Lattice Semiconductor Reports First Quarter Financial Results.HILLSBORO Hillsboro, city (1990 pop. 37,520), seat of Washington co., NW Oreg., in the Tualatin valley; inc. 1876. Integrated circuits, other high-tech products, furniture, plastics, and medical equipment are manufactured in this growing city in Oregon's "Sunset Corridor. , Ore. -- Lattice Semiconductor Lattice Semiconductor Corporation (NASDAQ: LSCC) is a United States based manufacturer of high-performance programmable logic devices (FPGAs, CPLDs, & SPLDs). The Oregon based company is the number four ranked company in world market share for FPGA devices,[1] Corporation (NASDAQ NASDAQin full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :LSCC LSCC Lake-Sumter Community College (Florida) LSCC Lattice Semiconductor Corporation (stock symbol) LSCC Lawson State Community College (Alabama) ) today announced financial results for the first quarter ended March 2005. Revenue for the first quarter was $51.3 million, an increase of six percent from last quarter's revenue of $48.5 million but down 13 percent from the $59.1 million reported in the same quarter a year ago. Quarterly revenue from PLD (Programmable Logic Device) Refers to a variety of logic chips that are programmable at the customer's site, the customer being the vendor of the finished chip, not the end user. products was $42.1 million, or 82 percent of total revenue, and grew six percent sequentially. Quarterly revenue from FPGA (Field Programmable Gate Array) A type of gate array that is programmed in the field rather than in a semiconductor fab. Containing up to hundreds of thousands of gates, there are a variety of FPGA architectures on the market. products was $9.2 million, or 18 percent of total revenue, and grew four percent sequentially. Quarterly revenue from New products, now 28 percent of total revenue, grew 13 percent sequentially and 86 percent on a year over year basis. Net loss for the first quarter was $10.9 million ($0.10 per share) as compared to the net loss of $13.1 million ($0.12 per share) reported last quarter. These losses include charges of $4.4 million and $5.8 million, respectively, for the amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. . Excluding these charges, loss for the first quarter was $6.5 million ($0.06 per share) as compared to a loss of $7.4 million ($0.07 per share) reported last quarter on a similar basis. These non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. have been highlighted as they are currently expected to be substantially eliminated in 2008. The Company believes exclusion of these charges more closely approximate its cash earnings performance. A reconciliation of non-GAAP net loss to GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net loss accompanies the financial tables in this earnings release. "During the first quarter, the programmable logic See PLD. market experienced a general recovery", stated Cyrus Cy·rus Known as "the Younger." 424?-401 b.c. Persian prince who led a mammoth force of Greeks against his brother Artaxerxes II. Y. Tsui, chairman and chief executive officer. "Due to these favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. conditions and a continuation of our new product revenue growth, we posted sequential quarterly revenue growth above our initial outlook. "Last quarter we also made a major product announcement with the successful introduction of our second new FPGA family, the LatticeXP(TM)", continued Tsui. "This differentiated next generation FPGA combines a low-cost architecture with non-volatile With regard to computer memory, it means that the content is not lost when the power is turned off. It does not mean "not changeable," which is the usual meaning of the word, because many non-volatile chips are rewritable. See non-volatile memory. non-volatile - non-volatile storage , infinitely reconfigurable ispXP (expanded programmability) technology. Manufactured using an advanced 130nm embedded Inserted into. See embedded system. flash process technology jointly developed with Fujitsu (company) Fujitsu - A Japanese elecronics corporation. Fujitsu owns ICL, Amdahl Corporation, and DMR. Home USA, Japan. , LatticeXP devices will allow a significant reduction in the historic price premium (compared to volatile FPGA devices) for non-volatile FPGA devices. We are pleased with the initial customer reception and expect the LatticeXP family to open new avenues of revenue growth for Lattice (theory) lattice - A partially ordered set in which all finite subsets have a least upper bound and greatest lower bound. This definition has been standard at least since the 1930s and probably since Dedekind worked on lattice theory in the 19th century; though he may not in the future." Business Outlook - June June: see month. 