UNITED STATES SECURITIES AND EXCHANGE COMMISSION
|
||||
Washington, D.C. 20549
|
||||
FORM 10-K
|
||||
(Mark One)
|
||||
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 29, 2018
|
|||
|
or
|
|||
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO __________
|
Delaware
|
93-0835214
|
(State of Incorporation)
|
(I.R.S. Employer Identification Number)
|
5555 NE Moore Court, Hillsboro, Oregon
|
97124-6421
|
(Address of principal executive offices)
|
(Zip Code)
|
(Title of Class)
|
(Name of each exchange on which registered)
|
Common Stock, $.01 par value
|
NASDAQ Global Select Market
|
Large accelerated filer
¨
|
Accelerated filer
þ
|
Non-accelerated filer
¨
|
Smaller reporting company
¨
|
Emerging growth company
¨
|
|
Aggregate market value of voting stock held by non-affiliates of the registrant as of June 29, 2018
|
$
|
575,075,952
|
|
Number of shares of common stock outstanding as of February 21, 2019
|
131,598,332
|
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|
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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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||
|
|
•
|
With the growth of data centers, our “processor agnostic” solutions are ideal for control and connect functions in enterprise and data center server applications.
|
•
|
With the expected continued communications infrastructure build
-
out from 5G deployment, Lattice solutions are being adopted to control and connect a variety of functions in critical systems.
|
•
|
With the increase in electrification and the proliferation of sensors in smart factories and automobiles, our low power
,
small form factor solutions are ideal for everything from battery powered systems and sensor applications to video formats.
|
•
|
With the increase in artificial intelligence and machine learning and a multitude of applications at the network edge, Lattice has the capabilities to provide solutions. These applications often act independently and need to make instantaneous decisions. As such, they need their own computing and learning capabilities to perform functions like face detection, image recognition, and video analytics – capabilities that we have today as a result of technology obtained with the acquisition of Silicon Image.
|
•
|
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 have among the lowest power consumption 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.
|
•
|
A full suite of standards-based HDMI
Video Connectivity Application Specific Standard Products ("ASSPs")
enable the immersive audio-visual experience that consumers demand.
|
•
|
Intellectual Property Licensing and Services
enable 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 Input-Output ("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.
|
•
|
FPGAs
optimized for I/O expansion, low cost look-up tables, hardware acceleration, hardware management, and affordability. Our FPGAs consume power at very low rates, 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.
|
•
|
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.
|
•
|
As factories and automotive manufacturers continue their evolution of computerization, power reduction, faster time to design in and market, lower costs are becoming increasingly normal.
|
•
|
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 Internet of things ("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 Manager 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 use 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 that 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 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.
|
•
|
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 consortium members, including us.
|
•
|
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 license 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.
|
•
|
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.
|
•
|
IP Services
- projects and design services for customers who wish to develop specific solutions that harness our proven technology and expertise.
|
•
|
Product and Technology Sales:
Involves direct and channel sales of silicon-based products with their associated software solutions and services.
|
•
|
Intellectual Property Licensing and Services:
Involves the licensing or sale of intellectual property that we have developed, some of which we use in our products, and certain design services that we may provide.
|
•
|
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 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.
|
•
|
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;
|
•
|
achievement of necessary volume of production to achieve acceptable cost;
|
•
|
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 HDMI-enabled and mobile 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.
|
|
Year Ended
(1)
|
|||||||||||||||||||
STATEMENT OF OPERATIONS:
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
(3)
|
|
January 3, 2015
(2)
|
|||||||||||
(In thousands, except per share data)
|
|
|
|
|
||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Product
|
$
|
380,468
|
|
|
$
|
356,502
|
|
|
$
|
390,704
|
|
|
$
|
369,200
|
|
|
$
|
366,127
|
|
|
Licensing and services
|
18,331
|
|
|
29,459
|
|
|
36,350
|
|
|
36,766
|
|
|
—
|
|
||||||
Total Revenue
|
398,799
|
|
|
385,961
|
|
|
427,054
|
|
|
405,966
|
|
|
366,127
|
|
||||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cost of product revenue
|
179,101
|
|
|
164,657
|
|
|
179,983
|
|
|
184,914
|
|
|
159,940
|
|
||||||
Cost of licensing and services revenue
|
259
|
|
|
4,725
|
|
|
637
|
|
|
1,143
|
|
|
—
|
|
||||||
Research and development
|
82,449
|
|
|
103,357
|
|
|
117,518
|
|
|
136,868
|
|
|
88,079
|
|
||||||
Selling, general, and administrative
|
91,054
|
|
|
90,718
|
|
|
98,602
|
|
|
97,349
|
|
|
73,527
|
|
||||||
Amortization of acquired intangible assets
|
17,690
|
|
|
31,340
|
|
|
33,575
|
|
|
29,580
|
|
|
2,948
|
|
||||||
Restructuring charges
|
17,349
|
|
|
7,196
|
|
|
9,267
|
|
|
19,239
|
|
|
17
|
|
||||||
Acquisition related charges
|
1,531
|
|
|
3,781
|
|
|
6,305
|
|
|
22,450
|
|
|
—
|
|
||||||
Impairment of goodwill and acquired intangible assets
|
12,486
|
|
|
32,431
|
|
|
7,866
|
|
|
21,655
|
|
|
—
|
|
||||||
Gain on sale of building
|
—
|
|
|
(4,624
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total costs and expenses
|
401,919
|
|
|
433,581
|
|
|
453,753
|
|
|
513,198
|
|
|
324,511
|
|
||||||
(Loss) income from operations
|
(3,120
|
)
|
|
(47,620
|
)
|
|
(26,699
|
)
|
|
(107,232
|
)
|
|
41,616
|
|
||||||
Interest expense
|
(20,600
|
)
|
|
(18,807
|
)
|
|
(20,327
|
)
|
|
(18,389
|
)
|
|
(172
|
)
|
||||||
Other (expense) income, net
|
(249
|
)
|
|
(3,286
|
)
|
|
2,844
|
|
|
(1,072
|
)
|
|
1,497
|
|
||||||
(Loss) income before income taxes
|
(23,969
|
)
|
|
(69,713
|
)
|
|
(44,182
|
)
|
|
(126,693
|
)
|
|
42,941
|
|
||||||
Income tax expense (benefit)
|
2,353
|
|
|
849
|
|
|
9,917
|
|
|
32,540
|
|
|
(5,639
|
)
|
||||||
Net (loss) income
|
$
|
(26,322
|
)
|
|
$
|
(70,562
|
)
|
|
$
|
(54,099
|
)
|
|
$
|
(159,233
|
)
|
|
$
|
48,580
|
|
|
|
||||||||||||||||||||
Net (loss) income per share:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Basic
|
$
|
(0.21
|
)
|
|
$
|
(0.58
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
(1.36
|
)
|
|
$
|
0.41
|
|
|
Diluted
|
$
|
(0.21
|
)
|
|
$
|
(0.58
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
(1.36
|
)
|
|
$
|
0.40
|
|
|
|
||||||||||||||||||||
Shares used in per share calculations:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Basic
|
126,564
|
|
|
122,677
|
|
|
119,994
|
|
|
117,387
|
|
|
117,708
|
|
||||||
Diluted
|
126,564
|
|
|
122,677
|
|
|
119,994
|
|
|
117,387
|
|
|
120,245
|
|
||||||
|
||||||||||||||||||||
BALANCE SHEET:
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
|
January 2, 2016
|
|
January 3, 2015
|
|||||||||||
(In thousands)
|
|
|
|
|
||||||||||||||||
Cash, cash equivalents, and short-term marketable securities
|
$
|
128,675
|
|
|
$
|
111,797
|
|
|
$
|
116,860
|
|
|
$
|
102,574
|
|
|
$
|
254,844
|
|
|
Total assets
|
$
|
623,687
|
|
|
$
|
635,961
|
|
|
$
|
766,883
|
|
|
$
|
785,920
|
|
|
$
|
510,530
|
|
|
Long term liabilities
|
$
|
295,812
|
|
|
$
|
334,621
|
|
|
$
|
338,903
|
|
|
$
|
369,223
|
|
|
$
|
8,809
|
|
|
Total liabilities
|
$
|
365,230
|
|
|
$
|
418,268
|
|
|
$
|
496,453
|
|
|
$
|
480,400
|
|
|
$
|
69,555
|
|
|
Total stockholders' equity
|
$
|
258,457
|
|
|
$
|
217,693
|
|
|
$
|
270,430
|
|
|
$
|
305,520
|
|
|
$
|
440,975
|
|
|
|
||||||||||||||||||||
(1)
|
Results for periods prior to 2018 are presented in accordance with ASC 605, which was in effect during those fiscal years.
