UNITED STATES SECURITIES AND EXCHANGE COMMISSION
|
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Washington, D.C. 20549
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FORM 10-K
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(Mark One)
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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 30, 2017
|
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|
or
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|||
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO __________
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Delaware
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93-0835214
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(State of Incorporation)
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(I.R.S. Employer Identification Number)
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111 SW Fifth Ave, Ste 700, Portland, OR
|
97204
|
(Address of principal executive offices)
|
(Zip Code)
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(Title of Class)
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(Name of each exchange on which registered)
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Common Stock, $.01 par value
|
NASDAQ Global Select Market
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Large accelerated filer
¨
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Accelerated filer
þ
|
Non-accelerated filer
¨
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Smaller reporting company
¨
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Emerging growth company
¨
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|
Aggregate market value of voting stock held by non-affiliates of the registrant as of July 1, 2017
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$
|
613,585,307
|
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Number of shares of common stock outstanding as of March 2, 2018
|
124,210,928
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Page
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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||
|
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•
|
More intelligence and computing power. Products need to be always-on and always-aware.
|
•
|
Longer battery lives for handheld devices and reduced energy consumption for plugged-in devices.
|
•
|
Real-time transmission of higher resolution video content on larger screen sizes.
|
•
|
Fast design cycles. Products must be quickly and easily differentiated.
|
•
|
Smaller form factors. Products need to lay flatter on the wall or fit more easily in people’s pockets.
|
•
|
Various levels of video processing and analytics.
|
•
|
FPGAs
bring multiple benefits to our customers. An FPGA’s parallel architecture enables faster processing than competing devices, such as processors, allowing for a user experience with shorter pauses and fewer delays. Our FPGAs are among the lowest power in the industry, enabling the application processor and other high power components to remain dormant longer, resulting in longer battery life. Finally, with some of the industry’s smallest packages, we enable thinner end products.
|
•
|
mmWave Devices
such as our SiBEAM Snap and WirelessHD products simplify connectivity. SiBEAM Snap is a wireless connection technology that can transfer a high definition movie to a mobile device in seconds while eliminating the connector port. WirelessHD products enable laptops, projectors, accessories, and other consumer products to communicate wirelessly at very high speeds.
|
•
|
A full suite of standards-based HDMI and MHL
Video Connectivity ASSPs
enable the immersive audio-visual experience that consumers demand.
|
•
|
Intellectual Property Licensing
enables customers who wish to develop a proprietary solution to use our proven technology.
|
•
|
As data center servers become smaller and power costs become more dominant, there is a growing requirement for smaller form factors with lower installed and operational costs. Lattice’s low cost per look up table, and high I/O count enable customers to use fewer devices in much smaller spaces.
|
•
|
Additionally, they need simplified control logic, enhanced security, and rigorous power and thermal management.
|
•
|
Networks typically require progressively higher bandwidth and increased reliability as more data is demanded by consumer and other connected devices. Bandwidth demands are also driven by the rapid transition to a cloud-based infrastructure.
|
•
|
As wireless cells become more compact without fans, there is a growing requirement for smaller form factors optimized for low power consumption.
|
•
|
To be able to connect high speed fiber to homes, campuses or city infrastructures, mmWave products enable the lowest cost, highest throughput solutions.
|
•
|
FPGAs
optimized for Input-Output (I/O) expansion, low cost look up tables, hardware acceleration, hardware management, and affordability. Our FPGAs consume very low power, which reduces operating costs. Their small form factor enables higher functional density in less space. Finally, our FPGAs are I/O rich, which allows for more connections with system application specific integrated circuits (ASICs) and ASSPs. Our programmable mixed signal devices make power and thermal management easy and reliable.
|
•
|
mmWave transceivers
feature high-integration, low power design, and internal / external antenna options. Our beam-steering technology makes point-to-point links smaller, cheaper, more reliable, lower power and easier to install, enabling backhaul at “wireless fiber” data rates.
|
•
|
As smart factories develop, sensors are proliferating and machine vision is becoming higher definition, in turn requiring increasing amounts of data to be gathered, connected, and processed.
|
•
|
Cars, trucks, and trains are also becoming smarter and more connected. Drivers and passengers are demanding better in-cabin experiences including entertainment, diagnostics, and enhanced safety — often involving multiple displays, cameras, and sensors.
|
•
|
In addition, as factories and automotive continue their evolution of computerization, lower power, faster time to design in and market, along with lower costs are becoming more of the normal.
|
•
|
Our small-sized, low-power
FPGAs
not only provide the I/O expansion, bridging, connectivity, and processing inherent in FPGAs to the full Industrial Market, but they also form the backbone of several integrated solutions, including complete HD camera and DVR solutions on a single FPGA device and Human-Machine Interfaces (HMI) on a chip.
|
•
|
Performance-tested and regulatory-approved
mmWave modules
greatly reduce latency response and the complexity of adding high-performance wireless video capabilities to displays, without the wires that clutter a factory floor or medical suite.
|
•
|
Automotive qualified MHL / HDMI
Video Connectivity ASSPs
allow consumers to stream UHD video from their mobile phones to their in-car entertainment system, delivering the ultimate connected car experience.
|
•
|
The ECP families
are our “Connectivity & Acceleration FPGAs.” They offer customers the lowest cost per gate, Digital Signal Processing (DSP) capability, and Serialize-Deserialize (SerDes) connectivity. ECP devices are optimized for the Communications and Computing market but also find significant use in the Industrial and Automotive market.
|
•
|
The MachXO families
are known as “Bridging and Expansion FPGAs.” They are control oriented and offer the lowest cost per I/O, along with the lowest cost per look up table. MachXO families are widely used across our three primary target markets: Communications and Computing, Industrial and Automotive, and Mobile and Consumer.
|
•
|
iCE40 families
are known as the “World’s Smallest FPGAs.” Their small size and ultra-low power make them the optimal products for customizing Consumer mobile and Industrial handheld products. The iCE40 UltraLite was named “Digital Semiconductor Product of the Year” by the 2015 Elektra European Electronics Industry Awards. In 2016, we released the latest member of the family, iCE40 UltraPlus, focused on smart phone and IoT edge devices.
|
•
|
CrossLink
was introduced in 2016 as the world’s first video “pASSP” (programmable Application Specific Standard Part). CrossLink combines the power and speed benefits of hardened video camera and display bridging cores with the flexibility of FPGA fabric. CrossLink was the 2016 recipient of the “Editor’s Choice Award” by EEPW magazine.
|
•
|
Programmable Mixed Signal devices
, such as our Platform Manger 2 and L-ASC10 combine programmable digital logic with analog functionality to help customers manage power, thermal, and control planes in real time.
|
•
|
While ASICs, ASSPs, and microcontrollers have historically dominated high-volume market segments through low cost and reduced power consumption, our FPGAs have become small enough with sufficiently low power consumption that we are now considered by customers in cases where they need the architectural benefits of FPGAs, namely programmability with its accelerated time-to-market and the speed that comes from parallelism. Not only can customers use FPGAs to add new features and support new standards, but if a customer’s design is not working as intended, the customer can quickly change it using the programmability of our FPGAs through software. In contrast, ASICs and ASSPs require time consuming and expensive redesign and fabrication. Against microcontrollers, we differentiate our products with smaller sized packages and higher performance.
|
•
|
Our main FPGA competitors are Xilinx and Intel. Both make FPGAs but are generally focused on the high-density end of the market, making devices that are up to a full order of magnitude larger than ours with the associated increases in power and size. We differentiate from them with ultra-low power and very small sized packages.
|
•
|
HDMI or MHL functionality offered in either discrete devices or integrated into system-on-a-chip products. These are offered by a small number of companies.
|
•
|
In-house semiconductor solutions designed by large consumer electronics OEMs.
|
•
|
Alternative HD connectivity technologies such as DisplayPort and MiraCast, which are offered by select companies.
|
•
|
Gigabit Connector
devices or wireless USB “eliminate the connectors on your mobile products.” Built with SiBEAM Snap technology, these devices connect consumer products to deliver up to 12 Gb/s of bi-directional bandwidth for ultra-fast data transfers and are effective across centimeter distances.
|
•
|
Our
Gigabit Indoor
devices and modules utilizing WiGig “cut the wires in home, office, and factory.” Geared around the Consumer and Industrial Markets these devices deliver "Blu-ray" quality video at 1080p and 4k20 resolutions with 5ms average latency and reach distances measured in meters.
|
•
|
Gigabit Outdoor
products provide “wireless fiber for network backhaul.” Gigabit-speed 60 GHz modules and devices address the need for high capacity wireless links in wireless broadband networks, urban LTE small cells and metro Wi-Fi hot spots, and other link applications. Achieving a range of 100’s of meters these devices provide the Communications market with ultra-high speed links for point-to-point connectivity.
|
1.
|
Standard IP Licensing
- these activities include our participation in two consortia for the licensing of HDMI and MHL technologies to customers who adopt the technology into their products and voluntarily report their usage and royalties. The royalties are split between consortia members, including us.
|
2.
|
IP Core Licensing
- some customers need Lattice’s technology for specific functions or features, but for various reasons are not able to use our silicon solutions. In those cases, we may sell them IP cores, which they can integrate into their own ASICs. In contrast to the use of consortia, these licensing activities are generally performed internally.
|
3.
|
Patent Monetization
- we sell certain patents from our portfolio generally for technology that we are no longer actively developing. The revenue from these sales generally consists of upfront payments and potential future royalties.
|
•
|
Product and Technology Sales
involve direct and channel sales of silicon based products with their associated solutions and services.
|
•
|
Intellectual Property Licensing
involves either the license or sale of intellectual property that we have developed, some of which we use in our products.
|
•
|
Purchase orders, consistent with common industry practices, can generally be revised or canceled up to 30 days before the scheduled delivery date without significant penalty.
|
•
|
Our backlog for sell-through distributors is valued at list price, which in most cases is substantially higher than the prices ultimately recognized as revenue.
|
•
|
A sizable portion of our revenue comes from our "turns business," where the product is ordered and delivered within the same quarter.
