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Lattice Semiconductor Reports Third Quarter 2023 Results

  • Quarterly revenue growth of 11% compared to Q3 2022 and 1% compared to Q2 2023
  • Gross Margin expands to 70.0% / 70.6% for Q3 2023 on a GAAP / Non-GAAP basis, compared to 68.8% / 69.5%, respectively, for Q3 2022
  • Net Income improves to $0.38 / $0.53 per diluted share for Q3 2023 on a GAAP / Non-GAAP basis, compared to $0.33 / $0.48, respectively, for Q3 2022

* 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 third quarter ended September 30, 2023.

Jim Anderson, president and CEO, said, "We delivered another quarter of solid growth, with Q3 2023 revenue and net income increasing 11% on a year-over-year basis. Today Lattice has the strongest product portfolio in our 40-year history and we continue to rapidly expand our product lineup. We look forward to our Developers Conference in December, when we expect to launch two new members of the Lattice Avant™ mid-range FPGA product family."

Sherri Luther, CFO, said, "We achieved Q3 2023 operating profit of 29.6% on a GAAP basis and 40.3% on a non-GAAP basis, with gross margin expansion of 120 basis points on a GAAP basis and 110 basis points on a non-GAAP basis compared to Q3 2022. We drove record cash generation, increased our free cash flow to 40%, and continued our share repurchase program for the twelfth consecutive quarter."

Selected Third Quarter 2023 Financial Results and Comparisons (in thousands, except per share data)

 

 

GAAP Financial Results (unaudited)

 

 

Q3 2023

 

Q2 2023

 

Q3 2022

 

Q/Q

 

Y/Y

Revenue

 

$

192,169

 

 

$

190,079

 

 

$

172,509

 

 

1.1%

 

11.4%

Gross Margin %

 

 

70.0

%

 

 

69.7

%

 

 

68.8

%

 

30 bps

 

120 bps

R&D Expense %

 

 

21.9

%

 

 

22.1

%

 

 

20.2

%

 

(20) bps

 

170 bps

SG&A Expense %

 

 

17.3

%

 

 

19.4

%

 

 

18.5

%

 

(210) bps

 

(120) bps

Operating Expenses

 

$

77,644

 

 

$

79,491

 

 

$

69,930

 

 

(2.3)%

 

11.0%

Income from Operations

 

$

56,917

 

 

$

53,070

 

 

$

48,802

 

 

7.2%

 

16.6%

Net Income

 

$

53,788

 

 

$

50,644

 

 

$

46,359

 

 

6.2%

 

16.0%

Net Income per Share - Basic

 

$

0.39

 

 

$

0.37

 

 

$

0.34

 

 

$0.02

 

$ 0.05

Net Income per Share - Diluted

 

$

0.38

 

 

$

0.36

 

 

$

0.33

 

 

$0.02

 

$ 0.05

 

 

Non-GAAP* Financial Results (unaudited)

 

 

Q3 2023

 

Q2 2023

 

Q3 2022

 

Q/Q

 

Y/Y

Revenue

 

$

192,169

 

 

$

190,079

 

 

$

172,509

 

 

1.1%

 

11.4%

Gross Margin %

 

 

70.6

%

 

 

70.5

%

 

 

69.5

%

 

10 bps

 

110 bps

R&D Expense %

 

 

18.2

%

 

 

18.0

%

 

 

17.1

%

 

20 bps

 

110 bps

SG&A Expense %

 

 

12.1

%

 

 

12.5

%

 

 

12.6

%

 

(40) bps

 

(50) bps

Operating Expenses

 

$

58,206

 

 

$

58,018

 

 

$

51,342

 

 

0.3%

 

13.4%

Income from Operations

 

$

77,408

 

 

$

75,968

 

 

$

68,512

 

 

1.9%

 

13.0%

Net Income

 

$

73,578

 

 

$

72,509

 

 

$

66,492

 

 

1.5%

 

10.7%

Net Income per Share - Basic

 

$

0.53

 

 

$

0.53

 

 

$

0.48

 

 

 

$ 0.05

Net Income per Share - Diluted

 

$

0.53

 

 

$

0.52

 

 

$

0.48

 

 

$ 0.01

 

