Business Wire | May 4, 2021 04:00PM EDT

Lattice Semiconductor Reports First Quarter 2021 Results

May 04, 2021

HILLSBORO, Ore.--(BUSINESS WIRE)--May 04, 2021--Lattice Semiconductor Corporation (NASDAQ: LSCC), the low power programmable leader, announced financial results today for the fiscal first quarter ended April 3, 2021.

Jim Anderson, president and CEO, said, "We grew revenue 19% in Q1 year-over-year, along with a 52% expansion in non-GAAP net income year-over-year. Revenue from our new Lattice Nexus(tm) platform increased sequentially in Q1 2021, and we began production of our second Nexus device, Certus(tm)-NX. Our recent addition to the S&P MidCap 400 Index recognizes our strong financial results, innovation and momentum. We are excited to be entering a new growth phase for the Company and look forward to providing a full business update at our Investor Day on May 11."

Sherri Luther, CFO, said, "We drove record operating profit of 17.8% on a GAAP basis and 28.0% on a non-GAAP basis, along with gross margin expansion of 190 basis points on both a GAAP and non-GAAP basis compared to Q1 2020. We generated $29 million in cash flow from operations in the quarter and repurchased $15 million of the Company's shares."

Selected First Quarter 2021 Financial Results and Comparisons (in thousands, except per share data)

GAAP Financial Results (unaudited)

Q1 2021 Q4 2020 Q1 2020 Q/Q Y/Y

Revenue $ 115,716 $ 107,173 $ 97,316 8.0% 18.9%

Gross Margin % 61.0 % 60.5 % 59.1 % 50 bps 190 bps

R&D Expense % 20.8 % 21.1 % 22.3 % (30) (150) bps bps

SG&A Expense % 21.7 % 22.9 % 23.2 % (120) (150) bps bps

Operating Expense $ 49,937 $ 47,529 $ 47,824 5.1% 4.4%

Operating Income $ 20,649 $ 17,332 $ 9,738 19.1% 112.0%

Net Income $ 18,813 $ 15,989 $ 8,167 17.7% 130.4%

Net Income per Share - $ 0.14 $ 0.12 $ 0.06 $0.02 $ 0.08Basic

Net Income per Share - $ 0.13 $ 0.11 $ 0.06 $0.02 $ 0.07Diluted

Non-GAAP* Financial Results (unaudited)

Q1 2021 Q4 2020 Q1 2020 Q/Q Y/Y

Revenue $ 115,716 $ 107,173 $ 97,316 8.0% 18.9%

Gross Margin % 61.7 % 61.6 % 59.8 % 10 bps 190 bps

R&D Expense % 18.3 % 18.5 % 19.6 % (20) (130) bps bps

SG&A Expense % 15.4 % 16.5 % 17.5 % (110) (210) bps bps

Operating Expense $ 38,940 $ 37,475 $ 36,107 3.9% 7.8%

Operating Income $ 32,419 $ 28,490 $ 22,046 13.8% 47.1%

Net Income $ 30,693 $ 27,540 $ 20,195 11.4% 52.0%

Net Income per Share - $ 0.23 $ 0.20 $ 0.15 $ 0.03 $ 0.08Basic

Net Income per Share - $ 0.22 $ 0.19 $ 0.15 $ 0.03 $ 0.07Diluted

First Quarter 2021 Highlights

* Revenue Growth: Revenue increased 19% in Q1 2021 compared to Q1 2020 and 8% in Q4 2020. * Profit Growth: Net income per diluted share expanded 117% on a GAAP basis and 47% on a non-GAAP basis compared to Q1 2020, with gross margin improving 190 basis points on both a GAAP and non-GAAP basis compared to Q1 2020. * Launched Lattice Crosslink(tm)-NX for Automotive Applications: The new Crosslink-NX brings best-in-class low power, small form factor, high-performance I/O, and reliability to automotive applications. * Launched Lattice mVision(tm) 2.0: The latest solutions stack features multiple updates that further accelerate the design of embedded applications for industrial, automotive, and smart consumer systems. * Lattice Sentry(tm) and Lattice Supply Guard(tm) Win Gold: Lattice won a New Product-Service of the Year Gold Award from Cyber Security Global Excellence Awards(r). * Lattice Joined S&P MidCap 400(r) Index: Lattice was added to the S&P MidCap 400(r) Index, effective April 20, 2021. * Lattice Investor Day 2021: Registration is now open to attend the virtual event on Tuesday, May 11, 2021 from 9-11 a.m. PDT / 12-2 p.m. EDT using link ir.latticesemi.com/investorday2021.

