Lattice Semiconductor Corporation (LSCC)

Q1 2010 Earnings Call Transcript

April 22, 2010 5:00 pm ET

Executives

David Pasquale – IR, Global IR Partners

Bruno Guilmart – President & CEO

Michael Potter – Corporate VP & CFO

Analysts

Tristan Gerra – Robert W. Baird

Richard Shannon – Northland Securities

Apurva Patel – Ticonderoga Securities

Ruben Roy – Pacific Crest Securities

Irea Kall – Eaton Vance

Greg Weaver – Invicta Capital

David Duley – Steelhead Securities

Josh Goldberg – G2

Presentation

Operator

Good afternoon. My name is Vinita and I will be your conference operator today. At this time, I’d like to welcome everyone to the Lattice Semiconductor first 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) As a reminder today's call will be available for replay. The conference ID number is 66-33-47-76. The number to dial-in for the replay is 706-645-9291.

At this time, I'd like to turn the call over to David Pasquale of Global IR Partners. Sir, you may begin your conference.

David Pasquale

Thank you, operator. Welcome everyone to Lattice Semiconductor’s first quarter 2010 results conference call. Joining us from the Company today are Mr. Bruno Guilmart, the Company’s President and CEO, and Mr. Michael G. Potter Lattice’s Corporate Vice President and Chief Financial Officer. 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 e-mail Global IR Partners using lscc@globalirpartners.com or you can get a copy of the release off the Investor Relations section of Lattice Semiconductor’s Web site.

Before we begin the formal remarks, I will review the Safe Harbor statement. It is our intention that this call will comply with the requirements of SEC Regulation FD. This call includes and constitutes the Company's official guidance for the second quarter of fiscal 2010.

If at any time after this call, we communicate any material changes to this guidance, we intend that such updates will be done using a public form, such as a press release or 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 in our filings with the Securities and Exchange Commission, including our fiscal year 2009 Form 10-K filed on March 10 and our quarterly reports on Form 10-Q. The Company disclaims any obligation to publicly update or revise any such forward-looking statements to reflect the events or circumstances that occur after this call.

Our prepared remarks will also be presented within the requirements of SEC Regulation G regarding Generally Accepted Accounting Principles or GAAP.

I will now turn the call over to Mr. Bruno Guilmart. Please go ahead, sir.

Bruno Guilmart

Thank you, David and thank you everyone for joining our call today. Our results again exceeded our quarterly related guidance .We believe that these results which show evidence of the measure of a broad-based global economic recovery, also continued to evaluate the business model and strategy where we implemented to achieve both robust and sustainable profitability at Lattice. Specifically, during the quarter, we achieved revenue growth of 28% compared to 4Q'09 and 63% compared to a year ago quarter.

Our order bookings remain strong throughout the quarter and we strictly manage our inventory, exceeding the quarter with lean inventory levels. We are very pleased to have recorded our second consecutive quarter of profitability. With that said, we think our business can achieve much more and we will continue to aggressively pursue growth opportunities, improve (inaudible) efficiencies and higher profitability

In terms of highlights all end markets, geographies, product lines grew sequentially. In fact, Q1 was the strongest quarter ever for our new FPGAs, MachXO family and our mixing of products. The MachXO products are on track became the Company’s biggest product family this year. All geographies and markets experienced double-digit growth.

Based on our results we believe that we are gaining market share and we are optimistic about our business moving forward. Our strategic focus on high value and low power solutions continues to gain traction as customers seek to optimize costs and power consumption of their designs.

We continued to build momentum with our XO, ECP3, XP2 and Power Manager family with season wins in communications, computing and consumers. In addition, as part of our ongoing commitment to strengthen our distribution channels we have recently announced the addition of Nu Horizon electronics for our North American and European regions. Nu Horizon was already distributed in Asia.

We expect that Nu Horizon will allocate back technical resources to Lattice and leverage its proven worldwide distribution network to help us generate new demand and better serve our existing customers.

We presently do not foresee any other major changes to our distribution network that there is always subject to any future opportunities arising that would permit us to further strengthen our sales channels.

We officially opened our Singapore operations center last February and already have close to 20 local employees actively contributing to the further streamlining of our supply chain.

With over two-third of our shipments now to Asia, these efforts will help both lower our costs and benefit our customers. In addition, we now shipped over 90% of our products from Singapore and our operating results this quarter include the benefit of our warehouse move, prominently reducing shipping expenses.

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