Lattice Semiconductor Reports Fourth Quarter and Full Year 2020 Results

The Company's management believes that these non-GAAP financial measures provide an additional and useful way of viewing aspects of our performance that, when viewed in conjunction with our GAAP results, provide a more comprehensive understanding of the various factors and trends affecting our ongoing financial performance and operating results than GAAP measures alone. Management also uses these non-GAAP measures for strategic and business decision-making, internal budgeting, forecasting, and resource allocation processes and believes that investors should have access to similar data.

These non-GAAP measures are included solely for informational and comparative purposes and are not meant as a substitute for GAAP and should be considered together with the consolidated financial information located in the tables attached to this press release.

About Lattice Semiconductor Corporation:

Lattice Semiconductor (NASDAQ: LSCC) is the low power programmable leader. We solve customer problems across the network, from the Edge to the Cloud, in the growing communications, computing, industrial, automotive and consumer markets. Our technology, long-standing relationships, and commitment to world-class support lets our customers quickly and easily unleash their innovation to create a smart, secure and connected world.

For more information about Lattice, please visit www.latticesemi.com. You can also follow us via LinkedIn, Twitter, Facebook, YouTube, WeChat, Weibo or Youku.

Lattice Semiconductor Corporation

Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended

 

Year Ended

 

 

January 2,

 

September 26,

 

December 28,

 

January 2,

 

December 28,

 

 

2021

 

2020

 

2019

 

2021

 

2019

Revenue

 

$

107,173

 

 

$

103,042

 

 

$

100,237

 

 

$

408,120

 

 

$

404,093

 

Cost of sales

 

 

42,312

 

 

 

40,736

 

 

 

40,944

 

 

 

162,814

 

 

 

165,671

 

Gross margin

 

 

64,861

 

 

 

62,306

 

 

 

59,293

 

 

 

245,306

 

 

 

238,422

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

22,633

 

 

 

22,439

 

 

 

19,543

 

 

 

89,223

 

 

 

78,617

 

Selling, general, and administrative

 

 

24,534

 

 

 

23,758

 

 

 

20,924

 

 

 

95,331

 

 

 

82,542

 

Amortization of acquired intangible assets

 

 

603

 

 

 

603

 

 

 

3,390

 

 

 

4,449

 

 

 

13,558

 

Restructuring

 

 

(241

)

 

 

2,692

 

 

 

(55

)

 

 

3,937

 

 

 

4,664

 

Total operating expenses

 

 

47,529

 

 

 

49,492

 

 

 

43,802

 

 

 

192,940

 

 

 

179,381

 

Income from operations

 

 

17,332

 

 

 

12,814

 

 

 

15,491

 

 

 

52,366

 

 

 

59,041

 

Interest expense

 

 

(788

)

 

 

(792

)

 

 

(1,184

)

 

 

(3,702

)

 

 

(11,731

)

Other expense, net

 

 

(125

)

 

 

(70

)

 

 

(228

)

 

 

(208

)

 

 

(2,245

)

Income before income taxes

 

 

16,419

 

 

 

11,952

 

 

 

14,079

 

 

 

48,456

 

 

 

45,065

 

Income tax expense (benefit)

 

 

430

 

 

 

(655

)

 

 

92

 

 

 

1,064

 

 

 

1,572

 

Net income

 

$

15,989

 

 

$

12,607

 

 

$

13,987

 

 

$

47,392

 

 

$

43,493

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.12

 

 

$

0.09

 

 

$

0.10

 

 

$

0.35

 

 

$

0.33

 

Diluted

 

$

0.11

 

 

$

0.09

 

 

$

0.10

 

 

$

0.34

 

 

$

0.32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in per share calculations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

136,104

 

 

 

135,598

 

 

 

133,691

 

 

 

135,220

 

 

 

132,471

 

Diluted

 

 

141,713

 

 

 

141,524

 

 

 

138,196

 

 

 

141,276

 

 

 

137,274

 

Lattice Semiconductor Corporation

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

January 2,

 

December 28,

 

 

2021

 

2019

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

182,332

 

 

$

118,081

 

Accounts receivable, net

 

 

64,581

 

 

 

64,917

 

Inventories, net

 

 

64,599

 

 

 

54,980

 

Other current assets

 

 

22,331

 

 

 

24,452

 

Total current assets

 

 

333,843

 

 

 

262,430

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

39,666

 

 

 

39,230

 

Operating lease right-of-use assets

 

 

22,178

 

 

 

23,591

 

Intangible assets, net

 

 

6,321

 

 

 

6,977

 

Goodwill

 

 

267,514

 

 

 

267,514

 

Deferred income taxes

 

 