|
|
Year Ended
|
|
% Change in
|
|||||||||||||||||||||||
(In thousands)
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
|
2017
|
|
2016
|
|||||||||||||||||
Asia
|
$
|
277,638
|
|
|
72
|
%
|
|
$
|
305,093
|
|
|
71
|
%
|
|
$
|
308,534
|
|
|
76
|
%
|
|
(9
|
)
|
|
(1
|
)
|
Europe
|
44,547
|
|
|
12
|
|
|
59,835
|
|
|
14
|
|
|
55,596
|
|
|
14
|
|
|
(26
|
)
|
|
8
|
|
|||
Americas
|
63,776
|
|
|
16
|
|
|
62,126
|
|
|
15
|
|
|
41,836
|
|
|
10
|
|
|
3
|
|
|
48
|
|
|||
Total revenue
|
$
|
385,961
|
|
|
100
|
%
|
|
$
|
427,054
|
|
|
100
|
%
|
|
$
|
405,966
|
|
|
100
|
%
|
|
(10
|
)
|
|
5
|
|
•
|
timely completion and introduction of new product designs;
|
•
|
ability to generate new design opportunities and design wins, including those which result in sales of significant volume;
|
•
|
availability of specialized field application engineering resources supporting demand creation and customer adoption of new products;
|
•
|
ability to utilize advanced manufacturing process technologies;
|
•
|
achieving acceptable yields and obtaining adequate production capacity from our wafer foundries and assembly and test subcontractors;
|
•
|
ability to obtain advanced packaging;
|
•
|
availability of supporting software design tools;
|
•
|
utilization of predefined IP logic;
|
•
|
market acceptance of our MHL-enabled and wireless mobile products, and our 60 GHz wireless products;
|
•
|
customer acceptance of advanced features in our new products;
|
•
|
availability of competing alternative technologies; and
|
•
|
market acceptance of our customers' products.
|
•
|
we may be more vulnerable to economic downturns, less able to withstand competitive pressures, and less flexible in responding to changing business and economic conditions;
|
•
|
our cash flow from operations may be allocated to the payment of outstanding indebtedness, and not to research and development, operations or business growth;
|
•
|
we might not generate sufficient cash flow from operations or other sources to enable us to meet our payment obligations under the facility and to fund other liquidity needs;
|
•
|
our ability to make distributions to our stockholders in a sale or liquidation may be limited until any balance on the facility is repaid in full; and
|
•
|
our ability to incur additional debt, including for working capital, acquisitions, or other needs, is more limited.
|
•
|
changes in local economic conditions;
|
•
|
currency exchange rate volatility;
|
•
|
governmental stimulus packages, controls, and trade restrictions;
|
•
|
governmental policies that promote development and consumption of domestic products;
|
•
|
export license requirements, foreign trade compliance matters, and restrictions on the use of technology;
|
•
|
political instability, war, terrorism, or pandemic disease;
|
•
|
changes in tax rates, tariffs, or freight rates;
|
•
|
reduced protection for intellectual property rights;
|
•
|
longer receivable collection periods;
|
•
|
natural or man-made disasters in the countries where we sell our products;
|
•
|
interruptions in transportation;
|
•
|
interruptions in the global communication infrastructure; and
|
•
|
labor regulations.
|
•
|
meet the market windows for consumer products;
|
•
|
predict technology and market trends;
|
•
|
develop IP cores to meet emerging market needs;
|
•
|
develop products on a timely basis;
|
•
|
maintain multiple design wins across different markets and customers to dampen the effects of market volatility;
|
•
|
be designed into our customers' products; and
|
•
|
avoid cancellations or delay of products.
|
•
|
our ongoing business may be disrupted and our management's attention may be diverted by investment, acquisition, transition, or integration activities;
|
•
|
an acquisition or strategic investment may not perform as well or further our business strategy as we expected, and we may not integrate an acquired company or technology as successfully as we expected;
|
•
|
we may incur unexpected costs, claims, or liabilities that we assume from an acquired company or technology or that are otherwise related to an acquisition;
|
•
|
we may discover adverse conditions post-acquisition that are not covered by representations and warranties;
|
•
|
we may increase some of our risks, such as increasing customer or end product concentration;
|
•
|
we may have difficulty incorporating acquired technologies or products with our existing product lines;
|
•
|
we may have higher than anticipated costs in continuing support and development of acquired products, and in general and administrative functions that support such products;
|
•
|
we may have difficulty integrating and retaining key personnel;
|
•
|
we may have difficulty integrating business systems, processes, and tools, such as accounting software, inventory management systems, or revenue systems which may have an adverse effect on our business;
|
•
|
our liquidity and/or capital structure may be adversely impacted;
|
•
|
our strategic investments may not perform as expected;
|
•
|
we may experience unexpected changes in how we are required to account for our acquisitions and strategic investments pursuant to U.S. GAAP;
|
•
|
we may have difficulty integrating acquired entities into our global tax structure with potentially negative impacts on our effective tax rate;
|
•
|
if the acquisition or strategic investment does not perform as projected, we might take a charge to earnings due to impaired goodwill;
|
•
|
we may divest certain assets of acquired businesses, leading to charges against earnings;
|
•
|
we may experience unexpected negative responses from vendors or customers to the acquisition, which may adversely impact our operations; and
|
•
|
we may have difficulty integrating the processes and control environment.
|
|
Low
|
|
High
|
||||
2017:
|
|
|
|
||||
First Quarter
|
$
|
6.76
|
|
|
$
|
7.55
|
|
Second Quarter
|
6.51
|
|
|
7.10
|
|
||
Third Quarter
|
5.05
|
|
|
7.03
|
|
||
Fourth Quarter
|
5.14
|
|
|
6.60
|
|
||
2016:
|
|
|
|
||||
First Quarter
|
$
|
4.02
|
|
|
$
|
6.67
|
|
Second Quarter
|
4.89
|
|
|
6.47
|
|
||
Third Quarter
|
5.21
|
|
|
6.69
|
|
||
Fourth Quarter
|
5.91
|
|
|
7.99
|
|
|
Year Ended
|
|
% Change in
|
|||||||||||||
(In thousands)
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
|
2017
|
|
2016
|
|||||||
Revenue
|
$
|
385,961
|
|
|
$
|
427,054
|
|
|
$
|
405,966
|
|
|
(10
|
)
|
|
5
|
Communications and Computing
|
Mobile and Consumer
|
Industrial and Automotive
|
Licensing and Services
|
Wireless
|
Smartphones
|
Security and Surveillance
|
IP Royalties
|
Wireline
|
Cameras
|
Machine Vision
|
Adopter Fees
|
Data Backhaul
|
Displays
|
Industrial Automation
|
IP Licenses
|
Computing
|
Tablets
|
Human Computer Interaction
|
Patent Sales
|
Servers
|
Wearables
|
Automotive
|
Testing Services
|
Data Storage
|
Televisions and Home Theater
|
Drones
|
|
|
Year Ended
|
|
% Change in
|
|||||||||||||||||||||||
(In thousands)
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
|
2017
|
|
2016
|
|||||||||||||||||
Asia
|
$
|
277,638
|
|
|
72
|
%
|
|
$
|
305,093
|
|
|
71
|
%
|
|
$
|
308,534
|
|
|
76
|
%
|
|
(9
|
)
|
|
(1
|
)
|
Europe
|
44,547
|
|
|
12
|
|
|
59,835
|
|
|
14
|
|
|
55,596
|
|
|
14
|
|
|
(26
|
)
|
|
8
|
|
|||
Americas
|
63,776
|
|
|
16
|
|
|
62,126
|
|
|
15
|
|
|
41,836
|
|
|
10
|
|
|
3
|
|
|
48
|
|
|||
Total revenue
|
$
|
385,961
|
|
|
100
|
%
|
|
$
|
427,054
|
|
|
100
|
%
|
|
$
|
405,966
|
|
|
100
|
%
|
|
(10
|
)
|
|
5
|
|
|
Year Ended
|
|||||||
|
December 30,
2017 |
|
December 31,
2016 |
|
January 2,
2016 |
|||
Arrow Electronics Inc.
