Lattice Semiconductor Reports Fourth Quarter and Full Year 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

 

 

Year Ended

 

 

 

December 31,

 

 

October 1,

 

 

January 1,

 

 

December 31,

 

 

January 1,

 

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

Revenue

 

$

175,960

 

 

$

172,509

 

 

$

141,795

 

 

$

660,356

 

 

$

515,327

 

Cost of sales

 

 

53,894

 

 

 

53,777

 

 

 

50,715

 

 

 

208,306

 

 

 

193,652

 

Gross margin

 

 

122,066

 

 

 

118,732

 

 

 

91,080

 

 

 

452,050

 

 

 

321,675

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

34,779

 

 

 

34,820

 

 

 

30,229

 

 

 

135,767

 

 

 

110,518

 

Selling, general, and administrative

 

 

32,355

 

 

 

31,926

 

 

 

28,646

 

 

 

122,076

 

 

 

105,617

 

Amortization of acquired intangible assets

 

 

870

 

 

 

869

 

 

 

804

 

 

 

3,778

 

 

 

2,613

 

Restructuring

 

 

46

 

 

 

2,315

 

 

 

394

 

 

 

2,551

 

 

 

940

 

Acquisition related charges

 

 

 

 

 

 

 

 

1,171

 

 

 

511

 

 

 

1,171

 

Total operating expenses

 

 

68,050

 

 

 

69,930

 

 

 

61,244

 

 

 

264,683

 

 

 

220,859

 

Income from operations

 

 

54,016

 

 

 

48,802

 

 

 

29,836

 

 

 

187,367

 

 

 

100,816

 

Interest expense

 

 

(1,280

)

 

 

(1,267

)

 

 

(657

)

 

 

(4,146

)

 

 

(2,738

)

Other (expense) income, net

 

 

(24

)

 

 

(820

)

 

 

(68

)

 

 

(1,109

)

 

 

(452

)

Income before income taxes

 

 

52,712

 

 

 

46,715

 

 

 

29,111

 

 

 

182,112

 

 

 

97,626

 

Income tax expense (benefit)

 

 

799

 

 

 

356

 

 

 

579

 

 

 

3,230

 

 

 

1,704

 

Net income

 

$

51,913

 

 

$

46,359

 

 

$

28,532

 

 

$

178,882

 

 

$

95,922

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.38

 

 

$

0.34

 

 

$

0.21

 

 

$

1.30

 

 

$

0.70

 

Diluted

 

$

0.37

 

 

$

0.33

 

 

$

0.20

 

 

$

1.27

 

 

$

0.67

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in per share calculations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

137,095

 

 

 

137,267

 

 

 

137,048

 

 

 

137,321

 

 

 

136,619

 

Diluted

 

 

139,631

 

 

 

139,935

 

 

 

141,587

 

 

 

140,667

 

 

 

142,143

 

Lattice Semiconductor Corporation

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

December 31,

 

 

January 1,

 

 

 

2022

 

 

2022

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

145,722

 

 

$

131,570

 

Accounts receivable, net

 

 

94,018

 

 

 

79,859

 

Inventories, net

 

 

110,375

 

 

 

67,594

 

Other current assets

 

 

29,052

 

 

 

22,328

 

Total current assets

 

 

379,167

 

 

 

301,351

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

47,614

 

 

 

38,094

 

Operating lease right-of-use assets

 

 

17,590

 

 

 

23,818

 

Intangible assets, net

 

 

25,070

 

 

 

29,782

 

Goodwill

 

 

315,358

 

 

 

315,358

 

Other long-term assets

 

 

13,914

 

 

 

18,091

 

 

 

$

798,713

 

 

$

726,494

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

42,036

 

 

$

34,597

 

Accrued expenses

 

 

48,467

 

 

 

26,444

 

Accrued payroll obligations

 

 

36,870

 

 

 

27,967

 

Current portion of long-term debt

 

 

 

 

 

17,173

 

Total current liabilities

 

 

127,373

 

 

 

106,181

 

 

 

 

 

 

 

 

 

 

Long-term debt, net of current portion

 

 

128,752

 

 

 

140,760

 

Long-term operating lease liabilities, net of current portion

 

 

13,618

 

 

 

19,248

 

Other long-term liabilities

 

 

41,807

 

 

 

