Lattice Semiconductor Reports Fourth Quarter and Full Year 2015

Lattice Semiconductor Reports Fourth Quarter and Full Year 2015 Results

(1) During the second quarter of fiscal 2014, the Company condensed its End Market categories. All periods presented have been revised accordingly.


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
	January 2, 2016			October 3, 2015			January 3, 2015			January 2, 2016			January 3, 2015
GAAP Revenue	$	101,194		$	109,715		$	83,600		$	405,966		$	366,127
Fair value adjustment to deferred revenue from purchase accounting	96			361			—			5,187			—
Non-GAAP Revenue	$	101,290		$	110,076		$	83,600		$	411,153		$	366,127

GAAP Cost of products sold	$	47,092		$	49,866		$	37,337		$	186,057		$	159,940
Fair value adjustment to deferred revenue from purchase accounting	—			47			—			1,496			—
Inventory step-up expense	(716		)	(716		)	—			(6,078		)	—
Stock-based compensation - gross margin	(372		)	(406		)	(228		)	(1,416		)	(815		)
Non-GAAP Cost of products sold	$	46,004		$	48,791		$	37,109		$	180,059		$	159,125

GAAP Gross margin	$	54,102		$	59,849		$	46,263		$	219,909		$	206,187
Fair value adjustment to deferred revenue from purchase accounting	96			314			—			3,691			—
Inventory step-up expense	716			716			—			6,078			—
Stock-based compensation - gross margin	372			406			228			1,416			815
Non-GAAP Gross margin	$	55,286		$	61,285		$	46,491		$	231,094		$	207,002
Non-GAAP Gross margin %	54.6		%	55.7		%	55.6		%	56.2		%	56.5		%

GAAP Operating expenses	$	90,550		$	77,807		$	41,524		$	327,141		$	164,571
Restructuring	(3,459		)	(6,818		)	(1		)	(19,239		)	(17		)
Acquisition related charges (1)	(372		)	(610		)	—			(22,450		)	—
Amortization of acquired intangible assets	(8,756		)	(8,941		)	(737		)	(29,580		)	(2,948		)
Impairment of goodwill and intangible assets	(21,655		)	—			—			(21,655		)	—
Stock-based compensation - operations	(4,416		)	(3,793		)	(3,030		)	(15,934		)	(11,987		)
Non-GAAP Operating expenses	$	51,892		$	57,645		$	37,756		$	218,283		$	149,619

GAAP (Loss) income from operations	$	(36,448	)	$	(17,958	)	$	4,739		$	(107,232	)	$	41,616
Fair value adjustment to deferred revenue from purchase accounting	96			314			—			3,691			—
Inventory step-up expense	716			716			—			6,078			—
Stock-based compensation - gross margin	372			406			228			1,416			815
Restructuring	3,459			6,818			1			19,239			17
Acquisition related charges (1)	372			610			—			22,450			—
Amortization of acquired intangible assets	8,756			8,941			737			29,580			2,948
Impairment of goodwill and intangible assets	21,655			—			—			21,655			—
Stock-based compensation - operations	4,416			3,793			3,030			15,934			11,987
Non-GAAP Income from operations	$	3,394		$	3,640		$	8,735		$	12,811		$	57,383


(1) Includes stock-based compensation and severance costs related to change in control.

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
	January 2, 2016			October 3, 2015			January 3, 2015			January 2, 2016			January 3, 2015
GAAP (Loss) income before income taxes and equity in net loss of an unconsolidated affiliate	$	(41,501	)	$	(24,655	)	$	4,796		$	(126,453	)	$	42,941
Fair value adjustment to deferred revenue from purchase accounting	96			314			—			3,691			—
Inventory step-up expense	716			716			—			6,078			—
Stock-based compensation - gross margin	372			406			228			1,416			815
Restructuring	3,459			6,818			1			19,239			17
Acquisition related charges (1)	372			610			—			22,450			—
Amortization of acquired intangible assets	8,756			8,941			737			29,580			2,948
Impairment of goodwill and intangible assets	21,655			—			—			21,655			—
Stock-based compensation - operations	4,416			3,793			3,030			15,934			11,987
Non-GAAP (Loss) income before income taxes and equity in net loss of an unconsolidated affiliate	$	(1,659	)	$	(3,057	)	$	8,792		$	(6,410	)	$	58,708
				—
GAAP Income tax expense (benefit)	$	3,510		$	309		$	(10,623	)	$	32,540		$	(5,639	)
Non-cash income tax expense (benefit)	(574		)	1,982			11,132			(24,201		)	7,238
Non-GAAP Income tax expense (benefit)	$	2,936		$	2,291		$	509		$	8,339		$	1,599

GAAP Net (loss) income attributable to common stockholders	$	(45,454	)	$	(24,862	)	$	15,419		$	(159,233	)	$	48,580
Fair value adjustment to deferred revenue from purchase accounting	96			314			—			3,691			—
Inventory step-up expense	716			716			—			6,078			—
Stock-based compensation - gross margin	372			406			228			1,416			815
Restructuring	3,459			6,818			1			19,239			17
Acquisition related charges (1)	372			610			—			22,450			—
Amortization of acquired intangible assets	8,756			8,941			737			29,580			2,948
Impairment of goodwill and intangible assets	21,655			—			—			21,655			—
Stock-based compensation - operations	4,416			3,793			3,030			15,934			11,987
Non-cash income tax expense (benefit)	574			(1,982		)	(11,132		)	24,201			(7,238		)
Non-GAAP Net (loss) income attributable to common stockholders	$	(5,038	)	$	(5,246	)	$	8,283		$	(14,989	)	$	57,109


(1) Includes stock-based compensation and severance costs related to change in control.

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
	January 2, 2016			October 3, 2015			January 3, 2015			January 2, 2016			January 3, 2015
GAAP Net (loss) income per share - basic	$	(0.38	)	$	(0.21	)	$	0.13		$	(1.36	)	$	0.41
Cumulative effect of Non-GAAP adjustments	0.34			0.17			(0.06		)	1.23			0.08
Non-GAAP Net (loss) income per share - basic	$	(0.04	)	$	(0.04	)	$	0.07		$	(0.13	)	$	0.49

GAAP Net (loss) income per share - diluted	$	(0.38	)	$	(0.21	)	$	0.13		$	(1.36	)	$	0.40
Cumulative effect of Non-GAAP adjustments	0.34			0.17			(0.06		)	1.23			0.07
Non-GAAP Net (loss) income per share - diluted	$	(0.04	)	$	(0.04	)	$	0.07		$	(0.13	)	$	0.47

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

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