About Lattice Semiconductor Corporation:
Lattice Semiconductor Corporation (NASDAQ: LSCC) provides smart connectivity solutions powered by our low power FPGA, video ASSP, 60 GHz millimeter wave, and IP products to the consumer, communications, industrial, computing, and automotive markets worldwide. Our unwavering commitment to our customers enables them to accelerate their innovation, creating an ever better and more connected world.
For more information, visit www.latticesemi.com. You can also follow us via LinkedIn, Twitter, Facebook, YouTube 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.
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Lattice Semiconductor Corporation Consolidated Statements of Operations (in thousands, except per share data) (unaudited) |
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| Three Months Ended | Year Ended | |||||||||||||||||||||
|
December 31,
2016 |
October 1,
2016 |
January 2,
2016 |
December 31,
2016 |
January 2,
2016 |
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| Revenue | $ | 118,108 | $ | 113,225 | $ | 101,194 | $ | 427,054 | $ | 405,966 | ||||||||||||
| Costs and expenses: | ||||||||||||||||||||||
| Cost of sales | 54,628 | 45,801 | 47,092 | 180,620 | 186,057 | |||||||||||||||||
| Research and development | 26,248 | 27,747 | 32,055 | 117,518 | 136,868 | |||||||||||||||||
| Selling, general, and administrative | 22,745 | 29,244 | 24,253 | 98,602 | 97,349 | |||||||||||||||||
| Amortization of acquired intangible assets | 8,283 | 8,260 | 8,756 | 33,575 | 29,580 | |||||||||||||||||
| Restructuring | 951 | 317 | 3,459 | 9,267 | 19,239 | |||||||||||||||||
| Acquisition related charges | 6,211 | — | 372 | 6,305 | 22,450 | |||||||||||||||||
| Impairment of goodwill and intangible assets | — | 7,866 | 21,655 | 7,866 | 21,655 | |||||||||||||||||
| 119,066 | 119,235 | 137,642 | 453,753 | 513,198 | ||||||||||||||||||
| Loss from operations | (958 | ) | (6,010 | ) | (36,448 | ) | (26,699 | ) | (107,232 | ) | ||||||||||||
| Interest expense | (5,070 | ) | (5,235 | ) | (5,519 | ) | (20,327 | ) | (18,389 | ) | ||||||||||||
| Other income (expense), net | 745 | 209 | 515 | 4,303 | (580 | ) | ||||||||||||||||
| Loss before income taxes and equity in net loss of an unconsolidated affiliate | (5,283 | ) | (11,036 | ) | (41,452 | ) | (42,723 | ) | (126,201 | ) | ||||||||||||
| Income tax expense | 2,507 | 971 | 3,510 | 9,917 | 32,540 | |||||||||||||||||
| Equity in net loss of an unconsolidated affiliate, net of tax | (374 | ) | (407 | ) | (492 | ) | (1,459 | ) | (492 | ) | ||||||||||||
| Net loss | $ | (8,164 | ) | $ | (12,414 | ) | $ | (45,454 | ) | $ | (54,099 | ) | $ | (159,233 | ) | |||||||
| Net loss per share, basic and diluted | $ | (0.07 | ) | $ | (0.10 | ) | $ | (0.38 | ) | $ | (0.45 | ) | $ | (1.36 | ) | |||||||
| Shares used in per share calculations, basic and diluted | 121,236 | 120,584 | 118,095 | 119,994 | 117,387 | |||||||||||||||||
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Lattice Semiconductor Corporation Consolidated Balance Sheets (in thousands) (unaudited) |
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December 31,
2016 |
January 2,
2016 |
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| Assets | |||||||||
| Current assets: | |||||||||
| Cash, cash equivalents and short-term marketable securities | $ | 116,860 | $ | 102,574 | |||||
| Accounts receivable, net | 99,637 | 88,471 | |||||||
| Inventories | 79,168 | 75,896 | |||||||
| Other current assets | 19,035 | 18,922 | |||||||
| Total current assets | 314,700 | 285,863 | |||||||
| Property and equipment, net | 49,481 | 51,852 | |||||||
| Intangible assets, net of amortization | 118,863 | 162,583 | |||||||
| Goodwill | 269,758 | 267,549 | |||||||
| Deferred income taxes | 372 | 578 | |||||||