|
|||||||||||||||||||
(2)
|
The year ended January 3, 2015 was a 53-week year as compared to the other years presented, which were based on our standard 52-week year.
|
|||||||||||||||||||
(3)
|
Our results for the year ended January 2, 2016 include the results associated with the acquisition of Silicon Image for the approximately 10-month period from March 11, 2015 through January 2, 2016. Results presented for the period prior to fiscal 2015 are those historically reported for Lattice only.
|
|
Year Ended *
|
|
% Change in
|
|||||||||||||
(In thousands)
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
|
2018
|
|
2017
|
|||||||
Revenue
|
$
|
398,799
|
|
|
$
|
385,961
|
|
|
$
|
427,054
|
|
|
3
|
|
(10
|
)
|
Communications and Computing
|
Mobile and Consumer
|
Industrial and Automotive
|
Licensing and Services
|
Wireless
|
Smart-phones
|
Security and Surveillance
|
IP Royalties
|
Wireline
|
Cameras
|
Machine Vision
|
Adopter Fees
|
Data Backhaul
|
Displays
|
Industrial Automation
|
IP Licenses
|
Client Computing
|
Wearables
|
Human Computer Interaction
|
Patent Sales
|
Data Center Computing
|
Televisions
|
Automotive
|
Testing Services
|
Data Storage
|
Home Theater
|
Drones
|
Design Services
|
|
Year Ended *
|
|
% Change in
|
|||||||||||||||||||||||
(In thousands)
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
|
2018
|
|
2017
|
|||||||||||||||||
Communications and Computing
|
$
|
123,195
|
|
|
31
|
%
|
|
$
|
113,019
|
|
|
29
|
%
|
|
$
|
123,021
|
|
|
29
|
%
|
|
9
|
|
|
(8
|
)
|
Mobile and Consumer
|
99,294
|
|
|
25
|
|
|
108,844
|
|
|
28
|
|
|
127,405
|
|
|
30
|
|
|
(9
|
)
|
|
(15
|
)
|
|||
Industrial and Automotive
|
157,979
|
|
|
39
|
|
|
134,639
|
|
|
35
|
|
|
140,278
|
|
|
33
|
|
|
17
|
|
|
(4
|
)
|
|||
Licensing and Services
|
18,331
|
|
|
5
|
|
|
29,459
|
|
|
8
|
|
|
36,350
|
|
|
8
|
|
|
(38
|
)
|
|
(19
|
)
|
|||
Total revenue
|
$
|
398,799
|
|
|
100
|
%
|
|
$
|
385,961
|
|
|
100
|
%
|
|
$
|
427,054
|
|
|
100
|
%
|
|
3
|
|
|
(10
|
)
|
|
Year Ended *
|
|
% Change in
|
|||||||||||||||||||||||
(In thousands)
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
|
2018
|
|
2017
|
|||||||||||||||||
Asia
|
$
|
298,119
|
|
|
75
|
%
|
|
$
|
277,638
|
|
|
72
|
%
|
|
$
|
305,093
|
|
|
71
|
%
|
|
7
|
|
|
(9
|
)
|
Europe
|
45,546
|
|
|
11
|
|
|
44,547
|
|
|
12
|
|
|
59,835
|
|
|
14
|
|
|
2
|
|
|
(26
|
)
|
|||
Americas
|
55,134
|
|
|
14
|
|
|
63,776
|
|
|
16
|
|
|
62,126
|
|
|
15
|
|
|
(14
|
)
|
|
3
|
|
|||
Total revenue
|
$
|
398,799
|
|
|
100
|
%
|
|
$
|
385,961
|
|
|
100
|
%
|
|
$
|
427,054
|
|
|
100
|
%
|
|
3
|
|
|
(10
|
)
|
|
Year Ended *
|
|||||||
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
|||
Arrow Electronics Inc.
|
29
|
%
|
|
24
|
%
|
|
24
|
%
|
Weikeng Group
|
25
|
|
|
27
|
|
|
22
|
|
All others
|
29
|
|
|
26
|
|
|
27
|
|
All distributors **
|
83
|
%
|
|
77
|
%
|
|
73
|
%
|
*
|
Results for 2017 and 2016 are presented in accordance with ASC 605, which was in effect during those fiscal years.
|
**
|
During the first quarter of 2018, we updated our channel categories to group all forms of distribution into a single channel. Prior periods have been reclassified to match current period presentation.
|
|
Year Ended
|
||||||||||
(In thousands)
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||
Gross margin
|
$
|
219,439
|
|
|
$
|
216,579
|
|
|
$
|
246,434
|
|
Percentage of revenue
|
55.0
|
%
|
|
56.1
|
%
|
|
57.7
|
%
|
|||
Product gross margin %
|
52.9
|
%
|
|
53.8
|
%
|
|
53.9
|
%
|
|||
Licensing and services gross margin %
|
98.6
|
%
|
|
84.0
|
%
|
|
98.2
|
%
|
|
Year Ended
|
|
% Change in
|
||||||||||||||
(In thousands)
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
|
2018
|
|
2017
|
||||||||
Research and development
|
$
|
82,449
|
|
|
$
|
103,357
|
|
|
$
|
117,518
|
|
|
(20.2
|
)%
|
|
(12.1
|
)%
|
Percentage of revenue
|
20.7
|
%
|
|
26.8
|
%
|
|
27.5
|
%
|
|
|
|
|
|||||
Mask costs included in Research and development
|
$
|
987
|
|
|
$
|
931
|
|
|
$
|
3,328
|
|
|
6.0
|
%
|
|
(72.0
|
)%
|
|
Year Ended
|
|
% Change in
|
||||||||||||||
(In thousands)
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
|
2018
|
|
2017
|
||||||||
Selling, general, and administrative
|
$
|
91,054
|
|
|
$
|
90,718
|
|
|
$
|
98,602
|
|
|
0.4
|
%
|
|
(8.0
|
)%
|
Percentage of revenue
|
22.8
|
%
|
|
23.5
|
%
|
|
23.1
|
%
|
|
|
|
|
|
Year Ended
|
|
% Change in
|
||||||||||||||
(In thousands)
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
|
2018
|
|
2017
|
||||||||
Amortization of acquired intangible assets
|
$
|
17,690
|
|
|
$
|
31,340
|
|
|
$
|
33,575
|
|
|
(43.6
|
)%
|
|
(6.7
|
)%
|
Percentage of revenue
|
4.4
|
%
|
|
8.1
|
%
|
|
7.9
|
%
|
|
|
|
|
|
Year Ended
|
|
% Change in
|
|||||||||||||
(In thousands)
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
|
2018
|
|
2017
|
|||||||
Restructuring charges
|
$
|
17,349
|
|
|
$
|
7,196
|
|
|
$
|
9,267
|
|
|
100+%
|
|
(22.3
|
)%
|
Percentage of revenue
|
4.4
|
%
|
|
1.9
|
%
|
|
2.2
|
%
|
|
|
|
|
|
Year Ended
|
|
% Change in
|
||||||||||||||
(In thousands)
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
|
2018
|
|
2017
|
||||||||
Acquisition related charges
|
$
|
1,531
|
|
|
$
|
3,781
|
|
|
$
|
6,305
|
|
|
(59.5
|
)%
|
|
(40.0
|
)%
|
Percentage of revenue
|
0.4
|
%
|
|
1.0
|
%
|
|
1.5
|
%
|
|
|
|
|
|
Year Ended
|
|
% Change in
|
|||||||||||||
(In thousands)
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
|
2018
|
|
2017
|
|||||||
