Lattice Semiconductor Corporation
- Supplemental Historical Financial Information -
(unaudited)
 
    Three Months Ended   Nine Months Ended
   

September 29,
2018

  

June 30,
2018

  

September 30,
2017

  

September 29,
2018

  

September 30,
2017
Operations and Cash Flow Information                    
Percent of Revenue                    
Gross Margin   57.5 %   48.9 %   58.0 %   54.5 %   56.9 %
R&D Expense   18.9 %   20.5 %   27.9 %   20.9 %   27.5 %
SG&A Expense   21.5 %   20.5 %   23.1 %   23.1 %   23.1 %
Depreciation and amortization (in thousands)   8,315     10,069     15,094     30,740     45,591  
Stock-based compensation expense (in thousands)   2,708     2,400     2,514     9,908     9,286  
Restructuring and severance related charges (in thousands)   90     4,376     3,071     5,495     4,713  
Net cash provided by operating activities (thousands)   10,978     7,124     24,232     20,560     35,746  
Capital expenditures (in thousands)   2,073     2,301     5,290     6,178     12,325  
Repayment of debt (in thousands)   15,875     11,134     —     27,884     33,679  
Interest paid (in thousands)   4,799     4,757     4,285     13,976     16,379  
Taxes paid (cash, in thousands)   659     2,017     1,332     2,716     2,308  
                     
Balance Sheet Information                    
Current Ratio   4.0     3.1     2.2          
A/R Days Revenue Outstanding   68     68     78          
Inventory Months   4.6     3.8     6.0          
                     
Revenue% (by Geography)                    
Asia   76 %   76 %   75 %   75 %   71 %
Europe (incl. Africa)   12 %   12 %   12 %   12 %   11 %
Americas   12 %   12 %   13 %   13 %   18 %
                     
Revenue% (by End Market)                    
Communications and Computing   32 %   29 %   30 %   30 %   29 %
Mobile and Consumer   27 %   24 %   28 %   26 %   29 %
Industrial and Automotive   37 %   43 %   37 %   40 %   33 %
Licensing and Services   4 %   4 %   5 %   4 %   9 %
                     
Revenue% (by Channel) *                    
Distribution   82 %   86 %   80 %   85 %   75 %
Direct   18 %   14 %   20 %   15 %   25 %
                               
*   During the first quarter of 2018, we updated our channel categories to group all forms of distribution into a single channel. 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   Nine Months Ended
   

September 29,
2018

  

June 30,
2018

  

September 30,
2017

  

September 29,
2018

  

September 30,
2017
                     
Gross Margin Reconciliation    
GAAP Gross margin   $ 58,364     $ 50,248     $ 53,322     $ 165,133     $ 165,363  
Inventory adjustment related to restructured operations   (288 )   8,277     —     7,989     —  
Stock-based compensation - gross margin   219     196     154     652     562  
Non-GAAP Gross margin   $ 58,295     $ 58,721     $ 53,476     $ 173,774     $ 165,925  
     
Gross Margin % Reconciliation    
GAAP Gross margin %   57.5 %   48.9 %   58.0 %   54.5 %   56.9 %
Cumulative effect of non-GAAP Gross Margin adjustments   (0.1 )%   8.3 %   0.1 %   2.9 %   0.2 %
Non-GAAP Gross margin %   57.4 %   57.2 %   58.1 %   57.4 %   57.1 %
     
Operating Expenses Reconciliation    
GAAP Operating expenses   $ 45,405     $ 63,812     $ 90,790     $ 166,533     $ 212,262  
Amortization of acquired intangible assets   (3,823 )   (4,523 )   (8,526 )   (13,982 )   (25,777 )
Restructuring charges   (90 )   (4,376 )   (3,071 )   (5,495 )   (4,713 )
Acquisition related charges (1)   —     (864 )   (681 )   (1,531 )   (3,208 )
Impairment of acquired intangible assets   (586 )   (11,900 )   (36,198 )   (12,486 )   (36,198 )
Stock-based compensation - operations   (2,489 )   (2,204 )   (2,360 )   (9,256 )   (8,724 )
Gain on sale of building   —     —     4,624     —     4,624  
Non-GAAP Operating expenses   $ 38,417     $ 39,945     $ 44,578     $ 123,783     $ 138,266  
     
Income (Loss) from Operations Reconciliation    
GAAP Income (loss) from operations   $ 12,959     $ (13,564 )   $ (37,468 )   $ (1,400 )   $ (46,899 )
Inventory adjustment related to restructured operations   (288 )   8,277     —     7,989     —  
Stock-based compensation - gross margin   219     196     154     652     562  
Amortization of acquired intangible assets   3,823     4,523     8,526     13,982     25,777  
Restructuring charges   90     4,376     3,071     5,495     4,713  
Acquisition related charges (1)   —     864     681     1,531     3,208  
Impairment of acquired intangible assets   586     11,900     36,198     12,486     36,198  
Stock-based compensation - operations   2,489     2,204     2,360     9,256     8,724  
Gain on sale of building   —     —     (4,624 )   —     (4,624 )
Non-GAAP Income from operations   $ 19,878     $ 18,776     $ 8,898     $ 49,991     $ 27,659  
     
