Lattice Semiconductor Reports First Quarter 2024 Results

 

Lattice Semiconductor Corporation

Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended

 

 

 

March 30,

 

 

December 30,

 

 

April 1,

 

 

 

2024

 

 

2023

 

 

2023

 

Revenue

 

$

140,815

 

 

$

170,596

 

 

$

184,310

 

Cost of sales

 

 

44,607

 

 

 

51,649

 

 

 

55,709

 

Gross margin

 

 

96,208

 

 

 

118,947

 

 

 

128,601

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

40,591

 

 

 

39,787

 

 

 

35,989

 

Selling, general, and administrative

 

 

36,469

 

 

 

34,661

 

 

 

32,578

 

Amortization of acquired intangible assets

 

 

870

 

 

 

869

 

 

 

870

 

Restructuring

 

 

1,704

 

 

 

481

 

 

 

30

 

Total operating expenses

 

 

79,634

 

 

 

75,798

 

 

 

69,467

 

Income from operations

 

 

16,574

 

 

 

43,149

 

 

 

59,134

 

Interest income (expense), net

 

 

1,307

 

 

 

1,453

 

 

 

(555

)

Other income (expense), net

 

 

(46

)

 

 

802

 

 

 

(95

)

Income before income taxes

 

 

17,835

 

 

 

45,404

 

 

 

58,484

 

Income tax expense (benefit)

 

 

3,039

 

 

 

(53,302

)

 

 

2,561

 

Net income

 

$

14,796

 

 

$

98,706

 

 

$

55,923

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.11

 

 

$

0.72

 

 

$

0.41

 

Diluted

 

$

0.11

 

 

$

0.71

 

 

$

0.40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in per share calculations:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

137,475

 

 

 

137,686

 

 

 

137,418

 

Diluted

 

 

138,774

 

 

 

139,114

 

 

 

140,101

 

Lattice Semiconductor Corporation

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

March 30,

 

 

December 30,

 

 

 

2024

 

 

2023

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

107,466

 

 

$

128,317

 

Accounts receivable, net

 

 

98,940

 

 

 

104,373

 

Inventories, net

 

 

95,384

 

 

 

98,826

 

Other current assets

 

 

38,948

 

 

 

36,430

 

Total current assets

 

 

340,738

 

 

 

367,946

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

51,390

 

 

 

49,546

 

Operating lease right-of-use assets

 

 

17,039

 

 

 

14,487

 

Intangible assets, net

 

 

19,888

 

 

 

20,974

 

Goodwill

 

 

315,358

 

 

 

315,358

 

Deferred income taxes

 

 

57,111

 

 

 

57,762

 

Other long-term assets

 

 

14,075

 

 

 

14,821

 

 

 

$

815,599

 

 

$

840,894

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

33,069

 

 

$

34,487

 

Accrued liabilities

 

 

32,049

 

 

 

36,048

 

Accrued payroll obligations

 

 

16,443

 

 

 

26,865

 

Total current liabilities

 

 

81,561

 

 

 

97,400

 

 

 

 

 

 

 

 

 

 

Long-term operating lease liabilities, net of current portion

 

 

12,799

 

 

 

10,739

 

Other long-term liabilities

 

 

38,577

 

 

 

40,735

 

Total liabilities

 

 

132,937

 

 

 

148,874

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

682,662

 

 

 

692,020

 

 

 

$

815,599

 

 

$

840,894

 

Lattice Semiconductor Corporation

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

Three Months Ended

 

 

 

March 30,

 

 

April 1,

 

 

 

2024

 

 

2023

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

14,796

 

 

$

55,923

 

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

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

18,494

 

 

 

14,255

 

Depreciation and amortization

 

 

9,129

 

 

 

8,090

 

Other non-cash adjustments

 

 

2,442

 

 

 

1,314

 

Net changes in assets and liabilities

 

 

(15,350

)

 

 

(34,718

)

Net cash provided by (used in) operating activities

 

 

29,511

 

 

 

44,864

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(3,426

)

 

 

(8,414

)

Other investing activities

 

 

(4,321

)

 

 

(2,615

)

Net cash provided by (used in) investing activities

 

 

(7,747

)

 

 

(11,029

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Repayment of long-term debt

 

 

 

 

 

(25,000

)

Repurchase of common stock

 

 

(20,000

)

 

 

(10,004

)

Net cash flows related to stock compensation exercises

 

 

(22,174

)

 

 

