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Lattice Semiconductor Reports Fourth Quarter and Full Year 2022 Results

  • Revenue Increases 28.1% for the Full Year 2022 Compared to the Full Year 2021; Q4 2022 Revenue Increases 24.1% Compared to Q4 2021
  • Gross Margin Expands to 69.4% / 70.0% for Q4 2022 on a GAAP / Non-GAAP Basis, from 64.2% / 65.1%, respectively, for Q4 2021
  • Net Income Improves to $0.37 / $0.49 Per Diluted Share for Q4 2022 on a GAAP / Non-GAAP Basis, Compared to $0.20 / $0.32, respectively, for Q4 2021
  • Full Year 2022 Net Income increases to $1.27 / $1.75 Per Diluted Share on a GAAP / Non-GAAP Basis, Compared to $0.67 / $1.06, respectively, for the Full Year 2021

* 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."

Lattice Semiconductor Corporation (NASDAQ: LSCC), the low power programmable leader, announced financial results today for the fiscal fourth quarter and full year ended December 31, 2022.

Jim Anderson, president and CEO, said, "We grew revenue 28% for the full year 2022, with continued strong growth in our strategic segments of industrial and automotive, and communications and computing. We delivered 86% annual growth in net income on a GAAP basis and 64% on a non-GAAP basis. In December, we launched the Lattice Avant™ platform, which doubles our addressable market and creates new greenfield growth opportunities. As we begin 2023, while we’re certainly not immune to any macro-economic challenges impacting the industry, the Company is well positioned in secular growth markets, with an expanding product portfolio, accelerating customer momentum and strong financial execution."

Sherri Luther, CFO, said, "In Q4 2022, revenue increased 24%, marking the eleventh consecutive quarter of sequential growth. We achieved record operating profit of 30.7% on a GAAP basis and 40.2% on a non-GAAP basis, while driving gross margin expansion of 520 basis points on a GAAP basis and 490 basis points on a non-GAAP basis compared to Q4 2021. We generated a record level of cash flow from operations, with a 42% increase compared to the prior year. In addition, since beginning our share repurchase program nine quarters ago, we have repurchased approximately 3.6 million shares, with 290,000 shares repurchased in Q4 2022."

Selected Fourth Quarter and Full Year 2022 Financial Results and Comparisons (in thousands, except per share data)

 

 

GAAP Financial Results (unaudited)

 

 

Q4 2022

 

Q3 2022

 

Q4 2021

 

Q/Q

 

Y/Y

 

FY 2022

 

FY 2021

 

FY/FY

Revenue

 

$ 175,960

 

$ 172,509

 

$ 141,795

 

2.0%

 

24.1%

 

$ 660,356

 

$ 515,327

 

28.1%

Gross Margin %

 

69.4%

 

68.8%

 

64.2%

 

60 bps

 

520 bps

 

68.5%

 

62.4%

 

610 bps

R&D Expense %

 

19.8%

 

20.2%

 

21.3%

 

(40) bps

 

(150) bps

 

20.6%

 

21.4%

 

(80) bps

SG&A Expense %

 

18.4%

 

18.5%

 

20.2%

 

(10) bps

 

(180) bps

 

18.5%

 

20.5%

 

(200) bps

Operating Expenses

 

$ 68,050

 

$ 69,930

 

$ 61,244

 

(2.7)%

 

11.1%

 

$ 264,683

 

$ 220,859

 

19.8%

Income from Operations

 

$ 54,016

 

$ 48,802

 

$ 29,836

 

10.7%

 

81.0%

 

$ 187,367

 

$ 100,816

 

85.9%

Net Income

 

$ 51,913

 

$ 46,359

 

$ 28,532

 

12.0%

 

81.9%

 

$ 178,882

 

$ 95,922

 

86.5%

Net Income per Share - Basic

 

$ 0.38

 

$ 0.34

 

$ 0.21

 

$ 0.04

 

$ 0.17

 

$ 1.30

 

$ 0.70

 

$ 0.60

Net Income per Share - Diluted

 

$ 0.37

 

$ 0.33

 

$ 0.20

 

$ 0.04

 

$ 0.17

 

$ 1.27

 

$ 0.67

 

$ 0.60

 

 

Non-GAAP* Financial Results (unaudited)

 

 

Q4 2022

 

Q3 2022

 

Q4 2021

 

Q/Q

 

Y/Y

 