2005 Quarter: --Sequential revenue growth is expected to be in the low to mid single digit A single character in a numbering system. In decimal, digits are 0 through 9. In binary, digits are 0 and 1. digit - An employee of Digital Equipment Corporation. See also VAX, VMS, PDP-10, TOPS-10, DEChead, double DECkers, field circus. range; --Gross margin percent is expected to be approximately flat; --Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. are expected to decrease by approximately $1 to $2 million; --Intangible asset amortization is expected to be approximately $4.1 million; and --Other Income is expected to be approximately $1.5 million. On April 22, 2005, Lattice will hold a telephone conference call at 5:30 a.m. (Pacific Time) with financial analysts. Investors may listen to our conference call live via the web at www.lscc.com. Replays of the call will also be available at www.lscc.com. On June 14, 2005, we plan to publish a "Business Update Statement" on our website. Our financial guidance will be limited to the comments on our public quarterly earnings call and these public business outlook statements. Additionally, during the June 2005 quarter, Lattice plans to participate in investor conferences sponsored by Piper Jaffray Piper Jaffray & Co. (NYSE: PJC), often shortened to just Piper Jaffray or PiperJaffray, is a U.S. middle-market investment banking firm based in Minneapolis, Minnesota and is a focused on delivering financial advice, investment products and transaction execution , JP Morgan Morgan, American family of financiers and philanthropists. Junius Spencer Morgan, 1813–90, b. West Springfield, Mass., prospered at investment banking. and Bear Stearns The Bear Stearns Companies, Inc. (NYSE: BSC) is the parent company of Bear, Stearns & Co. Inc., one of the largest global investment banks and securities trading and brokerage firms in the world. . Specific presentation dates and times are posted on our website at www.lscc.com. The foregoing paragraphs contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the federal securities laws including statements about future quarterly financial results, revenues, customers, product offerings and the Company's ability to compete. Investors are cautioned that actual events and results could differ materially from these statements as a result of a number of factors, including overall semiconductor market conditions, market acceptance and demand for the Company's new products, the Company's dependencies on our silicon wafer (1) A small, thin continuous-loop magnetic tape cartridge that has been used from time to time for data storage and specialized applications. (2) The base unit of chip making. It is a slice taken from a salami-like silicon crystal ingot up to 12" (300mm) in diameter. suppliers, the impact of competitive products and pricing, technological and product development risks. The Company does not intend to update or revise any forward looking statements, whether as a result of events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" or to reflect the occurrence of unanticipated events. Lattice Semiconductor Corporation provides the industry's broadest range of Field Programmable Gate Arrays See FPGA. (FPGA) and Programmable Logic Devices See PLD. (PLD), including Field Programmable System Chips (FPSC FPSC Florida Public Service Commission FPSC Financial Planners Standards Council (Canada) FPSC Field Programmable System Chip (Lucent Technologies) FPSC Fundación Promoción Social de la Cultura ), Complex Programmable Logic Devices (hardware) complex programmable logic device - (CPLD) A programmable circuit similar to an FPGA, but generally on a smaller scale, invented by Xilinx, Inc. (CPLD (Complex PLD) A programmable logic device that is made up of several simple PLDs (SPLDs) with a programmable switching matrix in between the logic blocks. CPLDs typically use EEPROM, flash memory or SRAM to hold the logic design interconnections. See PLD and SPLD. ), Programmable Mixed-Signal Products (ispPAC(R)) and Programmable Digital Interconnect (1) To attach one device to another. (2) A physical port (plug, socket) or wireless port (transmitter, receiver) used to attach one device to another. Devices (ispGDX(R)). Lattice also offers industry leading SERDES See serializer/deserializer. products. Lattice is "Bringing the Best Together" with comprehensive solutions for system design, including an unequaled portfolio of non-volatile programmable devices that deliver instant-on Refers to software-based computers, PDAs and cellphones that are immediately available for user input right after they are powered on. It implies that the software, or at least a primary component of the software, is stored in a non-volatile memory and does not have to be loaded from operation, security and "single chip solution" space savings. Lattice products are sold worldwide through an extensive network of independent sales representatives and distributors, primarily to OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and customers in communications, computing computing - computer , industrial, consumer, automotive, medical and military end markets. Company headquarters are located at 5555 NE Moore Moore, city (1990 pop. 40,761), Cleveland co., central Okla., a suburb of Oklahoma City; inc. 1887. Its manufactures include lightning- and surge-protection equipment, packaging for foods, and auto parts. Court, Hillsboro, Oregon Hillsboro is a city in and county seat of Washington County, Oregon, United States.GR6 The community began in 1842 and was named Hillsborough in 1850, before incorporation in 1876 as Hillsboro. 97124-6421, USA; telephone 503-268-8000, fax 503-268-8037. For more information about Lattice Semiconductor Corporation, visit http://www.latticesemi.com Lattice Semiconductor Corporation, Lattice (& design), L (& design), LatticeXP, ispXP and specific product designations are either registered trademarks or trademarks of Lattice Semiconductor Corporation or its subsidiaries in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. other countries.
