Lattice Semiconductor Reports Third Quarter 2013 Results

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                     Lattice Semiconductor Corporation                      
                   Consolidated Statements of Operations                    
                   (in thousands, except per share data)                    
                                (unaudited)                                 
                                                                            
                           Three Months Ended           Nine Months Ended   
                   ---------------------------------  --------------------- 
                    September  June 29,    September   September  September 
                    28, 2013     2013      29, 2012    28, 2013   29, 2012  
                   ---------- ----------  ----------  ---------- ---------- 
Revenue            $   87,154 $   84,694  $   70,889  $  243,006 $  213,381 
Costs and                                                                   
 expenses:                                                                  
Cost of products                                                            
 sold                  41,463     39,584      32,341     114,050     98,297 
Research and                                                                
 development           20,254     20,267      20,446      58,635     58,955 
Selling, general                                                            
 and                                                                        
 administrative        16,385     17,072      17,720      49,955     55,048 
Acquisition                                                                 
 related charges                                                            
 (1)                      737        737         729       2,223      3,418 
Restructuring (2)          85         19          --         257        643 
                   ---------- ----------  ----------  ---------- ---------- 
                       78,924     77,679      71,236     225,120    216,361 
                   ---------- ----------  ----------  ---------- ---------- 
Income (loss) from                                                                  
  operations                          8,230            7,015                (347)          17,886          (2,980)
Other  income                                                                                                                                
  (expense),  net                      346                (54)                  88                  240                846  
                                      ----------  ----------    ----------    ----------  ----------  
Income  (loss)                                                                                                                              
  before  provision                                                                                                                      
  for  income  taxes              8,576            6,961                (259)          18,126          (2,134)
Provision  for                                                                                                                              
  income  taxes  (3)                  417            1,921              1,916              3,037          20,297  
                                      ----------  ----------    ----------    ----------  ----------  
Net  Income  (loss)    $        8,159  $        5,040    $      (2,175)  $      15,089  $    (22,431)
                                      ==========  ==========    ==========    ==========  ==========  
                                                                                                                                                        
Net  Income  (loss)                                                                                                                      
  per  share  (4):                                                                                                                          
Basic                            $          0.07  $          0.04    $        (0.02)  $          0.13  $        (0.19)
                                      ==========  ==========    ==========    ==========  ==========  
Diluted                        $          0.07  $          0.04    $        (0.02)  $          0.13  $        (0.19)
                                      ==========  ==========    ==========    ==========  ==========  
                                                                                                                                                        
Shares  used  in  per                                                                                                                    
  share                                                                                                                                            
  calculations  (4):                                                                                                                    
Basic                                  116,055        115,733          116,785          115,730        117,612  
                                      ==========  ==========    ==========    ==========  ==========  
Diluted                              117,349        117,109          116,785          117,093        117,612  
                                      ==========  ==========    ==========    ==========  ==========  
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
------------------                                                                                                                    
Notes:                                                                                                                                            
                                                                                                                                                        
(1)      During  the  first  nine  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  nine  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  nine  months  ended  September  29,      
            2012  reflects  the  nonrecurring  impact  of  transactions  required  to          
            implement  our  global  tax  structure  and  the  resulting  intercompany  sale
            of  inventory  and  fixed  assets.                                                                                
                                                                                                                                                        
(4)      For  the  three  and  nine  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  nine  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)                                                                
                                                                                                                                                        
                                                                                              September  28,      December  29,  
                                                                                                        2013                      2012          
                                                                                              --------------  --------------
                                        Assets                                                                                                    
Current  assets:                                                                                                                          
Cash,  cash  equivalents  and  short-term                                                                              
  marketable  securities                                                  $            210,772  $            183,401
Accounts  receivable,  net                                                              52,991                  46,947
Inventories                                                                                        42,295                  44,194
Other  current  assets  (1)                                                              14,631                  12,527
                                                                                              --------------  --------------
Total  current  assets                                                                    320,689                287,069
                                                                                                                                                        
Property  and  equipment,  net                                                        42,345                  40,384
Long-term  marketable  securities                                                  4,717                    4,717
Other  long-term  assets                                                                    7,199                    6,854
Intangible  assets,  net  of  amortization                                  13,220                  15,430
Goodwill                                                                                              44,808                  44,808
Deferred  income  taxes  (1)                                                            13,746                  15,357
                                                                                              --------------  --------------
                                                                                              $            446,724  $            414,619
                                                                                              ==============  ==============
                                                                                                                                                        
          Liabilities  and  Stockholders'  Equity                                                                      
Current  liabilities:                                                                                                                
Accounts  payable  and  other  accrued  liabilities  $              44,424  $              42,540
Deferred  income  and  allowances  on  sales  to                                                                    
  sell-through  distributors                                                          17,587                  10,553
                                                                                              --------------  --------------
Total  current  liabilities                                                            62,011                  53,093
                                                                                                                                                        
Other  long-term  liabilities  (1)                                                  5,011                    3,976
                                                                                              --------------  --------------
Total  liabilities                                                                            67,022                  57,069
                                                                                                                                                        
Stockholders'  equity                                                                    379,702                357,550
                                                                                              --------------  --------------
                                                                                              $            446,724  $            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  -                          
                                                                                                                                                        
                                                                                                        3Q13          2Q13          3Q12    
Operations  Information                                                                                                            
Percent  of  Revenue                                                                                                                    
Gross  Margin                                                                                52.4%        53.3%        54.4%  
R&D  Expense                                                                                  23.2%        23.9%        28.8%  
SG&A  Expense                                                                                18.8%        20.2%        25.0%  
                                                                                                                                                        
Depreciation  and  amortization  (in  thousands)                5,210        4,894        5,892  
Capital  expenditures  (in  thousands)                                  3,400        3,783        3,156  
Stock  compensation  expense  (in  thousands)                      2,562        2,511        2,075  
Restructuring  and  severance  related  charges  (in                                                          
  thousands)                                                                                    376            84            1,195  
Taxes  paid  (cash,  in  thousands)                                            126            104            333    
                                                                                                                                                        
Balance  Sheet  Information                                                                                                      
Current  Ratio                                                                                5.2            5.4            5.7    
A/R  Days  Revenue  Outstanding                                                  55              68              71      
Inventory  Months                                                                          3.1            3.8            3.5    
                                                                                                                                                        
Revenue%  (by  Product  Family)                                                                                                
PLD                                                                                                    70%            69%            63%    
FPGA                                                                                                  30%            31%            37%    
                                                                                                                                                        
Revenue%  (by  Product  Classification)  (1)                                                                        
New                                                                                                    51%            46%            26%    
Mainstream                                                                                      41%            42%            54%    
Mature                                                                                              8%              12%            20%    
                                                                                                                                                        
Revenue%  (by  Geography)                                                                                                          
Asia                                                                                                  76%            74%            69%    
Europe  (incl.  Africa)                                                                14%            14%            18%    
Americas                                                                                          10%            12%            13%    
                                                                                                                                                        
Revenue%  (by  End  Market)  (2)                                                                                                
Communications                                                                              35%            38%            44%    
Industrial  &  Other                                                                      20%            23%            32%    
Computing                                                                                        9%              8%              13%    
Consumer                                                                                          36%            31%            11%    
                                                                                                                                                        
Revenue%  (by  Channel)                                                                                                              
Sell-through  distribution                                                        41%            44%            56%    
Direct                                                                                              59%            56%            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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