Exhibit 99.1
Lattice Semiconductor Reports First Quarter Financial Results
HILLSBORO, Ore.--(BUSINESS WIRE)--April 22, 2004--Lattice
Semiconductor Corporation (Nasdaq:LSCC) today announced financial
results for the first quarter ended March 2004.
Revenue for the first quarter was $59.1 million, an increase of 12
percent from last quarter's revenue of $52.8 million and up three
percent from the $57.3 million reported in the same quarter a year
ago.
Beginning this quarter, the Company will provide product revenue
detail for only two categories: FPGA and PLD. PLD product revenue
includes revenue from CPLD and SPLD products. Quarterly revenue from
FPGA products was $11.4 million, or 19 percent of total revenue, and
grew 10 percent sequentially. Quarterly revenue from PLD products was
$47.7 million, or 81 percent of total revenue, and grew over 12
percent sequentially.
Net loss for the first quarter was $16.5 million ($0.15 per
share). This loss includes $18.7 million of charges for amortization
of intangible assets. Excluding these charges, income for the quarter
was $2.1 million ($0.02 per share). These non-cash charges have been
highlighted here as they are not expected to continue at these levels
beyond June 2004 and are currently expected to be eliminated in 2009.
The Company believes exclusion of these charges more closely
approximates its cash earnings performance. A reconciliation of
non-GAAP income to GAAP loss accompanies the financial tables in this
earnings release.
"During the first quarter, the programmable logic market
experienced a strong recovery," stated Cyrus Y. Tsui, chairman and
chief executive officer. "Due to these favorable conditions we posted
very strong sequential quarterly revenue growth. However, these
historically high growth rates are not sustainable going forward.
During the ensuing year we will remain steadfastly focused on
executing our product development strategy and introducing our next
generation FPGA product families."
Business Outlook - June 2004 Quarter:
-- Revenue is expected to grow approximately 3 to 5 percent on a
sequential basis;
-- Gross margin percent is expected to be in the same range as
the March 2004 quarter;
-- Total operating expenses are expected to be approximately
flat;
-- Intangible asset amortization is expected to decrease by
approximately $1 million;
-- Other Income is expected to be approximately $3 million; and
-- We do not anticipate reporting a tax provision.
On April 23, 2004, Lattice will hold a telephone conference call
at 5:30 am (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
10, 2004, 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 2004 quarter, Lattice plans
to participate in investor conferences sponsored by the JP Morgan and
Smith Barney Citigroup. Specific presentation dates and times are
posted on our website at www.lscc.com.
The foregoing paragraphs contain forward-looking statements 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 the
possibility that further accounting adjustments may be required and
the effectiveness of changes to the Company's internal controls, as
well as overall semiconductor market conditions, market acceptance and
demand for the Company's new products, the Company's dependencies on
our silicon wafer 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 after the date hereof or to
reflect the occurrence of unanticipated events.
Lattice Semiconductor Corporation, the inventor of in-system
programmable (ISP(TM)) logic products, designs, develops and markets
the broadest range of Field Programmable Gate Arrays (FPGA), Field
Programmable System Chips (FPSCs) and high-performance ISP
Programmable Logic Devices (PLDs), including Complex Programmable
Logic Devices (CPLD), Programmable Analog Components (PAC), and
Programmable Digital Interconnect (GDX). Lattice also offers industry
leading SERDES products. Lattice offers total solutions for today's
system designs by delivering the most innovative programmable silicon
products that embody leading-edge system expertise.
Lattice products are sold worldwide through an extensive network
of independent sales representatives and distributors, primarily to
OEM customers in the communications, computing, industrial and
military end markets. Company headquarters are located at 5555 N.E.
Moore Court, Hillsboro, Oregon 97124 USA. For more information access
our web site at www.latticesemi.com.
Lattice Semiconductor Corporation, L (& design), Lattice (&
design) ISP 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.
Lattice Semiconductor Corporation
Consolidated Statement of Operations
(in thousands, except per share data)
(unaudited)
Three months ended
-----------------------------
Mar. 31, Dec. 31, Mar. 31,
Description 2004 2003 2003
- ---------------------------------------------------------------------
Revenue $59,071 $52,757 $57,297
Costs and expenses:
Costs of products sold 24,719 23,814 23,028
Research and development 22,259 22,385 21,832
Selling, general and administrative 13,087 13,562 12,483
Amortization of intangible assets
(1)(2) 18,654 18,661 21,114
-----------------------------
Total costs and expenses 78,719 78,422 78,457
-----------------------------
Loss from operations (19,648) (25,665) (21,160)
Other income, net 3,107 421 1,491
-----------------------------
Loss before (benefit) provision for
income taxes (16,541) (25,244) (19,669)
(Benefit) provision for income taxes -- -- --
-----------------------------
Net loss ($16,541) ($25,244) ($19,669)
=============================
Basic net loss per share ($0.15) ($0.22) ($0.18)
=============================
Diluted net loss per share ($0.15) ($0.22) ($0.18)
=============================
Shares used in per share calculations:
Basic 112,627 112,364 111,390
=============================
Diluted (3) 112,627 112,364 111,390
=============================
Notes:
(1) Intangible assets subject to amortization aggregate $66.8
million, net, at March 31, 2004 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, the
acquisition of Vantis Corporation on June 16, 1999 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 $0.8 million, $0.8 million and $3.3 million of deferred
stock compensation expense for the quarters ended March 31, 2004,
December 31, 2003 and March 31, 2003, 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 convertible
notes as they are antidilutive.