FY 2022

 

FY 2021

 

FY/FY

Revenue

 

$ 175,960

 

$ 172,509

 

$ 141,795

 

2.0%

 

24.1%

 

$ 660,356

 

$ 515,327

 

28.1%

Gross Margin %

 

70.0%

 

69.5%

 

65.1%

 

50 bps

 

490 bps

 

69.1%

 

63.2%

 

590 bps

R&D Expense %

 

16.8%

 

17.1%

 

18.0%

 

(30) bps

 

(120) bps

 

17.4%

 

18.4%

 

(100) bps

SG&A Expense %

 

13.1%

 

12.6%

 

13.9%

 

50 bps

 

(80) bps

 

13.0%

 

14.6%

 

(160) bps

Operating Expenses

 

$ 52,469

 

$ 51,342

 

$ 45,752

 

2.2%

 

14.7%

 

$ 200,997

 

$ 170,022

 

18.2%

Income from Operations

 

$ 70,653

 

$ 68,512

 

$ 46,609

 

3.1%

 

51.6%

 

$ 255,363

 

$ 155,758

 

63.9%

Net Income

 

$ 68,367

 

$ 66,492

 

$ 45,345

 

2.8%

 

50.8%

 

$ 246,679

 

$ 150,864

 

63.5%

Net Income per Share - Basic

 

$ 0.50

 

$ 0.48

 

$ 0.33

 

$ 0.02

 

$ 0.17

 

$ 1.80

 

$ 1.10

 

$ 0.70

Net Income per Share - Diluted

 

$ 0.49

 

$ 0.48

 

$ 0.32

 

$ 0.01

 

$ 0.17

 

$ 1.75

 

$ 1.06

 

$ 0.69

Fourth Quarter and Full Year 2022 Highlights:

 

Revenue Growth: Q4 2022 revenue increased 24% year-over-year, marking the eleventh consecutive quarter of sequential growth. Revenue for the full year 2022 increased 28% compared to 2021.

 

Margin Expansion: Gross margin expanded 520 basis points on a GAAP basis and 490 basis points on a non-GAAP basis compared to Q4 2021. For the full year 2022, gross margin expanded 610 basis points on a GAAP basis and 590 basis points on a non-GAAP basis compared to 2021.

 

Successful Lattice Avant™ Launch: Lattice launched its newest power-efficient FPGA platform, Lattice Avant™, significantly expanding its product portfolio, doubling the addressable market and creating new greenfield revenue growth opportunities.

 

Lattice Receives Multiple Industry Awards: For the third year in a row, Lattice received the Global Semiconductor Alliance (GSA) Most Respected Public Semiconductor Company Award. Lattice won the 2022 SEAL Sustainability Award and was a 2023 BIG Innovation Awards winner for the Lattice Avant™ FPGA platform.

 

2023 Analyst and Investor Day: Lattice Semiconductor expects to hold its 2023 Analyst and Investor Day on Monday, May 15, 2023 at Nasdaq's MarketSite in Times Square, New York City.

Business Outlook - First Quarter of 2023:

 

Revenue for the first quarter of 2023 is expected to be between $175 million and $185 million.

 

Gross margin percentage for the first quarter of 2023 is expected to be 70% plus or minus 1% on a non-GAAP basis.

 

Total operating expenses for the first quarter of 2023 are expected to be between $53 million and $55 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 first quarter of 2023, certain items that affect GAAP measurement of financial measures for gross margin percentage and total operating expenses is 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 . 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 first quarter 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 2022, and business outlook on Monday, February 13 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 13735470. 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:

The foregoing paragraphs contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, 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, but are not limited to, statements relating to our market position in secular growth markets; the size of our addressable market, new greenfield growth opportunities; our product portfolio expansion; accelerating customer momentum; strong financial execution; and the statements under the heading “Business Outlook - First Quarter of 2023.” 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 are inherently uncertain due to such factors such as global economic conditions which may affect customer demand, pricing and inflationary pressures, competitive actions, and international trade disputes and sanctions. In addition, the ongoing COVID-19 pandemic continues to impact the overall economy and, as a result of the foregoing, may negatively impact our operating results for future periods. 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 Item 1A in Lattice’s most recent Annual Report on Form 10-K and as may be supplemented from time-to-time in Lattice’s other filings with the Securities and Exchange Commission, all of which are expressly incorporated herein by reference.