Impairment of acquired intangible assets
|
$
|
12,486
|
|
|
$
|
32,431
|
|
|
$
|
7,866
|
|
|
(61.5
|
)%
|
|
100+%
|
Percentage of revenue
|
3.1
|
%
|
|
8.4
|
%
|
|
1.8
|
%
|
|
|
|
|
|
Year Ended
|
|
% Change in
|
||||||||||||||
(In thousands)
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
|
2018
|
|
2017
|
||||||||
Interest expense
|
$
|
(20,600
|
)
|
|
$
|
(18,807
|
)
|
|
$
|
(20,327
|
)
|
|
9.5
|
%
|
|
(7.5
|
)%
|
Percentage of revenue
|
(5.2
|
)%
|
|
(4.9
|
)%
|
|
(4.8
|
)%
|
|
|
|
|
|
Year Ended
|
|
% Change in
|
|||||||||||||
(In thousands)
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
|
2018
|
|
2017
|
|||||||
Other (expense) income, net
|
$
|
(249
|
)
|
|
$
|
(3,286
|
)
|
|
$
|
2,844
|
|
|
(92
|
)%
|
|
100+%
|
Percentage of revenue
|
(0.1
|
)%
|
|
(0.9
|
)%
|
|
0.7
|
%
|
|
|
|
|
|
Year Ended
|
|
% Change in
|
||||||||||||
(In thousands)
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
|
2018
|
|
2017
|
||||||
Income tax expense
|
$
|
2,353
|
|
|
$
|
849
|
|
|
$
|
9,917
|
|
|
100+%
|
|
(91.4)%
|
(In thousands)
|
December 29, 2018
|
|
December 30, 2017
|
|
$ Change
|
|
%Change
|
|||||||
Cash and cash equivalents
|
$
|
119,051
|
|
|
$
|
106,815
|
|
|
$
|
12,236
|
|
|
11
|
%
|
Short-term marketable securities
|
9,624
|
|
|
4,982
|
|
|
4,642
|
|
|
93
|
%
|
|||
Total Cash and cash equivalents and Short-term marketable securities
|
$
|
128,675
|
|
|
$
|
111,797
|
|
|
$
|
16,878
|
|
|
15
|
%
|
(In thousands)
|
December 29, 2018
|
|
December 30, 2017
|
|
$Change
|
|
%Change
|
|||||||
Accounts receivable, net
|
$
|
60,890
|
|
|
$
|
55,104
|
|
|
$
|
5,786
|
|
|
11
|
%
|
Days sales outstanding - Overall
|
58
|
|
|
53
|
|
|
5
|
|
|
|
(In thousands)
|
December 29, 2018
|
|
December 30, 2017
|
|
$Change
|
|
%Change
|
|||||||
Inventories
|
$
|
67,096
|
|
|
$
|
79,903
|
|
|
$
|
(12,807
|
)
|
|
(16
|
)%
|
Months of inventory on hand
|
4.8
|
|
|
5.4
|
|
|
(0.6
|
)
|
|
|
(In thousands)
|
|
|
|
||||
Fiscal year
|
|
Operating leases (1)
|
Long-term Debt (2)
|
||||
2019
|
|
$
|
7,090
|
|
$
|
23,756
|
|
2020
|
|
6,893
|
|
74,331
|
|
||
2021
|
|
5,452
|
|
191,699
|
|
||
2022
|
|
4,658
|
|
—
|
|
||
2023
|
|
4,229
|
|
—
|
|
||
Thereafter
|
|
9,930
|
|
—
|
|
||
|
|
$
|
38,252
|
|
$
|
289,786
|
|
(In thousands, except per share amounts)
|
Year Ended
|
|||||||||||
(unaudited)
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
|||||||
Gross Margin Reconciliation
|
|
|
|
|
|
|||||||
GAAP Gross margin
|
$
|
219,439
|
|
|
$
|
216,579
|
|
|
$
|
246,434
|
|
|
Inventory adjustment related to restructured operations
|
7,829
|
|
|
—
|
|
|
—
|
|
||||
Acquisition related inventory fair value effect (1)
|
—
|
|
|
—
|
|
|
523
|
|
||||
Stock-based compensation expense - gross margin
|
940
|
|
|
788
|
|
|
888
|
|
||||
Non-GAAP Gross margin
|
$
|
228,208
|
|
|
$
|
217,367
|
|
|
$
|
247,845
|
|
|
|
||||||||||||
Gross Margin % Reconciliation
|
|
|
|
|
|
|||||||
GAAP Gross margin %
|
55.0
|
%
|
|
56.1
|
%
|
|
57.7
|
%
|
||||
Cumulative effect of non-GAAP Gross Margin adjustments
|
2.2
|
%
|
|
0.2
|
%
|
|
0.3
|
%
|
||||
Non-GAAP Gross margin %
|
57.2
|
%
|
|
56.3
|
%
|
|
58.0
|
%
|
||||
|
||||||||||||
Operating Expenses Reconciliation
|
|
|
|
|
|
|||||||
GAAP Operating expenses
|
$
|
222,559
|
|
|
$
|
264,199
|
|
|
$
|
273,133
|
|
|
Amortization of acquired intangible assets
|
(17,690
|
)
|
|
(31,340
|
)
|
|
(33,575
|
)
|
||||
Restructuring charges
|
(17,349
|
)
|
|
(7,196
|
)
|
|
(9,267
|
)
|
||||
Acquisition related charges (2)
|
(1,531
|
)
|
|
(3,781
|
)
|
|
(6,305
|
)
|
||||
Impairment of acquired intangible assets
|
(11,686
|
)
|
|
(32,431
|
)
|
|
(7,866
|
)
|
||||
Stock-based compensation expense - operations
|
(12,706
|
)
|
|
(11,755
|
)
|
|
(15,325
|
)
|
||||
Gain on sale of building
|
—
|
|
|
4,624
|
|
|
—
|
|
||||
Non-GAAP Operating expenses
|
$
|
161,597
|
|
|
$
|
182,320
|
|
|
$
|
200,795
|
|
|
|
||||||||||||
(Loss) Income from Operations Reconciliation
|
|
|
|
|
|
|||||||
GAAP Loss from operations
|
$
|
(3,120
|
)
|
|
$
|
(47,620
|
)
|
|
$
|
(26,699
|
)
|
|
Inventory adjustment related to restructured operations
|
7,829
|
|
|
—
|
|
|
—
|
|
||||
Acquisition related inventory fair value effect (1)
|
—
|
|
|
—
|
|
|
523
|
|
||||
Stock-based compensation expense - gross margin
|
940
|
|
|
788
|
|
|
888
|
|
||||
Amortization of acquired intangible assets
|
17,690
|
|
|
31,340
|
|
|
33,575
|
|
||||
Restructuring charges
|
17,349
|
|
|
7,196
|
|
|
9,267
|
|
||||
Acquisition related charges (2)
|
1,531
|
|
|
3,781
|
|
|
6,305
|
|
||||
Impairment of goodwill and acquired intangible assets
|
11,686
|
|
|
32,431
|
|
|
7,866
|
|
||||
Stock-based compensation expense - operations
|
12,706
|
|
|
11,755
|
|
|
15,325
|
|
||||
Gain on sale of building
|
—
|
|
|
(4,624
|
)
|
|
—
|
|
||||
Non-GAAP Income from operations
|
$
|
66,611
|
|
|
$
|
35,047
|
|
|
$
|
47,050
|
|
|
|
||||||||||||
(Loss) Income from Operations % Reconciliation
|
|
|
|
|
|
|||||||
GAAP Loss from operations %
|
(0.8
|
)%
|
|
(12.3
|
)%
|
|
(6.3
|
)%
|
||||
Cumulative effect of non-GAAP Gross Margin and Operating adjustments
|
17.5
|
%
|
|
21.4
|
%
|
|
17.3
|
%
|
||||
Non-GAAP Income from operations %
|
16.7
|
%
|
|
9.1
|
%
|
|
11.0
|
%
|
||||
|
||||||||||||
(1)
|
Fair value adjustment for inventory step-up from purchase accounting.
|
|||||||||||
(2)
|
Legal fees and outside services that were related to our proposed acquisition by Canyon Bridge Acquisition Company, Inc.
