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Lattice Semiconductor Reports First Quarter ResultsHILLSBORO, Ore. - April 26, 2007 - Lattice Semiconductor Corporation (NASDAQ: LSCC) today announced financial results for the first quarter ended March 2007. For the first quarter, revenue was $58.1 million, an increase of one percent from the $57.5 million reported in the same quarter a year ago, and a decrease of six percent from the $61.8 million reported in the prior quarter. FPGA revenue for the first quarter was $11.9 million, up 10 percent from the $10.8 million reported in the same quarter a year ago, and up slightly from $11.8 million reported in the prior quarter. PLD revenue for the quarter was $46.3 million, a one percent decrease over the $46.7 million reported in the same quarter a year ago, and a decrease of seven percent from prior quarter revenue of $50.0 million. New product revenue for the first quarter was $4.8 million, up 126% from the $2.1 million reported in the same quarter a year ago, and up 17% from $4.1 million reported in the prior quarter. Other income for the first quarter of 2007 was $3.0 million and included a $0.7 million gain related to the extinguishment of outstanding zero coupon convertible notes. Net loss for the first quarter was $4.4 million ($0.04 per share), as compared to a net loss of $0.8 million ($0.01 per share) reported in the same quarter a year ago, and prior quarter net income of $0.9 million ($0.01 per share). These results include non-cash amortization charges, stock based compensation expense and restructuring charges, which total $3.9 million and $3.6 million for the first quarter of 2007 and 2006, respectively, and $3.8 million for the fourth quarter of 2006. Excluding these charges, net loss for the quarter was $0.5 million as compared to net income of $2.8 million for the comparable quarter a year ago, and net income of $4.8 million for the fourth quarter of 2006. During the first quarter we paid $37.5 million in cash to Fujitsu, which completed our $125.0 million wafer pre-payment obligation under our foundry agreement. During the quarter we also paid $19.6 million for the repurchase of our zero coupon convertible notes. "Industry conditions continued to be challenging during the first quarter primarily driven by weakness in the communications and computing end markets and continuing customer inventory corrections. This resulted in an anticipated decline in our overall revenue," said Steve Skaggs, Lattice's President and Chief Executive Officer. "Nonetheless, we were encouraged by the relative performance of our New products and our FPGA business last quarter. Looking forward, we are currently seeing signs of improvement in industry conditions and consequently anticipate sequential revenue growth in the second quarter."
First Quarter Business Highlights:
Business Outlook - June 2007 Quarter
Discussion of Non-GAAP Financial Measures: Management evaluates and makes operating decisions using various performance measures. In addition to our GAAP results, we also consider adjusted net income, which we refer to as non-GAAP net (loss) income. This measure is generally based on the revenue of our products and the costs of those operations, such as cost of products sold, research and development, sales and marketing and general and administrative expenses, that management considers in evaluating our ongoing core operating performance. Non-GAAP net (loss) income excludes amortization of intangible assets, stock-based compensation and restructuring charges. Intangible assets relate to assets acquired through acquisitions and consist of technology purchased in connection with the acquisitions. Stock-based compensation charges are related to the adoption of SFAS No. 123(R) effective January 1, 2006, and include expense for items such as stock options and restricted stock units granted to employees, purchases under the employee stock purchase plan and deferred stock compensation issued in connection with acquisitions. Restructuring charges consist of expenses and subsequent adjustments incurred under our corporate restructuring plan that took place in the fourth quarter of fiscal 2005, and include items such as separation packages, costs to vacate space under long-term lease arrangements, the cost to write-off an intellectual property license and other related expenses. Non-GAAP net income (loss) is a supplemental measure of our performance that is not required by and not presented in accordance with GAAP. Moreover, it should not be considered as an alternative to net loss, operating loss or any other performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities or as a measure of our liquidity. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures contained within this press release with our net loss, which is our most directly comparable GAAP financial result. For more information, see the consolidated statements of operations contained in this earnings release. On April 26, 2007, Lattice will hold a telephone conference call at 2:00pm (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, 2007, 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. The foregoing paragraphs contain forward-looking statements that involve estimates, assumptions, risks and uncertainties. With respect to particular forward-looking statements in the Business Outlook – June 2007 Quarter section of this release, Lattice believes the factors identified below in connection with each such statement could cause actual results to differ materially from the forward-looking statements. Estimates of future revenue are inherently uncertain due to the high percentage of quarterly “turns” business. In addition, revenue is affected by such factors as pricing pressures, competitive actions, the demand for our products, and the ability to supply products to customers in a timely manner. Actual gross margin percentage and operating expenses could vary from the estimates contained herein on the basis of, among other things, changes in revenue levels, product pricing, changes in wafer, assembly and test costs, variations in manufacturing yields, and changes in stock-based compensation charges due to stock price changes. In addition to the foregoing, other factors that may cause actual results to differ materially from the forward-looking statements herein include the Company’s dependencies on its silicon wafer suppliers, technological and product development risks, and the other risks that are described from time to time in our filings with the Securities and Exchange Commission. The Company does not intend 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. Lattice Semiconductor Corporation provides the industry’s broadest range of Programmable Logic Devices (PLD), including Field Programmable Gate Arrays (FPGA), Complex Programmable Logic Devices (CPLD), Mixed-Signal Power Management and Clock Generation Devices, and industry-leading SERDES products. Lattice continues to deliver "More of the Best" to its customers with comprehensive solutions for system design, including an unequaled portfolio of high performance, non-volatile and low cost FPGAs. Lattice products are sold worldwide through an extensive network of independent sales representatives and distributors, primarily to OEM customers in the communications, computing, consumer, industrial and military end markets. For more information access our web site at www.latticesemi.com. # # # Lattice Semiconductor Corporation, Lattice (& design), L (& design), FreedomChip, ispClock, ispGDX2, ispXPGA, ispGDXV, ORCA, ispLSI, LatticeECP, LatticeECP2, LatticeECP2M, LatticeSC, LatticeXP, MachXO, ispMACH, ispPAC 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. For more information contact: |
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