Further economic and market disruptions from COVID-19 may increase or change the severity of our other risks reported in Item 1A in Lattice’s most recent Annual Report on Form 10-K. 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 Lattice’s management to predict all risk factors. 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, 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 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. 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 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, Weibo or Youku.

Lattice Semiconductor Corporation

Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

October 1,

 

 

January 1,

 

 

December 31,

 

 

January 1,

 

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

Revenue

 

$

175,960

 

 

$

172,509

 

 

$

141,795

 

 

$

660,356

 

 

$

515,327

 

Cost of sales

 

 

53,894

 

 

 

53,777

 

 

 

50,715

 

 

 

208,306

 

 

 

193,652

 

Gross margin

 

 

122,066

 

 

 

118,732

 

 

 

91,080

 

 

 

452,050

 

 

 

321,675

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

34,779

 

 

 

34,820

 

 

 

30,229

 

 

 

135,767

 

 

 

110,518

 

Selling, general, and administrative

 

 

32,355

 

 

 

31,926

 

 

 

28,646

 

 

 

122,076

 

 

 

105,617

 

Amortization of acquired intangible assets

 

 

870

 

 

 

869

 

 

 

804

 

 

 

3,778

 

 

 

2,613

 

Restructuring

 

 

46

 

 

 

2,315

 

 

 

394

 

 

 

2,551

 

 

 

940

 

Acquisition related charges

 

 

 

 

 

 

 

 

1,171

 

 

 

511

 

 

 

1,171

 

Total operating expenses

 

 

68,050

 

 

 

69,930

 

 

 

61,244

 

 

 

264,683

 

 

 

220,859

 

Income from operations

 

 

54,016

 

 

 

48,802

 

 

 

29,836

 

 

 

187,367

 

 

 

100,816

 

Interest expense

 

 

(1,280

)

 

 

(1,267

)

 

 

(657

)

 

 

(4,146

)

 

 

(2,738

)

Other (expense) income, net

 

 

(24

)

 

 

(820

)

 

 

(68

)

 

 

(1,109

)

 

 

(452

)

Income before income taxes

 

 

52,712

 

 

 

46,715

 

 

 

29,111

 

 

 

182,112

 

 

 

97,626

 

Income tax expense (benefit)

 

 

799

 

 

 

356

 

 

 

579

 

 

 

3,230

 

 

 

1,704

 

Net income

 

$

51,913

 

 

$

46,359

 

 

$

28,532

 

 

$

178,882

 

 

$

95,922

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.38

 

 

$

0.34

 

 

$

0.21

 

 

$

1.30

 

 

$

0.70

 

Diluted

 

$

0.37

 

 

$

0.33

 

 

$

0.20

 

 

$

1.27

 

 

$

0.67

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in per share calculations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

137,095

 

 

 

137,267

 

 

 

137,048

 

 

 

137,321

 

 

 

136,619

 

Diluted

 

 

139,631

 

 

 

139,935

 

 

 

141,587

 

 

 

140,667

 

 

 

142,143

 

Lattice Semiconductor Corporation

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

December 31,

 

 

January 1,

 

 

 

2022

 

 

2022

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

145,722

 

 

$

131,570

 

Accounts receivable, net

 

 

94,018

 

 

 

79,859

 

Inventories, net

 

 

110,375

 

 

 

67,594

 

Other current assets

 

 

29,052

 

 

 

22,328

 

Total current assets

 

 

379,167

 

 

 

301,351

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

47,614

 

 

 

38,094

 

Operating lease right-of-use assets

 

 

17,590

 

 

 

23,818

 

Intangible assets, net

 

 

25,070

 

 

 

29,782

 

Goodwill

 

 

315,358

 

 

 

315,358

 

Other long-term assets

 

 

13,914

 

 

 

18,091

 

 

 

$

798,713

 

 

$

726,494

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

42,036

 

 

$

34,597

 

Accrued expenses

 

 

48,467

 

 

 

26,444

 

Accrued payroll obligations

 

 

36,870

 

 

 

27,967

 

Current portion of long-term debt

 

 

 

 

 

17,173

 

Total current liabilities

 

 

127,373

 

 

 

106,181

 

 

 

 

 

 

 

 

 

 

Long-term debt, net of current portion

 

 

128,752

 

 

 

140,760

 

Long-term operating lease liabilities, net of current portion

 

 

13,618

 

 

 

19,248

 

Other long-term liabilities

 