$ 0.05

Third Quarter 2023 Highlights

  • Record Revenue: Revenue increased 11% in Q3 2023 compared to Q3 2022 and 1% compared to Q2 2023.
  • Profit Growth: Gross margin expanded 120 basis points on a GAAP basis and 110 basis points on a non-GAAP basis compared to Q3 2022, with net income per diluted share increasing 15% on a GAAP basis and 10% on a non-GAAP basis compared to Q3 2022.
  • Continued Product Portfolio Expansion: Launched the Lattice CrossLinkU™-NX FPGA family, the industry’s first FPGA with integrated USB device functionality in its class to meet growing customer needs to simplify USB-based design for applications across multiple markets.
  • Mazda Selects Lattice FPGAs: Mazda Motor Corporation's new crossover SUV models CX-60 and CX-90 leverage an interface bridging solution based on multiple power efficient Lattice FPGAs to enable safety-critical Advanced Driver Assistance System (ADAS) features.
  • Lattice Receives Multiple Industry Awards:
    • Hewlett Packard Enterprise 2023 Cyber Security Supplier of the Year
    • 2023 AutoTech Breakthrough Award with New Lattice Drive Solution Stack
    • 2023 CyberSecurity Breakthrough Award

Business Outlook - Fourth Quarter of 2023:

  • Revenue for the fourth quarter of 2023 is expected to be between $166 million and $186 million.
  • Gross margin percentage for the fourth quarter of 2023 is expected to be 70.5% plus or minus 1% on a non-GAAP basis.
  • Total operating expenses for the fourth quarter of 2023 are expected to be between $57 million and $59 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 fourth quarter of 2023, certain items that affect GAAP measurement of financial measures for gross margin percentage and total operating expenses are 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, including certain large and/or unpredictable charges such as stock-based compensation expense; litigation expense outside the ordinary course of business; and restructuring. 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 second quarter guidance or a corresponding reconciliation to GAAP for the quarter. From a qualitative perspective, the differences between our GAAP measurement of financial measures for gross margin percentage and total operating expenses and our non-GAAP measure of those items will consist of items similar to those described in the financial tables later in this release for such items historically, including, for example and without limitation, certain large and/or unpredictable charges such as stock-based compensation expense; litigation expense outside the ordinary course of business; and restructuring. 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 third quarter 2023, and business outlook on Monday, October 30 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 13741270. 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 rapid product portfolio expansion and strength; launch of new products; and the statements under the heading “Business Outlook - Fourth 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, international trade disputes and sanctions, and potential impact of global pandemics. 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.

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 payroll 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, change in tax law and other tax adjustments. 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, or Weibo.

Lattice Semiconductor Corporation

Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

July 1,

 

October 1,

 

September 30,

 

October 1,

 

 

2023

 

2023

 

2022

 

2023

 

2022

Revenue

 

$

192,169

 

 

$

190,079

 

 

$

172,509

 

 

$

566,558

 

 

$

484,396

 

Cost of sales

 

 

57,608

 

 

 

57,518

 

 

 

53,777

 

 

 

170,835

 

 

 

154,412

 

Gross margin

 

 

134,561

 

 

 

132,561

 

 

 

118,732

 

 

 

395,723

 

 

 

329,984

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

42,048

 

 

 

41,946

 

 

 

34,820

 

 

 

119,983

 

 

 

100,988

 

Selling, general, and administrative

 

 

33,217

 

 

 

36,788

 

 

 

31,926

 

 

 

102,583

 

 

 

89,721

 

Amortization of acquired intangible assets

 

 

870

 

 

 

869

 

 

 

869

 

 

 

2,609

 

 

 

2,908

 

Restructuring

 

 

1,509

 

 

 

(112

)

 

 

2,315

 

 

 

1,427

 

 

 

2,505

 

Acquisition related

 

 

 

 

 

 

 

 

 

 

 

 

 

 

511

 

Total operating expenses

 

 

77,644

 

 

 

79,491

 

 

 

69,930

 

 

 

226,602

 

 

 

196,633

 

Income from operations

 

 

56,917

 

 

 

53,070

 

 

 

48,802

 

 

 

169,121

 

 

 

133,351

 

Interest income (expense), net

 

 

954

 

 

 

189

 

 

 

(1,267

)

 

 

588

 

 

 

(2,866

)

Other income (expense), net

 

 

14

 

 

 

(176

)

