-----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, GrhxKk3923BT2E2O9RSeC6Nfljgkxtmsca2Ms73fWik1uiEFNVeNEMLl4mfwAfot +ZUGC/C5Q12rRxADPIkg1Q== 0001157523-03-005563.txt : 20031021 0001157523-03-005563.hdr.sgml : 20031021 20031020202644 ACCESSION NUMBER: 0001157523-03-005563 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031020 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20031021 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: 03948694 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 a4497269.txt LATTICE SEMICONDUCTOR CORPORATION 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 October 20, 2003 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. of Employer 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 October 20, 2003. 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 October 20, 2003, Lattice Semiconductor Corporation (the "Company") issued a press release announcing the Company's earnings for the fiscal quarter ended September 30, 2003. 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 October 20, 2003. 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: October 20, 2003 By: /s/ STEPHEN A. SKAGGS --------------------------------- Name: STEPHEN A. SKAGGS Title: Chief Financial Officer EX-99 3 a4497269ex991.txt LATTICE SEMICONDUCTOR CORPORATION PRESS RELEASE Exhibit 99.1 Lattice Semiconductor Reports Third Quarter Results HILLSBORO, Ore.--(BUSINESS WIRE)--Oct. 20, 2003--Lattice Semiconductor Corporation (Nasdaq:LSCC) today announced financial results for the third quarter of 2003. Revenue for the quarter was $51.0 million, down 12 percent from the $58.2 million reported last quarter and a decrease of nine percent from the $56.1 million reported in the same quarter a year ago. Quarterly revenue from FPGA products was $9.2 million, an increase of three percent from last quarter, while quarterly revenue from high density CPLD products was $34.8 million, down 14 percent from last quarter. New product revenue grew 41 percent sequentially and now accounts for 12 percent of total quarterly revenue. Mainstream product revenue declined four percent sequentially and now accounts for 44 percent of quarterly revenue, while Mature product revenue declined 27 percent sequentially and now accounts for 44 percent of quarterly revenue. On a GAAP basis, net loss for the quarter was $21.9 million ($0.20 per share). This loss includes an $18.7 million charge for amortization of intangible assets. Non-GAAP loss for the quarter was $3.2 million ($0.03 per share). This loss includes a $5.7 million non-recurring charge associated with the early call of our previously outstanding 4 3/4 percent convertible notes. Non-GAAP earnings exclude non-cash acquisition related amortization expenses and more closely approximates our cash earnings performance. A reconciliation of non-GAAP to GAAP earnings accompanies the financial tables in this earnings release. "While disappointed with our overall revenue performance last quarter, we remain encouraged about the acceptance of our new products," stated Cyrus Y. Tsui, chairman and chief executive officer. "Our recently introduced products once again generated a record level of design activity during the last quarter and continue to be well received by our worldwide customer base. These new products now account for over 50 percent of our new design-ins. Unfortunately the sequential revenue growth of our new products and our FPGA business was more than offset by the sequential revenue decline of our mature product families." Business Outlook - December 2003 Quarter: -- Revenue is expected to be approximately flat. -- Gross margins are expected to be approximately flat as a percentage of revenue. -- Total operating expenses are expected to be approximately flat. -- Other Income is expected to be approximately $400 thousand. -- We do not anticipate reporting a tax provision. On October 21, 2003, Lattice will hold a telephone conference call at 5:30 am (Pacific Time) with financial analysts. Investors may listen to our conference call via the web at www.ccbn.com. Both the conference call and our business outlook statement will be available on our website, www.lscc.com. On December 11, 2003, 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 December 2003 quarter, Lattice plans to participate in investor conferences sponsored by the American Electronics Association, JP Morgan and Morgan Stanley. 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 our 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 overall semiconductor market conditions, market acceptance and demand for our new products, risks related to our recent acquisitions and their integration with Lattice, our dependencies on our silicon wafer suppliers, the impact of competitive products and pricing, technological and product development risks. Oregon-based Lattice Semiconductor Corporation designs, develops and markets the broadest range of Field Programmable Gate Arrays (FPGAs) and Field Programmable System Chips (FPSCs) and high-performance ISP(TM) programmable logic devices (PLDs). 