Lattice Semiconductor Reports Second Quarter 2013 Results; 19% Sales Increase Produces Record Revenue Quarter

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                     Lattice Semiconductor Corporation                      
                   Consolidated Statements of Operations                    
                   (in thousands, except per share data)                    
                                (unaudited)                                 
                                                                            
                                Three Months Ended        Six Months Ended  
                          ----------------------------- ------------------- 
                           June 29, March 30,  June 30,  June 29,  June 30, 
                             2013      2013      2012      2013      2012   
                          --------- --------- --------- --------- --------- 
Revenue                   $  84,694 $  71,158 $  70,792 $ 155,852 $ 142,492 
Costs and expenses:                                                         
Cost of products sold        39,584    33,003    33,741    72,587    65,956 
Research and development     20,267    18,114    19,363    38,381    38,509 
                                                                            
Selling, general and                                                        
 administrative              17,072    16,498    19,405    33,570    37,328 
Acquisition related                                                         
 charges (1)                    737       749       982     1,486     2,689 
Restructuring (2)                19       153        87       172       643 
                          --------- --------- --------- --------- --------- 
                             77,679    68,517    73,578   146,196   145,125 
                          --------- --------- --------- --------- --------- 
Income (loss) from                                                          
 operations                   7,015     2,641    (2,786)    9,656    (2,633)
Other (expense) income,                                                     
 net                            (54)      (52)      694      (106)      758 
                           ---------  ---------  ---------  ---------  ---------  
Income  (loss)  before                                                                                                                
  provision  for  income                                                                                                              
  taxes                                                6,961          2,589        (2,092)        9,550        (1,875)
                                                                                                                                                        
Provision  for  income  taxes                                                                                                    
  (3)                                                    1,921              699        10,450          2,620        18,381  
                                                    ---------  ---------  ---------  ---------  ---------  
Net  Income  (loss)                  $      5,040  $      1,890  $  (12,542)$      6,930  $  (20,256)
                                                    =========  =========  =========  =========  =========  
                                                                                                                                                        
Net  Income  (loss)  per                                                                                                              
  share  (4):                                                                                                                                  
Basic                                          $        0.04  $        0.02  $      (0.11)$        0.06  $      (0.17)
                                                    =========  =========  =========  =========  =========  
Diluted                                      $        0.04  $        0.02  $      (0.11)$        0.06  $      (0.17)
                                                    =========  =========  =========  =========  =========  
                                                                                                                                                        
Shares  used  in  per  share                                                                                                        
  calculations  (4):                                                                                                                    
Basic                                              115,733      115,391      117,874      115,562      118,024  
                                                    =========  =========  =========  =========  =========  
Diluted                                          117,109      116,714      117,874      116,935      118,024  
                                                    =========  =========  =========  =========  =========  
______________________                                                                                                            
Notes:                                                                                                                                            
                                                                                                                                                        
(1)  During  the  first  six  months  of  fiscal  2012,  the  Company  recorded                
        consulting,  legal  costs,  severance  related  integration  costs  and                
        amortization  of  intangible  assets  associated  with  the  acquisition  of        
        SiliconBlue.  During  the  first  six  months  of  2013,  Acquisition  related      
        charges  consist  of  amortization  of  acquired  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  three  and  six  months  ended  June  30,  2012            
        reflects  our  new  global  tax  structure  and  the  resulting  intercompany        
        sale  of  inventory  and  fixed  assets.                                                                          
                                                                                                                                                        
(4)  For  the  three  and  six  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.  For  the
        three  and  six  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.  ESPP  shares  are  included  if  dilutive.  
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                            Lattice  Semiconductor  Corporation                                          
                                                Consolidated  Balance  Sheets                                                  
                                                              (in  thousands)                                                              
                                                                  (unaudited)                                                                
                                                                                                                                                        
                                                                                                      June  29,        December  29,  
                                                                                                            2013                    2012        
                                                                                                  -------------  -------------
                                          Assets                                                                                                  
Current  assets:                                                                                                                          
Cash,  cash  equivalents  and  short-term  marketable                                                        
  securities                                                                            $          174,224              183,401
Accounts  receivable,  net                                                                63,605                46,947
Inventories                                                                                          49,654                44,194
Other  current  assets  (1)                                                                13,342                12,527
                                                                                                  -------------  -------------
Total  current  assets                                                                      300,825              287,069
                                                                                                                                                        