Business Outlook - Second Quarter of 2021:

* Revenue for the second quarter of 2021 is expected to be between $116 million and $124 million. * Gross margin percentage for the second quarter of 2021 is expected to be 62% plus or minus 1% on a non-GAAP basis. * Total operating expenses for the second quarter of 2021 are expected to be between $40.5 million and $41.5 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 first quarter of 2021, certain items that affect GAAP measurement of financial measures are out of the Company's control and/or cannot be reasonably predicted. Consequently, the Company is unable to provide a reasonable estimate of GAAP measurement for guidance or a corresponding reconciliation to GAAP for the quarter. 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 first quarter 2021, and business outlook on Tuesday, May 4 at 5:00 p.m. Eastern Time. The dial-in number for the live audio call is 1-888-684-5603 or 1-918-398-4852 with conference identification number 2619109. 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 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 belief that we are entering a new growth phase for the Company; and the statements under the heading "Business Outlook - Second Quarter of 2021." 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 pressures, competitive actions, and international trade disputes and sanctions. In addition, the COVID-19 pandemic has negatively impacted the overall economy and, as a result of the foregoing, may negatively impact our operating results for future periods. 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 risks more fully described in Lattice's filings with the SEC including its Annual Report on Form 10-K for the fiscal year ended January 2, 2021, and Lattice's quarterly reports filed on Form 10-Q. COVID-19 may increase or change the severity of our other risks reported in our Annual Report on Form 10-K for the fiscal year ended January 2, 2021. Lattice believes these and other risks and uncertainties could cause actual results to differ materially from the forward-looking statements. 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. The non-GAAP measures presented exclude charges and adjustments primarily related to stock-based compensation and related tax effects, restructuring plans and related charges, amortization of acquired intangible assets, and the estimated tax effect of these items. The non-GAAP net income for the first quarter of fiscal 2021 and the fourth quarter of fiscal 2020 includes a change in the non-GAAP tax rate calculation to exclude profits from jurisdictions where there is a full valuation allowance on deferred tax assets to improve alignment of non-GAAP income tax expense to non-GAAP income before tax. 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, Weibo or Youku.

Lattice Semiconductor Corporation

Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

Three Months Ended

April 3, January March 28, 2,

2021 2021 2020

Revenue $ 115,716 $ 107,173 $ 97,316

Cost of sales 45,130 42,312 39,754

Gross margin 70,586 64,861 57,562

Operating expenses:

Research and development 24,066 22,633 21,693

Selling, general, and administrative 25,092 24,534 22,551

Amortization of acquired intangible 603 603 2,640 assets

Restructuring 176 (241 ) 940

Total operating expenses 49,937 47,529 47,824

Income from operations 20,649 17,332 9,738

Interest expense (718 ) (788 ) (1,077 )

Other expense, net (162 ) (125 ) (50 )

Income before income taxes 19,769 16,419 8,611

Income tax expense 956 430 444

Net income $ 18,813 $ 15,989 $ 8,167



Net income per share:

Basic $ 0.14 $ 0.12 $ 0.06

Diluted $ 0.13 $ 0.11 $ 0.06



Shares used in per share calculations:

Basic 136,401 136,104 134,253

Diluted 141,674 141,713 138,044

Lattice Semiconductor Corporation

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

April 3,

January 2,

2021

2021

Assets

Current assets:

Cash and cash equivalents

$

185,268

$

182,332

Accounts receivable, net

71,090

64,581

Inventories, net

59,456

64,599

Other current assets

21,066

22,331

Total current assets

336,880

333,843

Property and equipment, net

38,143

39,666

Operating lease right-of-use assets

28,006

22,178

Intangible assets, net

7,294

6,321

Goodwill

267,514

267,514

Deferred income taxes

566

577

Other long-term assets

9,181

9,968

$

687,584

$

680,067

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$

27,384

$

27,530

Accrued expenses

24,559

21,411

Accrued payroll obligations

11,592

18,028

Current portion of long-term debt

17,144

12,762

Total current liabilities

80,679

79,731

Long-term debt, net of current portion

153,644

157,934

Long-term operating lease liabilities, net of current portion

23,539

18,906

Other long-term liabilities

38,137

39,069

Total liabilities

295,999

295,640

Stockholders' equity

391,585

384,427

$

687,584

$

680,067

Lattice Semiconductor Corporation

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

April 3, January 2,

2021 2021

Assets

Current assets:

