Lattice Semiconductor Reports First Quarter 2022 Results

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 let 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

 

 

 

April 2,

 

 

January 1,

 

 

April 3,

 

 

 

2022

 

 

2022

 

 

2021

 

Revenue

 

$

150,515

 

 

$

141,795

 

 

$

115,716

 

Cost of sales

 

 

49,748

 

 

 

50,715

 

 

 

45,130

 

Gross margin

 

 

100,767

 

 

 

91,080

 

 

 

70,586

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

32,555

 

 

 

30,229

 

 

 

24,066

 

Selling, general, and administrative

 

 

28,771

 

 

 

28,646

 

 

 

25,092

 

Amortization of acquired intangible assets

 

 

1,169

 

 

 

804

 

 

 

603

 

Restructuring

 

 

54

 

 

 

394

 

 

 

176

 

Acquisition related charges

 

 

455

 

 

 

1,171

 

 

 

 

Total operating expenses

 

 

63,004

 

 

 

61,244

 

 

 

49,937

 

Income from operations

 

 

37,763

 

 

 

29,836

 

 

 

20,649

 

Interest expense

 

 

(708

)

 

 

(657

)

 

 

(718

)

Other (expense) income, net

 

 

(22

)

 

 

(68

)

 

 

(162

)

Income before income taxes

 

 

37,033

 

 

 

29,111

 

 

 

19,769

 

Income tax expense (benefit)

 

 

955

 

 

 

579

 

 

 

956

 

Net income

 

$

36,078

 

 

$

28,532

 

 

$

18,813

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.26

 

 

$

0.21

 

 

$

0.14

 

Diluted

 

$

0.26

 

 

$

0.20

 

 

$

0.13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in per share calculations:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

137,500

 

 

 

137,048

 

 

 

136,401

 

Diluted

 

 

141,281

 

 

 

141,587

 

 

 

141,674

 

Lattice Semiconductor Corporation

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

 

 

 

 

 

 

April 2,

 

 

January 1,

 

 

 

2022

 

 

2022

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

122,989

 

 

$

131,570

 

Accounts receivable, net

 

 

83,055

 

 

 

79,859

 

Inventories, net

 

 

71,773

 

 

 

67,594

 

Other current assets

 

 

21,368

 

 

 

22,328

 

Total current assets

 

 

299,185

 

 

 

301,351

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

39,626

 

 

 

38,094

 

Operating lease right-of-use assets

 

 

22,378

 

 

 

23,818

 

Intangible assets, net

 

 

28,350

 

 

 

29,782

 

Goodwill

 

 

315,358

 

 

 

315,358

 

Other long-term assets

 

 

16,029

 

 

 

18,091

 

 

 

$

720,926

 

 

$

726,494

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

38,491

 

 

$

34,597

 

Accrued expenses

 

 

27,062

 

 

 

26,444

 

Accrued payroll obligations

 

 

16,328

 

 

 

27,967

 

Current portion of long-term debt

 

 

17,182

 

 

 

17,173

 

Total current liabilities

 

 

99,063

 

 

 

106,181

 

 

 

 

 

 

 

 

 

 

Long-term debt, net of current portion

 

 

136,461

 

 

 

140,760

 

Long-term operating lease liabilities, net of current portion

 

 

17,735

 

 

 

19,248

 

Other long-term liabilities

 

 

46,112

 

 

 

48,672

 

Total liabilities

 

 

299,371

 

 

 

314,861

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

421,555

 

 

 

411,633

 

 

 

$

720,926

 

 

$

726,494

 

Lattice Semiconductor Corporation

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

 

 

 

Three Months Ended

 

 

 

April 2,

 

 

April 3,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

36,078

 

 

$

18,813

 

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

14,125

 

 

 

10,454

 

Depreciation and amortization

 

 

7,179

 

 

 

5,901

 

Other non-cash adjustments

 

 

1,740

 

 

 

1,679

 

Net changes in assets and liabilities

 

 

(15,917

)

 

 

(7,476

)

Net cash provided by (used in) operating activities

 

 

43,205

 

 

 

29,371

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(4,426

)

 

 

(1,270

)

Other investing activities

 

 