 

 

(820

)

 

 

(257

)

 

 

(1,085

)

Income before income taxes

 

 

57,885

 

 

 

53,083

 

 

 

46,715

 

 

 

169,452

 

 

 

129,400

 

Income tax expense

 

 

4,097

 

 

 

2,439

 

 

 

356

 

 

 

9,097

 

 

 

2,431

 

Net income

 

$

53,788

 

 

$

50,644

 

 

$

46,359

 

 

$

160,355

 

 

$

126,969

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.39

 

 

$

0.37

 

 

$

0.34

 

 

$

1.16

 

 

$

0.92

 

Diluted

 

$

0.38

 

 

$

0.36

 

 

$

0.33

 

 

$

1.15

 

 

$

0.90

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in per share calculations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

137,948

 

 

 

137,735

 

 

 

137,267

 

 

 

137,697

 

 

 

137,397

 

Diluted

 

 

139,828

 

 

 

139,768

 

 

 

139,935

 

 

 

139,927

 

 

 

140,921

 

Lattice Semiconductor Corporation

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

September 30,

 

December 31,

 

 

2023

 

2022

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

114,397

 

 

$

145,722

 

Accounts receivable, net

 

 

105,913

 

 

 

94,018

 

Inventories, net

 

 

104,019

 

 

 

110,375

 

Other current assets

 

 

36,404

 

 

 

29,052

 

Total current assets

 

 

360,733

 

 

 

379,167

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

50,164

 

 

 

47,614

 

Operating lease right-of-use assets

 

 

16,088

 

 

 

17,590

 

Intangible assets, net

 

 

21,951

 

 

 

25,070

 

Goodwill

 

 

315,358

 

 

 

315,358

 

Other long-term assets

 

 

15,328

 

 

 

13,914

 

 

 

$

779,622

 

 

$

798,713

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

36,887

 

 

$

42,036

 

Accrued liabilities

 

 

36,305

 

 

 

48,467

 

Accrued payroll obligations

 

 

27,471

 

 

 

36,870

 

Total current liabilities

 

 

100,663

 

 

 

127,373

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

 

 

 

128,752

 

Long-term operating lease liabilities, net of current portion

 

 

12,122

 

 

 

13,618

 

Other long-term liabilities

 

 

40,667

 

 

 

41,807

 

Total liabilities

 

 

153,452

 

 

 

311,550

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

626,170

 

 

 

487,163

 

 

 

$

779,622

 

 

$

798,713

 

Lattice Semiconductor Corporation

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

Nine Months Ended

 

 

September 30,

 

October 1,

 

 

2023

 

2022

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

160,355

 

 

$

126,969

 

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

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

52,408

 

 

 

41,207

 

Depreciation and amortization

 

 

25,279

 

 

 

21,498

 

Other non-cash adjustments

 

 

5,199

 

 

 

6,935

 

Net changes in assets and liabilities

 

 

(45,623

)

 

 

(39,784

)

Net cash provided by (used in) operating activities

 

 

197,618

 

 

 

156,825

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(16,370

)

 

 

(13,080

)

Other investing activities

 

 

(8,917

)

 

 

(8,322

)

Net cash provided by (used in) investing activities

 

 

(25,287

)

 

 

(21,402

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from long-term debt, net of issuance costs

 

 

 

 

 

148,601

 

Repayment of long-term debt

 

 

(130,000

)

 

 

(158,750

)

Repurchase of common stock

 

 

(30,005

)

 

 

(90,137

)

Net cash flows related to stock compensation exercises

 

 

(43,114

)

 

 

(45,726

)

Net cash provided by (used in) financing activities

 

 

(203,119

)

 

 

(146,012

)

Effect of exchange rate change on cash

 

 

(537

)

 

 

(2,215

)

Net increase (decrease) in cash and cash equivalents

 

 

(31,325

)

 

 

(12,804

)

Beginning cash and cash equivalents

 

 

145,722

 

 

 

131,570

 

Ending cash and cash equivalents

 

$

114,397

 

 

$

118,766

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Interest paid

 

$

3,240

 

 

$

2,203

 

Income taxes paid, net of refunds

 

$

11,229

 

 

$

4,115

 

Operating lease payments

 

$

6,179

 

 

$

5,500

 

