-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PWRtwbAPl0wJ8xqcIvxVqVN4X9/2wecH9OM/vZfPHJudQiZZf2ktuOEM8WAvBsTV lmDu2z2pIDATdpxQS/NMMg== 0001157523-04-006759.txt : 20040727 0001157523-04-006759.hdr.sgml : 20040727 20040723060049 ACCESSION NUMBER: 0001157523-04-006759 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040723 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20040723 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LATTICE SEMICONDUCTOR CORP CENTRAL INDEX KEY: 0000855658 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 930835214 STATE OF INCORPORATION: DE FISCAL YEAR END: 0101 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-18032 FILM NUMBER: 04927660 BUSINESS ADDRESS: STREET 1: 5555 NE MOORE COURT CITY: HILLSBORO STATE: OR ZIP: 97124-6421 BUSINESS PHONE: 5032688000 MAIL ADDRESS: STREET 1: 5555 NE MOORE COURT CITY: HILLSBORO STATE: OR ZIP: 97124 8-K 1 a4686744.txt LATTICE SEMICONDUCTOR 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------- FORM 8-K CURRENT REPORT ----------------- Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 July 23, 2004 Date of Report (Date of earliest event reported) LATTICE SEMICONDUCTOR CORPORATION Exact name of registrant as specified in its charter) Delaware 000-18032 93-0835214 (State or other jurisdiction (Commission File Number) (I.R.S. Employer of incorporation) Identification No.) 5555 NE Moore Court Hillsboro, OR 97124-6421 (503) 268-8000 (Address of principal executive offices) (Registrant's telephone number, including area code) Item 7. Exhibits. (c) Exhibits: The following exhibit is filed with this report on Form 8-K: Exhibit No. Description - ----------- ----------- 99.1 Press Release of Lattice Semiconductor Corporation, dated July 22, 2004 Item 9. Regulation FD Disclosure and Disclosure of Results of Operations and Financial Condition (Item 12)* The following information and exhibit relating thereto are furnished pursuant to Items 9 and 12 of this Current Report on Form 8-K: On July 22, 2004, Lattice Semiconductor Corporation (the "Company") issued a press release announcing the Company's financial results for the fiscal quarter ended June 30, 2004. A copy of the press release is attached hereto as Exhibit 99.1. * The information furnished under Item 9 and Item 12 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 99.1 Press Release of Lattice Semiconductor Corporation, dated July 22, 2004. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. LATTICE SEMICONDUCTOR CORPORATION Date: July 23, 2004 By: /s/ Jan Johannessen -------------------------------- Name: Jan Johannessen Title: Chief Financial Officer EX-99.1 2 a4686744ex991.txt PRESS RELEASE EXHIBIT 99.1 Lattice Semiconductor Reports Second Quarter Financial Results HILLSBORO, Ore.--(BUSINESS WIRE)--July 22, 2004--Lattice Semiconductor Corporation (Nasdaq:LSCC) today announced financial results for the second quarter ended June 2004. Revenue for the second quarter was $60.9 million, an increase of three percent from last quarter's revenue of $59.1 million and up eight percent from the $56.6 million reported in the same quarter a year ago. Quarterly revenue from PLD products was $49.8 million, or 82 percent of total revenue, and grew four percent sequentially. Quarterly revenue from FPGA products was $11.1 million, or 18 percent of total revenue, and declined two percent sequentially but increased 24 percent on a year over year basis. Quarterly revenue from New products, now 16 percent of total revenue, grew 28 percent sequentially and more than doubled on a year over year basis. Net loss for the second quarter was $16.0 million ($0.14 per share). This loss includes a $17.1 million charge for amortization of intangible assets. Excluding these charges, income for the quarter was $1.1 million ($0.01 per share). These non-cash amortization charges have been highlighted as they are not expected to continue at these levels and are currently expected to be entirely eliminated in 2007. The Company believes exclusion of these charges more closely approximates its cash earnings performance. A reconciliation of non-GAAP income to GAAP loss accompanies the financial tables in this earnings release. "Last quarter we made two significant new product announcements," stated Cyrus Y. Tsui, chairman and chief executive officer. "First, we