|
|
|
December 29, 2018
|
|
December 30, 2017
|
||||
Total cost of contracts for Japanese yen (thousands)
|
|
$
|
1,955
|
|
|
$
|
2,204
|
|
Number of contracts
|
|
2
|
|
|
2
|
|
||
Settlement month
|
|
June 2019
|
|
|
June 2018
|
|
|
Page
|
Consolidated Financial Statements:
|
|
(In thousands, except share and par value data)
|
December 29, 2018
|
|
December 30, 2017
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
119,051
|
|
|
$
|
106,815
|
|
Short-term marketable securities
|
9,624
|
|
|
4,982
|
|
||
Accounts receivable, net of allowance for doubtful accounts
|
60,890
|
|
|
55,104
|
|
||
Inventories
|
67,096
|
|
|
79,903
|
|
||
Prepaid expenses and other current assets
|
27,762
|
|
|
16,567
|
|
||
Total current assets
|
284,423
|
|
|
263,371
|
|
||
Property and equipment, net
|
34,883
|
|
|
40,423
|
|
||
Intangible assets, net
|
21,325
|
|
|
51,308
|
|
||
Goodwill
|
267,514
|
|
|
267,514
|
|
||
Deferred income taxes
|
215
|
|
|
198
|
|
||
Other long-term assets
|
15,327
|
|
|
13,147
|
|
||
Total assets
|
$
|
623,687
|
|
|
$
|
635,961
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses (includes restructuring)
|
$
|
51,763
|
|
|
$
|
54,405
|
|
Accrued payroll obligations
|
9,365
|
|
|
10,416
|
|
||
Current portion of long-term debt
|
8,290
|
|
|
1,508
|
|
||
Deferred income and allowances on sales to distributors
|
—
|
|
|
17,250
|
|
||
Deferred licensing and services revenue
|
—
|
|
|
68
|
|
||
Total current liabilities
|
69,418
|
|
|
83,647
|
|
||
Long-term debt
|
251,357
|
|
|
299,667
|
|
||
Other long-term liabilities
|
44,455
|
|
|
34,954
|
|
||
Total liabilities
|
365,230
|
|
|
418,268
|
|
||
Commitments and contingencies (Notes 13 and 19)
|
—
|
|
|
—
|
|
||
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; 129,728,000 shares issued and outstanding as of December 29, 2018 and 123,895,000 shares issued and outstanding as of December 30, 2017
|
1,297
|
|
|
1,239
|
|
||
Additional paid-in capital
|
736,274
|
|
|
695,768
|
|
||
Accumulated deficit
|
(476,783
|
)
|
|
(477,862
|
)
|
||
Accumulated other comprehensive loss
|
(2,331
|
)
|
|
(1,452
|
)
|
||
Total stockholders' equity
|
258,457
|
|
|
217,693
|
|
||
Total liabilities and stockholders' equity
|
$
|
623,687
|
|
|
$
|
635,961
|
|
|
|
Year Ended
|
||||||||||
(In thousands, except per share data)
|
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||
Revenue:
|
|
|
|
|
|
|
||||||
Product
|
|
$
|
380,468
|
|
|
$
|
356,502
|
|
|
$
|
390,704
|
|
Licensing and services
|
|
18,331
|
|
|
29,459
|
|
|
36,350
|
|
|||
Total revenue
|
|
398,799
|
|
|
385,961
|
|
|
427,054
|
|
|||
Costs and expenses:
|
|
|
|
|
|
|
||||||
Cost of product revenue
|
|
179,101
|
|
|
164,657
|
|
|
179,983
|
|
|||
Cost of licensing and services revenue
|
|
259
|
|
|
4,725
|
|
|
637
|
|
|||
Research and development
|
|
82,449
|
|
|
103,357
|
|
|
117,518
|
|
|||
Selling, general, and administrative
|
|
91,054
|
|
|
90,718
|
|
|
98,602
|
|
|||
Amortization of acquired intangible assets
|
|
17,690
|
|
|
31,340
|
|
|
33,575
|
|
|||
Restructuring charges
|
|
17,349
|
|
|
7,196
|
|
|
9,267
|
|
|||
Acquisition related charges
|
|
1,531
|
|
|
3,781
|
|
|
6,305
|
|
|||
Impairment of acquired intangible assets
|
|
12,486
|
|
|
32,431
|
|
|
7,866
|
|
|||
Gain on sale of building
|
|
—
|
|
|
(4,624
|
)
|
|
—
|
|
|||
Total costs and expenses
|
|
401,919
|
|
|
433,581
|
|
|
453,753
|
|
|||
Loss from operations
|
|
(3,120
|
)
|
|
(47,620
|
)
|
|
(26,699
|
)
|
|||
Interest expense
|
|
(20,600
|
)
|
|
(18,807
|
)
|
|
(20,327
|
)
|
|||
Other (expense) income, net
|
|
(249
|
)
|
|
(3,286
|
)
|
|
2,844
|
|
|||
Loss before income taxes
|
|
(23,969
|
)
|
|
(69,713
|
)
|
|
(44,182
|
)
|
|||
Income tax expense
|
|
2,353
|
|
|
849
|
|
|
9,917
|
|
|||
Net loss
|
|
$
|
(26,322
|
)
|
|
$
|
(70,562
|
)
|
|
$
|
(54,099
|
)
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Net loss per share, basic and diluted
|
|
$
|
(0.21
|
)
|
|
$
|
(0.58
|
)
|
|
$
|
(0.45
|
)
|
|
|
|
|
|
|
|
||||||
Shares used in per share calculations, basic and diluted
|
|
126,564
|
|
|
122,677
|
|
|
119,994
|
|
|
|
Year Ended
|
||||||||||
(In thousands)
|
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||
Net loss
|
|
$
|
(26,322
|
)
|
|
$
|
(70,562
|
)
|
|
$
|
(54,099
|
)
|
Other comprehensive loss:
|
|
|
|
|
|
|
||||||
Unrealized gain (loss) related to marketable securities, net of tax
|
|
41
|
|
|
(73
|
)
|
|
(172
|
)
|
|||
Reclassification adjustment for (gains) losses related to marketable securities included in other (expense) income, net
|
|
(18
|
)
|
|
252
|
|
|
79
|
|
|||
Translation adjustment, net of tax
|
|
(1,271
|
)
|
|
2,620
|
|
|
(1,303
|
)
|
|||
Change in actuarial valuation of defined benefit pension
|
|
369
|
|
|
(95
|
)
|
|
150
|
|
|||
Comprehensive loss
|
|
$
|
(27,201
|
)
|
|
$
|
(67,858
|
)
|
|
$
|
(55,345
|
)
|
|
Common Stock
($.01 par value) |
|
Additional Paid-in
capital |
|
Accumulated
deficit |
|
Accumulated other comprehensive loss
|
|
|
|||||||||||||
(In thousands, except par value data)
|
Shares
|
|
Amount
|
|
|
|
|
Total
|
||||||||||||||
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 valuation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
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 valuation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(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
|
|
Net loss for 2018
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,322
|
)
|
|
—
|
|
|
(26,322
|
)
|
|||||
Unrealized gain related to marketable securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|
41
|
|
|||||
Recognized gain on redemption of marketable securities, previously unrealized
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
(18
|
)
|
|||||
Translation adjustments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,271
|
)
|
|
(1,271
|
)
|
|||||
Common stock issued in connection with the exercise of stock options, ESPP and vested RSUs, net of tax
