Lattice Semiconductor Corporation · NASDAQ:LSCC
Lattice Semiconductor — Q3 2017 Earnings Presentation
17 slides from Lattice Semiconductor's earnings presentation, Nov 7, 2017
Slide 1: Q3 2017 Earnings Call
Q3 2017 Earnings Call November 2017 LATTICE SEMICONDUCTOR Exhibit 99.2
Slide 2: Safe Harbor
[2] Safe Harbor This presentation contains forward-looking statements that involve estimates, assumptions, risks and uncertainties, including statements relating to our belief that we have a number of other cost savings actions that are well underway and expected to benefit the Company in 2018, putt
Slide 3: Q3 2017 Summary
[3] Q3 2017 Summary GAAP NON-GAAP Q3 2017 Q2 2017 Change Q3 2017 Q2 2017 Change Revenue $92.0M $94.1M -$2.1M $92.0M $94.1M -$2.1M Gross Margin % 58.0% 54.4% +3.6% 58.1% 54.6% +3.5% OPEX $90.8M $59.9M +$30.9M $44.6M $46.0M -$1.4M OP INC (loss) $(37.5)M $(8.7)M -$28.8M $8.9M $5.4M +$3.5M OP INC (loss)
Slide 4: Recent Business Highlights
[4] Recent Business Highlights Lattice's iCE40 FPGA Continues Impressive Design Win Track Record Valve selected Lattice’s low power and low cost iCE40™. iCE40 significantly reduces the number of signals that need to be routed from sensors to the applications processor / microcontrollers, which in tu
Slide 5: Lattice's Pathway to Growth & Profitability
[5] Edge connectivity drives stable base business growth Edge computing accelerates future growth Stability & growth drive solid financial returns Lattice’s Pathway to Growth & Profitability EDGE CONNECTIVITY EDGE COMPUTING FINANCIAL GROWTH $
Slide 6: Decades of Leadership for Stability
[6] Decades of Leadership for Stability Control Stability Control, Connectivity and Computing for Edge Intelligence Control PLDs Financial Stability Edge Incumbency
Slide 7: Edge Connectivity for Growth
[7] Edge Connectivity for Growth Control, Connectivity and Computing for Edge Intelligence Control Connectivity Growth Edge Connectivity Proven Growth Driver Leveraging Acquisitions Control PLDs Financial Stability Edge Incumbency
Slide 8: Edge Computing for the Future
[8] Edge Computing for the Future Control, Connectivity and Computing for Edge Intelligence Control Connectivity Compute Edge Computing Future Growth Driver New Market Needs Existing Lattice Products Edge Connectivity Proven Growth Driver Leveraging Acquisitions Control PLDs Financial Stability Edge
Slide 9: Edge Computing Applications
[9] Edge Computing Applications Wide Range of Requirements Face detection Smartphones Wearables <10 mWs <$1 ~1 BOPS Speech recognition Smart speakers AR/VR <500 mWs <$3 ~10 BOPS License plate recognition Surveillance cameras Drones <1W <$5 ~100 BOPS Fault detection Machine vision Robotics <3W <$10 ~
Slide 10: Q3 2017 Financial Highlights
[10] 99.2 113.2 118.1 104.6 94.1 92.0 $0 $30 $60 $90 $120 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Q3 2017 Financial Highlights Non-GAAP Revenue ($M) 50.8 52.9 45.1 47.7 46 44.6 $0 $20 $40 $60 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Non-GAAP OPEX ($M) Non-GAAP Gross Margin (%) % Q3 2017 Revenue was $92.0 million Q3 re
Slide 11: Diversified Customer Base Provides Stability
[11] Diversified Customer Base Provides Stability Customer Diversification 1 CUSTOMER 2 CUSTOMERS 1 CUSTOMER 10% Customer Count % of Revenue from Top 20 Customers
Slide 12: Diversified Markets for Stability and Growth
[12] Diversified Markets for Stability and Growth PLD MARKET CAGR* 2016 – 2021 Consumer +6% Industrial +10% Automotive +11% Communications +0% Compute +6% *IHS Markit WW Semi Shipments Q2’17 Product Revenue by Market Co n tr o l E d g e Co n n e cti v it y E d g e Co m p u ti n g
Slide 13: Executing to Gross Margin Model
[13] Executing to Gross Margin Model F in a n cial M o d e l T a rg e t M id 5 0 ’s Lattice Gross Margin GM Range Consumer 40% - 50% Comms & Compute 50% - 60% Industrial & Auto 65% - 75% IP & Services 85% - 95%
Slide 14: Significantly Reducing OpEx
[14] Significantly Reducing OpEx Growth Plans Achievable with This Level of Spending Headcount actions taken & other cost structure improvement well underway Reductions indexed to base business New product investments funded 8% 8-9% 7-9% Lattice OpEx** ($M) * Based on Company Estimates ** **Non-GAAP
Slide 15: Improving Liquidity & Cash Flow
[15] Improving Liquidity & Cash Flow Priority #1 is to Pay Down the Debt Net Debt = debt minus cash 2018 Expectations Triple digit EBITDA Enables $50M to $60M in debt reduction Improved leverage ratio ** * Based on Company Estimates
Slide 16: Q4 2017 Financial Guidance
[16] Q4 2017 Financial Guidance In Millions Low Midpoint High Revenue $92M $95M $97M GAAP & Non-GAAP Gross margin % 54% 56% 58% GAAP Operating expenses $53M $54M $55M Amortization of acquired intangible assets -2% $5M +2% Restructuring charges -2% $3M +2% Stock-based compensation - operations -2% $2
Slide 17: Lattice's Pathway to Growth and Profitability
[17] Edge connectivity drives stable base business growth Edge computing accelerates future growth Stability & growth drive solid financial returns Lattice Semiconductor Pathway to Growth and Profitability EDGE CONNECTIVITY EDGE COMPUTING FINANCIAL GROWTH $
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