|
24
|
%
|
|
24
|
%
|
|
20
|
%
|
Weikeng Group
|
27
|
|
|
22
|
|
|
12
|
|
All others
|
15
|
|
|
15
|
|
|
13
|
|
All sell-through distributors
|
66
|
%
|
|
61
|
%
|
|
45
|
%
|
|
Year Ended
|
||||||||||
(In thousands)
|
December 30,
2017 |
|
December 31,
2016 |
|
January 2,
2016 |
||||||
Gross margin
|
$
|
216,579
|
|
|
$
|
246,434
|
|
|
$
|
219,909
|
|
Percentage of revenue
|
56.1
|
%
|
|
57.7
|
%
|
|
54.2
|
%
|
|||
Product gross margin %
|
53.8
|
%
|
|
53.9
|
%
|
|
49.9
|
%
|
|||
Licensing and services gross margin %
|
84.0
|
%
|
|
98.2
|
%
|
|
96.9
|
%
|
|
Year Ended
|
|
% Change in
|
||||||||||||||
(In thousands)
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
|
2017
|
|
2016
|
||||||||
Research and development
|
$
|
103,357
|
|
|
$
|
117,518
|
|
|
$
|
136,868
|
|
|
(12.1
|
)%
|
|
(14.1
|
)%
|
Percentage of revenue
|
26.8
|
%
|
|
27.5
|
%
|
|
33.7
|
%
|
|
|
|
|
|||||
Mask costs included in Research and development
|
$
|
931
|
|
|
$
|
3,328
|
|
|
$
|
5,770
|
|
|
(72.0
|
)%
|
|
(42.3
|
)%
|
|
Year Ended
|
|
% Change in
|
||||||||||||||
(In thousands)
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
|
2017
|
|
2016
|
||||||||
Selling, general, and administrative
|
$
|
90,718
|
|
|
$
|
98,602
|
|
|
$
|
97,349
|
|
|
(8.0
|
)%
|
|
1.3
|
%
|
Percentage of revenue
|
23.5
|
%
|
|
23.1
|
%
|
|
24.0
|
%
|
|
|
|
|
|
Year Ended
|
|
% Change in
|
||||||||||||||
(In thousands)
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
|
2017
|
|
2016
|
||||||||
Amortization of acquired intangible assets
|
$
|
31,340
|
|
|
$
|
33,575
|
|
|
$
|
29,580
|
|
|
(6.7
|
)%
|
|
13.5
|
%
|
Percentage of revenue
|
8.1
|
%
|
|
7.9
|
%
|
|
7.3
|
%
|
|
|
|
|
|
Year Ended
|
|
% Change in
|
||||||||||||||
(In thousands)
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
|
2017
|
|
2016
|
||||||||
Restructuring charges
|
$
|
7,196
|
|
|
$
|
9,267
|
|
|
$
|
19,239
|
|
|
(22.3
|
)%
|
|
(51.8
|
)%
|
Percentage of revenue
|
1.9
|
%
|
|
2.2
|
%
|
|
4.7
|
%
|
|
|
|
|
|
Year Ended
|
|
% Change in
|
||||||||||||||
(In thousands)
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
|
2017
|
|
2016
|
||||||||
Acquisition related charges
|
$
|
3,781
|
|
|
$
|
6,305
|
|
|
$
|
22,450
|
|
|
(40.0
|
)%
|
|
(71.9
|
)%
|
Percentage of revenue
|
1.0
|
%
|
|
1.5
|
%
|
|
5.5
|
%
|
|
|
|
|
|
Year Ended
|
|
% Change in
|
|||||||||||||
(In thousands)
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
|
2017
|
|
2016
|
|||||||
Impairment of goodwill and acquired intangible assets
|
$
|
32,431
|
|
|
$
|
7,866
|
|
|
$
|
21,655
|
|
|
+100%
|
|
(63.7
|
)%
|
Percentage of revenue
|
8.4
|
%
|
|
1.8
|
%
|
|
5.3
|
%
|
|
|
|
|
|
Year Ended
|
|
% Change in
|
||||||||||||||
(In thousands)
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
|
2017
|
|
2016
|
||||||||
Interest expense
|
$
|
(18,807
|
)
|
|
$
|
(20,327
|
)
|
|
$
|
(18,389
|
)
|
|
(7.5
|
)%
|
|
10.5
|
%
|
Percentage of revenue
|
(4.9
|
)%
|
|
(4.8
|
)%
|
|
(4.5
|
)%
|
|
|
|
|
|
Year Ended
|
|
% Change in
|
||||||||||||
(In thousands)
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
|
2017
|
|
2016
|
||||||
Other (expense) income, net
|
$
|
(3,286
|
)
|
|
$
|
2,844
|
|
|
$
|
(1,072
|
)
|
|
(100+)%
|
|
100+%
|
Percentage of revenue
|
(0.9
|
)%
|
|
0.7
|
%
|
|
(0.3
|
)%
|
|
|
|
|
|
Year Ended
|
|
% Change in
|
|||||||||||||
(In thousands)
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
|
2017
|
|
2016
|
|||||||
Income tax expense
|
$
|
849
|
|
|
$
|
9,917
|
|
|
$
|
32,540
|
|
|
(91.4
|
)%
|
|
(69.5)%
|
(In thousands)
|
December 30, 2017
|
|
December 31, 2016
|
|
$ Change
|
||||||
Cash and cash equivalents
|
$
|
106,815
|
|
|
$
|
106,552
|
|
|
$
|
263
|
|
Short-term marketable securities
|
4,982
|
|
|
10,308
|
|
|
(5,326
|
)
|
|||
Total Cash and cash equivalents and Short-term marketable securities
|
$
|
111,797
|
|
|
$
|
116,860
|
|
|
$
|
(5,063
|
)
|
(In thousands)
|
December 30, 2017
|
|
December 31, 2016
|
|
$Change
|
|
%Change
|
|||||||
Accounts receivable, net
|
$
|
55,104
|
|
|
$
|
99,637
|
|
|
$
|
(44,533
|
)
|
|
(44.7
|
)%
|
Days sales outstanding - Overall
|
53
|
|
|
77
|
|
|
(24
|
)
|
|
|
||||
Days sales outstanding - Product
|
53
|
|
|
75
|
|
|
(22
|
)
|
|
|
||||
Days sales outstanding - Licensing and services
|
29
|
|
|
106
|
|
|
(77
|
)
|
|
|
(In thousands)
|
December 30, 2017
|
|
December 31, 2016
|
|
$Change
|
|
%Change
|
|||||||
Inventories
|
$
|
79,903
|
|
|
$
|
79,168
|
|
|
$
|
735
|
|
|
0.9
|
%
|
Months of inventory on hand
|
5.4
|
|
|
4.3
|
|
|
1.1
|
|
|
|
(In thousands)
|
|
|
|
||||
Fiscal year
|
|
Operating leases (1)
|
Long-term Debt (2)
|
||||
2018
|
|
$
|
6,310
|
|
$
|
20,027
|
|
2019
|
|
4,784
|
|
41,366
|
|
||
2020
|
|
4,860
|
|
71,849
|
|
||
2021
|
|
4,654
|
|
219,966
|
|
||
2022
|
|
4,694
|
|
—
|
|
||
Thereafter
|
|
14,259
|
|
—
|
|
||
|
|
$
|
39,561
|
|
$
|
353,208
|
|
(In thousands, except per share amounts)
|
Year Ended
|
||||||||||
(unaudited)
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||
|
|
|
|
|
|
||||||
Revenue Reconciliation
|
|
|
|
|
|
||||||
GAAP Revenue
|
$
|
385,961
|
|
|
$
|
427,054
|
|
|
$
|
405,966
|
|
Acquisition related deferred revenue effect (1)
|
—
|
|
|
—
|
|
|
5,187
|
|
|||
Non-GAAP Revenue
|
$
|
385,961
|
|
|
$
|
427,054
|
|
|
$
|
411,153
|
|
|
|
|
|
|
|
||||||
Gross Margin Reconciliation
|
|
|
|
|
|
||||||
GAAP Gross margin
|
$
|
216,579
|
|
|
$
|
246,434
|
|
|
$
|
219,909
|
|
Acquisition related net deferred revenue effect (1) (2)
|
—
|
|
|
—
|
|
|
3,691
|
|
|||
Acquisition related inventory fair value effect (3)
|
—
|
|
|
523
|
|
|
6,078
|
|
|||
Stock-based compensation expense - gross margin
|
788
|
|
|
888
|
|
|
1,416
|
|
|||
Non-GAAP Gross margin
|
$
|
217,367
|
|
|
$
|
247,845
|
|
|
$
|
231,094
|
|
|
|
|
|
|
|
||||||
Gross Margin % Reconciliation
|
|
|
|
|
|
||||||
GAAP Gross margin %
|
56.1
|
%
|
|
57.7
|
%
|
|
54.2
|
%
|
|||
Cumulative effect of non-GAAP Gross Margin adjustments
|
0.2
|
%
|
|
0.3
|
%
|
|
2.0
|
%
|
|||
Non-GAAP Gross margin %
|
56.3
|
%
|
|
58.0
|
%
|
|
56.2
|
%
|
|||
|
|
|
|
|
|
||||||
Operating Expenses Reconciliation
|
|
|
|
|
|
||||||
GAAP Operating expenses
|
$
|
264,199
|
|
|
$
|
273,133
|
|
|
$
|
327,141
|
|
Amortization of acquired intangible assets
|
(31,340
|
)
|
|
(33,575
|
)
|
|
(29,580
|
)
|
|||
Restructuring charges
|
(7,196
|
)
|
|
(9,267
|
)
|
|
(19,239
|
)
|
|||
Acquisition related charges (4)
|
(3,781
|
)
|
|
(6,305
|
)
|
|
(22,450
|
)
|
|||
Impairment of goodwill and acquired intangible assets
|
(32,431
|
)
|
|
(7,866
|
)
|
|
(21,655
|
)
|
|||
Stock-based compensation expense - operations
|
(11,755
|
)
|
|
(15,325
|
)
|
|
(15,934
|
)
|
|||
Gain on sale of building
|
4,624
|
|
|
—
|
|
|
—
|
|
|||
Non-GAAP Operating expenses
|
$
|
182,320
|
|
|
$
|
200,795
|
|
|
$
|
218,283
|
|
|
|
|
|
|
|
||||||
(Loss) Income from Operations Reconciliation
|
|
|
|
|
|
||||||
GAAP Loss from operations
|
$
|
(47,620
|
)
|
|
$
|
(26,699
|
)
|
|
$
|
(107,232
|
)
|
Acquisition related net deferred revenue effect (1) (2)
|
—
|
|
|
—
|
|
|
3,691
|
|
|||
Acquisition related inventory fair value effect (3)
|
—
|
|
|
523
|
|
|
6,078
|
|
|||
Stock-based compensation expense - gross margin
|
788
|
|
|
888
|
|
|
1,416
|
|
|||
Amortization of acquired intangible assets
|
31,340
|
|
|
33,575
|
|
|
29,580
|
|
|||
Restructuring charges
|
7,196
|
|
|
9,267
|
|
|
19,239
|
|
|||
Acquisition related charges (4)
|
3,781
|
|
|
6,305
|
|
|
22,450
|
|
|||
Impairment of goodwill and acquired intangible assets
|
32,431
|
|
|
7,866
|
|
|
21,655
|
|
|||
Stock-based compensation expense - operations
|
11,755
|
|
|
15,325
|
|
|
15,934
|
|
|||
Gain on sale of building
|
(4,624
|
)
|
|
—
|
|
|
—
|
|
|||
Non-GAAP Income from operations
|
$
|
35,047
|
|
|
$
|
47,050
|
|
|
$
|
12,811
|
|
|
|
|
|
|
|
||||||
(1) Fair value adjustment to deferred revenue from purchase accounting
|
|||||||||||
(2) Fair value adjustment to deferred cost of sales from purchase accounting
|
|||||||||||
(3) Fair value adjustment for inventory step-up from purchase accounting
|
|||||||||||
(4) Includes legal fees and outside services that were related to our proposed acquisition by Canyon Bridge Acquisition Company, Inc.
|
|||||||||||
and stock-based compensation and severance costs related to change in control.