 

41,807

 

 

 

48,672

 

Total liabilities

 

 

311,550

 

 

 

314,861

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

487,163

 

 

 

411,633

 

 

 

$

798,713

 

 

$

726,494

 

Lattice Semiconductor Corporation

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

Year Ended

 

 

 

December 31,

 

 

January 1,

 

 

 

2022

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

178,882

 

 

$

95,922

 

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

55,530

 

 

 

46,475

 

Depreciation and amortization

 

 

29,323

 

 

 

24,429

 

Other non-cash adjustments

 

 

8,303

 

 

 

6,348

 

Net changes in assets and liabilities

 

 

(33,232

)

 

 

(5,452

)

Net cash provided by (used in) operating activities

 

 

238,806

 

 

 

167,722

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Cash paid for business acquisition, net of cash acquired

 

 

 

 

 

(68,099

)

Capital expenditures

 

 

(23,338

)

 

 

(9,835

)

Other investing activities

 

 

(11,594

)

 

 

(11,862

)

Net cash provided by (used in) investing activities

 

 

(34,932

)

 

 

(89,796

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from long-term debt, net of issuance costs

 

 

148,597

 

 

 

 

Repayment of long-term debt

 

 

(178,750

)

 

 

(13,125

)

Repurchase of common stock

 

 

(110,132

)

 

 

(70,124

)

Net cash flows related to stock compensation exercises

 

 

(47,787

)

 

 

(45,364

)

Net cash provided by (used in) financing activities

 

 

(188,072

)

 

 

(128,613

)

Effect of exchange rate change on cash

 

 

(1,650

)

 

 

(75

)

Net increase (decrease) in cash and cash equivalents

 

 

14,152

 

 

 

(50,762

)

Beginning cash and cash equivalents

 

 

131,570

 

 

 

182,332

 

Ending cash and cash equivalents

 

$

145,722

 

 

$

131,570

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information and non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Interest paid

 

$

3,973

 

 

$

2,313

 

Income taxes paid, net of refunds

 

$

4,621

 

 

$

3,304

 

Lattice Semiconductor Corporation

Supplemental Historical Financial Information

(unaudited)

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

October 1,

 

 

January 1,

 

 

December 31,

 

 

January 1,

 

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

Balance Sheet Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A/R Days Revenue Outstanding (DSO)

 

 

49

 

 

 

53

 

 

 

51

 

 

 

 

 

 

 

 

 

Inventory Days (DIO)

 

 

187

 

 

 

159

 

 

 

122

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue% (by Geography)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asia

 

 

65

%

 

 

72

%

 

 

71

%

 

 

71

%

 

 

74

%

Americas

 

 

19

%

 

 

13

%

 

 

19

%

 

 

15

%

 

 

16

%

Europe (incl. Africa)

 

 

16

%

 

 

15

%

 

 

10

%

 

 

14

%

 

 

10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue% (by End Market)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Communications and Computing

 

 

40

%

 

 

41

%

 

 

43

%

 

 

42

%

 

 

42

%

Industrial and Automotive

 

 

51

%

 

 

50

%

 

 

42

%

 

 

48

%

 

 

44

%

Consumer

 

 

6

%

 

 

6

%

 

 

9

%

 

 

7

%

 

 

10

%

Licensing and Services

 

 

3

%

 

 

3

%

 

 

6

%

 

 

3

%

 

 

4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue% (by Channel)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distribution

 

 

89

%

 

 

90

%

 

 

86

%

 

 

89

%

 

 

87

%

Direct

 

 

11

%

 

 

10

%

 

 

14

%

 

 

11

%

 

 

13

%

Lattice Semiconductor Corporation

Reconciliation of U.S. GAAP to Non-GAAP Financial Measures

(in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

October 1,

 

 

January 1,

 

 

December 31,

 

 

January 1,

 

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

Gross Margin Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Gross margin

 

$

122,066

 

 

$

118,732

 

 

$

91,080

 

 

$

452,050

 

 

$

321,675

 

Stock-based compensation - gross margin (1)

 

 

1,056

 

 

 

1,122

 

 

 

1,281

 

 

 

4,310

 

 

 

4,105

 

Non-GAAP Gross margin

 

$

123,122

 

 

$

119,854

 

 

$

92,361

 

 

$

456,360

 

 

$

325,780

 

Gross Margin % Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Gross margin %

 

 

69.4

%

 