|
5,833
|
|
|
58
|
|
|
26,860
|
|
|
—
|
|
|
—
|
|
|
26,918
|
|
|||||
Stock-based compensation expense related to stock options, ESPP and RSUs
|
—
|
|
|
—
|
|
|
13,646
|
|
|
—
|
|
|
—
|
|
|
13,646
|
|
|||||
Defined benefit pension, net of actuarial valuation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
369
|
|
|
369
|
|
|||||
Accounting method transition adjustment (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
27,401
|
|
|
—
|
|
|
27,401
|
|
|||||
Balances, December 29, 2018
|
129,728
|
|
|
$
|
1,297
|
|
|
$
|
736,274
|
|
|
$
|
(476,783
|
)
|
|
$
|
(2,331
|
)
|
|
$
|
258,457
|
|
|
Year Ended
|
||||||||||
(In thousands)
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(26,322
|
)
|
|
$
|
(70,562
|
)
|
|
$
|
(54,099
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
39,261
|
|
|
57,861
|
|
|
61,806
|
|
|||
Impairment of acquired intangible assets
|
12,486
|
|
|
32,431
|
|
|
7,866
|
|
|||
Amortization of debt issuance costs and discount
|
2,230
|
|
|
1,982
|
|
|
1,350
|
|
|||
Change in deferred income tax provision
|
(96
|
)
|
|
(154
|
)
|
|
90
|
|
|||
(Gain) loss on sale or maturity of marketable securities
|
(18
|
)
|
|
252
|
|
|
79
|
|
|||
Gain on forward contracts
|
(53
|
)
|
|
(77
|
)
|
|
(184
|
)
|
|||
Stock-based compensation expense
|
13,646
|
|
|
12,543
|
|
|
16,213
|
|
|||
(Gain) loss on disposal of fixed assets
|
(178
|
)
|
|
(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
|
266
|
|
|
1,761
|
|
|
1,459
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
(3,978
|
)
|
|
44,613
|
|
|
(11,419
|
)
|
|||
Inventories
|
13,177
|
|
|
(902
|
)
|
|
(3,272
|
)
|
|||
Prepaid expenses and other assets
|
(11,667
|
)
|
|
889
|
|
|
(2,270
|
)
|
|||
Accounts payable and accrued expenses (includes restructuring)
|
13,325
|
|
|
(23,588
|
)
|
|
8,338
|
|
|||
Accrued payroll obligations
|
(1,051
|
)
|
|
726
|
|
|
402
|
|
|||
Income taxes payable
|
498
|
|
|
(556
|
)
|
|
3,216
|
|
|||
Deferred income and allowances on sales to distributors
|
—
|
|
|
(15,007
|
)
|
|
14,391
|
|
|||
Deferred licensing and services revenue
|
(68
|
)
|
|
(495
|
)
|
|
(183
|
)
|
|||
Net cash provided by operating activities
|
51,458
|
|
|
38,514
|
|
|
41,734
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Proceeds from sales of and maturities of short-term marketable securities
|
5,000
|
|
|
12,689
|
|
|
14,897
|
|
|||
Purchase of marketable securities
|
(9,603
|
)
|
|
(7,420
|
)
|
|
(7,490
|
)
|
|||
Proceeds from sale of building
|
—
|
|
|
7,895
|
|
|
—
|
|
|||
Cash paid for costs of sale of building
|
—
|
|
|
(1,004
|
)
|
|
—
|
|
|||
Capital expenditures
|
(8,384
|
)
|
|
(12,855
|
)
|
|
(16,717
|
)
|
|||
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
|
)
|
|||
Cash paid for software licenses
|
(8,123
|
)
|
|
(8,532
|
)
|
|
(9,035
|
)
|
|||
Net cash used in investing activities
|
$
|
(21,110
|
)
|
|
$
|
(8,260
|
)
|
|
$
|
(17,373
|
)
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
|
|||||||||||
The accompanying notes are an integral part of these Consolidated Financial Statements
|
|
|
December 29, 2018
|
|
December 30, 2017
|
||||
Total cost of contracts for Japanese yen
(in thousands)
|
|
$
|
1,955
|
|
|
$
|
2,204
|
|
Number of contracts
|
|
2
|
|
|
2
|
|
||
Settlement month
|
|
June 2019
|
|
|
June 2018
|
|
|
|
Year Ended
|
|||||||
|
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
|||
Revenue attributable to top five end customers
|
|
18
|
%
|
|
26
|
%
|
|
27
|
%
|
Revenue attributable to largest end customer
|
|
6.1
|
%
|
|
7.3
|
%
|
|
9.9
|
%
|
|
Year Ended
|
|||||||
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
|||
Arrow Electronics Inc.
|
29
|
%
|
|
24
|
%
|
|
24
|
%
|
Weikeng Group
|
25
|
|
|
27
|
|
|
22
|
|
All others
|
29
|
|
|
26
|
|
|
27
|
|
Revenue attributable to distributors*
|
83
|
%
|
|
77
|
%
|
|
73
|
%
|
*
|
During the first quarter of 2018, we updated our channel categories to group all forms of distribution into a single channel. Prior periods have been reclassified to match the current period presentation.
|
Condensed Consolidated Balance Sheets
|
|||||||||
|
|
As of December 29, 2018
|
|||||||
(In thousands)
|
|
As reported under new standard
|
|
Adjustments
|
|
Pro forma as if previous standard was in effect
|
|||
Accounts receivable, net of allowance for doubtful accounts
|
|
60,890
|
|
|
6,600
|
|
|
67,490
|
|
Inventories
|
|
67,096
|
|
|
78
|
|
|
67,174
|
|
Prepaid expenses and other current assets
|
|
27,762
|
|
|
(9,775
|
)
|
|
17,987
|
|
Total assets
|
|
623,687
|
|
|
(3,097
|
)
|
|
620,590
|
|
|
|
|
|
|
|
|
|||
Accounts payable and accrued expenses (includes restructuring)
|
|
51,763
|
|
|
(1,156
|
)
|
|
50,607
|
|
Deferred income and allowances on sales to distributors
|
|
—
|
|
|
34,637
|
|
|
34,637
|
|
Accumulated deficit
|
|
(476,783
|
)
|
|
(36,578
|
)
|
|
(513,361
|
)
|
Total liabilities and stockholders' equity
|
|
623,687
|
|
|
(3,097
|
)
|
|
620,590
|
|
|
Major Class of Revenue
|
|
Year Ended *
|
|||||||
|
(In thousands)
|
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
|||
|
Product revenue - Distributors
|
|
330,719
|
|
|
297,736
|
|
|
310,163
|
|
|
Product revenue - Direct
|
|
49,749
|
|
|
58,766
|
|
|
80,541
|
|
|
Licensing and services revenue
|
|
18,331
|
|
|
29,459
|
|
|
36,350
|
|
|
Total revenue
|
|
398,799
|
|
|
385,961
|
|
|
427,054
|
|
|
|
|
|
|
|
|
|
|||
|
Revenue by Geographical Market
|
|
Year Ended *
|
|||||||
|
(In thousands)
|
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
|||
|
Asia
|
|
298,119
|
|
|
277,638
|
|
|
305,093
|
|
|
Europe
|
|
45,546
|
|
|
44,547
|
|
|
59,835
|
|
|
Americas
|
|
55,134
|
|
|
63,776
|
|
|
62,126
|
|
|
Total revenue
|
|
398,799
|
|
|
385,961
|
|
|
427,054
|
|
|
|
|
|
|
|
|
|
|||
*
|
As noted above, amounts in periods prior to fiscal 2018 have not been adjusted under the modified retrospective method of adopting ASC 606 and, therefore, are presented under GAAP in effect during that period.
