Exhibit 99.1
Lattice Semiconductor Reports First Quarter Financial Results
HILLSBORO, Ore.--(BUSINESS WIRE)--April 21, 2005--Lattice
Semiconductor Corporation (NASDAQ:LSCC) today announced financial
results for the first quarter ended March 2005.
Revenue for the first quarter was $51.3 million, an increase of
six percent from last quarter's revenue of $48.5 million but down 13
percent from the $59.1 million reported in the same quarter a year
ago.
Quarterly revenue from PLD products was $42.1 million, or 82
percent of total revenue, and grew six percent sequentially. Quarterly
revenue from FPGA products was $9.2 million, or 18 percent of total
revenue, and grew four percent sequentially. Quarterly revenue from
New products, now 28 percent of total revenue, grew 13 percent
sequentially and 86 percent on a year over year basis.
Net loss for the first quarter was $10.9 million ($0.10 per share)
as compared to the net loss of $13.1 million ($0.12 per share)
reported last quarter. These losses include charges of $4.4 million
and $5.8 million, respectively, for the amortization of intangible
assets. Excluding these charges, loss for the first quarter was $6.5
million ($0.06 per share) as compared to a loss of $7.4 million ($0.07
per share) reported last quarter on a similar basis. These non-cash
charges have been highlighted as they are currently expected to be
substantially eliminated in 2008. The Company believes exclusion of
these charges more closely approximate its cash earnings performance.
A reconciliation of non-GAAP net loss to GAAP net loss accompanies the
financial tables in this earnings release.
"During the first quarter, the programmable logic market
experienced a general recovery", stated Cyrus Y. Tsui, chairman and
chief executive officer. "Due to these favorable conditions and a
continuation of our new product revenue growth, we posted sequential
quarterly revenue growth above our initial outlook.
"Last quarter we also made a major product announcement with the
successful introduction of our second new FPGA family, the
LatticeXP(TM)", continued Tsui. "This differentiated next generation
FPGA combines a low-cost architecture with non-volatile, infinitely
reconfigurable ispXP (expanded programmability) technology.
Manufactured using an advanced 130nm embedded flash process technology
jointly developed with Fujitsu, LatticeXP devices will allow a
significant reduction in the historic price premium (compared to
volatile FPGA devices) for non-volatile FPGA devices. We are pleased
with the initial customer reception and expect the LatticeXP family to
open new avenues of revenue growth for Lattice in the future."
Business Outlook - June 2005 Quarter:
-- Sequential revenue growth is expected to be in the low to mid
single digit range;
-- Gross margin percent is expected to be approximately flat;
-- Total operating expenses are expected to decrease by
approximately $1 to $2 million;
-- Intangible asset amortization is expected to be approximately
$4.1 million; and
-- Other Income is expected to be approximately $1.5 million.
On April 22, 2005, Lattice will hold a telephone conference call
at 5:30 a.m. (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, 2005, 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 2005 quarter, Lattice plans
to participate in investor conferences sponsored by Piper Jaffray, JP
Morgan and Bear Stearns. 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 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 provides the industry's broadest
range of Field Programmable Gate Arrays (FPGA) and Programmable Logic
Devices (PLD), including Field Programmable System Chips (FPSC),
Complex Programmable Logic Devices (CPLD), Programmable Mixed-Signal
Products (ispPAC(R)) and Programmable Digital Interconnect Devices
(ispGDX(R)). Lattice also offers industry leading SERDES products.
Lattice is "Bringing the Best Together" with comprehensive solutions
for system design, including an unequaled portfolio of non-volatile
programmable devices that deliver instant-on operation, security and
"single chip solution" space savings.
Lattice products are sold worldwide through an extensive network
of independent sales representatives and distributors, primarily to
OEM customers in communications, computing, industrial, consumer,
automotive, medical and military end markets. Company headquarters are
located at 5555 NE Moore Court, Hillsboro, Oregon 97124-6421, USA;
telephone 503-268-8000, fax 503-268-8037. For more information about
Lattice Semiconductor Corporation, visit http://www.latticesemi.com
Lattice Semiconductor Corporation, Lattice (& design), L (&
design), LatticeXP, ispXP 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)
Three months ended
------------------
Mar. 31, Dec. 31, Mar. 31,
Description 2005 2004 2004
- ----------------------------------------------------------------------
(unaudited)(unaudited)(unaudited)
Revenue $ 51,283 $ 48,541 $ 59,071
Costs and expenses:
Costs of products sold 22,171 21,058 24,719
Research and development 24,557 22,886 22,259
Selling, general and
administrative 14,333 13,017 13,087
Amortization of intangible
assets (1)(2) 4,416 5,759 18,654
--------- --------- ---------
Total costs and expenses 65,477 62,720 78,719
--------- --------- ---------
Loss from operations (14,194) (14,179) (19,648)
Other income, net 3,409 1,141 3,107
--------- --------- ---------
Loss before provision for
income taxes (10,785) (13,038) (16,541)
Provision for income taxes 100 100 0
--------- --------- ---------
Net loss ($10,885) ($13,138) ($16,541)
========= ========= =========
Basic net loss per share ($0.10) ($0.12) ($0.15)
========= ========= =========
Diluted net loss per share ($0.10) ($0.12) ($0.15)
========= ========= =========
Shares used in per share calculations:
Basic 113,460 113,307 112,627
========= ========= =========
Diluted (3) 113,460 113,307 112,627
========= ========= =========
Notes:
(1) Intangible assets subject to amortization aggregate $37.0 million,
net, at March 31, 2005 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 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 $0.6 million, $0.6 million and $0.8 million of deferred
stock compensation expense for the quarters ended March 31, 2005,
December 31, 2004, and March 31, 2004, 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 Zero Coupon
Convertible Subordinated Notes as they are antidilutive.
