Lattice Semiconductor Corporation (Nasdaq: LSCC), the low power
programmable leader, announced financial results today for the
fiscal first quarter ended March 30, 2024.
Revenue for the first quarter of 2024 was $140.8 million, with
GAAP gross margin of 68.3% and GAAP net income of $0.11 per diluted
share. On a non-GAAP basis, gross margin was 69% with net income
per diluted share of $0.29.
Jim Anderson, president and CEO, said, "First quarter 2024
results came in as expected and reflect the near-term impact of
cyclic industry headwinds. Despite near-term headwinds, the Company
is well-positioned for the long-term as we execute on the largest
product portfolio expansion in our history."
Sherri Luther, CFO, said, "We remain disciplined in our
spending, while continuing to invest for long-term growth. In
addition, we continued to return capital to shareholders by
executing on our fourteenth consecutive quarter of share
repurchases."
Selected First Quarter 2024 Financial Results and Comparisons
(in thousands, except per share data)
GAAP Financial Results
(unaudited)
Q1 2024
Q4 2023
Q1 2023
Q/Q
Y/Y
Revenue
$
140,815
$
170,596
$
184,310
(17.5)%
(23.6)%
Gross Margin %
68.3
%
69.7
%
69.8
%
(140) bps
(150) bps
R&D Expense %
28.8
%
23.3
%
19.5
%
550 bps
930 bps
SG&A Expense %
25.9
%
20.3
%
17.7
%
560 bps
820 bps
Operating Expenses
$
79,634
$
75,798
$
69,467
5.1%
14.6%
Income from Operations
$
16,574
$
43,149
$
59,134
(61.6)%
(72.0)%
Net Income
$
14,796
$
98,706
$
55,923
(85.0)%
(73.5)%
Net Income per Share - Basic
$
0.11
$
0.72
$
0.41
$(0.61)
$ (0.30)
Net Income per Share - Diluted
$
0.11
$
0.71
$
0.40
$(0.60)
$ (0.29)
Fourth quarter of 2023 GAAP net income
includes an income tax benefit of $0.41 per diluted share
associated with a valuation allowance release.
Non-GAAP* Financial Results
(unaudited)
Q1 2024
Q4 2023
Q1 2023
Q/Q
Y/Y
Revenue
$
140,815
$
170,596
$
184,310
(17.5)%
(23.6)%
Gross Margin %
69.0
%
70.4
%
70.3
%
(140) bps
(130) bps
R&D Expense %
23.1
%
18.7
%
16.5
%
440 bps
660 bps
SG&A Expense %
16.1
%
13.8
%
12.8
%
230 bps
330 bps
Operating Expenses
$
54,858
$
55,495
$
53,983
(1.1)%
1.6%
Income from Operations
$
42,238
$
64,563
$
75,641
(34.6)%
(44.2)%
Net Income
$
40,258
$
62,801
$
71,772
(35.9)%
(43.9)%
Net Income per Share - Basic
$
0.29
$
0.46
$
0.52
$ (0.17)
$ (0.23)
Net Income per Share - Diluted
$
0.29
$
0.45
$
0.51
$ (0.16)
$ (0.22)
GAAP represents U.S. Generally Accepted
Accounting Principles. Non-GAAP represents GAAP excluding the
impact of certain activities which the Company's management
excludes in analyzing the Company's operating results and in
understanding trends in the Company's earnings. Additional
information relating to these measures is included below in
“Non-GAAP Financial Measures.” For a reconciliation of GAAP to
non-GAAP results, see accompanying tables "Reconciliation of U.S.
GAAP to Non-GAAP Financial Measures."
First Quarter 2024 Highlights:
- New AI-PC Win: Lattice hardware and software power AI
computer vision on new Dell Latitude models.
- Software Solutions Expansion: Launched an enhanced
version of the award-winning Lattice ORAN™ solution stack.
- Enhanced FPGA Design Tool: Released a new version of the
award-winning Lattice Radiant® software, featuring an advanced
design automation flow solution with expanded functional safety and
reliability capabilities.
- Lattice Received Multiple Industry Awards:
- 2024 Top Workplace USA Award
- 2024 BIG AI Excellence Award Winner
- 2024 Globee Cybersecurity Awards
Business Outlook - Second Quarter of 2024:
- Revenue for the second quarter of 2024 is expected to be
between $120 million and $140 million.
- Gross margin percentage for the second quarter of 2024 is
expected to be 69.0% plus or minus 1% on a non-GAAP basis.
- Total operating expenses for the second quarter of 2024 are
expected to be between $54 million and $56 million on a non-GAAP
basis.
