Lattice Semiconductor Reports Fourth Quarter and Full Year 2015

Lattice Semiconductor Reports Fourth Quarter and Full Year 2015 Results

Lattice was founded in 1983 and is headquartered in Portland, Oregon. In March 2015, the Company acquired Silicon Image, which is a leader in setting industry standards including the highly successful HDMI®, DVI™, MHL® and WirelessHD® standards.

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Lattice Semiconductor Corporation, Lattice (& design), L (& design), iCE40 and MachXO3L and specific product designations are either registered trademarks or trademarks of Lattice Semiconductor Corporation or its subsidiaries in the United States and/or other countries.

GENERAL NOTICE: Other product names used in this publication are for identification purposes only and may be trademarks of their respective holders.


Lattice Semiconductor Corporation Consolidated Statements of Operations (in thousands, except per share data) (unaudited)

	Three Months Ended									Year Ended
	January 2, 2016			October 3, 2015			January 3, 2015			January 2, 2016			January 3, 2015
Revenue	$	101,194		$	109,715		$	83,600		$	405,966		$	366,127
Costs and expenses:
Cost of sales	47,092			49,866			37,337			186,057			159,940
Research and development	32,055			37,619			22,485			136,868			88,079
Selling, general, and administrative	24,253			23,819			18,301			97,349			73,527
Acquisition related charges	372			610			—			22,450			—
Restructuring	3,459			6,818			1			19,239			17
Amortization of acquired intangible assets	8,756			8,941			737			29,580			2,948
Impairment of goodwill and intangible assets	21,655			—			—			21,655			—
	137,642			127,673			78,861			513,198			324,511
(Loss) income from operations	(36,448		)	(17,958		)	4,739			(107,232		)	41,616
Interest expense	(5,519		)	(5,754		)	(87		)	(18,389		)	(262		)
Other income (expense), net	466			(943		)	144			(832		)	1,587
(Loss) income before income taxes and equity in net loss of an unconsolidated affiliate	(41,501		)	(24,655		)	4,796			(126,453		)	42,941
Income tax expense (benefit)	3,510			309			(10,623		)	32,540			(5,639		)
Equity in net loss of an unconsolidated affiliate, net of tax	(492		)	—			—			(492		)	—
Net (loss) income	(45,503		)	(24,964		)	15,419			(159,485		)	48,580
Net loss attributable to non-controlling interest	49			102			—			252			—
Net (loss) income attributable to common stockholders	$	(45,454	)	$	(24,862	)	$	15,419		$	(159,233	)	$	48,580

Net (loss) income per share:
Basic	$	(0.38	)	$	(0.21	)	$	0.13		$	(1.36	)	$	0.41
Diluted	$	(0.38	)	$	(0.21	)	$	0.13		$	(1.36	)	$	0.40

Shares used in per share calculations:
Basic	118,095			117,669			117,931			117,387			117,708
Diluted	118,095			117,669			119,486			117,387			120,245


Lattice Semiconductor Corporation Consolidated Balance Sheets (in thousands) (unaudited)

	January 2, 2016		January 3, 2015
Assets
Current assets:
Cash, cash equivalents and short-term marketable securities	$	102,574	$	254,844
Accounts receivable, net	88,471		62,372
Inventories	75,896		64,925
Other current assets	18,922		16,281
Total current assets	285,863		398,422

Property and equipment, net	51,852		27,796
Other long-term assets	17,495		9,862
Intangible assets, net of amortization	162,583		9,537
Goodwill	267,549		44,808
Deferred income taxes	578		20,105
	$	785,920	$	510,530

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and other accrued liabilities	$	83,761	$	45,800
Current portion of long-term debt	7,557		—
Deferred income and allowances on sales to sell-through distributors and deferred license revenue	19,859		14,946
Total current liabilities	111,177		60,746

Long-term debt	330,870		—
Other long-term liabilities	38,353		8,809
Total liabilities	480,400		69,555

Stockholders' equity	305,520		440,975
	$	785,920	$	510,530


Lattice Semiconductor Corporation - Supplemental Historical Financial Information - (unaudited)

	Three Months Ended						Year Ended
	January 2, 2016		October 3, 2015		January 3, 2015		January 2, 2016		January 3, 2015
Operations Information
Percent of Revenue
Gross Margin	53.5	%	54.5	%	55.3	%	54.2	%	56.3	%
R&D Expense	31.7	%	34.3	%	26.9	%	33.7	%	24.1	%
SG&A Expense	24.0	%	21.7	%	21.9	%	24.0	%	20.1	%
Depreciation and amortization (in thousands)	17,892		17,553		5,375		60,808		22,248
Capital expenditures (in thousands)	6,624		4,552		3,394		18,209		10,267
Stock-based compensation expense (in thousands)	4,788		4,199		3,257		17,350		12,801
Stock-based compensation included in acquisition related charges (in thousands)	—		402		—		4,293		—
Restructuring and severance related charges (in thousands)	3,459		6,818		59		19,239		628
Severance costs included in acquisition related charges (in thousands)	—		—		—		4,017		—
Taxes paid (cash, in thousands)	2,936		2,291		509		8,339		1,599
Balance Sheet Information
Current Ratio	2.6		2.7		6.6
A/R Days Revenue Outstanding	80		71		67
Inventory Months	4.8		4.8		5.2
Revenue% (by Geography)
Asia	75	%	79	%	68	%	76	%	73	%
Europe (incl. Africa)	12	%	12	%	16	%	14	%	16	%
Americas	13	%	9	%	16	%	10	%	11	%
Revenue% (by End Market) (1)
Communications	28	%	26	%	41	%	28	%	42	%
Consumer	30	%	33	%	20	%	31	%	25	%
Industrial	30	%	31	%	39	%	32	%	33	%
Licensing	12	%	10	%	—	%	9	%	—	%
Revenue% (by Channel)
Sell-through distribution	44	%	46	%	49	%	45	%	45	%
Direct	56	%	54	%	51	%	55	%	55	%

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