Lattice Semiconductor Corporation
Consolidated Balance Sheet
(in thousands)
Mar. 31, Dec. 31,
Description 2005 2004
- ----------------------------------------------------------------------
(unaudited)
Assets
Current assets:
Cash and marketable securities $ 253,212 $ 296,295
Accounts receivable, net 24,940 19,587
Inventories 36,530 38,634
Other current assets 44,203 46,527
--------- ---------
Total current assets 358,885 401,043
Property and equipment, net 45,708 47,586
Foundry investments, advances and other assets 94,310 97,877
Goodwill and other intangible assets, net (1) 260,601 264,400
--------- ---------
$ 759,504 $ 810,906
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and other accrued
liabilities $ 37,679 $ 61,161
Deferred income on sales to distributors 10,776 11,399
--------- ---------
Total current liabilities 48,455 72,560
Zero Coupon Convertible Subordinated Notes due
in 2010 153,500 169,000
Other long-term liabilities 27,347 26,755
--------- ---------
180,847 195,755
Stockholders' equity 530,202 542,591
--------- ---------
$ 759,504 $ 810,906
========= =========
Note:
(1) At March 31, 2005, includes approximately $223.6 million in
Goodwill and $37.0 million of other intangible assets, net, related
to previous acquisitions. The other intangible assets are being
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 2005 2004 2004
- ----------------------------------------------------------------------
Revenue $ 51,283 $ 48,541 $ 59,071
Costs and expenses:
Costs of products sold 22,171 21,058 24,719
Research and development 24,557 22,886 22,259
Selling, general and administrative 14,333 13,017 13,087
-------- -------- --------
Total costs and expenses 61,061 56,961 60,065
-------- -------- --------
Loss from operations (9,778) (8,420) (994)
Other income, net 3,409 1,141 3,107
-------- -------- --------
(Loss) income before provision for income
taxes (6,369) (7,279) 2,113
Provision for income taxes 100 100 0
-------- -------- --------
Non-GAAP net (loss) income ($6,469) ($7,379)$ 2,113
======== ======== ========
Diluted Non-GAAP (loss) income
per share (2) ($0.06) ($0.07)$ 0.02
======== ======== ========
Shares used in calculations 113,460 113,307 117,795
======== ======== ========
Notes:
(1) This table presents operating information which is consistent
with the information reported by Thompson Financial, 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, 2005 and December 31, 2004,
the computation of diluted Non-GAAP loss excludes the effect of stock
options and our Zero Coupon Subordinated Convertible Notes as they
are antidilutive. For the three months ended March 31, 2004, the
computation of diluted Non-GAAP income includes the effect of stock
options but excludes the effect of our Zero Coupon Subordinated
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 2005 2004 2004
- ----------------------------------------------------------------------
Net loss ($0.10) ($0.12) ($0.15)
Add:
Amortization of intangible assets $ 0.04 $ 0.05 $ 0.17
------- ------- -------
Non-GAAP (loss) income ($0.06) ($0.07)$ 0.02
======= ======= =======
Notes:
(1) This table reconciles net 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 2005)
Operations Information Q105 Q404 Q104
------ ------ ------
Percent of Revenue
Gross Margin 56.8% 56.6% 58.2%
R&D Expense 47.9% 47.1% 37.7%
SG&A Expense 27.9% 26.8% 22.2%
Operating Loss -27.7% -29.2% -33.3%
Operating Loss (Non-GAAP) -19.1% -17.3% -1.7%
Depreciation Expense ($000) 3,764 3,890 4,498
Capital Expenditures ($000) 1,886 2,301 2,022
Balance Sheet Information
Current Ratio 7.4 5.5 9.3
A/R Days Revenue Outstanding 44 37 40
Inventory Months 4.9 5.5 5.4
Revenue % (by Product Family)
FPGA 18% 18% 19%
PLD 82% 82% 81%
Revenue % (by Product Classification(1))
New 28% 26% 13%
Mainstream 36% 35% 43%
Mature 36% 39% 44%
Revenue % (by Geography)
Americas 30% 33% 36%
Europe (incl. Africa) 25% 26% 24%
Asia (incl. ROW) 45% 41% 40%
Revenue % (by End Market)
Communications 53% 48% 53%
Computing 19% 20% 19%
Other 28% 32% 28%
Revenue % (by Channel)
Direct 59% 59% 58%
Distribution 41% 41% 42%
(1)Product Classification:
- -----------------------
New: LatticeEC/P, FPSC, XPLD, XPGA, GDX2, ORCA 4,
ispMACH 4000/Z, ispPAC-PWR, ispCLK
Mainstream: ORCA 3, GDX/V, ispMACH L/V, ispLSI 2000V, ispLSI
5000V, ispLSI 8000V, ispMACH 5000V/G, and Other
Mature: ORCA 2, all 5-Volt CPLDs, all SPLDs
CONTACT: Lattice Semiconductor Corporation
Roddy Sloss, 503-268-8000