48,672

 

Total liabilities

 

 

311,550

 

 

 

314,861

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

487,163

 

 

 

411,633

 

 

 

$

798,713

 

 

$

726,494

 

Lattice Semiconductor Corporation

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

Year Ended

 

 

 

December 31,

 

 

January 1,

 

 

 

2022

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

178,882

 

 

$

95,922

 

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

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

55,530

 

 

 

46,475

 

Depreciation and amortization

 

 

29,323

 

 

 

24,429

 

Other non-cash adjustments

 

 

8,303

 

 

 

6,348

 

Net changes in assets and liabilities

 

 

(33,232

)

 

 

(5,452

)

Net cash provided by (used in) operating activities

 

 

238,806

 

 

 

167,722

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Cash paid for business acquisition, net of cash acquired

 

 

 

 

 

(68,099

)

Capital expenditures

 

 

(23,338

)

 

 

(9,835

)

Other investing activities

 

 

(11,594

)

 

 

(11,862

)

Net cash provided by (used in) investing activities

 

 

(34,932

)

 

 

(89,796

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from long-term debt, net of issuance costs

 

 

148,597

 

 

 

 

Repayment of long-term debt

 

 

(178,750

)

 

 

(13,125

)

Repurchase of common stock

 

 

(110,132

)

 

 

(70,124

)

Net cash flows related to stock compensation exercises

 

 

(47,787

)

 

 

(45,364

)

Net cash provided by (used in) financing activities

 

 

(188,072

)

 

 

(128,613

)

Effect of exchange rate change on cash

 

 

(1,650

)

 

 

(75

)

Net increase (decrease) in cash and cash equivalents

 

 

14,152

 

 

 

(50,762

)

Beginning cash and cash equivalents

 

 

131,570

 

 

 

182,332

 

Ending cash and cash equivalents

 

$

145,722

 

 

$

131,570

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Interest paid

 

$

3,973

 

 

$

2,313

 

Income taxes paid, net of refunds

 

$

4,621

 

 

$

3,304

 

Lattice Semiconductor Corporation

Supplemental Historical Financial Information

(unaudited)

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

October 1,

 

 

January 1,

 

 

December 31,

 

 

January 1,

 

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

Balance Sheet Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A/R Days Revenue Outstanding (DSO)

 

 

49

 

 

 

53

 

 

 

51

 

 

 

 

 

 

 

 

 

Inventory Days (DIO)

 

 

187

 

 

 

159

 

 

 

122

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue% (by Geography)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asia

 

 

65

%

 

 

72

%

 

 

71

%

 

 

71

%

 

 

74

%

Americas

 

 

19

%

 

 

13

%

 

 

19

%

 

 

15

%

 

 

16

%

Europe (incl. Africa)

 

 

16

%

 

 

15

%

 

 

10

%

 

 

14

%

 

 

10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue% (by End Market)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Communications and Computing

 

 

40

%

 

 

41

%

 

 

43

%

 

 

42

%

 

 

42

%

Industrial and Automotive

 

 

51

%

 

 

50

%

 

 

42

%

 

 

48

%

 

 

44

%

Consumer

 

 

6

%

 

 

6

%

 

 

9

%

 

 

7

%

 

 

10

%

Licensing and Services

 

 

3

%

 

 

3

%

 

 

6

%

 

 

3

%

 

 

4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue% (by Channel)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution

 

 

89

%

 

 

90

%

 

 

86

%

 

 

89

%

 

 

87

%

Direct

 

 

11

%

 

 

10

%

 

 

14

%

 

 

11

%

 

 

13

%

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

 

 

 

December 31,

 

 

October 1,

 

 

January 1,

 

 

December 31,

 

 

January 1,

 

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

Gross Margin Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Gross margin

 

$

122,066

 

 

$

118,732

 

 

$

91,080

 

 

$

452,050

 

 

$

321,675

 

Stock-based compensation - gross margin (1)

 

 

1,056

 

 

 

1,122

 

 

 

1,281

 

 

 

4,310

 

 

 

4,105

 

Non-GAAP Gross margin

 

$

123,122

 

 

$

119,854

 

 

$

92,361

 

 

$

456,360

 

 

$

325,780

 

Gross Margin % Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Gross margin %

 

 

69.4

%

 

 

