Lattice Semiconductor Corporation (
Q4 2010 Earnings Call Transcript
January 27, 2011 5:00 pm ET
David Pasquale – IR, Global IR Partners
Darin Billerbeck – President and CEO
Michael Potter – VP and CFO
Richard Shannon – Northland Capital
Sundeep Bajikar – Morgan Stanley
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Good afternoon. My name is Morgan and I will be your conference operator today. At this time, I would like to welcome everyone to the Lattice Semiconductor fourth quarter 2010 conference call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question and answer session. (Operator Instructions)
Thank you. I’d now like to turn the call over to our host, Mr. David Pasquale. Sir, you may begin your conference.
Thank you, operator. Welcome everyone to Lattice Semiconductor’s fourth quarter 2010 results conference call. Joining us from the company today are Mr. Darin G. Billerbeck the Company’s President and CEO, Mr. Michael G. Potter Lattice’s Corporate Vice President and CFO. Both executives will be available for Q&A after the prepared comments. If you have not yet received a copy of today’s results release please email Global IR Partners using
or you can get a copy of the release off of the investor relations sections of Lattice Semiconductor’s website.
Before we begin the formal remarks I will review the Safe Harbor statements. It is our intention that this call will comply with the requirements of FCC Regulation FD. This call includes and constitutes the company’s official guidance for the first quarter of fiscal 2011. If at any time after this call we communicate any material changes to this guide, we intend that such updates will be done using a public forum such as a press release or a publicly announced conference call. The matters that we discuss today other than historical information includes forward-looking statements relating to our future financial performance and other performance expectations.
Investors are cautioned that forward-looking statements are neither promises nor guarantees. They involve risks and uncertainties that may cause actual results to differ materially from those projected in the forward-looking statements. Some of those risks and uncertainties are detailed within our fillings with the Securities and Exchange Commission including our fiscal year 2009 Form 10K filed on March 10 and our quarterly reports on Form 10Q. The company disclaims any obligation to publicly update or revise any such forward-looking statements to reflect events or circumstances that occur after this call. Our prepared remarks also will be presented within the requirements of FCC Reg G regarding Generally Accepted Accounting Principles or GAAP.
I would like to now turn the call over to Mr. Darin Billerbeck. Please go ahead, sir.
Thank you, David, and thanks to everyone for joining us on our call today. This is my first quarter since joining Lattice as President and CEO. I’m excited to be part of the Lattice team and look forward to the challenge of profitably growing our company. One of the most frequent questions I get asked has to do with my observation since joining Lattice. My response is I’m highly impressed with the people not just those in the U.S. but our workforce globally. Additionally, I’m impressed by our overall market line up including the recently launched MachXO2 family. Last but not least I’m pleased by the previous changes we made to our distribution network that will create more sales opportunities.
Lattice is clearly well positioned for the next 12 to 18 months in the low density PLD and mid range FPGA markets. We have a strong line up of low cost, low power and high convenience products that is evidenced by the early wins from our non-volatile MachXO2 and broad acceptance of our mid range LatticeECP3 an area where we will see upside and we will focus on is improving the efficiency of our R&D processes. This is not an issue of spending more on R&D but getting more out of the money we spend for Lattice it’s about delivering solutions defined as a combination of the right software and hardware (inaudible) customers on budget and on schedule.
Another thing that we have learned working at large companies and small innovation companies is that one size does not fit all when it comes to companywide processes and systems. At Lattice we will balance a laser focus on where we win follow it up with time of decisions, crisp executive and no bureaucracy. In terms of specific results for the fourth quarter revenue of $73.1 million was down 5% from $77.1 million in Q3 2010, while up 33% from $55.1 million in Q4 of 2009. Gross margin came in at 62.7% compared to 59.1% in Q3 2010 and 55.3% in Q4 2009.
The fourth quarter was in line with guidance as strength in the consumer industrial and other end markets was offset by the weakness in communications market. As some customers suggest that there is short-term inventory. Our turns in Q4 2010 came in as expected on a dollar basis with higher than expected contributions from mature products. Turns in non-communication areas including industrial and some military also come in as expected. As noted in our release revenue and margin benefited from higher sequential sales in a mature product category. This segment has more recently had several strong quarters of growth with the exception being Q3 and is reasonable to expect further fluctuation in mature products as mature products typically decline over the long run.