Cash and cash equivalents $ 185,268 $ 182,332

Accounts receivable, net 71,090 64,581

Inventories, net 59,456 64,599

Other current assets 21,066 22,331

Total current assets 336,880 333,843



Property and equipment, net 38,143 39,666

Operating lease right-of-use assets 28,006 22,178

Intangible assets, net 7,294 6,321

Goodwill 267,514 267,514

Deferred income taxes 566 577

Other long-term assets 9,181 9,968

$ 687,584 $ 680,067



Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable $ 27,384 $ 27,530

Accrued expenses 24,559 21,411

Accrued payroll obligations 11,592 18,028

Current portion of long-term debt 17,144 12,762

Total current liabilities 80,679 79,731



Long-term debt, net of current portion 153,644 157,934

Long-term operating lease liabilities, net of 23,539 18,906 current portion

Other long-term liabilities 38,137 39,069

Total liabilities 295,999 295,640



Stockholders' equity 391,585 384,427

$ 687,584 $ 680,067

Lattice Semiconductor Corporation

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Three Months Ended

April 3,

March 28,

2021

2020

Cash flows from operating activities:

Net income

$

18,813

$

8,167

Adjustments to reconcile net income to net cash provided by operating activities:

Stock-based compensation expense

10,454

8,728

Depreciation and amortization

5,901

7,793

Other non-cash adjustments

1,679

1,509

Net changes in assets and liabilities

(7,476

)

(5,094

)

Net cash provided by (used in) operating activities

29,371

21,103

Cash flows from investing activities:

Capital expenditures

(1,270

)

(3,867

)

Other investing activities

(3,056

)

(2,775

)

Net cash provided by (used in) investing activities

(4,326

)

(6,642

)

Cash flows from financing activities:

Proceeds from long-term debt

-

50,000

Repayment of long-term debt

-

(4,375

)

Purchase of treasury stock

(15,002

)

-

Net cash flows related to stock compensation exercises

(6,870

)

(1,484

)

Net cash provided by (used in) financing activities

(21,872

)

44,141

Effect of exchange rate change on cash

(237

)

(111

)

Net increase in cash and cash equivalents

2,936

58,491

Beginning cash and cash equivalents

182,332

118,081

Ending cash and cash equivalents

$

185,268

$

176,572

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

Interest paid

$

592

$

1,113

Income taxes paid, net of refunds

$

675

$

852

Lattice Semiconductor Corporation

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Three Months Ended

April 3, March 28,

2021 2020

Cash flows from operating activities:

Net income $ 18,813 $ 8,167

Adjustments to reconcile net income to net cash provided by operating activities:

Stock-based compensation expense 10,454 8,728

Depreciation and amortization 5,901 7,793

Other non-cash adjustments 1,679 1,509

Net changes in assets and liabilities (7,476 ) (5,094 )

Net cash provided by (used in) operating activities 29,371 21,103

Cash flows from investing activities:

Capital expenditures (1,270 ) (3,867 )

Other investing activities (3,056 ) (2,775 )

Net cash provided by (used in) investing activities (4,326 ) (6,642 )

Cash flows from financing activities:

Proceeds from long-term debt - 50,000

Repayment of long-term debt - (4,375 )

Purchase of treasury stock (15,002 ) -

Net cash flows related to stock compensation (6,870 ) (1,484 )exercises

Net cash provided by (used in) financing activities (21,872 ) 44,141

Effect of exchange rate change on cash (237 ) (111 )

Net increase in cash and cash equivalents 2,936 58,491

Beginning cash and cash equivalents 182,332 118,081

Ending cash and cash equivalents $ 185,268 $ 176,572



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

Interest paid $ 592 $ 1,113

Income taxes paid, net of refunds $ 675 $ 852

Lattice Semiconductor Corporation

Supplemental Historical Financial Information

(unaudited)

Three Months Ended

April 3,

January 2,

March 28,

2021

2021

2020

Balance Sheet Information

A/R Days Revenue Outstanding (DSO)

56

55

64

Inventory Days (DIO)

120

139

112

Revenue% (by Geography)

Asia

76

%

77

%

71

%

Americas

14

%

15

%

17

%

Europe (incl. Africa)

10

%

8

%

12

%

Revenue% (by End Market)

Communications and Computing

43

%

43

%

39

%

Industrial and Automotive

43

%

43

%

43

%

Consumer

10

%

10

%

14

%

Licensing and Services

4

%

4

%

4

%

Revenue% (by Channel)

Distribution

85

%

88

%

78

%

Direct

15

%

12

%

22

%

Lattice Semiconductor Corporation

Supplemental Historical Financial Information

(unaudited)

