Lattice Semiconductor Reports Second Quarter 2022 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 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

 

 

Six Months Ended

 

 

 

July 2,

 

 

April 2,

 

 

July 3,

 

 

July 2,

 

 

July 3,

 

 

 

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue

 

$

161,372

 

 

$

150,515

 

 

$

125,905

 

 

$

311,887

 

 

$

241,621

 

Cost of sales

 

 

50,887

 

 

 

49,748

 

 

 

48,721

 

 

 

100,635

 

 

 

93,851

 

Gross margin

 

 

110,485

 

 

 

100,767

 

 

 

77,184

 

 

 

211,252

 

 

 

147,770

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

33,613

 

 

 

32,555

 

 

 

27,454

 

 

 

66,168

 

 

 

51,520

 

Selling, general, and administrative

 

 

29,024

 

 

 

28,771

 

 

 

25,607

 

 

 

57,795

 

 

 

50,699

 

Amortization of acquired intangible assets

 

 

870

 

 

 

1,169

 

 

 

603

 

 

 

2,039

 

 

 

1,206

 

Restructuring

 

 

136

 

 

 

54

 

 

 

204

 

 

 

190

 

 

 

380

 

Acquisition related charges

 

 

56

 

 

 

455

 

 

 

 

 

 

511

 

 

 

 

Total operating expenses

 

 

63,699

 

 

 

63,004

 

 

 

53,868

 

 

 

126,703

 

 

 

103,805

 

Income from operations

 

 

46,786

 

 

 

37,763

 

 

 

23,316

 

 

 

84,549

 

 

 

43,965

 

Interest expense

 

 

(891

)

 

 

(708

)

 

 

(702

)

 

 

(1,599

)

 

 

(1,420

)

Other (expense) income, net

 

 

(243

)

 

 

(22

)

 

 

(135

)

 

 

(265

)

 

 

(297

)

Income before income taxes

 

 

45,652

 

 

 

37,033

 

 

 

22,479

 

 

 

82,685

 

 

 

42,248

 

Income tax expense (benefit)

 

 

1,120

 

 

 

955

 

 

 

641

 

 

 

2,075

 

 

 

1,597

 

Net income

 

$

44,532

 

 

$

36,078

 

 

$

21,838

 

 

$

80,610

 

 

$

40,651

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.32

 

 

$

0.26

 

 

$

0.16

 

 

$

0.59

 

 

$

0.30

 

Diluted

 

$

0.32

 

 

$

0.26

 

 

$

0.15

 

 

$

0.57

 

 

$

0.29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in per share calculations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

137,424

 

 

 

137,500

 

 

 

136,388

 

 

 

137,462

 

 

 

136,394

 

Diluted

 

 

140,170

 

 

 

141,281

 

 

 

141,491

 

 

 

140,657

 

 

 

141,637

 

Lattice Semiconductor Corporation

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

July 2,

 

 

January 1,

 

 

 

2022

 

 

2022

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

117,882

 

 

$

131,570

 

Accounts receivable, net

 

 

93,380

 

 

 

79,859

 

Inventories, net

 

 

77,478

 

 

 

67,594

 

Other current assets

 

 

25,720

 

 

 

22,328

 

Total current assets

 

 

314,460

 

 

 

301,351

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

42,741

 

 

 

38,094

 

Operating lease right-of-use assets

 

 

20,407

 

 

 

23,818

 

Intangible assets, net

 

 

27,218

 

 

 

29,782

 

Goodwill

 

 

315,358

 

 

 

315,358

 

Other long-term assets

 

 

16,944

 

 

 

18,091

 

 

 

$

737,128

 

 

$

726,494

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

39,336

 

 

$

34,597

 

Accrued expenses

 

 

29,082

 

 

 

26,444

 

Accrued payroll obligations

 

 

20,798

 

 

 

27,967

 

Current portion of long-term debt

 

 

17,192

 

 

 

17,173

 

Total current liabilities

 

 

106,408

 

 

 

106,181

 

 

 

 

 

 

 

 

 

 

Long-term debt, net of current portion

 

 

132,159

 

 

 

140,760

 

Long-term operating lease liabilities, net of current portion

 

 

15,917

 

 

 

19,248

 

Other long-term liabilities

 

 

46,723

 

 

 

48,672

 

Total liabilities

 

 

301,207

 