Income (Loss) from Operations % Reconciliation    
GAAP Income (loss) from operations %   12.8 %   (13.2 )%   (40.7 )%   (0.5 )%   (16.1 )%
Cumulative effect of non-GAAP Gross Margin and Operating adjustments   6.8 %   31.5 %   50.4 %   17.0 %   25.6 %
Non-GAAP Income from operations %   19.6 %   18.3 %   9.7 %   16.5 %   9.5 %
     

(1) Legal fees and outside services that were related to our proposed acquisition by Canyon Bridge Acquisition Company, Inc.
 
 
Lattice Semiconductor Corporation
- Reconciliation of U.S. GAAP to Non-GAAP Financial Measures -
(in thousands, except per share data)
(unaudited)
                     
    Three Months Ended   Nine Months Ended
   

September 29,
2018

  

June 30,
2018

  

September 30,
2017

  

September 29,
2018

  

September 30,
2017
     
Other Expense, Net Reconciliation    
GAAP Other expense, net   $ (452 )   $ (348 )   $ (2,027 )   $ (246 )   $ (2,104 )
Loss on sale of assets and business units   —     —     1,796     —     1,496  
Non-GAAP Other expense, net   $ (452 )   $ (348 )   $ (231 )   $ (246 )   $ (608 )
     
Income Tax Expense (Benefit) Reconciliation    
GAAP Income tax expense (benefit)   $ 33     $ 1,343     $ (331 )   $ 1,973     $ 234  
Estimated tax effect of non-GAAP adjustments (2)   108     (258 )   (218 )   (88 )   142  
Non-GAAP Income tax expense (benefit)   $ 141     $ 1,085     $ (549 )   $ 1,885     $ 376  
     
Net Income (Loss) Reconciliation    
GAAP Net income (loss)   $ 6,974     $ (20,223 )   $ (43,052 )   $ (19,201 )   $ (63,349 )
Inventory adjustment related to restructured operations   (288 )   8,277     —     7,989     —  
Stock-based compensation - gross margin   219     196     154     652     562  
Amortization of acquired intangible assets   3,823     4,523     8,526     13,982     25,777  
Restructuring charges   90     4,376     3,071     5,495     4,713  
Acquisition related charges (1)   —     864     681     1,531     3,208  
Impairment of acquired intangible assets   586     11,900     36,198     12,486     36,198  
Stock-based compensation - operations   2,489     2,204     2,360     9,256     8,724  
Gain on sale of building   —     —     (4,624 )   —     (4,624 )
Loss on sale of assets and business unit   —     —     1,796     —     1,496  
Estimated tax effect of non-GAAP adjustments (2)   (108 )   258     218     88     (142 )
Non-GAAP Net income   $ 13,785     $ 12,375     $ 5,328     $ 32,278     $ 12,563  
     
Net Income (Loss) Per Share Reconciliation    
GAAP Net income (loss) per share - basic and diluted   $ 0.05     $ (0.16 )   $ (0.35 )   $ (0.15 )   $ (0.52 )
Cumulative effect of Non-GAAP adjustments   0.06     0.26     0.39     0.41     0.62  
Non-GAAP Net income per share - basic and diluted   $ 0.11     $ 0.10     $ 0.04     $ 0.26     $ 0.10  
                     
Shares used in per share calculations:                    
Basic   127,816     124,843     122,990     125,578     122,393  
Diluted - GAAP (3)   129,474     124,843     122,990     125,578     122,393  
Diluted - Non-GAAP (3)   129,474     125,620     124,225     126,862     124,454  
             
(1) Legal fees and outside services that were related to our proposed acquisition by Canyon Bridge Acquisition Company, Inc.

(2) 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.”
(3) Diluted shares are calculated using the GAAP treasury stock method. In a loss position, diluted shares equal basic shares.
 
 
Lattice Semiconductor Corporation
- Reconciliation of U.S. GAAP to Non-GAAP Financial Measures -
(in thousands, except per share data)
(unaudited)
             
   

Three Months Ended
   

December 29, 2018
             
Business Outlook - Fourth Quarter 2018   Low   Midpoint   High
             
GAAP Operating expenses   $ 52,000     $ 53,500     $ 55,000  
Cumulative effect of Non-GAAP Operating expense adjustments (4)   (15,000 )   (15,500 )   (16,000 )
Non-GAAP Operating expenses   $ 37,000     $ 38,000     $ 39,000  
                         
(4) Includes estimated Amortization of acquired intangible assets, Restructuring, and Stock-based compensation included in Operating Expenses

 

Source: Lattice Semiconductor Corporation