launched the initial wave of our planned next generation FPGA products with the introduction of the LatticeEC(TM) and LatticeECP-DSP(TM) families. The first device of these new FPGA families will be production released during the current quarter, ahead of schedule. Both FPGA families were designed from the ground up in order to optimally balance emerging customer requirements in terms of cost, architectural features and performance. As the FPGA market is rapidly transitioning from high-priced, low-volume devices to low-priced, high-volume devices, we believe the timing of these new FPGA product families is excellent. Second, we entered the timing IC market with our revolutionary ispClock(TM) family of in-system programmable clock management devices. Combining our proprietary programmable mixed signal technology with high-performance programmable logic, ispClock devices offer an unprecedented level of performance and flexibility in support of advanced clock network design. We are pleased with the customer reception to our recent announcements and expect these new product families to open new avenues of revenue growth for Lattice during 2005." Business Outlook -- September 2004 Quarter: -- Revenue is expected to be flat, plus or minus two percent; -- Gross margin percentage is expected to be approximately flat; -- Total operating expenses are expected to be approximately flat; -- Intangible asset amortization is expected to decline by $11.1 million to approximately $6 million; and -- Other Income is expected to be approximately $3 million. On July 23, 2004, Lattice will hold a telephone conference call at 5:30 am (Pacific Time) with financial analysts. Investors may listen to our conference call live via the web at www.lscc.com. Replays of the call will also be available at www.lscc.com. On September 9, 2004, we plan to publish a "Business Update Statement" on our website. Our financial guidance will be limited to the comments on our public quarterly earnings call and these public business outlook statements. Additionally, during the September 2004 quarter, Lattice plans to participate in an investor conference sponsored by Schwab Soundview Capital. Specific presentation dates and times are posted on our website at www.lscc.com. The foregoing paragraphs contain forward-looking statements within the meaning of the federal securities laws including statements about future quarterly financial results, revenues, customers, product offerings and the Company's ability to compete. Investors are cautioned that actual events and results could differ materially from these statements as a result of a number of factors, including the possibility that further accounting adjustments may be required and the effectiveness of changes to the Company's internal controls, as well as overall semiconductor market conditions, market acceptance and demand for the Company's new products, the Company's dependencies on our silicon wafer suppliers, the impact of competitive products and pricing, technological and product development risks. 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. Lattice Semiconductor Corporation, the inventor of in-system programmable (ISP(TM)) logic products, designs, develops and markets the broadest range of Field Programmable Gate Arrays (FPGA), Field Programmable System Chips (FPSCs) and high-performance ISP Programmable Logic Devices (PLDs), including Complex Programmable Logic Devices (CPLD), Programmable Analog Components (PAC), and Programmable Digital Interconnect (GDX). Lattice also offers industry leading SERDES products. Lattice offers total solutions for today's system designs by delivering the most innovative programmable silicon products that embody leading-edge system expertise. Lattice products are sold worldwide through an extensive network of independent sales representatives and distributors, primarily to OEM customers in the communications, computing, industrial and military end markets. Company headquarters are located at 5555 N.E. Moore Court, Hillsboro, Oregon 97124 USA. For more information access our web site at www.latticesemi.com. Lattice Semiconductor Corporation, L (& design), Lattice (& design) ISP and specific product designations are either registered trademarks or trademarks of Lattice Semiconductor Corporation or