| Other long-term assets | 13,709 | 17,495 | |||||||
| $ | 766,883 | $ | 785,920 | ||||||
| Liabilities and Stockholders' Equity | |||||||||
| Current liabilities: | |||||||||
| Accounts payable and other accrued liabilities | $ | 90,798 | $ | 83,761 | |||||
| Current portion of long-term debt |
15,862 |
7,557 | |||||||
| Deferred income and allowances on sales to sell-through distributors and deferred license revenue | 32,985 | 19,859 | |||||||
| Total current liabilities |
139,645 |
111,177 | |||||||
| Long-term debt |
318,760 |
330,870 | |||||||
| Other long-term liabilities | 38,048 | 38,353 | |||||||
| Total liabilities | 496,453 | 480,400 | |||||||
| Stockholders' equity | 270,430 | 305,520 | |||||||
| $ | 766,883 | $ | 785,920 | ||||||
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Lattice Semiconductor Corporation Consolidated Statements of Cash Flows (in thousands) (unaudited) |
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| Year Ended | ||||||||||
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December 31,
2016 |
January 2,
2016 |
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| Cash flows from operating activities: | ||||||||||
| Net loss | $ | (54,099 | ) | $ | (159,233 | ) | ||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||
| Depreciation and amortization | 61,806 | 60,808 | ||||||||
| Impairment of intangible assets | 7,866 | 21,655 | ||||||||
| Amortization of debt issuance costs and discount | 1,350 | 2,835 | ||||||||
| Change in deferred income tax provision | 90 | 21,367 | ||||||||
| Loss on sale or maturity of marketable securities | 79 | 333 | ||||||||
| Gain on forward contracts | (184 | ) | — | |||||||
| Stock-based compensation expense | 16,213 | 18,396 | ||||||||
| Loss on disposal of fixed assets | 597 | — | ||||||||
| Gain on sale of business unit | (2,646 | ) | — | |||||||
| Equity in net loss of an unconsolidated affiliate, net of tax | 1,459 | 492 | ||||||||
| Changes in assets and liabilities: | ||||||||||
| Accounts receivable, net | (11,419 | ) | 4,578 | |||||||
| Inventories | (3,272 | ) | 9,868 | |||||||
| Prepaid expenses and other current assets | (2,270 | ) | (6,710 | ) | ||||||
| Accounts payable and accrued expenses (includes restructuring) | 8,338 | 6,301 | ||||||||
| Accrued payroll obligations | 402 | (10,202 | ) | |||||||
| Income taxes payable | 3,216 | 1,749 | ||||||||
| Deferred income and allowances on sales to sell-through distributors | 14,391 | 2,920 | ||||||||
| Deferred licensing and services revenue | (183 | ) | 1,958 | |||||||
| Net cash provided by (used in) operating activities | 41,734 | (22,885 | ) | |||||||
| Cash flows from investing activities: | ||||||||||
| Proceeds from sales of and maturities of short-term marketable securities | 14,897 | 142,956 | ||||||||
| Purchases of marketable securities, net | (7,490 | ) | (15,982 | ) | ||||||
| Cash paid for business acquisition, net of cash acquired | — | (431,068 | ) | |||||||
| Capital expenditures | (16,717 | ) | (18,209 | ) | ||||||
| Proceeds from sale of business unit, net of cash sold | 1,972 | — | ||||||||
| Cash paid for a non-marketable equity method investment | (1,000 | ) | (5,000 | ) | ||||||
| Cash paid for software licenses | (9,035 | ) | (9,515 | ) | ||||||
| Net cash used in investing activities | (17,373 | ) | (336,818 | ) | ||||||
| Cash flows from financing activities: | ||||||||||
| Proceeds from issuance of restricted stock units, net of withholding taxes | (3,565 | ) | (3,493 | ) | ||||||
| Purchases of treasury stock | — | (6,970 | ) | |||||||
| Net proceeds from issuance of common stock | 7,607 | 5,679 | ||||||||
| Net proceeds from issuance of long-term debt | — | 346,500 | ||||||||
| Cash paid for debt issuance costs | — | (8,283 | ) | |||||||