577

 

 

 

478

 

Other long-term assets

 

 

9,968

 

 

 

11,796

 

 

 

$

680,067

 

 

$

612,016

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

27,530

 

 

$

44,350

 

Accrued expenses

 

 

21,411

 

 

 

20,591

 

Accrued payroll obligations

 

 

18,028

 

 

 

13,404

 

Current portion of long-term debt

 

 

12,762

 

 

 

21,474

 

Total current liabilities

 

 

79,731

 

 

 

99,819

 

 

 

 

 

 

 

 

 

 

Long-term debt, net of current portion

 

 

157,934

 

 

 

125,072

 

Long-term operating lease liabilities, net of current portion

 

 

18,906

 

 

 

21,438

 

Other long-term liabilities

 

 

39,069

 

 

 

38,028

 

Total liabilities

 

 

295,640

 

 

 

284,357

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

384,427

 

 

 

327,659

 

 

 

$

680,067

 

 

$

612,016

 

Lattice Semiconductor Corporation

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

Year Ended

 

 

January 2,

 

December 28,

 

 

2021

 

2019

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

47,392

 

 

$

43,493

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

25,140

 

 

 

33,056

 

Stock-based compensation expense

 

 

40,372

 

 

 

18,899

 

Other non-cash adjustments

 

 

6,104

 

 

 

10,294

 

Net changes in assets and liabilities

 

 

(27,321

)

 

 

18,395

 

Net cash provided by operating activities

 

 

91,687

 

 

 

124,137

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(12,121

)

 

 

(15,590

)

Other investing activities

 

 

(8,747

)

 

 

54

 

Net cash used in investing activities

 

 

(20,868

)

 

 

(15,536

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from long-term debt

 

 

50,000

 

 

 

206,500

 

Cash paid for debt issuance costs

 

 

 

 

 

(2,086

)

Repayment of long-term debt

 

 

(26,250

)

 

 

(321,408

)

Purchase of treasury stock

 

 

(14,989

)

 

 

 

Net cash flows related to stock compensation exercises

 

 

(16,862

)

 

 

7,082

 

Net cash used in financing activities

 

 

(8,101

)

 

 

(109,912

)

Effect of exchange rate change on cash

 

 

1,533

 

 

 

341

 

Net increase (decrease) in cash and cash equivalents

 

 

64,251

 

 

 

(970

)

Beginning cash and cash equivalents

 

 

118,081

 

 

 

119,051

 

Ending cash and cash equivalents

 

$

182,332

 

 

$

118,081

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information and non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Interest paid

 

$

3,700

 

 

$

10,995

 

Income taxes paid, net of refunds

 

$

1,868

 

 

$

3,393

 

Lattice Semiconductor Corporation

Supplemental Historical Financial Information

(unaudited)

 

 

 

Three Months Ended

 

Year Ended

 

 

January 2,

 

September 26,

 

December 28,

 

January 2,

 

December 28,

 

 

2021

 

2020

 

2019

 

2021

 

2019

Balance Sheet Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A/R Days Revenue Outstanding (DSO)

 

 

55

 

 

 

65

 

 

 

59

 

 

 

 

 

 

 

 

 

Inventory Days (DIO)

 

 

139

 

 

 

133

 

 

 

123

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue% (by Geography)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asia

 

 

77

%

 

 

77

%

 

 

73

%

 

 

75

%

 

 

74

%

Americas

 

 

15

%

 

 

15

%

 

 

11

%

 

 

15

%

 

 

14

%

Europe (incl. Africa)

 

 

8

%

 

 

8

%

 

 

16

%

 

 

10

%

 

 

12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue% (by End Market)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Communications and Computing

 

 

43

%

 

 

43

%

 

 

38

%

 

 

43

%

 

 

39

%

Industrial and Automotive

 

 

43

%

 

 

41

%

 

 

39

%

 

 

41

%

 

 

37

%

Consumer

 

 

10

%

 

 

10

%

 

 

18

%

 

 

11

%

 

 

19

%

Licensing and Services

 

 

4

%

 

 

6

%

 

 

5

%

 

 

5

%

 

 

5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue% (by Channel)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution

 

 

88

%

 

 

82

%

 

 

84

%

 

 

83

%

 

 

82

%

Direct

 

 

12

%

 

 

18

%

 

 

16

%

 

 

17

%

 

 

18

%

Lattice Semiconductor Corporation

Reconciliation of U.S. GAAP to Non-GAAP Financial Measures

(in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended

 

Year Ended

 

 

January 2,

 

September 26,

 

December 28,

 

January 2,

 

December 28,

 

 

2021

 

2020

 

2019

 