its subsidiaries in the United States and/or other countries. Lattice Semiconductor Corporation Consolidated Statement of Operations (in thousands, except per share data) (unaudited) Three months ended Six months ended ---------------------------- ------------------- June 30, Mar. 31, June 30, June 30, June 30, Description 2004 2004 2003 2004 2003 - -------------------------------------------------- ------------------- Revenue $60,939 $59,071 $56,575 $120,010 $113,872 Costs and expenses: Costs of products sold 26,232 24,719 22,993 50,951 46,021 Research and development 22,599 22,259 21,702 44,858 43,534 Selling, general and administrative 14,069 13,087 12,614 27,156 25,097 Amortization of intangible assets (1)(2) 17,051 18,654 18,687 35,705 39,801 ---------------------------- ------------------- Total costs and expenses 79,951 78,719 75,996 158,670 154,453 ---------------------------- ------------------- Loss from operations (19,012) (19,648) (19,421) (38,660) (40,581) Other income (expense), net 3,136 3,107 (1,365) 6,243 126 ---------------------------- ------------------- Loss before (benefit) provision for income taxes (15,876) (16,541) (20,786) (32,417) (40,455) Provision (benefit) for income taxes 100 -- (2,554) 100 (2,554) ---------------------------- ------------------- Net loss ($15,976) ($16,541) ($18,232) ($32,517) ($37,901) ============================ =================== Basic net loss per share ($0.14) ($0.15) ($0.16) ($0.29) ($0.34) ============================ =================== Diluted net loss per share ($0.14) ($0.15) ($0.16) ($0.29) ($0.34) ============================ =================== Shares used in per share calculations: Basic 112,812 112,627 111,507 112,728 111,473 ============================ =================== Diluted (3) 112,812 112,627 111,507 112,728 111,473 ============================ =================== Notes: (1) Intangible assets subject to amortization aggregate $51.1 million, net, at June 30, 2004 and relate to the acquisition of Cerdelinx Technologies, Inc. on August 26, 2002, the acquisition of the FPGA business of Agere Systems, Inc. on January 18, 2002 and the acquisition of Integrated Intellectual Property Inc. on March 16, 2001. These intangible assets are amortized to expense generally over three to seven years on a straight-line basis. Intangible asset amortization will decline to approximately $5.8 million in the September 2004 quarter as amortization of intangible assets related to the June 1999 Vantis acquisition was completed in the June 2004 quarter. (2) Includes $1.3 million, $0.8 million and $0.8 million of deferred stock compensation expense for the quarters ended June 30, 2004, March 31, 2004 and June 30, 2003, respectively, attributable to Research and Development activities. Includes $2.1 million, and $4.1 million of deferred stock compensation expense for the six-month periods ended June 30, 2004, and June 30, 2003, respectively, attributable to Research and Development activities. (3) For all periods presented, the computation of diluted net loss per share excludes the effect of stock options and our convertible notes as they are antidilutive. Lattice Semiconductor Corporation Consolidated Balance Sheet (in thousands) (unaudited) June 30, Dec. 31, Description 2004 2003 - ------------------------------------------------------------ --------- Assets Current assets: Cash and short-term investments $310,834 $277,750 Accounts receivable, net 28,937 26,796 Inventories 40,770 46,630 Other current assets 51,118 51,537 --------- --------- Total current assets 431,659 402,713 Property and equipment, net 51,774 53,800 Foundry investments, advances and other assets 55,733 86,883 Goodwill and other intangible assets, net (1) 274,652 308,232 --------- --------- $813,818 $851,628 ========= ========= Liabilities and Stockholders' Equity Current liabilities: Accounts payable and other accrued liabilities $28,013 $28,500 Deferred income on sales to distributors 15,939 10,564 Income taxes payable -- 37 --------- --------- Total current liabilities 43,952 39,101 Zero Coupon Convertible notes due in 2010 184,000 184,000 Other long-term liabilities 23,090 22,415 --------- --------- 207,090 206,415 Stockholders' equity 562,776 606,112 --------- --------- $813,818 $851,628 ========= ========= Note: (1) At June 30, 2004, includes