Lattice Semiconductor Reports Fourth Quarter and Full Year 2016

Lattice Semiconductor Reports Fourth Quarter and Full Year 2016 Results

Fourth Quarter 2016 Financial Highlights*:

Revenue of $118.1 million.
On a GAAP basis, net loss of $8.2 million or $0.07 per basic and diluted share.
On a Non-GAAP basis, net income of $11.8 million or $0.10 per basic and diluted share.
Gross margin of 53.7% on a GAAP basis and 53.9% on a non-GAAP basis.
Lattice Semiconductor entered into a definitive agreement to be acquired by Canyon Bridge Capital Partners, Inc.

Full Year 2016 Financial Highlights*:

Revenue of $427.1 million.
On a GAAP basis, net loss of $54.1 million or $0.45 per basic and diluted share.
On a Non-GAAP basis, net income of $17.0 million or $0.14 per basic and diluted share.
Gross margin of 57.7% on a GAAP basis and 58.0% on a non-GAAP basis.

* GAAP represents U.S. Generally Accepted Accounting Principles. Non-GAAP represents GAAP excluding the impact of certain activities which the Company's management excludes in analyzing the Company's operating results and in understanding trends in the Company's earnings. For a reconciliation of GAAP to non-GAAP results, see accompanying tables "Reconciliation of U.S. GAAP to Non-GAAP Financial Measures."

PORTLAND, Ore. — (BUSINESS WIRE) — February 15, 2017 — Lattice Semiconductor Corporation (NASDAQ: LSCC), the global leader in smart connectivity solutions, announced financial results today for the fiscal fourth quarter and full year ended December 31, 2016.

The Company reported revenue for the fourth quarter of 2016 of $118.1 million, which increased 4.3% sequentially, as compared to the third quarter 2016 revenue of $113.2 million, and increased 16.7%, as compared to the fourth quarter 2015 revenue of $101.2 million.

Gross margin on a GAAP basis was 53.7% for the fourth quarter of 2016, as compared to the third quarter of 2016 gross margin of 59.5% and 53.5% for the fourth quarter of 2015. Gross margin for the fourth quarter of 2016 was 53.9% on a non-GAAP basis, as compared to 59.8% for the third quarter of 2016 and 54.6% for the fourth quarter of 2015.

Total operating expenses for the fourth quarter of 2016 were $64.4 million on a GAAP basis (includes $6.2 million in acquisition related expenses), as compared to $73.4 million for the third quarter of 2016 (includes $7.5 million in bad debt expense related to the bankruptcy filing of one of our distributors; and a $7.9 million acquired intangible assets impairment charge due to changes in our role as the agent of the HDMI consortium) and $90.6 million for the fourth quarter of 2015 (includes a $21.7 million impairment of goodwill and intangible assets). Total operating expenses were $45.1 million for the fourth quarter of 2016 on a non-GAAP basis, as compared to $52.9 million for the third quarter of 2016, and $51.9 million for the fourth quarter of 2015.

GAAP net loss for the fourth quarter was $8.2 million ($0.07 per basic and diluted share), with net income of $11.8 million ($0.10 per basic and diluted share) on a non-GAAP basis. GAAP results for the fourth quarter of 2016 reflect $1.0 million in restructuring charges, $6.2 million in acquisition related charges, $2.5 million in tax expense, $8.3 million in amortization of acquired intangible assets, and $4.1 million in stock-based compensation expense. This compares to a net loss on a GAAP basis in the prior quarter of $12.4 million ($0.10 per basic and diluted share), with net income on a non-GAAP basis in the prior quarter of $5.9 million ($0.05 per basic and diluted share), and compares to a net loss on a GAAP basis in the year ago period of $45.5 million ($0.38 per basic and diluted share), or a net loss of $4.5 million ($0.04 per basic and diluted share) on a non-GAAP basis. GAAP results for the third quarter of 2016 reflect the above mentioned $7.5 million in bad debt expense and $7.9 million impairment charge, along with $0.3 million in restructuring charges, $1.0 million in tax expense, $8.3 million in amortization of acquired intangible assets, and $4.3 million in stock-based compensation expense. GAAP results for the fourth quarter of 2015 reflect $3.5 million in restructuring charges, $0.4 million in acquisition related charges, $3.5 million in tax expense, $8.8 million in amortization of acquired intangible assets, $21.7 million in impairment of goodwill and intangible assets, and $4.8 million in stock-based compensation expense.

For the fiscal year 2016, revenue was $427.1 million on a GAAP basis, an increase of 5.2% from $406.0 million in the fiscal year 2015. Revenue for the fiscal year 2016 was $427.1 million on a non-GAAP basis, an increase of 3.9% from $411.2 million in fiscal year 2015. Net loss on a GAAP basis for fiscal year 2016 was $54.1 million ($0.45 per basic and diluted share), compared to a net loss of $159.2 million ($1.36 per basic and diluted share) reported in fiscal year 2015. Net income for the fiscal year 2016 was $17.0 million ($0.14 per basic and diluted share) on a non-GAAP basis, compared to a net loss of $18.2 million ($0.15 per basic and diluted share) for the fiscal year 2015. GAAP results for the fiscal year 2016 reflect $9.3 million in restructuring costs, $6.3 million in acquisition related charges, $9.9 million in tax expense, $33.6 million in amortization of acquired intangible assets, $7.9 million in impairment of goodwill and intangible assets, and $16.2 million in stock-based compensation expense. GAAP results for the fiscal year 2015 reflect $19.2 million in restructuring costs, $22.5 million in acquisition related charges, $32.5 million in tax expense, $29.6 million in amortization of acquired intangible assets, $21.7 million in impairment of goodwill and intangible assets, and $17.4 million in stock-based compensation expense.

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