|
|
|
Year Ended
|
||||||||||
(in thousands, except per share data)
|
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||
Net loss
|
|
$
|
(26,322
|
)
|
|
$
|
(70,562
|
)
|
|
$
|
(54,099
|
)
|
|
|
|
|
|
|
|
||||||
Shares used in basic and diluted net loss per share
|
|
126,564
|
|
|
122,677
|
|
|
119,994
|
|
|||
|
|
|
|
|
|
|
||||||
Basic and diluted net loss per share
|
|
$
|
(0.21
|
)
|
|
$
|
(0.58
|
)
|
|
$
|
(0.45
|
)
|
|
|
Year Ended
|
|||||||
(in thousands)
|
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
|||
Stock options, RSUs, and ESPP shares excluded as they are antidilutive
|
|
7,567
|
|
|
6,622
|
|
|
8,978
|
|
(In thousands)
|
December 29, 2018
|
|
December 30, 2017
|
||||
Short-term marketable securities:
|
|
|
|
||||
Maturing within one year
|
$
|
7,454
|
|
|
$
|
4,982
|
|
Maturing between one and two years
|
2,170
|
|
|
—
|
|
||
Total marketable securities
|
$
|
9,624
|
|
|
$
|
4,982
|
|
|
Fair value measurements as of
|
|
Fair value measurements as of
|
||||||||||||||||||||||||||||
|
December 29, 2018
|
|
December 30, 2017
|
||||||||||||||||||||||||||||
(In thousands)
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||
Short-term marketable securities
|
$
|
9,624
|
|
|
$
|
9,624
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,982
|
|
|
$
|
4,982
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency forward exchange contracts, net
|
53
|
|
|
—
|
|
|
53
|
|
|
—
|
|
|
77
|
|
|
—
|
|
|
77
|
|
|
—
|
|
||||||||
Total fair value of financial instruments
|
$
|
9,677
|
|
|
$
|
9,624
|
|
|
$
|
53
|
|
|
$
|
—
|
|
|
$
|
5,059
|
|
|
$
|
4,982
|
|
|
$
|
77
|
|
|
$
|
—
|
|
(In thousands)
|
December 29, 2018
|
|
December 30, 2017
|
||||
Work in progress
|
$
|
47,224
|
|
|
$
|
49,642
|
|
Finished goods
|
19,872
|
|
|
30,261
|
|
||
Total inventories
|
$
|
67,096
|
|
|
$
|
79,903
|
|
(In thousands)
|
December 29, 2018
|
|
December 30, 2017
|
||||
Production equipment and software
|
160,979
|
|
|
155,492
|
|
||
Leasehold improvements
|
12,648
|
|
|
13,277
|
|
||
Office furniture and equipment
|
2,623
|
|
|
2,914
|
|
||
|
176,250
|
|
|
171,683
|
|
||
Accumulated depreciation and amortization
|
(141,367
|
)
|
|
(131,260
|
)
|
||
|
$
|
34,883
|
|
|
$
|
40,423
|
|
|
|
December 29, 2018
|
||||||||||||||||
(In thousands)
|
|
Weighted Average Amortization Period (in years)
|
|
Gross
|
|
Impairment
|
|
Accumulated Amortization
|
|
Intangible assets, net
|
||||||||
Developed technology
|
|
5.0
|
|
$
|
112,269
|
|
|
$
|
(12,486
|
)
|
|
$
|
(83,185
|
)
|
|
$
|
16,598
|
|
Customer relationships
|
|
5.8
|
|
22,934
|
|
|
—
|
|
|
(19,048
|
)
|
|
3,886
|
|
||||
Licensed technology
|
|
5.0
|
|
1,195
|
|
|
—
|
|
|
(354
|
)
|
|
841
|
|
||||
Total identified intangible assets
|
|
|
|
$
|
136,398
|
|
|
$
|
(12,486
|
)
|
|
$
|
(102,587
|
)
|
|
$
|
21,325
|
|
|
|
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
|
|
|
Year Ended
|
||||||||||
(In thousands)
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||
Research and development
|
$
|
277
|
|
|
$
|
569
|
|
|
$
|
745
|
|
Amortization of acquired intangible assets
|
17,690
|
|
|
31,340
|
|
|
33,575
|
|
|||
|
$
|
17,967
|
|
|
$
|
31,909
|
|
|
$
|
34,320
|
|
(In thousands)
|
Amount
|
||
2019
|
13,613
|
|
|
2020
|
4,499
|
|
|
2021
|
2,239
|
|
|
2022
|
238
|
|
|
Thereafter
|
736
|
|
|
Total
|
$
|
21,325
|
|
|
|
Year Ended
|
||||||||||
(In thousands)
|
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||
Impairment of cost-basis investment
|
|
$
|
(266
|
)
|
|
$
|
(1,761
|
)
|
|
$
|
(1,459
|
)
|
(In thousands)
|
|
Total
|
||
Balance at December 31, 2016
|
|
$
|
4,049
|
|
Impairment of cost-basis investment
|
|
(1,761
|
)
|
|
Balance at December 30, 2017
|
|
2,288
|
|
|
Impairment of cost-basis investment
|
|
(266
|
)
|
|
Balance at December 29, 2018
|
|
$
|
2,022
|
|
(In thousands)
|
December 29, 2018
|
|
December 30, 2017
|
||||
Trade accounts payable
|
$
|
31,880
|
|
|
$
|
35,350
|
|
Liability for non-cancelable contracts
|
6,078
|
|
|
7,232
|
|
||
Restructuring
|
4,220
|
|
|
2,088
|
|
||
Other accrued expenses
|
9,585
|
|
|
9,735
|
|
||
Total accounts payable and accrued expenses
|
$
|
51,763
|
|
|
$
|
54,405
|
|
Fiscal year
|
|
Amount
|
||
(In thousands)
|
|
|||
2019
|
|
$
|
7,090
|
|
2020
|
|
6,893
|
|
|
2021
|
|
5,452
|
|
|
2022
|
|
4,658
|
|
|
2023
|
|
4,229
|
|
|
Thereafter
|
|
9,930
|
|
|
|
|
$
|
38,252
|
|
|
|
Year Ended
|
||||||||||
(In thousands)
|
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||
Domestic
|
|
$
|
(8,274
|
)
|
|
$
|
(17,341
|
)
|
|
$
|
(33,962
|
)
|
Foreign
|
|
(15,695
|
)
|
|
(52,372
|
)
|
|
(10,220
|
)
|
|||
Loss before taxes
|
|
$
|
(23,969
|
)
|
|
$
|
(69,713
|
)
|
|
$
|
(44,182
|
)
|
|
|
Year Ended
|
||||||||||
(In thousands)
|
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||
Current:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
536
|
|
|
$
|
508
|
|
|
$
|
1,896
|
|
State
|
|
38
|
|
|
30
|
|
|
13
|
|
|||
Foreign
|
|
1,869
|
|
|
304
|
|
|
7,918
|
|
|||
|
|
2,443
|
|
|
842
|
|
|
9,827
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
Federal
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
State
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Foreign
|
|
(90
|
)
|
|
7
|
|
|
90
|
|
|||
|
|
(90
|
)
|
|
7
|
|
|
90
|
|
|||
Income tax expense
|
|
$
|
2,353
|
|
|
$
|
849
|
|
|
$
|
9,917
|
|
|
|
Year Ended
|
||||
|
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
|
|
%
|
|
%
|
|
%
|
Statutory federal rate
|
|
(21)
|
|
(35)
|
|
(35)
|
Adjustments for tax effects of:
|
|
|
|
|
|
|
State taxes, net
|
|
(6)
|
|
(7)
|
|
7
|
Research and development credits
|
|
(5)
|
|
(1)
|
|
(2)
|
Stock compensation
|
|
8
|
|
3
|
|
3
|
Foreign rate differential
|
|
20
|
|
28
|
|
15
|
Foreign dividends
|
|
—
|
|
1
|
|
—
|
Foreign withholding taxes
|
|
5
|
|
—
|
|
9
|
Other permanent
|
|
2
|
|
—
|
|
3
|
Other deferred tax asset adjustment
|
|
13
|
|
—
|
|
—
|
Valuation allowance
|
|
(11)
|
|
(73)
|
|
17
|
Change in uncertain tax benefit accrual
|
|
2
|
|
1
|
|
5
|
Stock compensation (ASU 2016-09) adoption
|
|
—
|
|
(8)
|
|
—
|
Tax rate change
|
|
—
|
|
93
|
|
—
|
Other
|
|
3
|
|
(1)
|
|
1
|
Effective income tax rate
|
|
10
|
|
1
|
|
23
|
(In thousands)
|
|
December 29, 2018
|
|
December 30, 2017
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Accrued expenses and reserves
|
|
$
|
3,714
|
|
|
$
|
3,096
|
|
Inventory
|
|
2
|