68.8

%

 

 

64.2

%

 

 

68.5

%

 

 

62.4

%

Cumulative effect of non-GAAP Gross Margin adjustments

 

 

0.6

%

 

 

0.7

%

 

 

0.9

%

 

 

0.6

%

 

 

0.8

%

Non-GAAP Gross margin %

 

 

70.0

%

 

 

69.5

%

 

 

65.1

%

 

 

69.1

%

 

 

63.2

%

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

GAAP R&D Expense %

 

 

19.8

%

 

 

20.2

%

 

 

21.3

%

 

 

20.6

%

 

 

21.4

%

Stock-based compensation - R&D (1)

 

 

(3.0

)%

 

 

(3.1

)%

 

 

(3.3

)%

 

 

(3.2

)%

 

 

(3.0

)%

Non-GAAP R&D Expense %

 

 

16.8

%

 

 

17.1

%

 

 

18.0

%

 

 

17.4

%

 

 

18.4

%

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

GAAP SG&A Expense %

 

 

18.4

%

 

 

18.5

%

 

 

20.2

%

 

 

18.5

%

 

 

20.5

%

Stock-based compensation - SG&A (1)

 

 

(4.7

)%

 

 

(4.9

)%

 

 

(6.3

)%

 

 

(5.1

)%

 

 

(5.9

)%

Litigation expense (2)

 

 

(0.6

)%

 

 

(1.0

)%

 

 

%

 

 

(0.4

)%

 

 

%

Non-GAAP SG&A Expense %

 

 

13.1

%

 

 

12.6

%

 

 

13.9

%

 

 

13.0

%

 

 

14.6

%

Operating Expenses Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Operating expenses

 

$

68,050

 

 

$

69,930

 

 

$

61,244

 

 

$

264,683

 

 

$

220,859

 

Stock-based compensation - operations (1)

 

 

(13,584

)

 

 

(13,758

)

 

 

(13,658

)

 

 

(54,119

)

 

 

(46,113

)

Litigation expense (2)

 

 

(1,081

)

 

 

(1,646

)

 

 

 

 

 

(2,727

)

 

 

 

Amortization of acquired intangible assets

 

 

(870

)

 

 

(869

)

 

 

(804

)

 

 

(3,778

)

 

 

(2,613

)

Restructuring and other charges (3)

 

 

(46

)

 

 

(2,315

)

 

 

(1,030

)

 

 

(3,062

)

 

 

(2,111

)

Non-GAAP Operating expenses

 

$

52,469

 

 

$

51,342

 

 

$

45,752

 

 

$

200,997

 

 

$

170,022

 

Income from Operations Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Income from operations

 

$

54,016

 

 

$

48,802

 

 

$

29,836

 

 

$

187,367

 

 

$

100,816

 

Stock-based compensation - gross margin (1)

 

 

1,056

 

 

 

1,122

 

 

 

1,281

 

 

 

4,310

 

 

 

4,105

 

Stock-based compensation - operations (1)

 

 

13,584

 

 

 

13,758

 

 

 

13,658

 

 

 

54,119

 

 

 

46,113

 

Litigation expense (2)

 

 

1,081

 

 

 

1,646

 

 

 

 

 

 

2,727

 

 

 

 

Amortization of acquired intangible assets

 

 

870

 

 

 

869

 

 

 

804

 

 

 

3,778

 

 

 

2,613

 

Restructuring and other charges (3)

 

 

46

 

 

 

2,315

 

 

 

1,030

 

 

 

3,062

 

 

 

2,111

 

Non-GAAP Income from operations

 

$

70,653

 

 

$

68,512

 

 

$

46,609

 

 

$

255,363

 

 

$

155,758

 

Income from Operations % Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Income from operations %

 

 

30.7

%

 

 

28.3

%

 

 

21.0

%

 

 

28.4

%

 

 

19.6

%

Cumulative effect of non-GAAP Gross Margin and Operating adjustments

 

 

9.5

%

 

 

11.4

%

 

 

11.9

%

 

 

10.3

%

 

 

10.6

%

Non-GAAP Income from operations %

 

 

40.2

%

 

 

39.7

%

 

 

32.9

%

 

 

38.7

%

 

 

30.2

%

(1)

 

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

(2)

 

Legal expenses associated with the defense of claims that are outside the ordinary course of business that were brought against the Company by Steven A.W. De Jaray, Perienne De Jaray and Darrell R. Oswalde.