Three Months Ended

April 3, January 2, March 28,

2021 2021 2020

Balance Sheet Information

A/R Days Revenue Outstanding (DSO) 56 55 64

Inventory Days (DIO) 120 139 112



Revenue% (by Geography)

Asia 76 % 77 % 71 %

Americas 14 % 15 % 17 %

Europe (incl. Africa) 10 % 8 % 12 %



Revenue% (by End Market)

Communications and Computing 43 % 43 % 39 %

Industrial and Automotive 43 % 43 % 43 %

Consumer 10 % 10 % 14 %

Licensing and Services 4 % 4 % 4 %



Revenue% (by Channel)

Distribution 85 % 88 % 78 %

Direct 15 % 12 % 22 %

Lattice Semiconductor Corporation

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

(in thousands, except per share data)

(unaudited)

Three Months Ended

April 3,

January 2,

March 28,

2021

2021

2020

Gross Margin Reconciliation

GAAP Gross margin

$

70,586

$

64,861

$

57,562

Stock-based compensation - gross margin (1)

773

1,104

591

Non-GAAP Gross margin

$

71,359

$

65,965

$

58,153

Gross Margin % Reconciliation

GAAP Gross margin %

61.0

%

60.5

%

59.1

%

Cumulative effect of non-GAAP Gross Margin adjustments

0.7

%

1.1

%

0.7

%

Non-GAAP Gross margin %

61.7

%

61.6

%

59.8

%

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

GAAP R&D Expense %

20.8

%

21.1

%

22.3

%

Stock-based compensation - R&D (1)

(2.5

)%

(2.6

)%

(2.7

)%

Non-GAAP R&D Expense %

18.3

%

18.5

%

19.6

%

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

GAAP SG&A Expense %

21.7

%

22.9

%

23.2

%

Stock-based compensation - SG&A (1)

(6.3

)%

(6.4

)%

(5.7

)%

Non-GAAP SG&A Expense %

15.4

%

16.5

%

17.5

%

Operating Expenses Reconciliation

GAAP Operating expenses

$

49,937

$

47,529

$

47,824

Stock-based compensation - operations (1)

(10,218

)

(9,692

)

(8,137

)

Amortization of acquired intangible assets

(603

)

(603

)

(2,640

)

Restructuring charges

(176

)

241

(940

)

Non-GAAP Operating expenses

$

38,940

$

37,475

$

36,107

Income from Operations Reconciliation

GAAP Income from operations

$

20,649

$

17,332

$

9,738

Stock-based compensation - gross margin (1)

773

1,104

591

Stock-based compensation - operations (1)

10,218

9,692

8,137

Amortization of acquired intangible assets

603

603

2,640

Restructuring charges

176

(241

)

940

Non-GAAP Income from operations

$

32,419

$

28,490

$

22,046

Income from Operations % Reconciliation

GAAP Income from operations %

17.8

%

16.2

%

10.0

%

Cumulative effect of non-GAAP Gross Margin and Operating adjustments

10.2

%

10.4

%

12.7

%

Non-GAAP Income from operations %

28.0

%

26.6

%

22.7

%

Lattice Semiconductor Corporation

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

(in thousands, except per share data)

(unaudited)

Three Months Ended

April 3, January 2, March 28,

2021 2021 2020



Gross Margin Reconciliation

GAAP Gross margin $ 70,586 $ 64,861 $ 57,562

Stock-based compensation - gross margin 773 1,104 591 (1)

Non-GAAP Gross margin $ 71,359 $ 65,965 $ 58,153



Gross Margin % Reconciliation

GAAP Gross margin % 61.0 % 60.5 % 59.1 %

Cumulative effect of non-GAAP Gross 0.7 % 1.1 % 0.7 %Margin adjustments

Non-GAAP Gross margin % 61.7 % 61.6 % 59.8 %



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

GAAP R&D Expense % 20.8 % 21.1 % 22.3 %

Stock-based compensation - R&D (1) (2.5 ) (2.6 ) (2.7 ) % % %

Non-GAAP R&D Expense % 18.3 % 18.5 % 19.6 %



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

GAAP SG&A Expense % 21.7 % 22.9 % 23.2 %

Stock-based compensation - SG&A (1) (6.3 ) (6.4 ) (5.7 ) % % %

Non-GAAP SG&A Expense % 15.4 % 16.5 % 17.5 %



Operating Expenses Reconciliation

GAAP Operating expenses $ 49,937 $ 47,529 $ 47,824

Stock-based compensation - operations (10,218 ) (9,692 ) (8,137 )(1)