(32,552

)

Net cash provided by (used in) financing activities

 

 

(42,174

)

 

 

(67,556

)

Effect of exchange rate change on cash

 

 

(441

)

 

 

135

 

Net increase (decrease) in cash and cash equivalents

 

 

(20,851

)

 

 

(33,586

)

Beginning cash and cash equivalents

 

 

128,317

 

 

 

145,722

 

Ending cash and cash equivalents

 

$

107,466

 

 

$

112,136

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Interest paid

 

$

 

 

$

1,849

 

Income taxes paid, net of refunds

 

$

1,249

 

 

$

413

 

Operating lease payments

 

$

2,099

 

 

$

2,000

 

Lattice Semiconductor Corporation

Supplemental Historical Financial Information

(unaudited)

 

 

 

Three Months Ended

 

 

March 30,

 

December 30,

 

April 1,

 

 

2024

 

2023

 

2023

Balance Sheet Information

 

 

 

 

 

 

 

 

 

 

 

 

A/R Days Revenue Outstanding (DSO)

 

 

64

 

 

 

56

 

 

 

45

 

Inventory Days (DIO)

 

 

195

 

 

 

175

 

 

 

192

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue % (by Geography)

 

 

 

 

 

 

 

 

 

 

 

 

Asia

 

 

66

%

 

 

60

%

 

 

57

%

Americas

 

 

22

%

 

 

22

%

 

 

23

%

Europe (incl. Africa)

 

 

12

%

 

 

18

%

 

 

20

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue % (by End Market)

 

 

 

 

 

 

 

 

 

 

 

 

Communications and Computing

 

 

39

%

 

 

34

%

 

 

36

%

Industrial and Automotive

 

 

53

%

 

 

59

%

 

 

59

%

Consumer

 

 

8

%

 

 

7

%

 

 

5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue $M (by End Market)

 

 

 

 

 

 

 

 

 

 

 

 

Communications and Computing

 

$

54.6

 

 

$

58.7

 

 

$

66.3

 

Industrial and Automotive

 

$

75.3

 

 

$

99.8

 

 

$

108.3

 

Consumer

 

$

10.9

 

 

$

12.1

 

 

$

9.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue % (by Channel)

 

 

 

 

 

 

 

 

 

 

 

 

Distribution

 

 

87

%

 

 

82

%

 

 

88

%

Direct

 

 

13

%

 

 

18

%

 

 

12

%

Lattice Semiconductor Corporation

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

(in thousands, except per share data)

(unaudited)

 

 

Three Months Ended

 

March 30,

 

December 30,

 

April 1,

 

2024

 

2023

 

2023

Gross Margin Reconciliation

GAAP Gross margin

$

96,208

 

$

118,947

 

$

128,601

 

Stock-based compensation - gross margin (1)

 

888

 

 

1,111

 

 

1,023

 

Non-GAAP Gross margin

$

97,096

 

$

120,058

 

$

129,624

 

 

Gross Margin % Reconciliation

GAAP Gross margin %

 

68.3

%

 

69.7

%

 

69.8

%

Stock-based compensation - gross margin (1)

 

0.7

%

 

0.7

%

 

0.5

%

Non-GAAP Gross margin %

 

69.0

%

 

70.4

%

 

70.3

%

 

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

GAAP R&D Expense %

 

28.8

%

 

23.3

%

 

19.5

%

Stock-based compensation - R&D (1)

 

(5.7

)%

 

(4.6

)%

 

(3.0

)%

Non-GAAP R&D Expense %

 

23.1

%

 

18.7

%

 

16.5

%

 

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

GAAP SG&A Expense %

 

25.9

%

 

20.3

%

 

17.7

%

Stock-based compensation - SG&A (1)

 

(7.1

)%

 

(5.3

)%

 

(4.7

)%

Litigation expense (2)

 

(2.7

)%

 

(1.2

)%

 

(0.2

)%

Non-GAAP SG&A Expense %

 

16.1

%

 

13.8

%

 

12.8

%

 

Operating Expenses Reconciliation

 

 

GAAP Operating expenses

$

79,634

 

$

75,798

 

$

69,467

 

Stock-based compensation - operations (1)

 

(18,117

)

 

(16,811

)

 

(14,296

)

Litigation expense (2)

 

(3,832

)

 

(2,098

)

 

(288

)

Amortization of acquired intangible assets

 

(870

)

 

(869

)

 

(870

)