(2,704

)

 

 

(3,056

)

Net cash provided by (used in) investing activities

 

 

(7,130

)

 

 

(4,326

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Repayment of long-term debt

 

 

(4,375

)

 

 

 

Repurchase of common stock

 

 

(15,000

)

 

 

(15,002

)

Net cash flows related to stock compensation exercises

 

 

(25,028

)

 

 

(6,870

)

Net cash provided by (used in) financing activities

 

 

(44,403

)

 

 

(21,872

)

Effect of exchange rate change on cash

 

 

(253

)

 

 

(237

)

Net increase (decrease) in cash and cash equivalents

 

 

(8,581

)

 

 

2,936

 

Beginning cash and cash equivalents

 

 

131,570

 

 

 

182,332

 

Ending cash and cash equivalents

 

$

122,989

 

 

$

185,268

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Interest paid

 

$

552

 

 

$

592

 

Income taxes paid, net of refunds

 

$

761

 

 

$

675

 

Lattice Semiconductor Corporation

Supplemental Historical Financial Information

(unaudited)

 

 

 

 

 

 

Three Months Ended

 

 

 

April 2,

 

 

January 1,

 

 

April 3,

 

 

 

2022

 

 

2022

 

 

2021

 

Balance Sheet Information

 

 

 

 

 

 

 

 

 

 

 

 

A/R Days Revenue Outstanding (DSO)

 

 

50

 

 

 

51

 

 

 

56

 

Inventory Days (DIO)

 

 

132

 

 

 

122

 

 

 

120

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue% (by Geography)

 

 

 

 

 

 

 

 

 

 

 

 

Asia

 

 

72

%

 

 

71

%

 

 

76

%

Americas

 

 

15

%

 

 

19

%

 

 

14

%

Europe (incl. Africa)

 

 

13

%

 

 

10

%

 

 

10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue% (by End Market)

 

 

 

 

 

 

 

 

 

 

 

 

Communications and Computing

 

 

42

%

 

 

43

%

 

 

43

%

Industrial and Automotive

 

 

46

%

 

 

42

%

 

 

43

%

Consumer

 

 

10

%

 

 

9

%

 

 

10

%

Licensing and Services

 

 

2

%

 

 

6

%

 

 

4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue% (by Channel)

 

 

 

 

 

 

 

 

 

 

 

 

Distribution

 

 

90

%

 

 

86

%

 

 

85

%

Direct

 

 

10

%

 

 

14

%

 

 

15

%

Lattice Semiconductor Corporation

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

(in thousands, except per share data)

(unaudited)

 

 

 

 

 

 

Three Months Ended

 

 

 

April 2,

 

 

January 1,

 

 

April 3,

 

 

 

2022

 

 

2022

 

 

2021

 

Gross Margin Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Gross margin

 

$

100,767

 

 

$

91,080

 

 

$

70,586

 

Stock-based compensation - gross margin (1)

 

 

1,121

 

 

 

1,281

 

 

 

773

 

Non-GAAP Gross margin

 

$

101,888

 

 

$

92,361

 

 

$

71,359

 

Gross Margin % Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Gross margin %

 

 

66.9

%

 

 

64.2

%

 

 

61.0

%

Cumulative effect of non-GAAP Gross Margin adjustments

 

 

0.8

%

 

 

0.9

%

 

 

0.7

%

Non-GAAP Gross margin %

 

 

67.7

%

 

 

65.1

%

 

 

61.7

%

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

 

 

 

 

 

 

 

 

 

 

 

 

GAAP R&D Expense %

 

 

21.6

%

 

 

21.3

%

 

 

20.8

%

Stock-based compensation - R&D (1)

 

 

(3.4

)%

 

 

(3.3

)%

 

 

(2.5

)%

Non-GAAP R&D Expense %

 

 

18.2

%

 

 

18.0

%

 

 

18.3

%

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

 

 

 

 

 

 

 

 

 

 

 

 

GAAP SG&A Expense %

 

 

19.1

%

 

 

20.2

%

 

 

21.7

%

Stock-based compensation - SG&A (1)

 

 

(5.9

)%

 

 

(6.3

)%

 

 