|
|
|
December 30, 2017
|
|
December 31, 2016
|
||||
Total cost of contracts for Japanese yen (thousands)
|
|
$
|
2,204
|
|
|
$
|
2,323
|
|
Number of contracts
|
|
2
|
|
|
2
|
|
||
Settlement month
|
|
June 2018
|
|
|
June 2017
|
|
|
Page
|
Consolidated Financial Statements:
|
|
(In thousands, except share and par value data)
|
December 30, 2017
|
|
December 31, 2016
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
106,815
|
|
|
$
|
106,552
|
|
Short-term marketable securities
|
4,982
|
|
|
10,308
|
|
||
Accounts receivable, net of allowance for doubtful accounts
|
55,104
|
|
|
99,637
|
|
||
Inventories
|
79,903
|
|
|
79,168
|
|
||
Prepaid expenses and other current assets
|
16,567
|
|
|
19,035
|
|
||
Total current assets
|
263,371
|
|
|
314,700
|
|
||
Property and equipment, net
|
40,423
|
|
|
49,481
|
|
||
Intangible assets, net
|
51,308
|
|
|
118,863
|
|
||
Goodwill
|
267,514
|
|
|
269,758
|
|
||
Deferred income taxes
|
198
|
|
|
372
|
|
||
Other long-term assets
|
13,147
|
|
|
13,709
|
|
||
Total assets
|
$
|
635,961
|
|
|
$
|
766,883
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses (includes restructuring)
|
$
|
54,405
|
|
|
$
|
80,933
|
|
Accrued payroll obligations
|
10,416
|
|
|
9,865
|
|
||
Current portion of long-term debt
|
1,508
|
|
|
33,767
|
|
||
Deferred income and allowances on sales to sell-through distributors
|
17,250
|
|
|
32,257
|
|
||
Deferred licensing and services revenue
|
68
|
|
|
728
|
|
||
Total current liabilities
|
83,647
|
|
|
157,550
|
|
||
Long-term debt
|
299,667
|
|
|
300,855
|
|
||
Other long-term liabilities
|
34,954
|
|
|
38,048
|
|
||
Total liabilities
|
418,268
|
|
|
496,453
|
|
||
Commitments and contingencies (Notes 13 and 20)
|
—
|
|
|
—
|
|
||
Stockholders' equity:
|
|
|
|
||||
Preferred stock, $.01 par value, 10,000,000 shares authorized, none issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $.01 par value, 300,000,000 shares authorized; 123,895,000 shares issued and outstanding as of December 30, 2017 and 121,645,000 shares issued and outstanding as of December 31, 2016
|
1,239
|
|
|
1,216
|
|
||
Additional paid-in capital
|
695,768
|
|
|
680,315
|
|
||
Accumulated deficit
|
(477,862
|
)
|
|
(406,945
|
)
|
||
Accumulated other comprehensive loss
|
(1,452
|
)
|
|
(4,156
|
)
|
||
Total stockholders' equity
|
217,693
|
|
|
270,430
|
|
||
Total liabilities and stockholders' equity
|
$
|
635,961
|
|
|
$
|
766,883
|
|
|
|
Year Ended
|
||||||||||
(In thousands, except per share data)
|
|
December 30, 2017
|
|
December 31,
2016 |
|
January 2, 2016
|
||||||
Revenue:
|
|
|
|
|
|
|
||||||
Product
|
|
$
|
356,502
|
|
|
$
|
390,704
|
|
|
$
|
369,200
|
|
Licensing and services
|
|
29,459
|
|
|
36,350
|
|
|
36,766
|
|
|||
Total revenue
|
|
385,961
|
|
|
427,054
|
|
|
405,966
|
|
|||
Costs and expenses:
|
|
|
|
|
|
|
||||||
Cost of product revenue
|
|
164,657
|
|
|
179,983
|
|
|
184,914
|
|
|||
Cost of licensing and services revenue
|
|
4,725
|
|
|
637
|
|
|
1,143
|
|
|||
Research and development
|
|
103,357
|
|
|
117,518
|
|
|
136,868
|
|
|||
Selling, general, and administrative
|
|
90,718
|
|
|
98,602
|
|
|
97,349
|
|
|||
Amortization of acquired intangible assets
|
|
31,340
|
|
|
33,575
|
|
|
29,580
|
|
|||
Restructuring charges
|
|
7,196
|
|
|
9,267
|
|
|
19,239
|
|
|||
Acquisition related charges
|
|
3,781
|
|
|
6,305
|
|
|
22,450
|
|
|||
Impairment of goodwill and acquired intangible assets
|
|
32,431
|
|
|
7,866
|
|
|
21,655
|
|
|||
Gain on sale of building
|
|
(4,624
|
)
|
|
—
|
|
|
—
|
|
|||
Total costs and expenses
|
|
433,581
|
|
|
453,753
|
|
|
513,198
|
|
|||
Loss from operations
|
|
(47,620
|
)
|
|
(26,699
|
)
|
|
(107,232
|
)
|
|||
Interest expense
|
|
(18,807
|
)
|
|
(20,327
|
)
|
|
(18,389
|
)
|
|||
Other (expense) income, net
|
|
(3,286
|
)
|
|
2,844
|
|
|
(1,072
|
)
|
|||
Loss before income taxes
|
|
(69,713
|
)
|
|
(44,182
|
)
|
|
(126,693
|
)
|
|||
Income tax expense
|
|
849
|
|
|
9,917
|
|
|
32,540
|
|
|||
Net loss
|
|
$
|
(70,562
|
)
|
|
$
|
(54,099
|
)
|
|
$
|
(159,233
|
)
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Net loss per share, basic and diluted
|
|
$
|
(0.58
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
(1.36
|
)
|
|
|
|
|
|
|
|
||||||
Shares used in per share calculations, basic and diluted
|
|
122,677
|
|
|
119,994
|
|
|
117,387
|
|
|
|
Year Ended
|
||||||||||
(In thousands)
|
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||
Net loss
|
|
$
|
(70,562
|
)
|
|
$
|
(54,099
|
)
|
|
$
|
(159,233
|
)
|
Other comprehensive loss:
|
|
|
|
|
|
|
||||||
Unrealized loss related to marketable securities, net of tax
|
|
(73
|
)
|
|
(172
|
)
|
|
(69
|
)
|
|||
Reclassification adjustment for losses related to marketable securities included in other (expense) income
|
|
252
|
|
|
79
|
|
|
442
|
|
|||
Translation adjustment loss, net of tax
|
|
2,620
|
|
|
(1,303
|
)
|
|
(1,243
|
)
|
|||
Change in actuarial valuation of defined benefit pension
|
|
(95
|
)
|
|
150
|
|
|
(156
|
)
|
|||
Comprehensive loss
|
|
$
|
(67,858
|
)
|
|
$
|
(55,345
|
)
|
|
$
|
(160,259
|
)
|
|
Common Stock
($.01 par value) |
|
Paid-in
capital |
|
Treasury
stock |
|
Accumulated
deficit |
|
Accumulated other comprehensive loss
|
|
|
|||||||||||||||
(In thousands, except par value data)
|
Shares
|
|
Amount
|
|
|
|
|
|
Total
|
|||||||||||||||||
Balances, January 3, 2015
|
117,288
|
|
|
$
|
1,173
|
|
|
$
|
635,299
|
|
|
$
|
—
|
|
|
$
|
(193,613
|
)
|
|
$
|
(1,884
|
)
|
|
$
|
440,975
|
|
Net loss for 2015
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(159,233
|
)
|
|
—
|
|
|
(159,233
|
)
|
||||||
Unrealized loss related to marketable securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(69
|
)
|
|
(69
|
)
|
||||||
Recognized loss on redemption of marketable securities, previously unrealized
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
442
|
|
|
442
|
|
||||||
Translation adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,243
|
)
|
|
(1,243
|
)
|
||||||
Common stock issued in connection with the exercise of stock options, ESPP and vested RSUs, net of tax
|
2,415
|
|
|
25
|
|
|
2,161
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,186
|
|
||||||
Stock repurchase
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,970
|
)
|
|
—
|
|
|
—
|
|
|
(6,970
|
)
|
||||||
Retirement of treasury stock
|
(1,052
|
)
|
|
(11
|
)
|
|
(6,959
|
)
|
|
6,970
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation expense related to options, ESPP and RSUs
|
—
|
|
|
—
|
|
|
18,396
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,396
|
|
||||||
Fair value of partially vested stock options and RSUs assumed in acquisition
|
—
|
|
|
—
|
|
|
5,139
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,139
|
|
||||||
Defined benefit pension, net of actuarial losses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(156
|
)
|
|
(156
|
)
|
||||||
Redemption of noncontrolling interest, net of previous accretion to redemption value.