Lattice Semiconductor Corporation

Supplemental Historical Financial Information

(unaudited)

 

 

 

Three Months Ended

 

 

September 30,

 

July 1,

 

October 1,

 

 

2023

 

2023

 

2022

Balance Sheet Information

 

 

 

 

 

 

 

 

 

 

 

 

A/R Days Revenue Outstanding (DSO)

 

 

50

 

 

 

46

 

 

 

53

 

Inventory Days (DIO)

 

 

165

 

 

 

177

 

 

 

159

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue % (by Geography)

 

 

 

 

 

 

 

 

 

 

 

 

Asia

 

 

61

%

 

 

63

%

 

 

72

%

Americas

 

 

17

%

 

 

17

%

 

 

13

%

Europe (incl. Africa)

 

 

22

%

 

 

20

%

 

 

15

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue % (by End Market) *

 

 

 

 

 

 

 

 

 

 

 

 

Communications and Computing

 

 

36

%

 

 

34

%

 

 

42

%

Industrial and Automotive

 

 

57

%

 

 

61

%

 

 

50

%

Consumer

 

 

7

%

 

 

5

%

 

 

8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue $M (by End Market) *

 

 

 

 

 

 

 

 

 

 

 

 

Communications and Computing

 

$

68.4

 

 

$

64.2

 

 

$

73.0

 

Industrial and Automotive

 

$

109.9

 

 

$

115.5

 

 

$

85.7

 

Consumer

 

$

13.9

 

 

$

10.4

 

 

$

13.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue % (by Channel)

 

 

 

 

 

 

 

 

 

 

 

 

Distribution

 

 

90

%

 

 

89

%

 

 

90

%

Direct

 

 

10

%

 

 

11

%

 

 

10

%

* During the first quarter of fiscal 2023, we realigned our end market categories. Prior periods have been reclassified to match current period presentation.

Lattice Semiconductor Corporation

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

(in thousands, except per share data)

(unaudited)

 
 

 

 

Three Months Ended

 

 

September 30,

 

July 1,

 

October 1,

 

 

2023

 

2023

 

2022

Gross Margin Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Gross margin

 

$

134,561

 

 

$

132,561

 

 

$

118,732

 

Stock-based compensation - gross margin (1)

 

 

1,053

 

 

 

1,425

 

 

 

1,122

 

Non-GAAP Gross margin

 

$

135,614

 

 

$

133,986

 

 

$

119,854

 

Gross Margin % Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Gross margin %

 

 

70.0

%

 

 

69.7

%

 

 

68.8

%

Cumulative effect of non-GAAP Gross Margin adjustments

 

 

0.6

%

 

 

0.8

%

 

 

0.7

%

Non-GAAP Gross margin %

 

 

70.6

%

 

 

70.5

%

 

 

69.5

%

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

GAAP R&D Expense %

 

 

21.9

%

 

 

22.1

%

 

 

20.2

%

Stock-based compensation - R&D (1)

 

 

(3.7

)%

 

 

(4.1

)%

 

 

(3.1

)%

Non-GAAP R&D Expense %

 

 

18.2

%

 

 

18.0

%

 

 

17.1

%

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

 

 

 

 

 

GAAP SG&A Expense %

 

 

17.3

%

 

 

19.4

%

 

 

18.5

%

Stock-based compensation - SG&A (1)

 

 

(4.6

)%

 

 

(6.7

)%

 

 

(4.9

)%

Litigation expense (2)

 

 

(0.6

)%

 

 

(0.2

)%

 

 

(1.0

)%

Non-GAAP SG&A Expense %

 

 

12.1

%

 

 

12.5

%

 

 

12.6

%

Operating Expenses Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Operating expenses

 

$

77,644

 

 

$

79,491

 

 

$

69,930

 

Stock-based compensation - operations (1)

 

 

(15,956

)

 

 

(20,277

)

 

 

(13,758

)

Litigation expense (2)

 

 

(1,103

)

 

 

(439

)

 

 

(1,646

)

Amortization of acquired intangible assets

 

 

(870

)

 

 

(869

)

 

 

(869

)

Restructuring and other

 

 

(1,509

)

 

 

112

 

 

 

(2,315

)

Non-GAAP Operating expenses

 

$

58,206

 

 

$

58,018

 

 

$

51,342

 

Income from Operations Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Income from operations