|
|
2
|
|
||
Deferred Revenue
|
|
—
|
|
|
228
|
|
||
Stock-based and deferred compensation
|
|
2,660
|
|
|
4,018
|
|
||
Interest expense disallowance
|
|
1,283
|
|
|
—
|
|
||
Intangible assets
|
|
14,649
|
|
|
19,576
|
|
||
Fixed assets
|
|
281
|
|
|
216
|
|
||
Net operating loss carry forwards
|
|
88,333
|
|
|
86,410
|
|
||
Tax credit carry forwards
|
|
92,208
|
|
|
90,530
|
|
||
Capital loss carry forwards
|
|
5,007
|
|
|
3,926
|
|
||
Other
|
|
1,130
|
|
|
2,323
|
|
||
Total deferred tax assets
|
|
209,267
|
|
|
210,325
|
|
||
Less: valuation allowance
|
|
(207,108
|
)
|
|
(209,691
|
)
|
||
Net deferred tax assets
|
|
2,159
|
|
|
634
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Fixed assets
|
|
1,536
|
|
|
559
|
|
||
Deferred revenue
|
|
525
|
|
|
—
|
|
||
Other
|
|
(57
|
)
|
|
16
|
|
||
Total deferred tax liabilities
|
|
2,004
|
|
|
575
|
|
||
Net deferred tax assets
|
|
$
|
155
|
|
|
$
|
59
|
|
(In thousands)
|
|
Amount
|
||
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
|
|
|
Reduction for tax positions of prior years
|
|
(1,824
|
)
|
|
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
|
|
|
Reductions for tax positions of prior years
|
|
(1,226
|
)
|
|
Reduction as a result of lapse of applicable statute of limitations
|
|
(2,047
|
)
|
|
Balance at December 30, 2017
|
|
44,832
|
|
|
Additions based on tax positions related to the current year
|
|
389
|
|
|
Additions based on tax positions of prior years
|
|
19
|
|
|
Reductions for tax positions of prior years
|
|
(5
|
)
|
|
Reduction as a result of lapse of applicable statute of limitations
|
|
(1,235
|
)
|
|
Balance at December 29, 2018
|
|
$
|
44,000
|
|
(In thousands)
|
Severance & Related
(1)
|
|
Lease Termination
|
|
Software Contracts & Engineering Tools
(2)
|
|
Other
See note (3) for 2018
|
|
Total
|
||||||||||
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
|
|
Restructuring charges
|
5,696
|
|
|
7,379
|
|
|
913
|
|
|
3,361
|
|
|
17,349
|
|
|||||
Costs paid or otherwise settled
|
(5,074
|
)
|
|
381
|
|
|
(1,055
|
)
|
|
(3,368
|
)
|
|
(9,116
|
)
|
|||||
Balance at December 29, 2018
|
$
|
1,814
|
|
|
$
|
8,630
|
|
|
$
|
218
|
|
|
$
|
18
|
|
|
$
|
10,680
|
|
(1)
|
Includes employee relocation costs and accelerated stock compensation
|
(2)
|
Includes cancellation of contracts, asset impairments, and accelerated depreciation on certain enterprise resource planning and customer relationship management systems
|
(3)
|
In fiscal 2018, "Other" activity includes the abandonment of long lived assets related to the restructuring of our agreements with a privately-held investee
|
(in thousands)
|
December 29, 2018
|
|
December 30, 2017
|
||||
Principal amount
|
$
|
263,033
|
|
|
$
|
306,791
|
|
Unamortized original issue discount and debt issuance costs
|
(3,386
|
)
|
|
(5,616
|
)
|
||
Less: Current portion of long-term debt
|
(8,290
|
)
|
|
(1,508
|
)
|
||
Long-term debt
|
$
|
251,357
|
|
|
$
|
299,667
|
|
|
|
|
Year Ended
|
|
|
||||||
(in thousands)
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||
Contractual interest
|
$
|
18,600
|
|
|
$
|
16,503
|
|
|
$
|
18,518
|
|
Amortization of debt issuance costs and discount
|
2,230
|
|
|
1,982
|
|
|
1,350
|
|
|||
Total Interest expense related to the Term Loan
|
$
|
20,830
|
|
|
$
|
18,485
|
|
|
$
|
19,868
|
|
Fiscal year
|
|
(in thousands)
|
||
|
|
|
||
2019
|
|
10,031
|
|
|
2020
|
|
63,131
|
|
|
2021
|
|
189,871
|
|
|
|
|
$
|
263,033
|
|
|
|
Year Ended
|
||||||||||
(In thousands)
|
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||
Cost of products sold
|
|
$
|
940
|
|
|
$
|
795
|
|
|
$
|
888
|
|
Research and development
|
|
4,357
|
|
|
5,245
|
|
|
7,928
|
|
|||
Selling, general, and administrative
|
|
8,349
|
|
|
6,503
|
|
|
7,397
|
|
|||
Total stock-based compensation
|
|
$
|
13,646
|
|
|
$
|
12,543
|
|
|
$
|
16,213
|
|
(Shares and aggregate intrinsic value in thousands)
|
Shares
|
|
Weighted
average exercise price |
|
Weighted average
remaining contractual term (years) |
|
Aggregate
Intrinsic Value |
|||||
Balance, December 30, 2017
|
12,939
|
|
|
$
|
5.76
|
|
|
|
|
|
||
Granted
|
843
|
|
|
7.61
|
|
|
|
|
|
|||
Exercised
|
(4,882
|
)
|
|
5.79
|
|
|
|
|
|
|||
Forfeited or expired
|
(2,284
|
)
|
|
5.87
|
|
|
|
|
|
|||
Balance, December 29, 2018
|
6,616
|
|
|
$
|
5.94
|
|
|
|
|
|
||
Vested and expected to vest at December 29, 2018
|
6,616
|
|
|
$
|
5.94
|
|
|
4.26
|
|
$
|
6,788
|
|
Exercisable, December 29, 2018
|
3,122
|
|
|
$
|
5.70
|
|
|
2.82
|
|
$
|
3,668
|
|
(Shares in thousands)
|
Shares
|
|
Weighted average grant date fair value
|
|||
Balance, December 30, 2017
|
2,766
|
|
|
$
|
5.85
|
|
Granted
|
3,498
|
|
|
8.02
|
|
|
Vested
|
(1,124
|
)
|
|
5.97
|
|
|
Forfeited or expired
|
(728
|
)
|
|
5.90
|
|
|
Balance, December 29, 2018
|
4,412
|
|
|
$
|
7.53
|
|
(Shares in thousands)
|
|
Unvested
|
|
Vested
|
|
Total
|
|||
Balance, December 30, 2017
|
|
707
|
|
|
83
|
|
|
790
|
|
Granted
|
|
788
|
|
|
—
|
|
|
788
|
|
Vested
|
|
(31
|
)
|
|
31
|
|
|
—
|
|
Exercised
|
|
—
|
|
|
(104
|
)
|
|
(104
|
)
|
Canceled
|
|
(555
|
)
|
|
(10
|
)
|
|
(565
|
)
|
Balance, December 29, 2018
|
|
909
|
|
|
—
|
|
|
909
|
|
(In thousands)
|
Balance at
beginning of period |
|
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 29, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Valuation allowance for deferred tax assets
|
209,691
|
|
|
(2,583
|
)
|
|
—
|
|
|
—
|
|
|
207,108
|
|
|||||
Allowance for doubtful accounts
|
9,371
|
|
|
1
|
|
|
73
|
|
|
(9,248
|
)
|
|
197
|
|
|||||
Allowance for warranty expense
|
255
|
|
|
580
|
|
|
—
|
|
|
(482
|
)
|
|
353
|
|
|||||
|
$
|
219,317
|
|
|
$
|
(2,002
|
)
|
|
$
|
73
|
|
|
$
|
(9,730
|
)
|
|
$
|
207,658
|
|
Fiscal year ended December 30, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Valuation allowance for deferred tax assets
|
$
|
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
|
|
|
|
|
|
|
|
|
|
||||||||||
Valuation allowance for deferred tax assets
|
$
|
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
|
|
|
|
Year Ended
|
||||||||||||||||
(In thousands)
|
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||||||||
United States:
|
|
$
|
38,585
|
|
|
10%
|
|
$
|
48,315
|
|
|
13%
|
|
$
|
51,752
|
|
|
12%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
China*
|
|
202,983
|
|
|
51
|
|
193,590
|
|
|
50
|
|
186,865
|
|
|
44
|
|||
Europe
|
|
45,546