Lattice Semiconductor Corporation
Consolidated Statement of Operations
(in thousands, except per share data)
Three months ended
------------------
Mar. 31, Dec. 31, Mar. 31,
Description 2005 2004 2004
----------------------------------------------------------------------
(unaudited)(unaudited)(unaudited)
Revenue $ 51,283 $ 48,541 $ 59,071
Costs and expenses:
Costs of products sold 22,171 21,058 24,719
Research and development 24,557 22,886 22,259
Selling, general and
administrative 14,333 13,017 13,087
Amortization of intangible
assets (1)(2) 4,416 5,759 18,654
--------- --------- ---------
Total costs and expenses 65,477 62,720 78,719
--------- --------- ---------
Loss from operations (14,194) (14,179) (19,648)
Other income, net 3,409 1,141 3,107
--------- --------- ---------
Loss before provision for
income taxes (10,785) (13,038) (16,541)
Provision for income taxes 100 100 0
--------- --------- ---------
Net loss ($10,885) ($13,138) ($16,541)
========= ========= =========
Basic net loss per share ($0.10) ($0.12) ($0.15)
========= ========= =========
Diluted net loss per share ($0.10) ($0.12) ($0.15)
========= ========= =========
Shares used in per share calculations:
Basic 113,460 113,307 112,627
========= ========= =========
Diluted (3) 113,460 113,307 112,627
========= ========= =========
Notes:
(1) Intangible assets subject to amortization aggregate $37.0 million,
net, at March 31, 2005 and relate to the acquisition of Cerdelinx
Technologies, Inc. on August 26, 2002, the acquisition of the FPGA
business of Agere Systems, Inc. on January 18, 2002 and the
acquisition of Integrated Intellectual Property Inc. on March 16,
2001. These intangible assets are amortized to expense generally over
three to seven years on a straight-line basis.
(2) Includes $0.6 million, $0.6 million and $0.8 million of deferred
stock compensation expense for the quarters ended March 31, 2005,
December 31, 2004, and March 31, 2004, respectively, attributable to
Research and Development activities.
(3) For all periods presented, the computation of diluted net loss per
share excludes the effect of stock options and our Zero Coupon
Convertible Subordinated Notes as they are antidilutive.
Lattice Semiconductor Corporation
Consolidated Balance Sheet
(in thousands)
Mar. 31, Dec. 31,
Description 2005 2004
----------------------------------------------------------------------
(unaudited)
Assets
Current assets:
Cash and marketable securities $ 253,212 $ 296,295
Accounts receivable, net 24,940 19,587
Inventories 36,530 38,634
Other current assets 44,203 46,527
--------- ---------
Total current assets 358,885 401,043
Property and equipment, net 45,708 47,586
Foundry investments, advances and other assets 94,310 97,877
Goodwill and other intangible assets, net (1) 260,601 264,400
--------- ---------
$ 759,504 $ 810,906
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and other accrued
liabilities $ 37,679 $ 61,161
Deferred income on sales to distributors 10,776 11,399
--------- ---------
Total current liabilities 48,455 72,560
Zero Coupon Convertible Subordinated Notes due
in 2010 153,500 169,000
Other long-term liabilities 27,347 26,755
--------- ---------
180,847 195,755
Stockholders' equity 530,202 542,591
--------- ---------
$ 759,504 $ 810,906
========= =========
Note:
(1) At March 31, 2005, includes approximately $223.6 million in
Goodwill and $37.0 million of other intangible assets, net, related
to previous acquisitions. The other intangible assets are being
amortized to expense generally over three to seven years. Goodwill is
not amortized effective with the March 2002 quarter.
