Lattice Semiconductor's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Lattice Semiconductor Corporation (LSCC)

Q1 2012 Earnings Call

April 19, 2012 6:00 PM ET


David Pasquale – Global IR Partners

Darin Billerbeck – President and CEO

Joseph Bedewi – Corporate VP and CFO


Tristan Gerra – Tristan Gerra

Ian Ing

Richard Shannon

Sundeep Bajikar

Ruben Roy

Nathan Johnsen

Bill Dezellem

David Duley

Brad Rosenbaum

Darin Billerbeck



Good afternoon, my name is Allie and I’ll be your conference operator today. At this time I would like to welcome everyone to Lattice Semiconductor’s First Quarter 2011 Conference Call. All lines have been placed on mute to prevent any background noise. After this speaker’s remarks there will be a question and answer session. (Operator Instructions). I would now like to turn the conference over to your host Mr. 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 2011 Results Conference Call. Joining us from the company today are Mr. Darin G. Billerbeck, the company’s President and CEO, and Mr. Joseph Bedewi, Lattice’s 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 or you can get a copy of the release off of the Investor Relations section of Lattice Semiconductor’s website.

Before we begin the formal remarks, I’ll 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 2012. If at any such time after this call we communicate any material changes to this guidance, we intend that such updates will be done using a public forum such as a press release or publicly-announced conference call.

The matters that we discuss today, other than historical information, including 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 2010 Form 10-K filled on March 11 in our quarterly reports on Form 10-Q. The company disclaims any obligation of publicly update or revised any such forward-looking statements to reflects events or circumstances that occur after this call.

Our prepared remarks also will be presented within the requirement of SEC Regulation G regarding generally accepted accounting principles for GAAP. I would like to now turn the call over to Mr. Darin Billerbeck. Please go ahead, sir.

Darin Billerbeck

Thank you, David. And thanks to everybody for joining us on the call today. The first quarter developed generally as we expected to. There were no major surprises in our core market or geographies although distribution continues to be weak. We saw varying degrees of order strength on customer by customer basis. All the inventory level and those of our distributors remained healthy.

Our backlog improved through the quarter as we began to see increased sales activities for Q2 and beyond. The backlog improvement aligned with the industry expectation for a stronger second half of the year.

In terms of Q1 revenue was $71.7 million of 2.2% of Q4. This is in line with our prior guidance reflecting a softening of demand and worldwide distribution. Gross margin was at the low end of our guidance reflecting customer mixture, lower revenue and SiliconBlue acquisition cost, which combined offset our prior restructuring effort.

In terms of key accomplishments in the quarter we substantially completed the integration of our SiliconBlue acquisition. We began marketing our new latest ECT4 and ice product line and expanded our traction of ECP3, which added support for video cameras and 3G applications. In addition we attained meaningful traction with market shipment.

With regards SiliconBlue we now have innovative sales operations and R&D teams. Customers can (inaudible) order iCE products through any later sales person rep or distribution channel. Culturally, the integration process has been a very positive experience for our employees as everyone has worked together to take the best from both companies. Overall, we are highly pleased with our progress of our integration team and their ability to execute to our 100-day integration plan.

On the new product front, we are excited about our ECP4 launch. Given the success of our award winning ECP3 product, we have high expectations for ECP4. ECP4 is our new low cost, low power 6 gig SERDES product for the wireless LTE comms market. We also announced a series of important milestone achievements and new developments in Q1. These included reaching our $20 million programmable mixed signal product shipment, extending the power, package size and performance of our popular ECP3 SPJ family, continuing to expand support for the consumer segment including several advances for 3D and video camera application.

We are currently shipping production on our iCE40 product to our mobile consumer customers. This is significant as we’re driving to complete the transition from iCE65 to iCE40 by the end of Q3. Finally, we announced our first MIPI BIF solution in support of the mobile product chipset standard.

In terms of adding color for the quarter, the revenue mix of New, Mainstream and Mature was 16%, 53% and 31% of revenue respectively in Q1. These lifecycle categories reflect updated classifications. Revenue from our new products were up 38% quarter-on-quarter, reflecting strength in our ECP3 product shipments in the communications market.

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