|
—
|
|
|
—
|
|
|
6,053
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,053
|
|
||||||
Balances, January 2, 2016
|
118,651
|
|
|
$
|
1,187
|
|
|
$
|
660,089
|
|
|
$
|
—
|
|
|
$
|
(352,846
|
)
|
|
$
|
(2,910
|
)
|
|
$
|
305,520
|
|
Net loss for 2016
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(54,099
|
)
|
|
—
|
|
|
(54,099
|
)
|
||||||
Unrealized loss related to marketable securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(172
|
)
|
|
(172
|
)
|
||||||
Recognized loss on redemption of marketable securities, previously unrealized
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
79
|
|
|
79
|
|
||||||
Translation adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,303
|
)
|
|
(1,303
|
)
|
||||||
Common stock issued in connection with the exercise of stock options, ESPP and vested RSUs, net of tax
|
2,994
|
|
|
29
|
|
|
4,013
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,042
|
|
||||||
Stock-based compensation expense related to options, ESPP and RSUs
|
—
|
|
|
—
|
|
|
16,213
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,213
|
|
||||||
Defined benefit pension, net of actuarial losses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
150
|
|
|
150
|
|
||||||
Balances, December 31, 2016
|
121,645
|
|
|
$
|
1,216
|
|
|
$
|
680,315
|
|
|
$
|
—
|
|
|
$
|
(406,945
|
)
|
|
$
|
(4,156
|
)
|
|
$
|
270,430
|
|
Net loss for 2017
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70,562
|
)
|
|
—
|
|
|
(70,562
|
)
|
||||||
Unrealized loss related to marketable securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(73
|
)
|
|
(73
|
)
|
||||||
Recognized loss on redemption of marketable securities, previously unrealized
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
252
|
|
|
252
|
|
||||||
Translation adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,620
|
|
|
2,620
|
|
||||||
Common stock issued in connection with the exercise of stock options, ESPP and vested RSUs, net of tax
|
2,250
|
|
|
23
|
|
|
2,795
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,818
|
|
||||||
Stock-based compensation expense related to stock options, ESPP and RSUs (1)
|
—
|
|
|
—
|
|
|
12,658
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,658
|
|
||||||
Defined benefit pension, net of actuarial losses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(95
|
)
|
|
(95
|
)
|
||||||
Accounting method transition adjustment (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(355
|
)
|
|
—
|
|
|
(355
|
)
|
||||||
Balances, December 30, 2017
|
123,895
|
|
|
$
|
1,239
|
|
|
$
|
695,768
|
|
|
$
|
—
|
|
|
$
|
(477,862
|
)
|
|
$
|
(1,452
|
)
|
|
$
|
217,693
|
|
|
Year Ended
|
||||||||||
(In thousands)
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(70,562
|
)
|
|
$
|
(54,099
|
)
|
|
$
|
(159,233
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
57,861
|
|
|
61,806
|
|
|
60,808
|
|
|||
Impairment of goodwill and acquired intangible assets
|
32,431
|
|
|
7,866
|
|
|
21,655
|
|
|||
Amortization of debt issuance costs and discount
|
1,982
|
|
|
1,350
|
|
|
2,835
|
|
|||
Change in deferred income tax provision
|
(154
|
)
|
|
90
|
|
|
21,367
|
|
|||
Loss on sale or maturity of marketable securities
|
252
|
|
|
79
|
|
|
333
|
|
|||
Gain on forward contracts
|
(77
|
)
|
|
(184
|
)
|
|
—
|
|
|||
Stock-based compensation expense
|
12,543
|
|
|
16,213
|
|
|
18,396
|
|
|||
(Gain) loss on disposal of fixed assets
|
(75
|
)
|
|
597
|
|
|
—
|
|
|||
Gain on sale of building
|
(4,624
|
)
|
|
—
|
|
|
—
|
|
|||
Loss (Gain) on sale of assets and business units
|
1,496
|
|
|
(2,646
|
)
|
|
—
|
|
|||
Impairment of cost-method investment
|
1,761
|
|
|
1,459
|
|
|
492
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
44,613
|
|
|
(11,419
|
)
|
|
4,578
|
|
|||
Inventories
|
(902
|
)
|
|
(3,272
|
)
|
|
9,868
|
|
|||
Prepaid expenses and other assets
|
889
|
|
|
(2,270
|
)
|
|
(6,710
|
)
|
|||
Accounts payable and accrued expenses (includes restructuring)
|
(23,588
|
)
|
|
8,338
|
|
|
6,301
|
|
|||
Accrued payroll obligations
|
726
|
|
|
402
|
|
|
(10,202
|
)
|
|||
Income taxes payable
|
(556
|
)
|
|
3,216
|
|
|
1,749
|
|
|||
Deferred income and allowances on sales to sell-through distributors
|
(15,007
|
)
|
|
14,391
|
|
|
2,920
|
|
|||
Deferred licensing and services revenue
|
(495
|
)
|
|
(183
|
)
|
|
1,958
|
|
|||
Net cash provided by (used in) operating activities
|
38,514
|
|
|
41,734
|
|
|
(22,885
|
)
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Proceeds from sales of and maturities of short-term marketable securities
|
12,689
|
|
|
14,897
|
|
|
142,956
|
|
|||
Purchase of marketable securities
|
(7,420
|
)
|
|
(7,490
|
)
|
|
(15,982
|
)
|
|||
Cash paid for business acquisition, net of cash acquired
|
—
|
|
|
—
|
|
|
(431,068
|
)
|
|||
Proceeds from sale of building
|
7,895
|
|
|
—
|
|
|
—
|
|
|||
Cash paid for costs of sale of building
|
(1,004
|
)
|
|
—
|
|
|
—
|
|
|||
Capital expenditures
|
(12,855
|
)
|
|
(16,717
|
)
|
|
(18,209
|
)
|
|||
Proceeds from sale of assets and business units, net of cash sold
|
967
|
|
|
1,972
|
|
|
—
|
|
|||
Repayment received on short-term loan to cost-method investee
|
2,000
|
|
|
—
|
|
|
—
|
|
|||
Short-term loan to cost-method investee
|
(2,000
|
)
|
|
—
|
|
|
—
|
|
|||
Cash paid for a cost-method investment
|
—
|
|
|
(1,000
|
)
|
|
(5,000
|
)
|
|||
Cash paid for software licenses
|
(8,532
|
)
|
|
(9,035
|
)
|
|
(9,515
|
)
|
|||
Net cash used in investing activities
|
$
|
(8,260
|
)
|
|
$
|
(17,373
|
)
|
|
$
|
(336,818
|
)
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
|
|||||||||||
The accompanying notes are an integral part of these Consolidated Financial Statements
|
LATTICE SEMICONDUCTOR CORPORATION
|
|||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
|
|||||||||||
|
|||||||||||
|
|
|
|
|
|
||||||
|
Year Ended
|
||||||||||
(In thousands)
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Restricted stock unit withholdings
|
$
|
(3,267
|
)
|
|
$
|
(3,565
|
)
|
|
$
|
(3,493
|
)
|
Proceeds from issuance of common stock
|
6,085
|
|
|
7,607
|
|
|
5,679
|
|
|||
Net proceeds from issuance of long-term debt
|
—
|
|
|
—
|
|
|
346,500
|
|
|||
Cash paid for debt issuance costs
|
—
|
|
|
—
|
|
|
(8,283
|
)
|
|||
Repayment of debt
|
(35,429
|
)
|
|
(5,154
|
)
|
|
(2,625
|
)
|
|||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
(6,970
|
)
|
|||
Cash paid to redeem noncontrolling interest
|
—
|
|
|
—
|
|
|
(867
|
)
|
|||
Net cash (used in) provided by financing activities
|
$
|
(32,611
|
)
|
|
$
|
(1,112
|
)
|
|
$
|
329,941
|
|
Effect of exchange rate change on cash
|
$
|
2,620
|
|
|
$
|
(1,303
|
)
|
|
$
|
(1,243
|
)
|
Net increase (decrease) in cash and cash equivalents
|
263
|
|
|
21,946
|
|
|
(31,005
|
)
|
|||
Beginning cash and cash equivalents
|
106,552
|
|
|
84,606
|
|
|
115,611
|
|
|||
Ending cash and cash equivalents
|
$
|
106,815
|
|
|
$
|
106,552
|
|
|
$
|
84,606
|
|
|
|
|
|
|
|
||||||
Supplemental cash flow information:
|
|
|
|
|
|
||||||
Change in unrealized loss related to marketable securities, net of tax, included in Accumulated other comprehensive loss
|
$
|
73
|
|
|
$
|
172
|
|
|
$
|
69
|
|
Income taxes paid, net of refunds
|
$
|
2,387
|
|
|
$
|
9,359
|
|
|
$
|
8,339
|
|
Interest paid
|
$
|
20,649
|
|
|
$
|
18,159
|
|
|
$
|
11,071
|
|
Accrued purchases of property and equipment
|
$
|
588
|
|
|
$
|
1,028
|
|
|
$
|
1,277
|
|
Note receivable resulting from sale of assets and business units
|
$
|
3,050
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Transfer of residual temporary equity to additional paid-in capital on redemption of noncontrolling interest
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,773
|
|
|
|
December 30, 2017
|
|
December 31, 2016
|
||||
Total cost of contracts for Japanese yen
(in thousands)
|
|
$
|
2,204
|
|
|
$
|
2,323
|
|
Number of contracts
|
|
2
|
|
|
2
|
|
||
Settlement month
|
|
June 2018
|
|
|
June 2017
|
|
|
|
Year Ended
|
|||||||
|
|
December 30,
2017 |
|
December 31,
2016 |
|
January 2,
2016 |
|||
Revenue attributable to top five end customers
|
|
26
|
%
|
|
27
|
%
|
|
32
|
%
|
Revenue attributable to largest end customer
|
|
7.3
|
%
|
|
9.9
|
%
|
|
9.3
|
%
|
|
|
Year Ended
|
|||||||
|
|
December 30,
2017 |
|
December 31,
2016 |
|
January 2,
2016 |
|||
Revenue attributable to sell-through distributors
|
|
66
|
%
|
|
61
|
%
|
|
45
|
%
|
(In thousands)
|
|
December 30, 2017
|
|
December 31, 2016
|
||||
Inventory valued at published list price and held by sell-through distributors with right of return
|
|
$
|
74,788
|
|
|
$
|
86,218
|
|
Allowance for distributor advances
|
|
(44,990
|
)
|
|
(37,090
|
)
|
||
Deferred cost of sales related to inventory held by sell-through distributors
|
|
(12,548
|
)
|
|
(16,871
|
)
|
||
Total Deferred income and allowances on sales to sell-through distributors