2021

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Margin Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Gross margin

 

$

64,861

 

 

$

62,306

 

 

$

59,293

 

 

$

245,306

 

 

$

238,422

 

Stock-based compensation - gross margin (1)

 

 

1,104

 

 

 

1,022

 

 

 

440

 

 

 

3,818

 

 

 

1,422

 

Inventory adjustment related to restructured operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(338

)

Non-GAAP Gross margin

 

$

65,965

 

 

$

63,328

 

 

$

59,733

 

 

$

249,124

 

 

$

239,506

 

Gross Margin % Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Gross margin %

 

 

60.5

%

 

 

60.5

%

 

 

59.2

%

 

 

60.1

%

 

 

59.0

%

Cumulative effect of non-GAAP Gross Margin adjustments

 

 

1.1

%

 

 

1.0

%

 

 

0.4

%

 

 

0.9

%

 

 

0.3

%

Non-GAAP Gross margin %

 

 

61.6

%

 

 

61.5

%

 

 

59.6

%

 

 

61.0

%

 

 

59.3

%

Research and Development Expense % (R&D Expense %) Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP R&D Expense %

 

 

21.1

%

 

 

21.8

%

 

 

19.5

%

 

 

21.9

%

 

 

19.5

%

Stock-based compensation - R&D (1)

 

 

(2.6

)%

 

 

(2.8

)%

 

 

(1.6

)%

 

 

(2.7

)%

 

 

(1.4

)%

Non-GAAP R&D Expense %

 

 

18.5

%

 

 

19.0

%

 

 

17.9

%

 

 

19.2

%

 

 

18.1

%

Selling, General, and Administrative Expense % (SG&A Expense %) Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP SG&A Expense %

 

 

22.9

%

 

 

23.1

%

 

 

20.9

%

 

 

23.4

%

 

 

20.4

%

Stock-based compensation - SG&A (1)

 

 

(6.4

)%

 

 

(7.1

)%

 

 

(3.5

)%

 

 

(6.8

)%

 

 

(2.9

)%

Non-GAAP SG&A Expense %

 

 

16.5

%

 

 

16.0

%

 

 

17.4

%

 

 

16.6

%

 

 

17.5

%

Operating Expenses Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Operating expenses

 

$

47,529

 

 

$

49,492

 

 

$

43,802

 

 

$

192,940

 

 

$

179,381

 

Stock-based compensation - operations (1)

 

 

(9,692

)

 

 

(10,189

)

 

 

(5,124

)

 

 

(38,324

)

 

 

(17,477

)

Amortization of acquired intangible assets

 

 

(603

)

 

 

(603

)

 

 

(3,390

)

 

 

(4,449

)

 

 

(13,558

)

Restructuring charges

 

 

241

 

 

 

(2,692

)

 

 

55

 

 

 

(3,937

)

 

 

(4,664

)

Impairment of acquired intangible assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,023

 

Non-GAAP Operating expenses

 

$

37,475

 

 

$

36,008

 

 

$

35,343

 

 

$

146,230

 

 

$

144,705

 

(1)

 

The non-GAAP adjustments for Stock-based compensation include related tax expenses.

Lattice Semiconductor Corporation

Reconciliation of U.S. GAAP to Non-GAAP Financial Measures

(in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended

 

Year Ended

 

 

January 2,

 

September 26,

 

December 28,

 

January 2,

 

December 28,

 

 

2021

 

2020

 

2019

 

2021

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Operations Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Income from operations

 

$

17,332

 

 

$

12,814

 

 

$

15,491

 

 

$

52,366

 

 

$

59,041

 

Stock-based compensation - gross margin (1)

 

 

1,104

 

 

 

1,022

 

 

 

440

 

 

 

3,818

 

 

 

1,422

 

Inventory adjustment related to restructured operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(338

)

Stock-based compensation - operations (1)

 

 

9,692

 

 

 

10,189

 

 

 

5,124

 

 

 

38,324

 

 

 

17,477

 

Amortization of acquired intangible assets

 

 

603

 

 

 

603

 

 

 

3,390

 

 

 

4,449

 

 

 

13,558

 

Restructuring charges

 

 

(241

)

 

 

2,692

 

 

 

(55

)

 

 

3,937

 

 

 

4,664

 

Impairment of acquired intangible assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,023

)

Non-GAAP Income from operations

 

$

28,490

 

 

$

27,320

 

 

$

24,390

 

 

$

102,894

 

 

$

94,801

 

Income from Operations % Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Income from operations %

 

 

16.2

%

 

 

12.4

%

 

 

15.5

%

 

 

12.8

%

 

 

14.6

%

Cumulative effect of non-GAAP Gross Margin and Operating adjustments

 