Appendix 1
Lattice Semiconductor Corporation
Consolidated Operations Information- Non-GAAP Basis(1)
(in thousands, except per share data)
(unaudited)
Three months ended
------------------
Mar. 31, Dec. 31, Mar. 31,
Description 2005 2004 2004
----------------------------------------------------------------------
Revenue $ 51,283 $ 48,541 $ 59,071
Costs and expenses:
Costs of products sold 22,171 21,058 24,719
Research and development 24,557 22,886 22,259
Selling, general and administrative 14,333 13,017 13,087
-------- -------- --------
Total costs and expenses 61,061 56,961 60,065
-------- -------- --------
Loss from operations (9,778) (8,420) (994)
Other income, net 3,409 1,141 3,107
-------- -------- --------
(Loss) income before provision for income
taxes (6,369) (7,279) 2,113
Provision for income taxes 100 100 0
-------- -------- --------
Non-GAAP net (loss) income ($6,469) ($7,379)$ 2,113
======== ======== ========
Diluted Non-GAAP (loss) income
per share (2) ($0.06) ($0.07)$ 0.02
======== ======== ========
Shares used in calculations 113,460 113,307 117,795
======== ======== ========
Notes:
(1) This table presents operating information which is consistent
with the information reported by Thompson Financial, Reuters and
Zacks for Lattice Semiconductor Corporation. A reconciliation to
GAAP on a per share basis is attached as Appendix 2.
(2) For the three months ended March 31, 2005 and December 31, 2004,
the computation of diluted Non-GAAP loss excludes the effect of stock
options and our Zero Coupon Subordinated Convertible Notes as they
are antidilutive. For the three months ended March 31, 2004, the
computation of diluted Non-GAAP income includes the effect of stock
options but excludes the effect of our Zero Coupon Subordinated
Convertible Notes as they are antidilutive.
Appendix 2
Lattice Semiconductor Corporation
Non-GAAP Earnings Reconciliation (1)
(unaudited)
Three months ended
------------------
Mar. 31, Dec. 31, Mar. 31,
Description 2005 2004 2004
----------------------------------------------------------------------
Net loss ($0.10) ($0.12) ($0.15)
Add:
Amortization of intangible assets $ 0.04 $ 0.05 $ 0.17
------- ------- -------
Non-GAAP (loss) income ($0.06) ($0.07)$ 0.02
======= ======= =======
Notes:
(1) This table reconciles net loss to non-GAAP information, which is
presented in Appendix 1, on a per-share basis.
Appendix 3
LATTICE SEMICONDUCTOR CORPORATION
- Supplemental Historic Financial Information -
(Q1 2005)
Operations Information Q105 Q404 Q104
------ ------ ------
Percent of Revenue
Gross Margin 56.8% 56.6% 58.2%
R&D Expense 47.9% 47.1% 37.7%
SG&A Expense 27.9% 26.8% 22.2%
Operating Loss -27.7% -29.2% -33.3%
Operating Loss (Non-GAAP) -19.1% -17.3% -1.7%
Depreciation Expense ($000) 3,764 3,890 4,498
Capital Expenditures ($000) 1,886 2,301 2,022
Balance Sheet Information
Current Ratio 7.4 5.5 9.3
A/R Days Revenue Outstanding 44 37 40
Inventory Months 4.9 5.5 5.4
Revenue % (by Product Family)
FPGA 18% 18% 19%
PLD 82% 82% 81%
Revenue % (by Product Classification(1))
New 28% 26% 13%
Mainstream 36% 35% 43%
Mature 36% 39% 44%
Revenue % (by Geography)
Americas 30% 33% 36%
Europe (incl. Africa) 25% 26% 24%
Asia (incl. ROW) 45% 41% 40%
Revenue % (by End Market)
Communications 53% 48% 53%
Computing 19% 20% 19%
Other 28% 32% 28%
Revenue % (by Channel)
Direct 59% 59% 58%
Distribution 41% 41% 42%
(1)Product Classification:
-----------------------
New: LatticeEC/P, FPSC, XPLD, XPGA, GDX2, ORCA 4,
ispMACH 4000/Z, ispPAC-PWR, ispCLK
Mainstream: ORCA 3, GDX/V, ispMACH L/V, ispLSI 2000V, ispLSI
5000V, ispLSI 8000V, ispMACH 5000V/G, and Other
Mature: ORCA 2, all 5-Volt CPLDs, all SPLDs
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