|
|
$
|
17,250
|
|
|
$
|
32,257
|
|
|
|
Year Ended
|
||||||||||
(in thousands, except per share data)
|
|
December 30,
2017 |
|
December 31,
2016 |
|
January 2,
2016 |
||||||
Net loss
|
|
$
|
(70,562
|
)
|
|
$
|
(54,099
|
)
|
|
$
|
(159,233
|
)
|
|
|
|
|
|
|
|
||||||
Shares used in basic and diluted net loss per share
|
|
122,677
|
|
|
119,994
|
|
|
117,387
|
|
|||
|
|
|
|
|
|
|
||||||
Basic and diluted net loss per share
|
|
$
|
(0.58
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
(1.36
|
)
|
|
|
Year Ended
|
|||||||
(in thousands)
|
|
December 30,
2017 |
|
December 31,
2016 |
|
January 2,
2016 |
|||
Stock options, RSUs, and ESPP shares excluded as they are antidilutive
|
|
6,622
|
|
|
8,978
|
|
|
9,243
|
|
(In thousands)
|
December 30, 2017
|
|
December 31, 2016
|
||||
Short-term marketable securities:
|
|
|
|
||||
Corporate and government bonds and notes
|
$
|
4,982
|
|
|
$
|
10,230
|
|
Certificates of deposit
|
—
|
|
|
78
|
|
||
Total marketable securities
|
$
|
4,982
|
|
|
$
|
10,308
|
|
|
Fair value measurements as of
|
|
Fair value measurements as of
|
||||||||||||||||||||||||||||
|
December 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||
(In thousands)
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||
Short-term marketable securities
|
$
|
4,982
|
|
|
$
|
4,982
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,308
|
|
|
$
|
10,230
|
|
|
$
|
78
|
|
|
$
|
—
|
|
Foreign currency forward exchange contracts, net
|
77
|
|
|
—
|
|
|
77
|
|
|
—
|
|
|
184
|
|
|
—
|
|
|
184
|
|
|
—
|
|
||||||||
Total fair value of financial instruments
|
$
|
5,059
|
|
|
$
|
4,982
|
|
|
$
|
77
|
|
|
$
|
—
|
|
|
$
|
10,492
|
|
|
$
|
10,230
|
|
|
$
|
262
|
|
|
$
|
—
|
|
(In thousands)
|
December 30, 2017
|
|
December 31, 2016
|
||||
Work in progress
|
$
|
49,642
|
|
|
$
|
50,688
|
|
Finished goods
|
30,261
|
|
|
28,480
|
|
||
Total inventories
|
$
|
79,903
|
|
|
$
|
79,168
|
|
(In thousands)
|
December 30, 2017
|
|
December 31, 2016
|
||||
Buildings
|
$
|
—
|
|
|
$
|
3,554
|
|
Computer and test equipment
|
155,492
|
|
|
162,388
|
|
||
Office furniture and equipment
|
2,914
|
|
|
3,460
|
|
||
Leasehold and building improvements
|
13,277
|
|
|
14,865
|
|
||
|
171,683
|
|
|
184,267
|
|
||
Accumulated depreciation and amortization
|
(131,260
|
)
|
|
(134,786
|
)
|
||
|
$
|
40,423
|
|
|
$
|
49,481
|
|
(In thousands)
|
|
December 30, 2017
|
|
December 31, 2016
|
||||
Beginning balance
|
|
$
|
269,758
|
|
|
$
|
267,549
|
|
Additions
|
|
—
|
|
|
2,209
|
|
||
Disposals
|
|
(2,244
|
)
|
|
—
|
|
||
Ending balance
|
|
$
|
267,514
|
|
|
$
|
269,758
|
|
|
|
December 30, 2017
|
||||||||||||||||
(In thousands)
|
|
Weighted Average Amortization Period (in years)
|
|
Gross
|
|
Impairment
|
|
Accumulated Amortization
|
|
Intangible assets, net
|
||||||||
Developed technology
|
|
4.7
|
|
$
|
158,700
|
|
|
$
|
(32,431
|
)
|
|
$
|
(81,847
|
)
|
|
$
|
44,422
|
|
Customer relationships
|
|
5.7
|
|
22,934
|
|
|
—
|
|
|
(16,696
|
)
|
|
6,238
|
|
||||
Licensed technology
|
|
3.5
|
|
2,392
|
|
|
—
|
|
|
(1,744
|
)
|
|
648
|
|
||||
Total identified intangible assets
|
|
|
|
$
|
184,026
|
|
|
$
|
(32,431
|
)
|
|
$
|
(100,287
|
)
|
|
$
|
51,308
|
|
|
|
December 31, 2016
|
||||||||||||||||
(In thousands)
|
|
Weighted Average Amortization Period (in years)
|
|
Gross
|
|
Impairment
|
|
Accumulated Amortization
|
|
Intangible assets, net
|
||||||||
Developed technology
|
|
4.7
|
|
$
|
141,359
|
|
|
$
|
—
|
|
|
$
|
(55,493
|
)
|
|
$
|
85,866
|
|
Customer relationships
|
|
6.1
|
|
30,800
|
|
|
(7,866
|
)
|
|
(13,694
|
)
|
|
9,240
|
|
||||
Licensed technology
|
|
3.3
|
|
2,127
|
|
|
—
|
|
|
(1,201
|
)
|
|
926
|
|
||||
Patents
|
|
5
|
|
769
|
|
|
—
|
|
|
(279
|
)
|
|
490
|
|
||||
Total identified finite-lived intangible assets
|
|
|
|
175,055
|
|
|
(7,866
|
)
|
|
(70,667
|
)
|
|
96,522
|
|
||||
In-process research and development
|
|
indefinite
|
|
22,341
|
|
|
—
|
|
|
—
|
|
|
22,341
|
|
||||
Total identified intangible assets
|
|
|
|
$
|
197,396
|
|
|
$
|
(7,866
|
)
|
|
$
|
(70,667
|
)
|
|
$
|
118,863
|
|
|
Year Ended
|
||||||||||
(In thousands)
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||
Research and development
|
$
|
569
|
|
|
$
|
745
|
|
|
$
|
731
|
|
Amortization of acquired intangible assets
|
31,340
|
|
|
33,575
|
|
|
29,580
|
|
|||
|
$
|
31,909
|
|
|
$
|
34,320
|
|
|
$
|
30,311
|
|
(In thousands)
|
Amount
|
||
2018
|
$
|
19,419
|
|
2019
|
16,619
|
|
|
2020
|
7,504
|
|
|
2021
|
5,148
|
|
|
2022
|
2,352
|
|
|
Thereafter
|
266
|
|
|
Total
|
$
|
51,308
|
|
|
|
Year Ended
|
||||||||||
(In thousands)
|
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||
Impairment of cost-basis investment
|
|
$
|
(1,761
|
)
|
|
$
|
(1,459
|
)
|
|
$
|
(492
|
)
|
(In thousands)
|
|
Total
|
||
Balance at January 2, 2016
|
|
$
|
4,508
|
|
Investment made during fiscal year
|
|
1,000
|
|
|
Impairment of cost-basis investment
|
|
(1,459
|
)
|
|
Balance at December 31, 2016
|
|
4,049
|
|
|
Impairment of cost-basis investment
|
|
(1,761
|
)
|
|
Balance at December 30, 2017
|
|
$
|
2,288
|
|
|
|
|
|
Amount of each
|
||
Fiscal Year
|
|
Frequency
|
|
payment
(In thousands)
|
||
2017
|
|
In the fourth calendar quarter
|
|
$
|
625
|
|
2018
|
|
At the end of each calendar quarter
|
|
$
|
875
|
|
2019
|
|
At the end of each calendar quarter
|
|
$
|
1,250
|
|
(In thousands)
|
December 30, 2017
|
|
December 31, 2016
|
||||
Trade accounts payable
|
$
|
35,350
|
|
|
$
|
37,800
|
|
Liability for non-cancelable contracts
|
4,531
|
|
|
5,744
|
|
||
Payable to members of the MHL and HDMI consortia*
|
87
|
|
|
9,698
|
|
||
Other accrued expenses
|
14,437
|
|
|
27,691
|
|
||
Total accounts payable and accrued expenses
|
$
|
54,405
|
|
|
$
|
80,933
|
|
Fiscal year
|
|
Amount
|
||
(In thousands)
|
|
|||
2018
|
|
$
|
6,310
|
|
2019
|
|
4,784
|
|
|
2020
|
|
4,860
|
|
|
2021
|
|
4,654
|
|
|
2022
|
|
4,694
|
|
|
Thereafter
|
|
14,259
|
|
|
|
|
$
|
39,561
|
|
|
|
Year Ended
|
||||||||||
(In thousands)
|
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||
Domestic
|
|
$
|
(17,341
|
)
|
|
$
|
(33,962
|
)
|
|
$
|
(93,229
|
)
|
Foreign
|
|
(52,372
|
)
|
|
(10,220
|
)
|
|
(33,464
|
)
|
|||
Loss before taxes
|
|
$
|
(69,713
|
)
|
|
$
|
(44,182
|
)
|
|
$
|
(126,693
|
)
|
|
|
Year Ended
|
||||||||||
(In thousands)
|
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
508
|
|
|
$
|
1,896
|
|
|
$
|
968
|
|
State
|
|
30
|
|
|
13
|
|
|
80
|
|
|||
Foreign
|
|
304
|
|
|
7,918
|
|
|
10,634
|
|
|||
|
|
842
|
|
|
9,827
|
|
|
11,682
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
—
|
|
|
—
|
|
|
18,713
|
|
|||
State
|
|
—
|
|
|
—
|
|
|
2,318
|
|
|||
Foreign
|
|
7
|
|
|
90
|
|
|
(173
|
)
|
|||
|
|
7
|
|
|
90
|
|
|
20,858
|
|
|||
Income tax expense
|
|
$
|
849
|
|
|
$
|
9,917
|
|
|
$
|
32,540
|
|
|
|
Year Ended
|
||||
|
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
|
|
%
|
|
%
|
|
%
|
Statutory federal rate
|
|
(35)
|
|
(35)
|
|
(35)
|
Adjustments for tax effects of:
|
|
|
|
|
|
|
State taxes, net
|
|
(7)
|
|
7
|
|
(6)
|
Research and development credits
|
|
(1)
|
|
(2)
|
|
(2)
|
Stock compensation
|
|
3
|
|
3
|
|
1
|
Foreign rate differential
|
|
28
|
|
15
|
|
12
|
Foreign dividends
|
|
1
|
|
—
|
|
5
|
Foreign withholding taxes
|
|
—
|
|
9
|
|
3
|
Other permanent
|
|
—
|
|
3
|
|
4
|
Goodwill impairment
|
|
—
|
|
—
|
|
4
|
Valuation allowance
|
|
(73)
|
|
17
|
|
46
|
Change in uncertain tax benefit accrual
|
|
1
|
|
5
|
|
(8)
|
Stock compensation adoption
|
|
(8)
|
|
—
|
|
—
|
Tax rate change
|
|
93
|
|
—
|
|
3
|
Other
|
|
(1)
|
|
1
|
|
(1)
|
Effective income tax rate
|
|
1
|
|
23
|
|
26
|
(In thousands)
|
|
December 30, 2017
|
|
December 31, 2016
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Accrued expenses and reserves
|
|
$
|
3,096
|
|
|
$
|
5,143
|
|
Inventory
|
|
2
|
|
|
290
|
|
||
Deferred Revenue
|
|
228
|
|
|
426
|
|
||
Stock-based and deferred compensation
|
|
4,018
|
|
|
7,269
|
|
||
Intangible assets
|
|
19,576
|
|
|
20,063
|
|
||
Fixed assets
|
|
216
|
|
|
678
|
|
||
Net operating loss carry forwards
|
|
86,410
|
|
|
137,521
|
|
||
Tax credit carry forwards
|
|
90,530
|
|
|
89,174
|
|
||
Capital loss carry forwards
|
|
3,926
|
|
|
962
|
|
||
Other
|
|
2,323
|
|
|
2,973
|
|
||
|
|
210,325
|
|
|
264,499
|
|
||
Less: valuation allowance
|
|
(209,691
|
)
|
|
(260,687
|
)
|
||
Net deferred tax assets
|
|
634
|
|
|
3,812
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Fixed Assets
|
|
559
|
|
|
—
|
|
||
Other
|
|
16
|
|
|
3,746
|
|
||
Total deferred tax liabilities
|
|
575
|
|
|
3,746
|
|
||
Net deferred tax assets
|
|
$
|
59
|
|
|
$
|
66
|
|
(In thousands)
|
|
Amount
|
||
Balance at January 3, 2015
|
|
$
|
18,673
|
|
Additions based on tax positions related to the current year
|
|
4,381
|
|
|