 

 

314,861

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

435,921

 

 

 

411,633

 

 

 

$

737,128

 

 

$

726,494

 

Lattice Semiconductor Corporation

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

Six Months Ended

 

 

 

July 2,

 

 

July 3,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

80,610

 

 

$

40,651

 

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

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

27,249

 

 

 

22,374

 

Depreciation and amortization

 

 

14,272

 

 

 

11,759

 

Other non-cash adjustments

 

 

3,445

 

 

 

3,383

 

Net changes in assets and liabilities

 

 

(32,658

)

 

 

(7,463

)

Net cash provided by (used in) operating activities

 

 

92,918

 

 

 

70,704

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(8,917

)

 

 

(4,413

)

Other investing activities

 

 

(5,368

)

 

 

(6,377

)

Net cash provided by (used in) investing activities

 

 

(14,285

)

 

 

(10,790

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Repayment of long-term debt

 

 

(8,750

)

 

 

(4,375

)

Repurchase of common stock

 

 

(50,161

)

 

 

(40,113

)

Net cash flows related to stock compensation exercises

 

 

(32,182

)

 

 

(9,975

)

Net cash provided by (used in) financing activities

 

 

(91,093

)

 

 

(54,463

)

Effect of exchange rate change on cash

 

 

(1,228

)

 

 

(49

)

Net increase (decrease) in cash and cash equivalents

 

 

(13,688

)

 

 

5,402

 

Beginning cash and cash equivalents

 

 

131,570

 

 

 

182,332

 

Ending cash and cash equivalents

 

$

117,882

 

 

$

187,734

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Interest paid

 

$

1,337

 

 

$

1,180

 

Income taxes paid, net of refunds

 

$

2,355

 

 

$

1,805

 

Lattice Semiconductor Corporation

Supplemental Historical Financial Information

(unaudited)

 

 

 

Three Months Ended

 

 

 

July 2,

 

 

April 2,

 

 

July 3,

 

 

 

2022

 

 

2022

 

 

2021

 

Balance Sheet Information

 

 

 

 

 

 

 

 

 

 

 

 

A/R Days Revenue Outstanding (DSO)

 

 

53

 

 

 

50

 

 

 

52

 

Inventory Days (DIO)

 

 

139

 

 

 

132

 

 

 

123

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue% (by Geography)

 

 

 

 

 

 

 

 

 

 

 

 

Asia

 

 

73

%

 

 

72

%

 

 

77

%

Americas

 

 

14

%

 

 

15

%

 

 

14

%

Europe (incl. Africa)

 

 

13

%

 

 

13

%

 

 

9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue% (by End Market)

 

 

 

 

 

 

 

 

 

 

 

 

Communications and Computing

 

 

44

%

 

 

42

%

 

 

42

%

Industrial and Automotive

 

 

46

%

 

 

46

%

 

 

45

%

Consumer

 

 

8

%

 

 

10

%

 

 

10

%

Licensing and Services

 

 

2

%

 

 

2

%

 

 

3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue% (by Channel)

 

 

 

 

 

 

 

 

 

 

 

 

Distribution

 

 

89

%

 

 

90

%

 

 

88

%

Direct

 

 

11

%

 

 

10

%

 

 

12

%

Lattice Semiconductor Corporation

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

(in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended

 

 

 

July 2,

 

 

April 2,

 

 

July 3,

 

 

 

2022

 

 

2022

 

 

2021

 

Gross Margin Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Gross margin

 

$

110,485

 

 

$

100,767

 

 

$

77,184

 

Stock-based compensation - gross margin (1)

 

 

1,011

 

 

 

1,121

 

 

 

995

 

Non-GAAP Gross margin

 

$

111,496

 

 

$

101,888

 

 

$

78,179

 

Gross Margin % Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Gross margin %

 

 

68.5

%

 

 

66.9

%

 

 

61.3

%

Cumulative effect of non-GAAP Gross Margin adjustments

 

 

0.6

%

 

 

0.8

%

 

 

0.8

%

Non-GAAP Gross margin %

 

 

69.1

%

 

 

67.7

%

 

 

62.1

%

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

 

 

 

 

 

 

 

 

 

 

 

 

GAAP R&D Expense %

 

 

20.8

%

 

 

21.6

%

 

 

21.8

%

Stock-based compensation - R&D (1)

