HILLSBORO, OR – JULY 23, 2009
- Lattice Semiconductor (NASDAQ: LSCC) today announced financial results for the second quarter ended July 4, 2009.
For the second quarter, revenue was $46.9 million, an increase of 8% from the $43.3 million reported in the prior quarter, and a decrease of 19% from the $58.1 million reported in the same quarter a year ago.
FPGA revenue for the second quarter was $17.2 million, an increase of 11% from the $15.5 million reported in the prior quarter, and an increase of 28% from the $13.4 million reported in the same quarter a year ago. PLD revenue for the second quarter was $29.7 million, an increase of 7% from the $27.8 million reported in the prior quarter, and a decrease of 34% from the $44.7 million reported in the same quarter a year ago.
Other income (expense), net, for the second quarter was income of $0.2 million compared to an expense of $0.5 million reported in the prior quarter and an expense of $10.5 million reported in the same quarter a year ago. Other income (expense) included an impairment charge of $0.5 million in the second quarter of 2009 compared to $0.7 million in the first quarter of 2009, related to an other-than-temporary decline in fair value of auction rate securities held in Long-term marketable securities. Other income (expense) for the second quarter of 2008 included an impairment charge of $11.3 million primarily related to an other-than-temporary decline in fair value of auction rate securities held in Long-term marketable securities.
Net loss for the second quarter was $2.7 million ($0.02 per share), compared to a prior quarter net loss of $5.8 million ($0.05 per share) and a net loss of $13.6 million ($0.12 per share) reported in the same quarter a year ago. The second quarter results included stock-based compensation expense, restructuring charges and an other-than-temporary impairment charge on marketable securities which totaled $1.4 million. Prior quarter and second quarter 2008 results include amortization charges, stock-based compensation expense, an other-than-temporary impairment charge and restructuring charges which totaled $2.1 million and $14.9 million, respectively. Excluding these items, non-GAAP net loss for the second quarter of 2009 was $1.3 million ($0.01 per share) compared to non-GAAP net loss of $3.6 million ($0.03 per share) for the first quarter of 2009 and non-GAAP net income of $1.3 million ($0.01 per share) for the same quarter a year ago.
Bruno Guilmart, Lattice's President and CEO, commented, "We continued to make progress in the second quarter as we executed on our focused product strategy under our improved operating structure. We benefited from continued strength in the Chinese telecom market, and a slight improvement of our business in Japan and the U.S., which helped offset continued weakness in Europe. Revenue in the second quarter remained strong to the end, with our turns business exceeding expectations. While visibility has improved it is still not great. We remain confident entering the third quarter, however, based on a stronger backlog, continued traction with new products and a significant win at one of the world's largest flat panel companies, that we expect to start contributing to revenue during the third quarter. We expect these positive trends will offset an approximately $2.0 million, expected negative revenue impact in the third quarter from changing certain distributors from a sell-in to a sell-through business model. These changes are necessary as they will improve transparency and visibility at our end customers.
"As part of our ongoing efforts to improve customer service and reduce our costs, we will be moving our warehouse to Singapore during the quarter. We expect this will improve our shipping times to most of our customers, reduce our cost of supply and reduce inventory on hand as well. We are also acting to reduce our staff by approximately 8% as we work to even better align our resources with our new operating model, bringing us closer to our goal of sustained profitability."
Michael G. Potter, Lattice's Corporate Vice President and Chief Financial Officer, added, "We generated $33.6 million of cash from operations in the second quarter, including the $30.0 million in other receivable that was repaid in cash by Fujitsu, ending the quarter with total liquidity of $158.2 million. This is comprised of $104.3 million of cash and cash equivalents, $30.0 million of other receivables and $23.9 million advance credits (recorded in other current assets) from Fujitsu. We expect to collect the other receivable in the fourth quarter of 2009, with the advance credits expected to be consumed over the next 12 months. We have no long term debt. We expect that the charge for the staff reductions planned for the third quarter will be approximately $1.2 million and that our cost reduction actions will reduce on-going expenses by approximately $1.5 million per quarter. Although we will have made significant progress towards lowering our overall costs with the actions taken in the third quarter of 2008 and these new actions, we will continue to look for ways to become closer to our customers and to reduce our costs as well." Second Quarter Business Highlights:
Business Outlook - Third Quarter 2009:
- Launched a new member of Lattice's award-winning Power Manager II family, the ProcessorPM(TM) device, a programmable, single chip solution for the reset generation, watchdog timer and voltage supervision functions found in virtually every microprocessor or DSP design
- Announced availability of a new 0.8-mm pitch 256-pin Chip-Array BGA (caBGA256) package for its popular MachXO(TM) PLD family that provides designers with a broader range of package options for implementing cost-sensitive, board space constrained designs
- Announced that industrial temperature-qualified versions of all Lattice's non-volatile LatticeXP2(TM) FPGAs have been released to volume production
- In Greater China, expanded distribution partnership with Weikeng and named Origin Electronics, a division of Nu Horizons Electronics Corp. (NasdaqGS: NUHC), distributor of the full range of Lattice products
Investor Conference Call / Webcast Details
- Revenue is expected to be minus 2% to plus 3% on a sequential basis, including the expected reduction in revenue of approximately $2.0 million due to transitioning certain distributors from the sell-in to the sell-through business model
- Gross margin percentage is expected to be approximately 52% to 54% of revenue
- Total operating expenses are expected to be approximately $29.2 million, inclusive of $1.2 million of restructuring charges
Lattice Semiconductor will review detailed second quarter 2009 results on Thursday, July 23, 2009 at 5:00 p.m. EDT. The conference call-in number is 1-706-758-4489. A live webcast of the conference call will also be available on Lattice's website at www.lscc.com
. Our financial guidance will be limited to the comments on our public quarterly earnings call and the public business outlook statements contained in this press release.
A replay of the call will be available approximately one hour after the conclusion of the live call through 12:00 p.m. EDT on August 6, 2009, by telephone at 1-706-645-9291. To access the replay use conference identification number 19724416. A webcast replay will also be available at on Lattice's website at www.lscc.com About Lattice Semiconductor
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