 

$

56,917

 

 

$

53,070

 

 

$

48,802

 

Stock-based compensation - gross margin (1)

 

 

1,053

 

 

 

1,425

 

 

 

1,122

 

Stock-based compensation - operations (1)

 

 

15,956

 

 

 

20,277

 

 

 

13,758

 

Litigation expense (2)

 

 

1,103

 

 

 

439

 

 

 

1,646

 

Amortization of acquired intangible assets

 

 

870

 

 

 

869

 

 

 

869

 

Restructuring and other

 

 

1,509

 

 

 

(112

)

 

 

2,315

 

Non-GAAP Income from operations

 

$

77,408

 

 

$

75,968

 

 

$

68,512

 

Income from Operations % Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Income from operations %

 

 

29.6

%

 

 

27.9

%

 

 

28.3

%

Cumulative effect of non-GAAP Gross Margin and Operating adjustments

 

 

10.7

%

 

 

12.1

%

 

 

11.4

%

Non-GAAP Income from operations %

 

 

40.3

%

 

 

40.0

%

 

 

39.7

%

(1)

 

The non-GAAP adjustments for Stock-based compensation include related payroll 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.

Lattice Semiconductor Corporation

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

(in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended

 

 

September 30,

 

July 1,

 

October 1,

 

 

2023

 

2023

 

2022

Other Income (Expense) Reconciliation

 

 

 

 

 

 

 

 

 

 

 

GAAP Other income (expense), net

 

$

14

 

 

$

(176

)

 

$

(820

)

Loss on re-financing of long-term debt

 

 

 

 

 

 

 

735

 

Non-GAAP Other income (expense), net

 

$

14

 

 

$

(176

)

 

$

(85

)

Income Tax Expense Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Income tax expense

 

$

4,097

 

 

$

2,439

 

 

$

356

 

Estimated tax effect of non-GAAP adjustments

 

 

1,467

 

 

 

1,372

 

 

 

312

 

Change in tax law (3)

 

 

(766

)

 

 

(339

)

 

 

 

Non-GAAP Income tax expense

 

$

4,798

 

 

$

3,472

 

 

$

668

 

Net Income Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net income

 

$

53,788

 

 

$

50,644

 

 

$

46,359

 

Stock-based compensation - gross margin (1)

 

 

1,053

 

 

 

1,425

 

 

 

1,122

 

Stock-based compensation - operations (1)

 

 

15,956

 

 

 

20,277

 

 

 

13,758

 

Litigation expense (2)

 

 

1,103

 

 

 

439

 

 

 

1,646

 

Amortization of acquired intangible assets

 

 

870

 

 

 

869

 

 

 

869

 

Restructuring and other

 

 

1,509

 

 

 

(112

)

 

 

2,315

 

Loss on re-financing of long-term debt

 

 

 

 

 

 

 

 

735

 

Estimated tax effect of non-GAAP adjustments

 

 

(1,467

)

 

 

(1,372

)

 

 

(312

)

Change in tax law (3)

 

 

766

 

 

 

339

 

 

 

 

Non-GAAP Net income

 

$

73,578

 

 

$

72,509

 

 

$

66,492

 

Net Income Per Share Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net income per share - basic

 

$

0.39

 

 

$

0.37

 

 

$

0.34

 

Cumulative effect of Non-GAAP adjustments

 

 

0.14

 

 

 

0.16

 

 

 

0.14

 

Non-GAAP Net income per share - basic

 

$

0.53

 

 

$

0.53

 

 

$

0.48

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net income per share - diluted

 

$

0.38

 

 

$

0.36

 

 

$

0.33

 

Cumulative effect of Non-GAAP adjustments

 

 

0.15

 

 

 

0.16

 

 

 

0.15

 

Non-GAAP Net income per share - diluted

 

$

0.53

 

 

$

0.52

 

 

$

0.48

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in per share calculations:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

137,948

 

 

 

137,735

 

 

 

137,267

 

Diluted

 

 

139,828

 

 

 

139,768

 

 

 

139,935

 

(1)

 

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

 

Adjustments for Change in tax law reflect an increase in our provision for U.S. tax on foreign operations resulting from The 2017 Tax Cuts and Jobs Act and is related to the capitalization and subsequent amortization of R&D costs for tax purposes.

 

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