2,263		10,267		12,500
Stock compensation expense (in thousands)	3,257		3,134		2,537		12,799		9,522
Restructuring and severance related charges (in thousands)	59		76		167		629		797
Taxes paid (cash, in thousands)	509		292		289		1,599		1,370
Balance Sheet Information
Current Ratio	6.6		6.4		5.6
A/R Days Revenue Outstanding	67		52		50
Inventory Months	5.2		5.6		3.4
Revenue% (by Product Family)
PLD	64	%	69	%	68	%	66	%	69	%
FPGA	36	%	31	%	32	%	34	%	31	%
Revenue% (by Product Classification) (1)
New	43	%	46	%	46	%	48	%	46	%
Mainstream	40	%	43	%	40	%	39	%	41	%
Mature	17	%	11	%	14	%	13	%	13	%
Revenue% (by Geography)
Asia	69	%	73	%	76	%	73	%	74	%
Europe (incl. Africa)	16	%	17	%	12	%	16	%	14	%
Americas	15	%	10	%	12	%	11	%	12	%
Revenue% (by End Market) (2)
Communications	41	%	41	%	41	%	42	%	38	%
Consumer	20	%	23	%	27	%	25	%	30	%
Industrial	39	%	36	%	32	%	33	%	32	%
Revenue% (by Channel)
Sell-through distribution	49	%	51	%	45	%	45	%	45	%
Direct	51	%	49	%	55	%	55	%	55	%

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