Lattice Semiconductor(LSCC) - 2024 Q4 - Annual Report

Revenue Performance - Revenue for fiscal 2024 decreased by $227.8 million, or 31%, to$ 509.4 million compared to $737.2 million in fiscal 2023, primarily due to softer demand in industrial and automotive applications and inventory normalization by customers [185]. - Total revenue for fiscal 2024 was$ 509,401,000, a decrease of 30.9% compared to $737,154,000 in fiscal 2023 [193]. - Revenue from the Communications and Computing end market decreased by 11% in fiscal 2024, primarily due to softer demand in telecommunications infrastructure [190]. - Revenue from the Industrial and Automotive end market decreased by 45% in fiscal 2024, primarily due to reduced demand and inventory normalization [191]. - Revenue from Asia decreased in fiscal 2024 compared to fiscal 2023, primarily due to the macroeconomic environment in the region [192]. - Revenue from distributors accounted for 89% of total revenue for the year ended December 28, 2024, up from 87% in 2023 [254]. - Revenue from the China market was$ 206.380 million, representing 40% of total revenue, compared to 32% in 2023 [288]. Profitability and Margins - Gross margin for fiscal 2024 was 66.8%, down from 69.8% in fiscal 2023, reflecting the impact of decreased revenue and increased costs [184]. - Income from operations for fiscal 2024 was $34.5 million, or 6.8% of revenue, down from$ 212.3 million, or 28.8% of revenue, in fiscal 2023 [184]. - The GAAP net income for fiscal 2024 was $61.1 million, representing a net income margin of 12.0%, down from 35.1% in 2023 [240]. - Adjusted EBITDA for fiscal 2024 was$ 162.0 million, with an adjusted EBITDA margin of 31.8%, compared to $324.7 million and 44.0% in 2023 [240]. - Net income for the year ended December 28, 2024, was$ 61,131,000, a decrease of 76.4% compared to $259,061,000 in 2023 [242]. Expenses - Research and development expenses increased to$ 159.3 million, representing 31.3% of revenue in fiscal 2024, compared to 21.7% in fiscal 2023 [184]. - Selling, general and administrative expenses were $116.9 million, or 23.0% of revenue, in fiscal 2024, compared to 18.6% in fiscal 2023 [184]. - Restructuring costs increased significantly to$ 12,291,000, representing 2.4% of total revenue, compared to $1,908,000 in fiscal 2023 [203]. - Total operating expenses increased slightly to$ 305.943 million from $302.400 million in 2023, marking a rise of 0.5% [358]. Cash Flow and Liquidity - Cash provided by operating activities decreased to$ 140.9 million in fiscal 2024 from $269.6 million in fiscal 2023, a decline of$ 128.7 million [224]. - The company had cash and cash equivalents of $136.3 million as of December 28, 2024, a 6.2% increase from$ 128.3 million in 2023 [223]. - The company had no outstanding long-term debt as of December 28, 2024, compared to $130.0 million in discretionary payments made in fiscal 2023 [226]. - Operating cash flow for 2024 was$ 140,876,000, down from $269,588,000 in 2023, a decline of 47.8% [246]. Assets and Liabilities - Total assets increased slightly to$ 843,903,000 in 2024 from $840,894,000 in 2023, reflecting a growth of 0.1% [244]. - Total liabilities decreased to$ 132,971,000 in 2024 from $148,874,000 in 2023, a reduction of 10.7% [244]. - Stockholders' equity increased to$ 710,932,000 in 2024, up from $692,020,000 in 2023, representing a growth of 2.9% [244]. Stock and Equity - The company issued 1,509,000 shares in connection with employee equity incentive plans in 2024 [248]. - The company repurchased 1,145,000 shares of common stock in 2024, totaling$ 66,806,000 [248]. - The company announced a new stock repurchase program on December 9, 2024, allowing for an additional $100 million in repurchases through December 31, 2025 [338]. Tax and Deferred Tax Assets - The income tax benefit for fiscal 2024 was$ (24,902,000), a decrease of 43.7% compared to $(44,205,000) in fiscal 2023, influenced by various tax benefits [209]. - Total deferred tax assets increased to$ 152.3 million in 2024 from $139.7 million in 2023, while the valuation allowance rose to$ 82.7 million from $79.1 million [343]. Audit and Compliance - The financial statements were audited and presented fairly in accordance with U.S. generally accepted accounting principles [360]. - The Company has been under audit by Ernst & Young LLP since 2020, with the latest report dated February 14, 2025 [368].