Amortization of acquired intangible (603 ) (603 ) (2,640 )assets

Restructuring charges (176 ) 241 (940 )

Non-GAAP Operating expenses $ 38,940 $ 37,475 $ 36,107



Income from Operations Reconciliation

GAAP Income from operations $ 20,649 $ 17,332 $ 9,738

Stock-based compensation - gross margin 773 1,104 591 (1)

Stock-based compensation - operations 10,218 9,692 8,137 (1)

Amortization of acquired intangible 603 603 2,640 assets

Restructuring charges 176 (241 ) 940

Non-GAAP Income from operations $ 32,419 $ 28,490 $ 22,046



Income from Operations % Reconciliation

GAAP Income from operations % 17.8 % 16.2 % 10.0 %

Cumulative effect of non-GAAP Gross 10.2 % 10.4 % 12.7 %Margin and Operating adjustments

Non-GAAP Income from operations % 28.0 % 26.6 % 22.7 %

(1)

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

(1) The non-GAAP adjustments for Stock-based compensation include related tax expenses.

Lattice Semiconductor Corporation

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

(in thousands, except per share data)

(unaudited)

Three Months Ended

April 3,

January 2,

March 28,

2021

2021

2020

Income Tax Expense (Benefit) Reconciliation

GAAP Income tax expense (benefit)

$

956

$

430

$

444

Estimated tax effect of non-GAAP adjustments (2)

(110

)

(393

)

280

Non-GAAP Income tax expense (benefit)

$

846

$

37

$

724

Net Income Reconciliation

GAAP Net income

$

18,813

$

15,989

$

8,167

Stock-based compensation - gross margin (1)

773

1,104

591

Stock-based compensation - operations (1)

10,218

9,692

8,137

Amortization of acquired intangible assets

603

603

2,640

Restructuring charges

176

(241

)

940

Estimated tax effect of non-GAAP adjustments (2)

110

393

(280

)

Non-GAAP Net income

$

30,693

$

27,540

$

20,195

Net Income Per Share Reconciliation

GAAP Net income per share - basic

$

0.14

$

0.12

$

0.06

Cumulative effect of Non-GAAP adjustments

0.09

0.08

0.09

Non-GAAP Net income per share - basic

$

0.23

$

0.20

$

0.15

GAAP Net income per share - diluted

$

0.13

$

0.11

$

0.06

Cumulative effect of Non-GAAP adjustments

0.09

0.08

0.09

Non-GAAP Net income per share - diluted

$

0.22

$

0.19

$

0.15

Shares used in per share calculations:

Basic

136,401

136,104

134,253

Diluted

141,674

141,713

138,044

Lattice Semiconductor Corporation

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

(in thousands, except per share data)

(unaudited)

Three Months Ended

April 3, January March 28, 2,

2021 2021 2020



Income Tax Expense (Benefit) Reconciliation

GAAP Income tax expense (benefit) $ 956 $ 430 $ 444

Estimated tax effect of non-GAAP (110 ) (393 ) 280 adjustments (2)

Non-GAAP Income tax expense (benefit) $ 846 $ 37 $ 724

Net Income Reconciliation

GAAP Net income $ 18,813 $ 15,989 $ 8,167

Stock-based compensation - gross margin 773 1,104 591 (1)

Stock-based compensation - operations 10,218 9,692 8,137 (1)

Amortization of acquired intangible 603 603 2,640 assets

Restructuring charges 176 (241 ) 940

Estimated tax effect of non-GAAP 110 393 (280 )adjustments (2)

Non-GAAP Net income $ 30,693 $ 27,540 $ 20,195

Net Income Per Share Reconciliation

GAAP Net income per share - basic $ 0.14 $ 0.12 $ 0.06

Cumulative effect of Non-GAAP 0.09 0.08 0.09 adjustments

Non-GAAP Net income per share - basic $ 0.23 $ 0.20 $ 0.15



GAAP Net income per share - diluted $ 0.13 $ 0.11 $ 0.06

Cumulative effect of Non-GAAP 0.09 0.08 0.09 adjustments

Non-GAAP Net income per share - diluted $ 0.22 $ 0.19 $ 0.15



Shares used in per share calculations:

Basic 136,401 136,104 134,253

Diluted 141,674 141,713 138,044

(1)

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

(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."

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CONTACT: MEDIA: Bob Nelson Lattice Semiconductor Corporation 408-826-6339 Bob.Nelson@latticesemi.com

CONTACT: INVESTORS: Rick Muscha Lattice Semiconductor Corporation 408-826-6000 Rick.Muscha@latticesemi.com