(6.3

)%

Non-GAAP SG&A Expense %

 

 

13.2

%

 

 

13.9

%

 

 

15.4

%

Operating Expenses Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Operating expenses

 

$

63,004

 

 

$

61,244

 

 

$

49,937

 

Stock-based compensation - operations (1)

 

 

(14,083

)

 

 

(13,658

)

 

 

(10,218

)

Amortization of acquired intangible assets

 

 

(1,169

)

 

 

(804

)

 

 

(603

)

Restructuring and other charges (2)

 

 

(509

)

 

 

(1,030

)

 

 

(176

)

Non-GAAP Operating expenses

 

$

47,243

 

 

$

45,752

 

 

$

38,940

 

Income from Operations Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Income from operations

 

$

37,763

 

 

$

29,836

 

 

$

20,649

 

Stock-based compensation - gross margin (1)

 

 

1,121

 

 

 

1,281

 

 

 

773

 

Stock-based compensation - operations (1)

 

 

14,083

 

 

 

13,658

 

 

 

10,218

 

Amortization of acquired intangible assets

 

 

1,169

 

 

 

804

 

 

 

603

 

Restructuring and other charges (2)

 

 

509

 

 

 

1,030

 

 

 

176

 

Non-GAAP Income from operations

 

$

54,645

 

 

$

46,609

 

 

$

32,419

 

Income from Operations % Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Income from operations %

 

 

25.1

%

 

 

21.0

%

 

 

17.8

%

Cumulative effect of non-GAAP Gross Margin and Operating adjustments

 

 

11.2

%

 

 

11.9

%

 

 

10.2

%

Non-GAAP Income from operations %

 

 

36.3

%

 

 

32.9

%

 

 

28.0

%

(1)

 

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

(2)

 

Other charges includes Acquisition related charges in the three months ended January 1, 2022 of $1.2 million.

Lattice Semiconductor Corporation

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

(in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended

 

 

 

April 2,

 

 

January 1,

 

 

April 3,

 

 

 

2022

 

 

2022

 

 

2021

 

Income Tax Expense (Benefit) Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Income tax expense (benefit)

 

$

955

 

 

$

579

 

 

$

956

 

Estimated tax effect of non-GAAP adjustments (3)

 

 

264

 

 

 

(40

)

 

 

(110

)

Non-GAAP Income tax expense (benefit)

 

$

1,219

 

 

$

539

 

 

$

846

 

Net Income Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net income

 

$

36,078

 

 

$

28,532

 

 

$

18,813

 

Stock-based compensation - gross margin (1)

 

 

1,121

 

 

 

1,281

 

 

 

773

 

Stock-based compensation - operations (1)

 

 

14,083

 

 

 

13,658

 

 

 

10,218

 

Amortization of acquired intangible assets

 

 

1,169

 

 

 

804

 

 

 

603

 

Restructuring and other charges (2)

 

 

509

 

 

 

1,030

 

 

 

176

 

Estimated tax effect of non-GAAP adjustments (3)

 

 

(264

)

 

 

40

 

 

 

110

 

Non-GAAP Net income

 

$

52,696

 

 

$

45,345

 

 

$

30,693

 

Net Income Per Share Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net income per share - basic

 

$

0.26

 

 

$

0.21

 

 

$

0.14

 

Cumulative effect of Non-GAAP adjustments

 

 

0.12

 

 

 

0.12

 

 

 

0.09

 

Non-GAAP Net income per share - basic

 

$

0.38

 

 

$

0.33

 

 

$

0.23

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net income per share - diluted

 

$

0.26

 

 

$

0.20

 

 

$

0.13

 

Cumulative effect of Non-GAAP adjustments

 

 

0.11

 

 

 

0.12

 

 

 

0.09

 

Non-GAAP Net income per share - diluted

 

$

0.37

 

 

$

0.32

 

 

$

0.22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in per share calculations:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

137,500

 

 

 

137,048

 

 

 

136,401

 

Diluted

 

 

141,281

 

 

 

141,587

 

 

 

141,674

 

(1)

 

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

(2)

 

Other charges includes Acquisition related charges in the three months ended January 1, 2022 of $1.2 million.

(3)

 

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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