Non-GAAP Financial Measures: In addition to financial measures
prepared in accordance with generally accepted accounting
principles (GAAP), this earnings release makes reference to
non-GAAP financial measures. With respect to the outlook for the
second quarter of 2024, certain items that affect GAAP measurement
of financial measures for gross margin percentage and total
operating expenses are not accessible on a forward-looking basis
because such items cannot be reasonably predicted without
unreasonable efforts due to the unpredictability of the amounts and
timing of events affecting the items we exclude from non-GAAP
measures, including certain large and/or unpredictable charges such
as stock-based compensation expense; litigation expense outside the
ordinary course of business; and restructuring. Consequently, the
Company is unable to provide a reasonable estimate of GAAP
measurement for non-GAAP gross margin percentage or non-GAAP total
operating expenses for quarterly guidance or a corresponding
reconciliation to GAAP for the quarter. From a qualitative
perspective, the differences between our GAAP measurement of
financial measures for gross margin percentage and total operating
expenses and our non-GAAP measure of those items will consist of
items similar to those described in the financial tables later in
this release for such items historically, including, for example
and without limitation, certain large and/or unpredictable charges
such as stock-based compensation expense; litigation expense
outside the ordinary course of business; and restructuring.
Additional information regarding the reasons the Company uses
non-GAAP measures, a reconciliation of these measures to the most
directly comparable GAAP measures, and other information relating
to these measures are included in this press release.
Investor Conference Call / Webcast Details:
Lattice Semiconductor will review the Company's financial
results for the fiscal first quarter 2024, and business outlook on
Monday, April 29 at 5:00 p.m. Eastern Time. The dial-in number for
the live audio call is 1-877-407-3982 or 1-201-493-6780 with
conference identification number 13745683. A live webcast of the
conference call will also be available on the investor relations
section of www.latticesemi.com. The Company's financial guidance
will be limited to the comments on its public quarterly earnings
call and the public business outlook statements contained in this
press release.
Forward-Looking Statements Notice:
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
and made pursuant to the safe harbor provisions of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements
involve estimates, assumptions, risks and uncertainties. Any
statements about our expectations, beliefs, plans, objectives,
assumptions or future events or performance are neither historical
facts nor assurances of future performance and may be
forward-looking. Such forward-looking statements include, but are
not limited to, statements relating to our rapid product portfolio
expansion; long-term position; near-term cyclical industry
headwinds; accelerating customer momentum; and the statements under
the heading “Business Outlook - Second Quarter of 2024.” Other
forward-looking statements may be indicated by words such as
“will,” “could,” “should,” “would,” “may,” “expect,” “plan,”
“project,” “anticipate,” “intend,” “forecast,” “future,” “believe,”
“estimate,” “predict,” “propose,” “potential,” “continue” or the
negative of these terms or other comparable terminology.
Estimates of future revenue and other financial and operational
outcomes are inherently uncertain due to factors such as global
economic conditions which may affect customer demand, the cyclical
nature of the semiconductor industry, pricing and inflationary
pressures, competitive actions, international trade disputes and
sanctions, the potential impact of global pandemics, and other
significant risks and uncertainties that are beyond our ability to
predict or control. Actual gross margin percentage and operating
expenses could vary from the estimates on the basis of, among other
things, changes in revenue levels, changes in product pricing and
mix, changes in wafer, assembly, test and other costs, variations
in manufacturing yields, the failure to sustain operational
improvements, and the actual amount of compensation charges due to
stock price changes. Actual results may differ materially from our
expectations and are subject to risks and uncertainties that relate
more broadly to our overall business, including those described in
our filings with the Securities and Exchange Commission, including
Lattice’s most recent Annual Report on Form 10-K, especially those
under the captions “Risk Factors” and “Management's Discussion and
Analysis of Financial Condition and Results of Operations”, all of
which are expressly incorporated herein by reference.
Lattice believes these and other risks and uncertainties could
cause actual results to differ materially from the forward-looking
statements. New risk factors emerge from time to time and it is not
possible for the Company to predict all risk factors. You should
not rely on forward-looking statements because actual results could
differ materially from those expressed in any forward-looking
statements. In addition, any forward-looking statement applies only
as of the date on which it is made. The Company does not intend to
and undertakes no obligation to update or revise any
forward-looking statements, whether as a result of events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
Non-GAAP Financial Measures:
Included within this press release and the accompanying tables
and notes are certain non-GAAP financial measures that supplement
the Company's consolidated financial information prepared in
accordance with U.S. GAAP, including non-GAAP gross margin, gross
margin percentage, R&D expense, SG&A expense, operating
expenses, income from operations, other (expense) income, net,
income tax expense, net income, net income per share – basic, and
net income per share – diluted. The non-GAAP measures presented
exclude charges and adjustments primarily related to stock-based
compensation and related payroll tax effects, litigation expense
outside the ordinary course of business, amortization of acquired
intangible assets, restructuring plans and other charges, and the
estimated tax effect of these items, non-cash changes in net
deferred income taxes, change in tax law and other tax adjustments.
These charges and adjustments are a result of periodic or non-core
operating activities of the Company. The Company describes these
non-GAAP financial measures and reconciles them to the most
directly comparable GAAP measures in the tables and notes attached
to this press release.
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. The
non-GAAP financial information used by the Company may differ from
that used by other companies. 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,
or Weibo.
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240429871162/en/
MEDIA: Sophia Hong Lattice Semiconductor Corporation
503-268-8786 Sophia.Hong@latticesemi.com
INVESTORS: Rick Muscha Lattice Semiconductor Corporation
408-826-6000 Rick.Muscha@latticesemi.com
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