Restructuring and other

 

(1,957

)

 

(525

)

 

(30

)

Non-GAAP Operating expenses

$

54,858

 

$

55,495

 

$

53,983

 

 

Income from Operations Reconciliation

 

 

GAAP Income from operations

$

16,574

 

$

43,149

 

$

59,134

 

Stock-based compensation - gross margin (1)

 

888

 

 

1,111

 

 

1,023

 

Stock-based compensation - operations (1)

 

18,117

 

 

16,811

 

 

14,296

 

Litigation expense (2)

 

3,832

 

 

2,098

 

 

288

 

Amortization of acquired intangible assets

 

870

 

 

869

 

 

870

 

Restructuring and other

 

1,957

 

 

525

 

 

30

 

Non-GAAP Income from operations

$

42,238

 

$

64,563

 

$

75,641

 

 

Income from Operations % Reconciliation

GAAP Income from operations %

 

11.8

%

 

25.3

%

 

32.1

%

Cumulative effect of non-GAAP Gross Margin and Operating adjustments

 

18.2

%

 

12.5

%

 

8.9

%

Non-GAAP Income from operations %

 

30.0

%

 

37.8

%

 

41.0

%

(1)

 

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

Lattice Semiconductor Corporation

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

(in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended

 

 

 

March 30,

 

 

December 30,

 

 

April 1,

 

 

 

2024

 

 

2023

 

 

2023

 

Income Tax (Benefit) Expense Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Income tax (benefit) expense

 

$

3,039

 

 

$

(53,302

)

 

$

2,561

 

Estimated tax effect of non-GAAP adjustments

 

 

4,337

 

 

 

1,170

 

 

 

1,670

 

Non-cash changes in net deferred income taxes (3)

 

 

(2,754

)

 

 

56,913

 

 

 

 

Change in tax law (4)

 

 

(1,381

)

 

 

(764

)

 

 

(1,012

)

Non-GAAP Income tax expense

 

$

3,241

 

 

$

4,017

 

 

$

3,219

 

Net Income Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net income

 

$

14,796

 

 

$

98,706

 

 

$

55,923

 

Stock-based compensation - gross margin (1)

 

 

888

 

 

 

1,111

 

 

 

1,023

 

Stock-based compensation - operations (1)

 

 

18,117

 

 

 

16,811

 

 

 

14,296

 

Litigation expense (2)

 

 

3,832

 

 

 

2,098

 

 

 

288

 

Amortization of acquired intangible assets

 

 

870

 

 

 

869

 

 

 

870

 

Restructuring and other

 

 

1,957

 

 

 

525

 

 

 

30

 

Estimated tax effect of non-GAAP adjustments

 

 

(4,337

)

 

 

(1,170

)

 

 

(1,670

)

Non-cash changes in net deferred income taxes (3)

 

 

2,754

 

 

 

(56,913

)

 

 

 

Change in tax law (4)

 

 

1,381

 

 

 

764

 

 

 

1,012

 

Non-GAAP Net income

 

$

40,258

 

 

$

62,801

 

 

$

71,772

 

Net Income Per Share Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net income per share - basic

 

$

0.11

 

 

$

0.72

 

 

$

0.41

 

Cumulative effect of Non-GAAP adjustments

 

 

0.18

 

 

 

(0.26

)

 

 

0.11

 

Non-GAAP Net income per share - basic

 

$

0.29

 

 

$

0.46

 

 

$

0.52

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net income per share - diluted

 

$

0.11

 

 

$

0.71

 

 

$

0.40

 

Cumulative effect of Non-GAAP adjustments

 

 

0.18

 

 

 

(0.26

)

 

 

0.11

 

Non-GAAP Net income per share - diluted

 

$

0.29

 

 

$

0.45

 

 

$

0.51

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in per share calculations:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

137,475

 

 

 

137,686

 

 

 

137,418

 

Diluted

 

 

138,774

 

 

 

139,114

 

 

 

140,101

 

(1)

 

The non-GAAP adjustments for Stock-based compensation include related payroll 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)

 

Non-cash changes in net deferred income taxes associated with the release of the valuation allowance against $56.9 million of our U.S. deferred tax assets in the fourth quarter of fiscal 2023.

(4)

 

Adjustments for Change in tax law reflect an increase in our provision for U.S. tax on foreign operations resulting from The 2017 Tax Cuts and Jobs Act and is related to the capitalization and subsequent amortization of R&D costs for tax purposes.


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