 

10.4

%

 

 

14.1

%

 

 

8.8

%

 

 

12.4

%

 

 

8.9

%

Non-GAAP Income from operations %

 

 

26.6

%

 

 

26.5

%

 

 

24.3

%

 

 

25.2

%

 

 

23.5

%

Other Expense Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Other expense

 

$

(125

)

 

$

(70

)

 

$

(228

)

 

$

(208

)

 

$

(2,245

)

Loss on refinancing of long-term debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,235

 

Non-GAAP Other expense

 

$

(125

)

 

$

(70

)

 

$

(228

)

 

$

(208

)

 

$

(10

)

Income Tax Expense (Benefit) Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Income tax expense (benefit)

 

$

430

 

 

$

(655

)

 

$

92

 

 

$

1,064

 

 

$

1,572

 

Estimated tax effect of non-GAAP adjustments (2)

 

 

(393

)

 

 

478

 

 

 

(11

)

 

 

 

 

 

 

Non-GAAP Income tax expense (benefit)

 

$

37

 

 

$

(177

)

 

$

81

 

 

$

1,064

 

 

$

1,572

 

(1)

 

The non-GAAP adjustments for Stock-based compensation include related tax expenses.

(2)

 

We calculate non-GAAP tax expense by applying our tax provision model to year-to-date and projected income after adjusting for non-GAAP items. The difference between calculated values for GAAP and non-GAAP tax expense has been included as the “Estimated tax effect of non-GAAP adjustments.”

Lattice Semiconductor Corporation

Reconciliation of U.S. GAAP to Non-GAAP Financial Measures

(in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended

 

Year Ended

 

 

January 2,

 

September 26,

 

December 28,

 

January 2,

 

December 28,

 

 

2021

 

2020

 

2019

 

2021

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net income

 

$

15,989

 

 

$

12,607

 

 

$

13,987

 

 

$

47,392

 

 

$

43,493

 

Stock-based compensation - gross margin (1)

 

 

1,104

 

 

 

1,022

 

 

 

440

 

 

 

3,818

 

 

 

1,422

 

Inventory adjustment related to restructured operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(338

)

Stock-based compensation - operations (1)

 

 

9,692

 

 

 

10,189

 

 

 

5,124

 

 

 

38,324

 

 

 

17,477

 

Amortization of acquired intangible assets

 

 

603

 

 

 

603

 

 

 

3,390

 

 

 

4,449

 

 

 

13,558

 

Restructuring charges

 

 

(241

)

 

 

2,692

 

 

 

(55

)

 

 

3,937

 

 

 

4,664

 

Impairment of acquired intangible assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,023

)

Loss on refinancing of long-term debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,235

 

Estimated tax effect of non-GAAP adjustments (2)

 

 

393

 

 

 

(478

)

 

 

11

 

 

 

 

 

 

 

Non-GAAP Net income

 

$

27,540

 

 

$

26,635

 

 

$

22,897

 

 

$

97,920

 

 

$

81,488

 

Net Income Per Share Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net income per share - basic

 

$

0.12

 

 

$

0.09

 

 

$

0.10

 

 

$

0.35

 

 

$

0.33

 

Cumulative effect of Non-GAAP adjustments

 

 

0.08

 

 

 

0.11

 

 

 

0.07

 

 

 

0.37

 

 

 

0.29

 

Non-GAAP Net income per share - basic

 

$

0.20

 

 

$

0.20

 

 

$

0.17

 

 

$

0.72

 

 

$

0.62

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net income per share - diluted

 

$

0.11

 

 

$

0.09

 

 

$

0.10

 

 

$

0.34

 

 

$

0.32

 

Cumulative effect of Non-GAAP adjustments

 

 

0.08

 

 

 

0.10

 

 

 

0.07

 

 

 

0.35

 

 

 

0.27

 

Non-GAAP Net income per share - diluted

 

$

0.19

 

 

$

0.19

 

 

$

0.17

 

 

$

0.69

 

 

$

0.59

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in per share calculations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

136,104

 

 

 

135,598

 

 

 

133,691

 

 

 

135,220

 

 

 

132,471

 

Diluted

 

 

141,713

 

 

 

141,524

 

 

 

138,196

 

 

 

141,276

 

 

 

137,274

 

(1)

 

The non-GAAP adjustments for Stock-based compensation include related tax expenses.

(2)

 

We calculate non-GAAP tax expense by applying our tax provision model to year-to-date and projected income after adjusting for non-GAAP items. The difference between calculated values for GAAP and non-GAAP tax expense has been included as the “Estimated tax effect of non-GAAP adjustments.”


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