| Repayment of debt | (5,154 | ) | (2,625 | ) | ||||||
| Cash paid to redeem noncontrolling interest | — | (867 | ) | |||||||
| Net cash (used in) provided by financing activities | (1,112 | ) | 329,941 | |||||||
| Lattice Semiconductor Corporation | ||||||||||
| Consolidated Statements of Cash Flows (continued) | ||||||||||
| (in thousands) | ||||||||||
| (unaudited) | ||||||||||
| Year Ended | ||||||||||
|
December 31,
2016 |
January 2,
2016 |
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| Effect of exchange rate change on cash | (1,303 | ) | (1,243 | ) | ||||||
| Net increase (decrease) in cash and cash equivalents | 21,946 | (31,005 | ) | |||||||
| Beginning cash and cash equivalents | 84,606 | 115,611 | ||||||||
| Ending cash and cash equivalents | $ | 106,552 | $ | 84,606 | ||||||
| Supplemental cash flow information: | ||||||||||
| Change in unrealized gain (loss) related to marketable securities, net of tax, included in Accumulated other comprehensive loss | $ | (93 | ) | $ | (69 | ) | ||||
| Income taxes paid, net of refunds | $ | 9,359 | $ | 8,339 | ||||||
| Interest paid | $ | 18,159 | $ | 11,071 | ||||||
| Accrued purchases of plant and equipment | $ | (249 | ) | $ | 799 | |||||
| Transfer of residual temporary equity to additional paid-in capital on redemption of noncontrolling interest | $ | — | $ | 6,773 | ||||||
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Lattice Semiconductor Corporation - Supplemental Historical Financial Information - (unaudited) |
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| Three Months Ended | Year Ended | ||||||||||||||||
| December 31, 2016 | October 1, 2016 | January 2, 2016 | December 31, 2016 | January 2, 2016 | |||||||||||||
| Operations Information | |||||||||||||||||
| Percent of Revenue | |||||||||||||||||
| Gross Margin | 53.7 | % | 59.5 | % | 53.5 | % | 57.7 | % | 54.2 | % | |||||||
| R&D Expense | 22.2 | % | 24.5 | % | 31.7 | % | 27.5 | % | 33.7 | % | |||||||
| SG&A Expense | 19.3 | % | 25.8 | % | 24.0 | % | 23.1 | % | 24.0 | % | |||||||
| Depreciation and amortization (in thousands) | 13,898 | 15,556 | 17,892 | 61,806 | 60,808 | ||||||||||||
| Capital expenditures (in thousands) | 2,726 | 3,889 | 6,624 | 16,717 | 18,209 | ||||||||||||
| Stock-based compensation expense (in thousands) | 4,106 | 4,309 | 4,788 | 16,213 | 17,350 | ||||||||||||
| Stock-based compensation included in acquisition related charges (in thousands) | — | — | — | — | 4,293 | ||||||||||||
| Restructuring and severance related charges (in thousands) | 951 | 317 | 3,459 | 9,267 | 19,239 | ||||||||||||
| Severance costs included in acquisition related charges (in thousands) | — | — | — | — | 4,017 | ||||||||||||
| Taxes paid (cash, in thousands) | 2,109 | 2,386 | 2,936 | 9,359 | 8,339 | ||||||||||||
| Balance Sheet Information | |||||||||||||||||
| Current Ratio | 2.3 | 2.2 | 2.6 | ||||||||||||||
| A/R Days Revenue Outstanding | 77 | 76 | 80 | ||||||||||||||
| Inventory Months | 4.3 | 5.3 | 4.8 | ||||||||||||||
| Revenue% (by Geography) | |||||||||||||||||
| Asia | 75 | % | 74 | % | 75 | % | 71 | % | 76 | % | |||||||
| Europe (incl. Africa) | 14 | % | 12 | % | 12 | % | 14 | % | 14 | % | |||||||
| Americas | 11 | % | 14 | % | 13 | % | 15 | % | 10 | % | |||||||
| Revenue% (by End Market) (1) | |||||||||||||||||
| Communications and Computing | 26 | % | 27 | % | 35 | % | 29 | % | 35 | % | |||||||
| Mobile and Consumer | 36 | % | 31 | % | 30 | % | 30 | % | 31 | % | |||||||
| Industrial and Automotive | 31 | % | 33 | % | 23 | % | 33 | % | 25 | % | |||||||
| Licensing and Services | 7 | % | 9 | % | 12 | % | 8 | % | 9 | % | |||||||
| Revenue% (by Channel) | |||||||||||||||||
| Sell-through distribution | 68 | % | 62 | % | 44 | % | 61 | % | 45 | % | |||||||
| Direct | 32 | % | 38 | % | 56 | % | 39 | % | 55 | % | |||||||