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 communication, 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), in-system programmable, 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 Nine months ended ------------------ ----------------- Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30, Description 2003 2003 2002 2003 2002 - --------------------- --------- -------- --------- --------- --------- Revenue $51,038 $58,178 $56,072 $167,527 $171,416 Costs and expenses: Costs of products sold 20,662 23,289 22,429 67,159 68,527 Research and development 21,173 21,702 21,523 64,707 63,986 Selling, general and administrative 12,114 12,614 11,712 37,211 35,790 In-process research and development (1) -- -- 5,653 -- 29,853 Amortization of intangible assets (2)(3) 18,665 18,687 18,070 58,466 54,616 --------------------------- --------- --------- Total costs and expenses 72,614 76,292 79,387 227,543 252,772 --------------------------- --------- --------- Loss from operations (21,576) (18,114) (23,315) (60,016) (81,356) Other (expense) income, net (3,611) (1,365) 2,764 (3,485) 3,941 --------------------------- --------- --------- Loss before benefit for income taxes (25,187) (19,479) (20,551) (63,501) (77,415) Benefit for income taxes (3,300) (2,554) (6,180) (5,854) (29,280) --------------------------- --------- --------- Net loss ($21,887)($16,925)($14,371) ($57,647) ($48,135) =========================== ========= ========= Basic net loss per share ($0.20) ($0.15) ($0.13) ($0.52) ($0.44) =========================== ========= ========= Diluted net loss per share ($0.20) ($0.15) ($0.13) ($0.52) ($0.44) =========================== ========= ========= Shares used in per share calculations: Basic 111,840 111,507 110,232 111,615 109,855 =========================== ========= ========= Diluted (4) 111,840 111,507 110,232 111,615 109,855 =========================== ========= ========= Notes: (1) Represents write-off of in-process research and development in conjunction with the August 26, 2002, acquisition of Cerdelinx Technologies, Inc. and the January 18, 2002, acquisition of the FPGA business of Agere Systems, Inc. (2) Intangible assets subject to amortization aggregate $102.5 million, net, at September 30, 2003 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, the acquisition of Vantis Corporation on June 16, 1999, 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. (3) Includes $0.8 million of deferred stock compensation expense for each of the quarters ended September 30, 2003, June 30, 2003, and September 30, 2002, respectively, and $4.9 million and $1.9 million of deferred stock compensation expense for the nine months ended September 30, 2003, and September 30, 2002, respectively, attributable to Research and Development activities. (4) 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. Consolidated Balance Sheet (in thousands) (unaudited) Sept. 30, Dec. 31, Description 2003 2002 - ------------------------------------------------- --------- -------- Assets Current assets: Cash and short-term investments $278,754 $276,880 Accounts receivable, net 26,941 26,374 Inventories 47,942 56,241 Other current assets 12,617 35,033 --------- --------- Total current assets 366,254 394,528 Property and equipment, net 56,520 62,786 Foundry investments, advances and other assets 124,670 104,507 Goodwill and other intangible assets, net (1) 326,071 379,442 --------- --------- $873,515 $941,263 ========= ========= Liabilities and Stockholders' Equity Current liabilities: Accounts payable and other accrued liabilities $28,846 $33,597 Deferred income on sales to distributors 6,361 11,983 Income taxes payable -- 142 --------- --------- Total current liabilities 35,207 45,722 4 3/4% Convertible notes due in 2006 -- 208,061 Zero Coupon Convertible notes due in 2010 184,000 -- Other long-term liabilities 22,053 26,345 --------- --------- 206,053 234,406 Stockholders' equity 632,255 661,135 --------- --------- $873,515 $941,263 ========= ========= Note: (1) At September 30, 2003, includes approximately $9.8 million of other intangible assets, net, recorded in the September 2002 quarter in connection with the August 26, 2002, acquisition of Cerdelinx Technologies, Inc. Also includes $142.5 million in Goodwill and $56.7 million of other intangible assets, net, recorded in the March 2002 quarter in connection with the January 18, 2002, acquisition of the FPGA business of Agere Systems, Inc., and approximately $81.1 million in Goodwill and $36.0 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 Nine months ended ------------------ ----------------- Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30, Description 2003 2003 2002 2003 2002 - --------------------- --------- -------- --------- --------- --------- Revenue $51,038 $58,178 $56,072 $167,527 $171,416 