Lattice Semiconductor Reports Fourth Quarter and Full Year 2018 Results
PORTLAND, Ore.--(BUSINESS WIRE)--Feb 12, 2019--Lattice Semiconductor Corporation (NASDAQ: LSCC), a leading provider of programmable logic devices, announced financial results today for the fiscal fourth quarter and full year ended December 29, 2018.
Jim Anderson, President and Chief Executive Officer, said, “We are pleased to report that for the full year 2018, we substantially improved Lattice’s profitability, earnings per share and operating cash flow. We simplified the Company’s operating structure and have attracted an experienced executive team to lead all critical business areas. Despite uncertainty in the current macroeconomic climate, we are positioned to benefit over the long term from multiple catalysts in our business, including growth in computing, industrial and automotive, and the global 5G buildout. We are excited about 2019 as we unlock additional value for the company and its shareholders.”
Sherri Luther, Chief Financial Officer, said, “The fourth quarter of 2018 demonstrated continued improvement in operations, with net loss per share at $0.05 on a GAAP basis, and net income of $0.08 per share on a non-GAAP basis. For the full year of 2018, we reduced our net loss per share on a GAAP basis to $0.21 from a loss of $0.58, and tripled our net income per share on a non-GAAP basis to $0.33 from $0.11. Importantly, we improved operating cash flow to $51.5 million in 2018 from $38.5 million in 2017 and made a total of $40 million in discretionary debt payments in 2018. We remain committed to delivering improved operating leverage.”
Selected Fourth Quarter and Full Year 2018 Financial Results and Comparisons (in thousands, except per share data)
†Results for periods in 2017 are presented in accordance with ASC 605, which was in effect during that fiscal year.
Full Year 2018 HighlightsImproved Financial Performance: Lattice exited 2018 in a stronger, more profitable position. We implemented initiatives to improve gross margin, reduce operating expenses, increase cash flow, and actively delever the balance sheet. Strategic Repositioning: Lattice completed a strategic repositioning in 2018 to focus on its profitable programmable logic business, while also improving efficiencies across its global operations. Actions taken included discontinuing its non-core millimeter wave business to focus entirely on programmable solutions moving forward, as well as optimizing the R&D project list to focus investments on areas with the greatest potential return. These actions are in-line with management’s strategy to drive profitable growth and increase shareholder value. New Management Team Added: Lattice strengthened its executive team with highly experienced, proven leaders with both broader semiconductor industry experience and deep FPGA knowledge. The new team and simplified structure is now in place across R&D, sales, marketing, operations and finance. Jim Anderson joined Lattice in September from AMD as the Company’s President and Chief Executive Officer; Steve Douglass joined Lattice in September from Xilinx, Inc. as Corporate Vice President, R&D Esam Elashmawi joined Lattice in September from Microsemi Corporation as Chief Marketing and Strategy Officer; Glenn O’Rourke joined Lattice in December from Xilinx, Inc. as Corporate Vice President, Global Operations; Sherri Luther joined Lattice in January from Coherent, Inc. as Chief Financial Officer; Mark Nelson joined Lattice in January from Intel Corporation’s Programmable Solutions Group (PSG) as Corporate Vice President of Worldwide Sales. New Product Introductions in 2018: Lattice further built upon its strong product portfolio with notable 2018 developments including: Introduction and expansion of the ultra-low power Lattice sensAI TM solution stack with a full ecosystem to help speed time-to-market for developers of low-power machine learning applications; Initial samples of Lattice’s new security solution for Platform Firmware Resilience delivered to top server manufacturers; Expansion of Lattice’s FPGA based modular video interface platform to simplify video connectivity for embedded vision system designs; Launch of Lattice’s Radiant TM next-generation FPGA software with enhanced ease-of-use for broad market low power applications.
Business Outlook - First Quarter of 2019:Revenue for the first quarter of 2019 is expected to be between approximately $94 million and $98 million. Gross margin percentage for the first quarter of 2019 is expected to be approximately 57.5% plus or minus 2% on a non-GAAP basis. Total operating expenses for the first quarter of 2019 are expected to be between approximately $37 million and $39 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 measures. With respect to the outlook for the first quarter of 2019, certain items that affect GAAP measurement of financial metrics are out of the Company’s control and/or cannot be reasonably predicted. Consequently, the Company is unable to provide a reasonable estimate of GAAP measurement for guidance or a corresponding reconciliation to GAAP for the quarter. 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 below, following the GAAP financial information.
Investor Conference Call / Webcast Details:
Lattice Semiconductor will review the Company’s financial results for the fiscal fourth quarter and full year 2018 and business outlook on Tuesday, February 12 at 5:00 p.m. Eastern Time. The dial-in number for the live audio call is 1-888-684-5603 or 1-918-398-4852 with conference identification number 8287936. A live webcast and replay 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:
The foregoing paragraphs contain forward-looking statements that involve estimates, assumptions, risks and uncertainties. Any statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. Such forward-looking statements include statements relating to: our belief that we are positioned to benefit over the long term from multiple catalysts in our business, including growth in computing, industrial and automotive, and the global 5G buildout; that we will unlock additional value for the company and its shareholders; and the statements under the heading “Business Outlook - First Quarter of 2019.” 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; and our expectation that we will remain focused on maximizing the leverage of our operating model and reduce our outstanding debt balance. Lattice believes the factors identified below could cause actual results to differ materially from the forward-looking statements.
Estimates of future revenue are inherently uncertain due to such factors as global economic conditions, which may affect customer demand, pricing pressures, competitive actions, the demand for our Mature, Mainstream and New products, and in particular our iCE40™ and MachXO3L™ devices, international trade disputes and sanctions, the ability to supply products to customers in a timely manner, changes in our distribution relationships, or the volatility of our consumer business. 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, including commodity costs, variations in manufacturing yields, the failure to sustain operational improvements, the actual amount of compensation charges due to stock price changes. Any unanticipated declines in revenue or gross margin, any unanticipated increases in our operating expenses or unanticipated charges could adversely affect our profitability.
In addition to the foregoing, other factors that may cause actual results to differ materially from the forward-looking statements in this press release include global economic uncertainty, overall semiconductor market conditions, market acceptance and demand for our new products, the Company’s dependencies on its silicon wafer suppliers, the impact of competitive products and pricing, technological and product development risks. In addition, actual results are subject to other risks and uncertainties that relate more broadly to our overall business, including those risks more fully described in Lattice’s filings with the SEC including its annual report on Form 10-K for the fiscal year ended December 30, 2017, and Lattice’s quarterly reports filed on Form 10-Q.
You should not unduly 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 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. The non-GAAP measures presented exclude charges and adjustments primarily related to stock-based compensation, restructuring plans and related charges, acquisition-related charges, amortization of acquired intangible assets, impairment of intangible assets, inventory adjustments from the discontinuation of the Company’s millimeter wave business, gain on sale of building, loss on sale of business unit, and the estimated tax effect of these items. 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.
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 a leader in low power, small form factor programmable logic devices. Our FPGAs deliver intelligence, connectivity, and control solutions to the industrial, compute, communications, consumer, and automotive markets. Our unwavering commitment to our global customers enables them to accelerate their innovation, creating an even better and more connected world.
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Lattice Semiconductor Corporation
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