Additions based on tax positions of prior years
|
|
—
|
|
|
Additions due to acquisition
|
|
41,083
|
|
|
Reduction for tax positions of prior years
|
|
(14,958
|
)
|
|
Settlements
|
|
—
|
|
|
Reduction as a result of lapse of applicable statute of limitations
|
|
(972
|
)
|
|
Balance at January 2, 2016
|
|
48,207
|
|
|
Additions based on tax positions related to the current year
|
|
2,573
|
|
|
Additions based on tax positions of prior years
|
|
530
|
|
|
Additions due to acquisition
|
|
—
|
|
|
Reduction for tax positions of prior years
|
|
(1,824
|
)
|
|
Settlements
|
|
—
|
|
|
Reduction as a result of lapse of applicable statute of limitations
|
|
(1,863
|
)
|
|
Balance at December 31, 2016
|
|
47,623
|
|
|
Additions based on tax positions related to the current year
|
|
471
|
|
|
Additions based on tax positions of prior years
|
|
11
|
|
|
Additions due to acquisition
|
|
—
|
|
|
Reductions for tax positions of prior years
|
|
(1,226
|
)
|
|
Settlements
|
|
—
|
|
|
Reduction as a result of lapse of applicable statute of limitations
|
|
(2,047
|
)
|
|
Balance at December 30, 2017
|
|
$
|
44,832
|
|
(In thousands)
|
Severance & related *
|
|
Lease termination
|
|
Software Contracts & Engineering Tools**
|
|
Other
|
|
Total
|
||||||||||
Balance at January 3, 2015
|
$
|
—
|
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
139
|
|
|
$
|
182
|
|
Restructuring charges
|
12,861
|
|
|
2,667
|
|
|
3,040
|
|
|
671
|
|
|
19,239
|
|
|||||
Costs paid or otherwise settled
|
(9,165
|
)
|
|
(1,705
|
)
|
|
(2,663
|
)
|
|
(810
|
)
|
|
(14,343
|
)
|
|||||
Balance at January 2, 2016
|
$
|
3,696
|
|
|
$
|
1,005
|
|
|
$
|
377
|
|
|
$
|
—
|
|
|
$
|
5,078
|
|
Restructuring charges
|
2,883
|
|
|
2,993
|
|
|
1,903
|
|
|
1,488
|
|
|
9,267
|
|
|||||
Costs paid or otherwise settled
|
(5,778
|
)
|
|
(2,962
|
)
|
|
(2,255
|
)
|
|
(1,476
|
)
|
|
(12,471
|
)
|
|||||
Balance at December 31, 2016
|
$
|
801
|
|
|
$
|
1,036
|
|
|
$
|
25
|
|
|
$
|
12
|
|
|
$
|
1,874
|
|
Restructuring charges
|
2,484
|
|
|
811
|
|
|
3,066
|
|
|
835
|
|
|
7,196
|
|
|||||
Costs paid or otherwise settled
|
(2,093
|
)
|
|
(977
|
)
|
|
(2,731
|
)
|
|
(822
|
)
|
|
(6,623
|
)
|
|||||
Balance at December 30, 2017
|
$
|
1,192
|
|
|
$
|
870
|
|
|
$
|
360
|
|
|
$
|
25
|
|
|
$
|
2,447
|
|
(in thousands)
|
December 30, 2017
|
|
December 31, 2016
|
||||
Principal amount
|
$
|
306,791
|
|
|
$
|
342,221
|
|
Unamortized original issue discount and debt issuance costs
|
(5,616
|
)
|
|
(7,599
|
)
|
||
Less: Current portion of long-term debt
|
(1,508
|
)
|
|
(33,767
|
)
|
||
Long-term debt
|
$
|
299,667
|
|
|
$
|
300,855
|
|
|
|
|
Year Ended
|
|
|
||||||
(in thousands)
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||
Contractual interest
|
$
|
16,503
|
|
|
$
|
18,518
|
|
|
$
|
15,225
|
|
Amortization of debt issuance costs and discount
|
1,982
|
|
|
1,350
|
|
|
2,835
|
|
|||
Total Interest expense related to the Term Loan
|
$
|
18,485
|
|
|
$
|
19,868
|
|
|
$
|
18,060
|
|
Fiscal year
|
|
(in thousands)
|
||
|
|
|
||
2018
|
|
$
|
3,500
|
|
2019
|
|
26,235
|
|
|
2020
|
|
59,187
|
|
|
2021
|
|
217,869
|
|
|
|
|
$
|
306,791
|
|
|
|
Year Ended
|
||||||||||
(In thousands)
|
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||
Cost of products sold
|
|
$
|
795
|
|
|
$
|
888
|
|
|
$
|
1,416
|
|
Research and development
|
|
5,245
|
|
|
7,928
|
|
|
9,141
|
|
|||
Selling, general, and administrative
|
|
6,503
|
|
|
7,397
|
|
|
6,793
|
|
|||
Acquisition related charges
|
|
—
|
|
|
—
|
|
|
4,293
|
|
|||
Total stock-based compensation
|
|
$
|
12,543
|
|
|
$
|
16,213
|
|
|
$
|
21,643
|
|
(Shares and aggregate intrinsic value in thousands)
|
Shares
|
|
Weighted
average exercise price |
|
Weighted average
remaining contractual term (years) |
|
Aggregate
Intrinsic Value |
|||||
Balance, December 31, 2016
|
12,566
|
|
|
$
|
5.70
|
|
|
|
|
|
||
Granted
|
3,732
|
|
|
5.73
|
|
|
|
|
|
|||
Exercised
|
(1,803
|
)
|
|
5.07
|
|
|
|
|
|
|||
Forfeited or expired
|
(1,556
|
)
|
|
6.00
|
|
|
|
|
|
|||
Balance, December 30, 2017
|
12,939
|
|
|
$
|
5.77
|
|
|
|
|
|
||
Vested and expected to vest at December 30, 2017
|
12,939
|
|
|
$
|
5.77
|
|
|
4.47
|
|
$
|
3,333
|
|
Exercisable, December 30, 2017
|
6,601
|
|
|
$
|
5.81
|
|
|
2.87
|
|
$
|
2,485
|
|
(Shares in thousands)
|
Shares
|
|
Weighted average grant date fair value
|
|||
Balance, December 31, 2016
|
3,247
|
|
|
$
|
5.90
|
|
Granted
|
1,530
|
|
|
5.83
|
|
|
Exercised
|
(1,478
|
)
|
|
5.95
|
|
|
Forfeited or expired
|
(533
|
)
|
|
5.84
|
|
|
Balance, December 30, 2017
|
2,766
|
|
|
$
|
5.85
|
|
(Shares in thousands)
|
|
Unvested
|
|
Vested
|
|
Total
|
|||
Balance, December 31, 2016
|
|
597
|
|
|
—
|
|
|
597
|
|
Granted
|
|
475
|
|
|
—
|
|
|
475
|
|
Vested
|
|
(92
|
)
|
|
92
|
|
|
—
|
|
Exercised
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
Canceled
|
|
(273
|
)
|
|
—
|
|
|
(273
|
)
|
Balance, December 30, 2017
|
|
707
|
|
|
83
|
|
|
790
|
|
|
Year Ended
|
||||
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
Executive stock options with a market condition
|
|
|
|
|
|
Expected volatility
|
41%
|
|
46%
|
|
44% to 46%
|
Risk-free interest rate
|
1.9%
|
|
1.1%
|
|
1.4%
|
Expected term (years)
|
4.5
|
|
4.5
|
|
4.5
|
Dividend yield
|
—%
|
|
—%
|
|
—%
|
Executive RSUs with a market condition
|
|
|
|
|
|
Expected volatility
|
n/a
|
|
n/a
|
|
36.9%
|
Risk-free interest rate
|
n/a
|
|
n/a
|
|
0.6%
|
Expected term (years)
|
n/a
|
|
n/a
|
|
2.0
|
Dividend yield
|
n/a
|
|
n/a
|
|
—%
|
(In thousands)
|
Balance at
beginning of period |
|
Balance received through acquisition
|
|
Charged (Credit) to
costs and expenses |
|
Charged (credit) to
other accounts |
|
Settlements & write-offs
net of recoveries |
|
Balance at end
of period |
||||||||||||
Fiscal year ended December 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Allowance for deferred taxes
|
260,687
|
|
|
—
|
|
|
(50,960
|
)
|
|
(36
|
)
|
|
—
|
|
|
209,691
|
|
||||||
Allowance for doubtful accounts
|
9,299
|
|
|
—
|
|
|
3
|
|
|
38
|
|
|
31
|
|
|
9,371
|
|
||||||
Allowance for warranty expense
|
352
|
|
|
—
|
|
|
100
|
|
|
—
|
|
|
(197
|
)
|
|
255
|
|
||||||
|
$
|
270,338
|
|
|
$
|
—
|
|
|
$
|
(50,857
|
)
|
|
$
|
2
|
|
|
$
|
(166
|
)
|
|
$
|
219,317
|
|
Fiscal year ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Allowance for deferred taxes
|
$
|
252,578
|
|
|
$
|
—
|
|
|
$
|
7,450
|
|
|
$
|
659
|
|
|
$
|
—
|
|
|
$
|
260,687
|
|
Allowance for doubtful accounts
|
621
|
|
|
—
|
|
|
7,362
|
|
|
2,284
|
|
|
(968
|
)
|
|
9,299
|
|
||||||
Allowance for warranty expense
|
370
|
|
|
—
|
|
|
216
|
|
|
—
|
|
|
(234
|
)
|
|
352
|
|
||||||
|
$
|
253,569
|
|
|
$
|
—
|
|
|
$
|
15,028
|
|
|
$
|
2,943
|
|
|
$
|
(1,202
|
)
|
|
$
|
270,338
|
|
Fiscal year ended January 2, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Allowance for deferred taxes
|
$
|
141,215
|
|
|
$
|
52,481
|
|
|
$
|
58,658
|
|
|
$
|
224
|
|
|
$
|
—
|
|
|
$
|
252,578
|
|
Allowance for doubtful accounts
|
875
|
|
|
—
|
|
|
(438
|
)
|
|
189
|
|
|
(5
|
)
|
|
621
|
|
||||||
Allowance for warranty expense
|
81
|
|
|
136
|
|
|
153
|
|
|
—
|
|
|
—
|
|
|
370
|
|
||||||
|
$
|
142,171
|
|
|
$
|
52,617
|
|
|
$
|
58,373
|
|
|
$
|
413
|
|
|
$
|
(5
|
)
|
|
$
|
253,569
|
|
|
|
Year Ended
|
||||||||||||||||
(In thousands)
|
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||||||||
United States:
|
|
$
|
48,315
|
|
|
13%
|
|
$
|
51,752
|
|
|
12%
|
|
$
|
33,677
|
|
|
8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
China*
|
|
193,590
|
|
|
50
|
|
186,865
|
|
|
44
|
|
165,582
|
|
|
41
|
|||
Europe
|
|
44,547
|
|
|
12
|
|
59,835
|
|
|
14
|
|
55,596
|
|
|
14
|
|||
Japan
|
|
42,286
|
|
|
11
|
|
49,080
|
|
|
12
|
|
44,067
|
|
|
11
|
|||
Taiwan
|
|
14,846
|
|
|
4
|
|
31,322
|
|
|
7
|
|
31,181
|
|
|
8
|
|||
Other Asia*
|
|
26,916
|
|
|
7
|
|
37,826
|
|
|
9
|
|
67,704
|
|
|
17
|
|||
Other Americas
|
|
15,461
|
|
|
4
|
|
10,374
|
|
|
3
|
|
8,159
|
|
|
2
|
|||
Total foreign revenue
|
|
337,646
|
|
|
87
|
|
375,302
|
|
|
88
|
|
372,289
|
|
|
92
|
|||
Total revenue
|
|
$
|
385,961
|
|
|
100%
|
|
$
|
427,054
|
|
|
100%
|
|
$
|
405,966
|
|
|
100%
|
(In thousands)
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||
United States
|
$
|
30,338
|
|
|
$
|
30,532
|
|
|
$
|
25,615
|
|
|
|
|
|
|
|
||||||
China
|
4,632
|
|
|
10,617
|
|
|
14,998
|
|
|||
Philippines
|
3,883
|
|
|
4,928
|
|
|
3,948
|
|
|||
Taiwan
|
958
|
|
|
2,310
|
|
|
3,677
|
|
|||
India
|
—
|
|
|
215
|
|
|
1,470
|
|
|||
Japan
|
313
|
|
|
637
|
|
|
1,211
|
|
|||
Other
|
299
|
|
|
242
|
|
|
933
|
|
|||
Total foreign property and equipment, net
|
10,085
|
|
|
18,949
|
|
|
26,237
|
|
|||
Total property and equipment, net
|
$
|
40,423
|
|
|
$
|
49,481
|
|
|
$
|
51,852
|
|
|
% of Total Revenue in Year Ended
|
|||||||
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
|||
Arrow Electronics Inc.