approximately $223.6 million in Goodwill and $51.1 million of other intangible assets, net, related to previous acquisitions. The other intangible assets will be amortized to expense generally over three to seven years. Goodwill is not amortized effective with the March 2002 quarter. Appendix 1 Lattice Semiconductor Corporation Consolidated Operations Information- Non-GAAP Basis (1) (in thousands, except per share data) (unaudited) Three months ended Six months ended -------------------------- ------------------ June 30, Mar. 31, June 30, June 30, June 30, Description 2004 2004 2003 2004 2003 - ---------------------------------------------------------------------- Revenue $60,939 $59,071 $56,575 $120,010 $113,872 Costs and expenses: Costs of products sold 26,232 24,719 22,993 50,951 46,021 Research and development 22,599 22,259 21,702 44,858 43,534 Selling, general and administrative 14,069 13,087 12,614 27,156 25,097 -------------------------- ------------------ Total costs and expenses 62,900 60,065 57,309 122,965 114,652 -------------------------- ------------------ Loss from operations (1,961) (994) (734) (2,955) (780) Other income (expense), net 3,136 3,107 (1,365) 6,243 126 -------------------------- ------------------ Income (loss) before provision (benefit) for income taxes 1,175 2,113 (2,099) 3,288 (654) Provision (benefit) for income taxes 100 -- (2,554) 100 (2,554) -------------------------- ------------------ Non-GAAP earnings $1,075 $2,113 $455 $3,188 $1,900 ========================== ================== Diluted Non-GAAP earnings per share (2) $0.01 $0.02 $0.00 $0.03 $0.02 ========================== ================== Shares used in calculations 114,125 117,795 113,405 115,921 113,268 ========================== ================== Notes: (1) This table presents operating information which is consistent with the information reported by First Call, Reuters and Zacks for Lattice Semiconductor Corporation. A reconciliation to GAAP on a per share basis is attached as Appendix 2. (2) For all periods presented, the computation of diluted Non-GAAP earnings includes the effect of stock options but excludes the effect of our convertible notes as they are antidilutive. Appendix 2 Lattice Semiconductor Corporation Non-GAAP Earnings Reconciliation (1) (unaudited) Three months ended Six months ended -------------------------- ------------------ June 30, Mar. 31, June 30, June 30, June 30, Description 2004 2004 2003 2004 2003 - ---------------------------------------------------------------------- Net loss ($0.14) ($0.15) ($0.16) ($0.29) ($0.34) Add: Amortization of intangible assets $0.15 $0.17 $0.16 $0.32 $0.36 -------------------------- ------------------ Non-GAAP income $0.01 $0.02 $0.00 $0.03 $0.02 ========================== ================== Notes: (1) This table reconciles net loss to non-GAAP information, which is presented in Appendix 1, on a per- share basis. Appendix 3 LATTICE SEMICONDUCTOR CORPORATION - Supplemental Historic Financial Information - (Q2 2004) Operations Information Q204 Q104 Q203 -------------------------------- Percent of Revenue Gross Margin 57.0% 58.2% 59.4% R&D Expense 37.1% 37.7% 38.4% SG&A Expense 23.1% 22.2% 22.3% Operating Loss -31.2% -33.3% -34.3% Operating Loss (Non-GAAP) -3.2% -1.7% -1.3% Depreciation Expense ($000) 4,366 4,498 4,603 Capital Expenditures ($000) 4,774 2,022 2,504 Balance Sheet Information Current Ratio 9.8 9.3 13.2 A/R Days Revenue Outstanding 43 40 46 Inventory Months 4.6 5.4 6.3 Revenue % (by Product Family) FPGA 18% 19% 15% PLD 82% 81% 85% Revenue % (by Product Classification (1)) New 16% 13% 8% Mainstream 43% 43% 41% Mature 41% 44% 51% Revenue % (by Geography) Americas 30% 36% 41% Europe (incl. Africa) 23% 24% 26% Asia (incl. ROW) 47% 40% 33% Revenue % (by End Market) Communications 51% 53% 52% Computing 17% 19% 21% Other 32% 28% 27% Revenue % (by Channel) Direct 63% 58% 54% Distribution 37% 42% 46% (1) Product Classification: - --------------------------- New: FPSC, XPLD, XPGA, GDX2, ORCA 4, ispMACH 4000, ispMACH 4000 Z, ispPAC-PWR Mainstream: ORCA 3, GDX/V, ispMACH L/V, ispLSI 2000V, ispLSI 5000V, ispLSI 8000V, ispMACH 5000VG, Mixed Signal, Software Mature: ORCA 2, All 5-Volt CPLDs, All SPLDs CONTACT: Lattice Semiconductor Corporation Roddy Sloss, 503-268-8000 -----END PRIVACY-ENHANCED MESSAGE-----