Costs and expenses: Costs of products sold 20,662 23,289 22,429 67,159 68,527 Research and development 21,173 21,702 21,523 64,707 63,986 Selling, general and administrative 12,114 12,614 11,712 37,211 35,790 ------------------------ ------------------ Total costs and expenses 53,949 57,605 55,664 169,077 168,303 ------------------------ ------------------ (Loss) income from operations (2,911) 573 408 (1,550) 3,113 Other (expense) income, net (3,611) (1,365) 2,764 (3,485) 3,941 ------------------------ ------------------ (Loss) income before (benefit) provision for income taxes (6,522) (792) 3,172 (5,035) 7,054 (Benefit) provision for income taxes (3,300) (2,554) 825 (5,854) 1,834 Tax shield (2) -- -- 4,250 -- 12,423 ------------------------ ------------------ Non-GAAP (loss) earnings ($3,222) $1,762 $6,597 $819 $17,643 ======================== ================== Diluted Non-GAAP (loss) earnings per share (3) ($0.03) $0.02 $0.06 $0.01 $0.16 ======================== ================== Shares used in calculations 111,840 113,405 110,683 112,918 111,760 ======================== ================== Notes: (1) This table presents operating information which is consistent with the information reported by First Call, IBES and Zacks for Lattice Semiconductor Corporation. A reconciliation to GAAP on a per share basis is attached as Appendix 2. (2) Tax Shield represents the current period tax deduction available from amortizing gross goodwill and other intangible assets (approximately $750 million as of December 31, 2002) over 15 years on a straight line basis using a 34% tax rate. As of the March 31, 2003, quarter, we are no longer reporting a Tax Shield. (3) For the three months ended June 30, 2003, and September 30, 2002, and for the nine months ended September 30, 2003 and 2002, respectively, 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. For the three months ended September 2003, the computation of diluted Non-GAAP loss excludes the effect of both stock options and our convertible notes as they are antidilutive. Appendix 2 Lattice Semiconductor Corporation Non-GAAP Earnings Reconciliation (1) (unaudited) Three months ended Nine months ended ------------------ ----------------- Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30, Description 2003 2003 2002 2003 2002 - -------------------- --------- -------- --------- --------- --------- Net loss ($0.20) ($0.15) ($0.13) ($0.52) ($0.44) Add: Amortization of intangible assets $0.17 $0.17 $0.10 $0.53 $0.31 In-process research and development (2) -- -- $0.04 -- $0.17 Tax shield (3) -- -- $0.04 -- $0.11 Difference in effective tax rate (4) -- -- $0.01 -- $0.01 -------------------------- --------------- Non-GAAP (loss) income ($0.03) $0.02 $0.06 $0.01 $0.16 ========================= =============== Notes: (1) This table reconciles net income (loss) to non-GAAP information, which is presented in Appendix 1, on a per-share basis. (2) Represents write-off of in-process research and development in conjunction with the August 26, 2002 acquisition of Cerdelinx Technologies, Inc. and the January 18, 2002, acquisition of the FPGA business of Agere Systems, Inc. (3) Tax Shield represents the current period tax deduction available from amortizing gross goodwill and other intangible assets (approximately $750 million as of December 31, 2002) over 15 years on a straight line basis using a 34% tax rate. As of the March 31, 2003, quarter, we are no longer reporting a Tax Shield. (4) The effective tax rate is the ratio of income tax expense to pretax income. The rate for the three and nine months ended September 30, 2002, presented in the non-GAAP information presentation is different from the rates in the Statement of Operations, due to the difference in the proportion of taxable income derived from operations. Appendix 3 LATTICE SEMICONDUCTOR CORPORATION - Supplemental Historic Financial Information - (Q3 2003) Operations Information Q303 Q203 Q302 ------------------------------ Percent of Revenue Gross Margin 59.5% 60.0% 60.0% R&D Expense 41.5% 37.3% 38.4% SG&A Expense 23.7% 21.7% 20.9% Operating (Loss) Income -42.3% -31.1% -41.6% Operating (Loss) Income (Non-GAAP) -5.7% 1.0% .7% Depreciation Expense ($000) 4,658 4,603 4,841 Capital Expenditures ($000) 2,300 2,504 4,494 Balance Sheet Information Current Ratio 10.4 14.0 8.0 A/R Days Revenue Outstanding 48 45 45 Inventory Months 7.0 6.2 8.1 Revenue % (by Product Family) FPGA 18% 16% 13% CPLD 68% 69% 69% SPLD 14% 15% 18% Revenue % (by Product Classification (a) ) New 12% 8% Mainstream 44% 40% Mature 44% 52% Revenue % (by Geography) Americas 37% 41% 43% Europe (incl. Africa) 23% 26% 26% Asia (incl. ROW) 40% 33% 31% Revenue % (by End Market) Communications 49% 52% 43% Computing 22% 21% 27% Other 29% 27% 30% Revenue % (by Channel) Direct 56% 52% 50% Distribution 44% 48% 50% (a) 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, Hillsboro Roddy Sloss, 503-268-8000 -----END PRIVACY-ENHANCED MESSAGE-----