 

68.8

%

 

 

64.2

%

 

 

68.5

%

 

 

62.4

%

Cumulative effect of non-GAAP Gross Margin adjustments

 

 

0.6

%

 

 

0.7

%

 

 

0.9

%

 

 

0.6

%

 

 

0.8

%

Non-GAAP Gross margin %

 

 

70.0

%

 

 

69.5

%

 

 

65.1

%

 

 

69.1

%

 

 

63.2

%

Research and Development Expense % (R&D Expense %) Reconciliation

GAAP R&D Expense %

 

 

19.8

%

 

 

20.2

%

 

 

21.3

%

 

 

20.6

%

 

 

21.4

%

Stock-based compensation - R&D (1)

 

 

(3.0

)%

 

 

(3.1

)%

 

 

(3.3

)%

 

 

(3.2

)%

 

 

(3.0

)%

Non-GAAP R&D Expense %

 

 

16.8

%

 

 

17.1

%

 

 

18.0

%

 

 

17.4

%

 

 

18.4

%

Selling, General, and Administrative Expense % (SG&A Expense %) Reconciliation

GAAP SG&A Expense %

 

 

18.4

%

 

 

18.5

%

 

 

20.2

%

 

 

18.5

%

 

 

20.5

%

Stock-based compensation - SG&A (1)

 

 

(4.7

)%

 

 

(4.9

)%

 

 

(6.3

)%

 

 

(5.1

)%

 

 

(5.9

)%

Litigation expense (2)

 

 

(0.6

)%

 

 

(1.0

)%

 

 

%

 

 

(0.4

)%

 

 

%

Non-GAAP SG&A Expense %

 

 

13.1

%

 

 

12.6

%

 

 

13.9

%

 

 

13.0

%

 

 

14.6

%

Operating Expenses Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Operating expenses

 

$

68,050

 

 

$

69,930

 

 

$

61,244

 

 

$

264,683

 

 

$

220,859

 

Stock-based compensation - operations (1)

 

 

(13,584

)

 

 

(13,758

)

 

 

(13,658

)

 

 

(54,119

)

 

 

(46,113

)

Litigation expense (2)

 

 

(1,081

)

 

 

(1,646

)

 

 

 

 

 

(2,727

)

 

 

 

Amortization of acquired intangible assets

 

 

(870

)

 

 

(869

)

 

 

(804

)

 

 

(3,778

)

 

 

(2,613

)

Restructuring and other charges (3)

 

 

(46

)

 

 

(2,315

)

 

 

(1,030

)

 

 

(3,062

)

 

 

(2,111

)

Non-GAAP Operating expenses

 

$

52,469

 

 

$

51,342

 

 

$

45,752

 

 

$

200,997

 

 

$

170,022

 

Income from Operations Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Income from operations

 

$

54,016

 

 

$

48,802

 

 

$

29,836

 

 

$

187,367

 

 

$

100,816

 

Stock-based compensation - gross margin (1)

 

 

1,056

 

 

 

1,122

 

 

 

1,281

 

 

 

4,310

 

 

 

4,105

 

Stock-based compensation - operations (1)

 

 

13,584

 

 

 

13,758

 

 

 

13,658

 

 

 

54,119

 

 

 

46,113

 

Litigation expense (2)

 

 

1,081

 

 

 

1,646

 

 

 

 

 

 

2,727

 

 

 

 

Amortization of acquired intangible assets

 

 

870

 

 

 

869

 

 

 

804

 

 

 

3,778

 

 

 

2,613

 

Restructuring and other charges (3)

 

 

46

 

 

 

2,315

 

 

 

1,030

 

 

 

3,062

 

 

 

2,111

 

Non-GAAP Income from operations

 

$

70,653

 

 

$

68,512

 

 

$

46,609

 

 

$

255,363

 

 

$

155,758

 

Income from Operations % Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Income from operations %

 

 

30.7

%

 

 

28.3

%

 

 

21.0

%

 

 

28.4

%

 

 

19.6

%

Cumulative effect of non-GAAP Gross Margin and Operating adjustments

 

 

9.5

%

 

 

11.4

%

 

 

11.9

%

 

 

10.3

%

 

 

10.6

%

Non-GAAP Income from operations %

 

 

40.2

%

 

 

39.7

%

 

 

32.9

%

 

 

38.7

%

 

 

30.2

%

(1)

 

The non-GAAP adjustments for Stock-based compensation include related 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)

 

Other charges includes Acquisition related charges in 2021 YTD of $1.2 million.