|
24
|
%
|
|
24
|
%
|
|
20
|
%
|
Weikeng Group
|
27
|
|
|
22
|
|
|
12
|
|
All others
|
15
|
|
|
15
|
|
|
13
|
|
All sell-through distributors
|
66
|
%
|
|
61
|
%
|
|
45
|
%
|
|
|
2017
|
|
2016
|
||||||||||||||||||||||||||||
(In thousands, except per share data)
|
|
Q4
|
|
Q3
|
|
Q2
|
|
Q1
|
|
Q4
|
|
Q3
|
|
Q2
|
|
Q1
|
||||||||||||||||
Revenue
|
|
$
|
95,266
|
|
|
$
|
91,971
|
|
|
$
|
94,137
|
|
|
$
|
104,587
|
|
|
$
|
118,108
|
|
|
$
|
113,225
|
|
|
$
|
99,209
|
|
|
$
|
96,512
|
|
Gross margin
|
|
51,216
|
|
|
53,322
|
|
|
51,209
|
|
|
60,832
|
|
|
63,480
|
|
|
67,424
|
|
|
58,426
|
|
|
57,104
|
|
||||||||
Restructuring charges
|
|
2,483
|
|
|
3,071
|
|
|
1,576
|
|
|
66
|
|
|
951
|
|
|
317
|
|
|
2,568
|
|
|
5,431
|
|
||||||||
Net loss
|
|
$
|
(7,213
|
)
|
|
$
|
(43,052
|
)
|
|
$
|
(13,022
|
)
|
|
$
|
(7,275
|
)
|
|
$
|
(8,164
|
)
|
|
$
|
(12,414
|
)
|
|
$
|
(13,810
|
)
|
|
$
|
(19,711
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net loss per share - basic and diluted
|
|
$
|
(0.06
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
(0.17
|
)
|
(i)
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
(ii)
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
|
(iii)
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
|
•
|
Establish regular technical accounting reviews involving the Corporate Controller, CFO, and other staff as appropriate to ensure an effective risk assessment is performed to identify and assess changes within the business and external environment that may impact financial reporting.
|
•
|
As changes are identified we will design and implement control activities on a timely basis.
|
•
|
The Disclosure Committee, a senior management committee, will meet routinely before and during the quarterly and annual close cycles to identify and assess unique or non-recurring transactions or events, the accounting for these matters, and associated relevant risk assessments.
|
•
|
The Disclosure Committee membership will be expanded to ensure comprehensive representation from throughout the Company’s operations.
|
•
|
Continued risk assessment of the accounting implications as warranted with the Audit Committee.
|
Exhibit Number
|
|
Description
|
|
|
|
2.1
|
|
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
10.1*
|
|
|
|
|
|
10.2*
|
|
|
|
|
|
10.3*
|
|
|
|
|
|
10.4*
|
|
|
|
|
|
10.5*
|
|
|
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Exhibit Number
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Description
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10.6*
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10.7*
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10.8*
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|
|
|
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10.9*
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|
|
|
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10.10*
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10.11
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|
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10.12*
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|
|
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10.13*
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10.14*
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21.1
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23.1
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31.1
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31.2
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32.1
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32.2
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema Document
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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|
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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|
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101.LAB
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XBRL Taxonomy Extension Labels Linkbase Document
|
|
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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|
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*
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Management contract or compensatory plan or arrangement required to be filed as an Exhibit to this Annual Report on Form 10-K pursuant to Item 15(b) thereof.
|
LATTICE SEMICONDUCTOR CORPORATION
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(Registrant)
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By:
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/s/ Max Downing
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Max Downing
Chief Financial Officer
(Duly Authorized Officer and Principal Financial and Accounting Officer)
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Date:
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March 13, 2018
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Signature
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Title
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Date
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|
|
|
Principal Executive Officer
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|
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/s/ Darin G. Billerbeck
|
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March 13, 2018
|
Darin G. Billerbeck
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President, Chief Executive Officer and Director
|
|
Principal Financial and Accounting Officer
|
|
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/s/ Max Downing
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March 13, 2018
|
Max Downing
|
Chief Financial Officer
|
|
Directors
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|
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/s/ Robin Abrams
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March 13, 2018
|
Robin Abrams
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Director
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/s/ Brian Beattie
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|
March 13, 2018
|
Brian Beattie
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Director
|
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/s/ John Bourgoin
|
|
March 13, 2018
|
John Bourgoin
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Director
|
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/s/ Robert Herb
|
|
March 13, 2018
|
Robert Herb
|
Director
|
|
/s/ Mark Jensen
|
|
March 13, 2018
|
Mark Jensen
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Director
|
|
/s/ Jeff Richardson
|
|
March 13, 2018
|
Jeff Richardson
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Director
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/s/ Fred Weber
|
|
March 13, 2018
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Fred Weber
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Director
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|
•
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Those who are eligible under the Company’s Sales Incentive Plan (“SIP”);
|
•
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Temporary employees (including interns) and contractors; and
|
•
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Any other persons deemed ineligible by application of the provisions set forth under the heading "Other General Provisions" hereafter.
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Performance Metric
|
Weight
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1 - Operating Income
|
33.33%
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2 - Revenue
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33.33%
|
3 - Corporate MBOs
|
33.33%
|
Total
|
100%
|
|
Name
|
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Jurisdiction of Incorporation
|
1.
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Lattice Semiconductor Limited
|
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Bermuda
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2.
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Lattice Semiconductor Canada Corporation
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Canada
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3.
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Lattice Semiconductor (Shanghai) Co. Ltd.
|
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China
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4.
|
Silicon Image Electronics Technology (Shanghai) Co. Ltd.
|
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China
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5.
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Lattice Semiconducteurs SARL
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France
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6.
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Lattice Semiconductor GmbH
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Germany
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7.
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SiliconBlue Technologies (Hong Kong) Ltd.
|
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Hong Kong
|
8
|
Lattice Semiconductor Asia Limited
|
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Hong Kong
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9.
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Lattice Semiconductor (India) Pvt. Ltd.
|
|
India
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10.
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Lattice Semiconductor SRL
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Italy
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11.
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Lattice Semiconductor Japan KK
|
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Japan
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12.
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Lattice Semiconductor Korea Co. Ltd.
|
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Korea
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13.
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Silicon Image Cooperatie U.A.
|
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Netherlands
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14.
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Silicon Image International B.V.
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Netherlands
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15.
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Lattice Semiconductor (PH) Corporation
|
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Philippines
|
16.
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Lattice SG Pte. Ltd.
|
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Singapore
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17.
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HDMI Licensing, LLC
|
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Delaware, USA
|
18.
|
MHL, LLC
|
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Delaware, USA
|
19.
|
SiBEAM, Inc.
|
|
Delaware, USA
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20.
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Lattice Connectivity, LLC
|
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Delaware, USA
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21.
|
Lattice Semiconductor International LLC
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Delaware, USA
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22.
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Silicon Image International LLC
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Delaware, USA
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23.
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SPMT, LLC
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Delaware, USA
|
24.
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WirelessHD, LLC
|
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Delaware, USA
|
25.
|
Lattice Semiconductor UK Limited
|
|
United Kingdom
|
26.
|
Silicon Image UK Limited
|
|
United Kingdom
|
1.
|
I have reviewed this
Annual Report on Form 10-K
of Lattice Semiconductor Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Darin G. Billerbeck
|
|
Darin G. Billerbeck
|
|
President and Chief Executive Officer
|
|
1.
|
I have reviewed this
Annual Report on Form 10-K
of Lattice Semiconductor Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Max Downing
|
|
Max Downing
|
|
Chief Financial Officer
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Darin G. Billerbeck
|
|
Darin G. Billerbeck
|
|
President and Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Max Downing
|
|
Max Downing
|
|
Chief Financial Officer
|