|
|
|
11
|
|
44,547
|
|
|
12
|
|
59,835
|
|
|
14
|
|||
Japan
|
|
44,033
|
|
|
11
|
|
42,286
|
|
|
11
|
|
49,080
|
|
|
12
|
|||
Taiwan
|
|
16,124
|
|
|
4
|
|
14,846
|
|
|
4
|
|
31,322
|
|
|
7
|
|||
Other Asia*
|
|
34,979
|
|
|
9
|
|
26,916
|
|
|
7
|
|
37,826
|
|
|
9
|
|||
Other Americas
|
|
16,549
|
|
|
4
|
|
15,461
|
|
|
4
|
|
10,374
|
|
|
3
|
|||
Total foreign revenue
|
|
360,214
|
|
|
90
|
|
337,646
|
|
|
87
|
|
375,302
|
|
|
88
|
|||
Total revenue
|
|
$
|
398,799
|
|
|
100%
|
|
$
|
385,961
|
|
|
100%
|
|
$
|
427,054
|
|
|
100%
|
(In thousands)
|
December 29, 2018
|
|
December 30, 2017
|
|
December 31, 2016
|
||||||
United States
|
$
|
27,353
|
|
|
$
|
30,338
|
|
|
$
|
30,532
|
|
|
|
|
|
|
|
||||||
China
|
2,360
|
|
|
4,632
|
|
|
10,617
|
|
|||
Philippines
|
3,319
|
|
|
3,883
|
|
|
4,928
|
|
|||
Taiwan
|
949
|
|
|
958
|
|
|
2,310
|
|
|||
Japan
|
324
|
|
|
313
|
|
|
637
|
|
|||
Other
|
578
|
|
|
299
|
|
|
457
|
|
|||
Total foreign property and equipment, net
|
7,530
|
|
|
10,085
|
|
|
18,949
|
|
|||
Total property and equipment, net
|
$
|
34,883
|
|
|
$
|
40,423
|
|
|
$
|
49,481
|
|
|
|
2018
|
|
2017 *
|
||||||||||||||||||||||||||||
(In thousands, except per share data)
|
|
Q4
|
|
Q3
|
|
Q2
|
|
Q1
|
|
Q4
|
|
Q3
|
|
Q2
|
|
Q1
|
||||||||||||||||
Revenue
|
|
$
|
95,977
|
|
|
$
|
101,484
|
|
|
$
|
102,715
|
|
|
$
|
98,623
|
|
|
$
|
95,266
|
|
|
$
|
91,971
|
|
|
$
|
94,137
|
|
|
$
|
104,587
|
|
Gross margin
|
|
54,306
|
|
|
58,364
|
|
|
50,248
|
|
|
56,521
|
|
|
51,216
|
|
|
53,322
|
|
|
51,209
|
|
|
60,832
|
|
||||||||
Restructuring charges
|
|
11,854
|
|
|
90
|
|
|
4,376
|
|
|
1,029
|
|
|
2,483
|
|
|
3,071
|
|
|
1,576
|
|
|
66
|
|
||||||||
Net (loss) income
|
|
$
|
(7,121
|
)
|
|
$
|
6,974
|
|
|
$
|
(20,223
|
)
|
|
$
|
(5,952
|
)
|
|
$
|
(7,213
|
)
|
|
$
|
(43,052
|
)
|
|
$
|
(13,022
|
)
|
|
$
|
(7,275
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net (loss) income per share - basic and diluted
|
|
$
|
(0.05
|
)
|
|
$
|
0.05
|
|
|
$
|
(0.16
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.06
|
)
|
(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.
|
•
|
Timely reviews with the Controller and/or CFO regarding technical accounting conclusions to ensure an effective risk assessment is performed to identify and assess changes within the business and external environment that may impact financial reporting;
|
•
|
Routine Disclosure Committee meetings to highlight and identify unique or non-recurring transactions or events, the accounting for these matters and the associated relevant risk assessments;
|
•
|
Expansion of the Disclosure Committee membership to include representatives from the Executive Leadership Team; and
|
•
|
Continued risk assessment reviews, as warranted, with the Audit Committee.
|
Exhibit Number
|
|
Description
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
10.1*
|
|
|
|
|
|
10.2*
|
|
|
|
|
|
10.3*
|
|
|
|
|
|
10.4*
|
|
|
|
|
|
10.5*
|
|
|
|
|
|
10.6*
|
|
|
|
|
|
10.7
|
|
|
|
|
|
Exhibit Number
|
|
Description
|
|
|
|
10.8*
|
|
|
|
|
|
10.9*
|
|
|
|
|
|
10.10*
|
|
|
|
|
|
10.11
|
|
|
|
|
|
10.12*
|
|
|
|
|
|
10.13*
|
|
|
|
|
|
10.14*
|
|
|
|
|
|
10.15
|
|
|
|
|
|
10.16*
|
|
|
|
|
|
10.17*
|
|
|
|
|
|
10.18*
|
|
|
|
|
|
10.19*
|
|
|
|
|
|
10.20*
|
|
|
|
|
|
21.1
|
|
|
|
|
|
23.1
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
*
|
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
|
|
(Registrant)
|
|
By:
|
/s/ Sherri Luther
|
|
Sherri Luther
Chief Financial Officer
(Duly Authorized Officer and Principal Financial and Accounting Officer)
|
Date:
|
February 26, 2019
|
Signature
|
Title
|
Date
|
|
|
|
Principal Executive Officer
|
|
|
/s/ James Anderson
|
|
February 26, 2019
|
James Anderson
|
President, Chief Executive Officer, and Director
|
|
|
|
|
Principal Financial and Accounting Officer
|
|
|
/s/ Sherri Luther
|
|
February 26, 2019
|
Sherri Luther
|
Chief Financial Officer
|
|
|
|
|
Directors
|
|
|
/s/ Robin Abrams
|
|
February 26, 2019
|
Robin Abrams
|
Director
|
|
/s/ Brian Beattie
|
|
February 26, 2019
|
Brian Beattie
|
Director
|
|
/s/ John Bourgoin
|
|
February 26, 2019
|
John Bourgoin
|
Director
|
|
/s/ Mark Jensen
|
|
February 26, 2019
|
Mark Jensen
|
Director
|
|
/s/ James Lederer
|
|
February 26, 2019
|
James Lederer
|
Director
|
|
/s/ John Major
|
|
February 26, 2019
|
John Major
|
Director
|
|
/s/ Krishna Rangasayee
|
|
February 26, 2019
|
Krishna Rangasayee
|
Director
|
|
/s/ Jeff Richardson
|
|
February 26, 2019
|
Jeff Richardson
|
Director
|
|
•
|
Those who are eligible under the Company’s Sales Incentive Plan (“SIP”);
|
•
|
Temporary employees (including interns) and contractors; and
|
•
|
Any other persons deemed ineligible by application of the provisions set forth under the heading "Other General Provisions" hereafter.
|
Performance Metric
|
Weight
|
1 - Operating Income
|
33.33%
|
2 - Revenue
|
33.33%
|
3 - Corporate MBOs
|
33.33%
|
Total
|
100%
|
|
Name
|
|
Jurisdiction of Incorporation
|
1.
|
Lattice Semiconductor Limited
|
|
Bermuda
|
2.
|
Lattice Semiconductor (Shanghai) Co. Ltd.
|
|
China
|
3.
|
Lattice Semiconducteurs SARL
|
|
France
|
4.
|
Lattice Semiconductor GmbH
|
|
Germany
|
5.
|
Lattice Semiconductor (India) Pvt. Ltd.
|
|
India
|
6.
|
Lattice Semiconductor SRL
|
|
Italy
|
7.
|
Lattice Semiconductor Japan KK
|
|
Japan
|
8
|
Lattice Semiconductor Korea Co. Ltd.
|
|
Korea
|
9.
|
Silicon Image Cooperatie U.A.
|
|
Netherlands
|
10.
|
Lattice Semiconductor (PH) Corporation
|
|
Philippines
|
11.
|
Lattice SG Pte. Ltd.
|
|
Singapore
|
12.
|
HDMI Licensing, LLC
|
|
Delaware, USA
|
13.
|
MHL, LLC
|
|
Delaware, USA
|
14.
|
SiBEAM, Inc.
|
|
Delaware, USA
|
15.
|
Lattice Connectivity, LLC
|
|
Delaware, USA
|
16.
|
Lattice Semiconductor International LLC
|
|
Delaware, USA
|
17.
|
Silicon Image International LLC
|
|
Delaware, USA
|
18.
|
SPMT, LLC
|
|
Delaware, USA
|
19.
|
WirelessHD, LLC
|
|
Delaware, USA
|
20.
|
Lattice Semiconductor UK Limited
|
|
United Kingdom
|
21.
|
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/ James Anderson
|
|
James Anderson
|
|
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/ Sherri Luther
|
|
Sherri Luther
|
|
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/ James Anderson
|
|
James Anderson
|
|
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/ Sherri Luther
|
|
Sherri Luther
|
|
Chief Financial Officer
|