Lattice Semiconductor Corporation
Consolidated Balance Sheet
(in thousands)
(unaudited)
Mar. 31, Dec. 31,
Description 2004 2003
- ----------------------------------------------------------- ---------
Assets
Current assets:
Cash and short-term investments $298,548 $277,750
Accounts receivable, net 26,013 26,796
Inventories 44,312 46,630
Other current assets 57,575 51,537
--------- ---------
Total current assets 426,448 402,713
Property and equipment, net 51,313 53,800
Foundry investments, advances and other assets 74,293 86,883
Goodwill and other intangible assets, net (1) 290,384 308,232
--------- ---------
$842,438 $851,628
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and other accrued liabilities $31,729 $28,500
Deferred income on sales to distributors 13,847 10,564
Income taxes payable 126 37
--------- ---------
Total current liabilities 45,702 39,101
Zero Coupon Convertible notes due in 2010 184,000 184,000
Other long-term liabilities 22,699 22,415
--------- ---------
206,699 206,415
Stockholders' equity 590,037 606,112
--------- ---------
$842,438 $851,628
========= =========
Note:
(1) At March 31, 2004, includes approximately $8.5 million of other
intangible assets, net, recorded in the September 2002 quarter in
connection with the August 26, 2002 acquisition of Cerdelinx
Technologies, Inc. Also includes $142.5 million in Goodwill and
$47.7 million of other intangible assets, net, recorded in the March
2002 quarter in connection with the January 18, 2002 acquisition of
the FPGA business of Agere Systems, Inc., and approximately $81.1
million in Goodwill and $10.6 million of other intangible assets,
net, related to previous acquisitions. The other intangible assets
will be 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 2004 2003 2003
- ---------------------------------------------------------------------
Revenue $59,071 $52,757 $57,297
Costs and expenses:
Costs of products sold 24,719 23,814 23,028
Research and development 22,259 22,385 21,832
Selling, general and administrative 13,087 13,562 12,483
--------------------------
Total costs and expenses 60,065 59,761 57,343
--------------------------
Loss from operations (994) (7,004) (46)
Other income, net 3,107 421 1,491
--------------------------
Income (loss) before provision (benefit)
for income taxes 2,113 (6,583) 1,445
Provision (benefit) for income taxes -- -- --
--------------------------
Non-GAAP earnings (loss) $2,113 ($6,583) $1,445
==========================
Diluted Non-GAAP earnings (loss) per share
(2) $0.02 ($0.06) $0.01
==========================
Shares used in calculations 117,795 112,364 113,098
==========================
Notes:
(1) This table presents operating information which is consistent
with the information reported by First Call, 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, 2004 and March 31, 2003,
the computation of diluted Non-GAAP earnings includes the effect of
stock options but excludes the effect of our convertible notes as
they are antidilutive. For the three months ended December 31, 2003,
the computation of diluted Non-GAAP loss excludes the effect of both
stock options and the effect of our 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 2004 2003 2003
- ---------------------------------------------------------------------
Net loss ($0.15) ($0.22) ($0.18)
Add:
Amortization of intangible assets $0.17 $0.16 $0.19
--------------------------
Non-GAAP income (loss) $0.02 ($0.06) $0.01
==========================
Notes:
(1) This table reconciles net income (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 2004)
Operations Information Q104 Q403 Q103
--------------------
Percent of Revenue
Gross Margin 58.2% 54.9% 59.8%
R&D Expense 37.7% 42.4% 38.1%
SG&A Expense 22.2% 25.7% 21.8%
Operating Loss -33.3% -48.6% -36.9%
Operating Loss (Non-GAAP) -1.7% -13.3% -0.1%
Depreciation Expense ($000) 4,498 4,598 4,742
Capital Expenditures ($000) 2,022 1,808 3,211
Balance Sheet Information
Current Ratio 9.3 10.3 7.2
A/R Days Revenue Outstanding 40 46 49
Inventory Months 5.4 5.9 6.7
Revenue % (by Product Family)
FPGA 19% 20% 15%
CPLD 67% 67% 70%
SPLD 14% 13% 15%
Revenue % (by Product Classification(a))
New 13% 14%
Mainstream 43% 42%
Mature 44% 44%
Revenue % (by Geography)
Americas 36% 36% 37%
Europe (incl. Africa) 24% 22% 31%
Asia (incl. ROW) 40% 42% 32%
Revenue % (by End Market)
Communications 53% 51% 44%
Computing 19% 21% 21%
Other 28% 28% 35%
Revenue % (by Channel)
Direct 58% 61% 55%
Distribution 42% 39% 45%
(a) Product Classification:
- -----------------------------------------------
New: FPSC, XPLD, XPGA, GDX2, ORCA 4, ispMACH 4000, ispMACH
4000 Z, ispPAC-PWR
Mainstream: ORCA 3, GDX/V, ispMACH L/V, ispLSI 2000V, ispLSI 5000V,
ispLSI 8000V, ispMACH 5000VG, Mixed Signal, Software
Mature: ORCA 2, All 5-Volt CPLDs, All SPLDs
CONTACT: Lattice Semiconductor Corporation
Roddy Sloss, 503-268-8000