Lattice Semiconductor Corporation

Reconciliation of U.S. GAAP to Non-GAAP Financial Measures

(in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

October 1,

 

 

January 1,

 

 

December 31,

 

 

January 1,

 

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

 

2022

 

Other (Expense) Income Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Other (expense) income, net

 

$

(24

)

 

$

(820

)

 

$

(68

)

 

$

(1,109

)

 

$

(452

)

Loss on re-financing of long-term debt

 

 

4

 

 

 

735

 

 

 

 

 

 

739

 

 

 

 

Non-GAAP Other (expense) income, net

 

$

(20

)

 

$

(85

)

 

$

(68

)

 

$

(370

)

 

$

(452

)

Income Tax Expense (Benefit) Reconciliation

GAAP Income tax expense (benefit)

 

$

799

 

 

$

356

 

 

$

579

 

 

$

3,230

 

 

$

1,704

 

Estimated tax effect of non-GAAP adjustments (4)

 

 

187

 

 

 

312

 

 

 

(40

)

 

 

938

 

 

 

 

Non-GAAP Income tax expense (benefit)

 

$

986

 

 

$

668

 

 

$

539

 

 

$

4,168

 

 

$

1,704

 

Net Income Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net income

 

$

51,913

 

 

$

46,359

 

 

$

28,532

 

 

$

178,882

 

 

$

95,922

 

Stock-based compensation - gross margin (1)

 

 

1,056

 

 

 

1,122

 

 

 

1,281

 

 

 

4,310

 

 

 

4,105

 

Stock-based compensation - operations (1)

 

 

13,584

 

 

 

13,758

 

 

 

13,658

 

 

 

54,119

 

 

 

46,113

 

Litigation expense (2)

 

 

1,081

 

 

 

1,646

 

 

 

 

 

 

2,727

 

 

 

 

Amortization of acquired intangible assets

 

 

870

 

 

 

869

 

 

 

804

 

 

 

3,778

 

 

 

2,613

 

Restructuring and other charges (3)

 

 

46

 

 

 

2,315

 

 

 

1,030

 

 

 

3,062

 

 

 

2,111

 

Loss on re-financing of long-term debt

 

 

4

 

 

 

735

 

 

 

 

 

 

739

 

 

 

 

Estimated tax effect of non-GAAP adjustments (4)

 

 

(187

)

 

 

(312

)

 

 

40

 

 

 

(938

)

 

 

 

Non-GAAP Net income

 

$

68,367

 

 

$

66,492

 

 

$

45,345

 

 

$

246,679

 

 

$

150,864

 

Net Income Per Share Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net income per share - basic

 

$

0.38

 

 

$

0.34

 

 

$

0.21

 

 

$

1.30

 

 

$

0.70

 

Cumulative effect of Non-GAAP adjustments

 

 

0.12

 

 

 

0.14

 

 

 

0.12

 

 

 

0.50

 

 

 

0.40

 

Non-GAAP Net income per share - basic

 

$

0.50

 

 

$

0.48

 

 

$

0.33

 

 

$

1.80

 

 

$

1.10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net income per share - diluted

 

$

0.37

 

 

$

0.33

 

 

$

0.20

 

 

$

1.27

 

 

$

0.67

 

Cumulative effect of Non-GAAP adjustments

 

 

0.12

 

 

 

0.15

 

 

 

0.12

 

 

 

0.48

 

 

 

0.39

 

Non-GAAP Net income per share - diluted

 

$

0.49

 

 

$

0.48

 

 

$

0.32

 

 

$

1.75

 

 

$

1.06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in per share calculations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

137,095

 

 

 

137,267

 

 

 

137,048

 

 

 

137,321

 

 

 

136,619

 

Diluted

 

 

139,631

 

 

 

139,935

 

 

 

141,587

 

 

 

140,667

 

 

 

142,143

 

(1)

 

The non-GAAP adjustments for Stock-based compensation include related 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)

 

Other charges includes Acquisition related charges in 2021 YTD of $1.2 million.

(4)

 

We calculate non-GAAP tax expense by applying our tax provision model to year-to-date and projected income after adjusting for non-GAAP items. The difference between calculated values for GAAP and non-GAAP tax expense has been included as the “Estimated tax effect of non-GAAP adjustments.”

 

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