 

 

(3.0

)%

 

 

(3.4

)%

 

 

(3.4

)%

Non-GAAP R&D Expense %

 

 

17.8

%

 

 

18.2

%

 

 

18.4

%

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

 

 

 

 

 

 

 

 

 

 

 

 

GAAP SG&A Expense %

 

 

18.0

%

 

 

19.1

%

 

 

20.3

%

Stock-based compensation - SG&A (1)

 

 

(4.9

)%

 

 

(5.9

)%

 

 

(5.7

)%

Non-GAAP SG&A Expense %

 

 

13.1

%

 

 

13.2

%

 

 

14.6

%

Operating Expenses Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Operating expenses

 

$

63,699

 

 

$

63,004

 

 

$

53,868

 

Stock-based compensation - operations (1)

 

 

(12,694

)

 

 

(14,083

)

 

 

(11,533

)

Amortization of acquired intangible assets

 

 

(870

)

 

 

(1,169

)

 

 

(603

)

Restructuring and other charges

 

 

(192

)

 

 

(509

)

 

 

(204

)

Non-GAAP Operating expenses

 

$

49,943

 

 

$

47,243

 

 

$

41,528

 

Income from Operations Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Income from operations

 

$

46,786

 

 

$

37,763

 

 

$

23,316

 

Stock-based compensation - gross margin (1)

 

 

1,011

 

 

 

1,121

 

 

 

995

 

Stock-based compensation - operations (1)

 

 

12,694

 

 

 

14,083

 

 

 

11,533

 

Amortization of acquired intangible assets

 

 

870

 

 

 

1,169

 

 

 

603

 

Restructuring and other charges

 

 

192

 

 

 

509

 

 

 

204

 

Non-GAAP Income from operations

 

$

61,553

 

 

$

54,645

 

 

$

36,651

 

Income from Operations % Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Income from operations %

 

 

29.0

%

 

 

25.1

%

 

 

18.5

%

Cumulative effect of non-GAAP Gross Margin and Operating adjustments

 

 

9.1

%

 

 

11.2

%

 

 

10.6

%

Non-GAAP Income from operations %

 

 

38.1

%

 

 

36.3

%

 

 

29.1

%

(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

 

 

 

July 2,

 

 

April 2,

 

 

July 3,

 

 

 

2022

 

 

2022

 

 

2021

 

Income Tax Expense (Benefit) Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Income tax expense (benefit)

 

$

1,120

 

 

$

955

 

 

$

641

 

Estimated tax effect of non-GAAP adjustments (2)

 

 

175

 

 

 

264

 

 

 

(33

)

Non-GAAP Income tax expense (benefit)

 

$

1,295

 

 

$

1,219

 

 

$

608

 

Net Income Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net income

 

$

44,532

 

 

$

36,078

 

 

$

21,838

 

Stock-based compensation - gross margin (1)

 

 

1,011

 

 

 

1,121

 

 

 

995

 

Stock-based compensation - operations (1)

 

 

12,694

 

 

 

14,083

 

 

 

11,533

 

Amortization of acquired intangible assets

 

 

870

 

 

 

1,169

 

 

 

603

 

Restructuring and other charges

 

 

192

 

 

 

509

 

 

 

204

 

Estimated tax effect of non-GAAP adjustments (2)

 

 

(175

)

 

 

(264

)

 

 

33

 

Non-GAAP Net income

 

$

59,124

 

 

$

52,696

 

 

$

35,206

 

Net Income Per Share Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net income per share - basic

 

$

0.32

 

 

$

0.26

 

 

$

0.16

 

Cumulative effect of Non-GAAP adjustments

 

 

0.11

 

 

 

0.12

 

 

 

0.10

 

Non-GAAP Net income per share - basic

 

$

0.43

 

 

$

0.38

 

 

$

0.26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net income per share - diluted

 

$

0.32

 

 

$

0.26

 

 

$

0.15

 

Cumulative effect of Non-GAAP adjustments

 

 

0.10

 

 

 

0.11

 

 

 

0.10

 

Non-GAAP Net income per share - diluted

 

$

0.42

 

 

$

0.37

 

 

$

0.25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in per share calculations:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

137,424

 

 

 

137,500

 

 

 

136,388

 

Diluted

 

 

140,170

 

 

 

141,281

 

 

 

141,491

 

(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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