(3)

 

Other charges includes Acquisition related charges in 2021 YTD 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

 

 

Year Ended

 

 

 

December 31,

 

 

October 1,

 

 

January 1,

 

 

December 31,

 

 

January 1,

 

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

Other (Expense) Income Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Other (expense) income, net

 

$

(24

)

 

$

(820

)

 

$

(68

)

 

$

(1,109

)

 

$

(452

)

Loss on re-financing of long-term debt

 

 

4

 

 

 

735

 

 

 

 

 

 

739

 

 

 

 

Non-GAAP Other (expense) income, net

 

$

(20

)

 

$

(85

)

 

$

(68

)

 

$

(370

)

 

$

(452

)

Income Tax Expense (Benefit) Reconciliation

GAAP Income tax expense (benefit)

 

$

799

 

 

$

356

 

 

$

579

 

 

$

3,230

 

 

$

1,704

 

Estimated tax effect of non-GAAP adjustments (4)

 

 

187

 

 

 

312

 

 

 

(40

)

 

 

938

 

 

 

 

Non-GAAP Income tax expense (benefit)

 

$

986

 

 

$

668

 

 

$

539

 

 

$

4,168

 

 

$

1,704

 

Net Income Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net income

 

$

51,913

 

 

$

46,359

 

 

$

28,532

 

 

$

178,882

 

 

$

95,922

 

Stock-based compensation - gross margin (1)

 

 

1,056

 

 

 

1,122

 

 

 

1,281

 

 

 

4,310

 

 

 

4,105

 

Stock-based compensation - operations (1)

 

 

13,584

 

 

 

13,758

 

 

 

13,658

 

 

 

54,119

 

 

 

46,113

 

Litigation expense (2)

 

 

1,081

 

 

 

1,646

 

 

 

 

 

 

2,727

 

 

 

 

Amortization of acquired intangible assets

 

 

870

 

 

 

869

 

 

 

804

 

 

 

3,778

 

 

 

2,613

 

Restructuring and other charges (3)

 

 

46

 

 

 

2,315

 

 

 

1,030

 

 

 

3,062

 

 

 

2,111

 

Loss on re-financing of long-term debt

 

 

4

 

 

 

735

 

 

 

 

 

 

739

 

 

 

 

Estimated tax effect of non-GAAP adjustments (4)

 

 

(187

)

 

 

(312

)

 

 

40

 

 

 

(938

)

 

 

 

Non-GAAP Net income

 

$

68,367

 

 

$

66,492

 

 

$

45,345

 

 

$

246,679

 

 

$

150,864

 

Net Income Per Share Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net income per share - basic

 

$

0.38

 

 

$

0.34

 

 

$

0.21

 

 

$

1.30

 

 

$

0.70

 

Cumulative effect of Non-GAAP adjustments

 

 

0.12

 

 

 

0.14

 

 

 

0.12

 

 

 

0.50

 

 

 

0.40

 

Non-GAAP Net income per share - basic

 

$

0.50

 

 

$

0.48

 

 

$

0.33

 

 

$

1.80

 

 

$

1.10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net income per share - diluted

 

$

0.37

 

 

$

0.33

 

 

$

0.20

 

 

$

1.27

 

 

$

0.67

 

Cumulative effect of Non-GAAP adjustments

 

 

0.12

 

 

 

0.15

 

 

 

0.12

 

 

 

0.48

 

 

 

0.39

 

Non-GAAP Net income per share - diluted

 

$

0.49

 

 

$

0.48

 

 

$

0.32

 

 

$

1.75

 

 

$

1.06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in per share calculations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

137,095

 

 

 

137,267

 

 

 

137,048

 

 

 

137,321

 

 

 

136,619

 

Diluted

 

 

139,631

 

 

 

139,935

 

 

 

141,587

 

 

 

140,667

 

 

 

142,143

 

(1)

 

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

(2)

 

Legal expenses associated with the defense of claims that are outside the ordinary course of business that were brought against the Company by Steven A.W. De Jaray, Perienne De Jaray and Darrell R. Oswalde.

(3)

 

Other charges includes Acquisition related charges in 2021 YTD of $1.2 million.

(4)

 

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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