Property  and  equipment,  net                                                          41,733                40,384
Long-term  marketable  securities                                                    4,717                  4,717
Other  long-term  assets                                                                      8,503                  6,854
Intangible  assets,  net  of  amortization                                    13,957                15,430
Goodwill                                                                                                44,808                44,808
Deferred  income  taxes  (1)                                                              13,757                15,357
                                                                                                  -------------  -------------
                                                                                                  $          428,300  $          414,619
                                                                                                  =============  =============
                                                                                                                                                        
            Liabilities  and  Stockholders'  Equity                                                                    
Current  liabilities:                                                                                                                
Accounts  payable  and  other  accrued  liabilities      $            42,013                42,540
Deferred  income  and  allowances  on  sales  to  sell-                                                        
  through  distributors                                                                      13,890                10,553
                                                                                                  -------------  -------------
Total  current  liabilities                                                              55,903                53,093
                                                                                                                                                        
Other  long-term  liabilities  (1)                                                    5,222                  3,976
                                                                                                  -------------  -------------
Total  liabilities                                                                              61,125                57,069
                                                                                                                                                        
Stockholders'  equity                                                                      367,175              357,550
                                                                                                  $          428,300  $          414,619
                                                                                                  =============  =============
______________________                                                                                                            
Notes:                                                                                                                                            
                                                                                                                                                        
(1)  In  June  2013  the  company  early  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  -                          
                                                                                                                                                        
                                                                                              2Q13              1Q13              2Q12      
Operations  Information                                                                                                            
Percent  of  Revenue                                                                                                                    
Gross  Margin                                                                      53.3%            53.6%            52.3%    
R&D  Expense                                                                        23.9%            25.5%            27.4%    
SG&A  Expense                                                                      20.2%            23.2%            27.4%    
                                                                                                                                                        
Depreciation  and  amortization  (in                                                                                      
  thousands)                                                                        4,894            5,066            5,243    
Capital  expenditures  (in  thousands)                        3,783            3,054            4,632    
Stock  compensation  expense  (in  thousands)            2,513            1,912            2,054    
Restructuring  and  severance  related  charges                                                                  
  (in  thousands)                                                                  19                  153              1,493    
Taxes  paid  (cash,  in  thousands)                                  104                852                53        
                                                                                                                                                        
Balance  Sheet  Information                                                                                                      
Current  Ratio                                                                      5.4                5.1                5.8      
A/R  Days  Revenue  Outstanding                                        68                  71                  77        
Inventory  Months                                                                3.8                4.0                3.3      
                                                                                                                                                        
Revenue%  (by  Product  Family)                                                                                                
PLD                                                                                          69%                68%                65%      
FPGA                                                                                        31%                32%                35%      
                                                                                                                                                        
Revenue%  (by  Product  Classification)  (1)                                                                        
New                                                                                          46%                39%                20%      
Mainstream                                                                            42%                47%                60%      
Mature                                                                                    12%                14%                20%      
                                                                                                                                                        
Revenue%  (by  Geography)                                                                                                          
Asia                                                                                        74%                69%                70%      
Europe  (incl.  Africa)                                                      14%                18%                17%      
Americas                                                                                12%                13%                13%      
                                                                                                                                                        
Revenue%  (by  End  Market)  (2)                                                                                                
Communications                                                                    38%                39%                46%      
Industrial  &  Other                                                            23%                26%                33%      
Computing                                                                              8%                  10%                13%      
Consumer                                                                                31%                25%                8%        
                                                                                                                                                        
Revenue%  (by  Channel)                                                                                                              
Sell-through  distribution                                              44%                49%                56%      
Direct                                                                                    56%                51%                44%      
                                                                                                                                                        
(1)  New:  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  to  End  Market  categories.  All  periods  presented      
        have  been  revised  to  conform  to  this  methodology.                                              
                                                                                                                                                        
                                                                                                                                                        
 




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