Lattice Semiconductor Corp (LSCC)
Q2 2011 Results Conference Call
July 21, 2011 5:00 p.m. EDT
David Pasquale – Global IR Partners
Darin G. Billerbeck – President and CEO
Joseph Bedewi – CFO, Corporate Vice President
Tristan Gerra – Robert W. Baird
Richard Shannon – Northland Securities
Sundeep Bajikar – Jefferies & Company
Dunham Winoto – Avian Securities
Bill Dezellem – Tieton Capital Management
David Duley – Merriman Curhan Ford & Co
Good afternoon, my name is [Shannon], and I will be your conference operator today.
At this time, I would like to welcome everyone to the Lattice Semiconductor Second Quarter 2011 Results Conference Call.
Previous Statements by LSCC
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Mr. David Pasquale, you may begin your conference.
Thank you, operator. Welcome, everyone, to Lattice Semiconductor's second quarter 2011 results conference call.
Joining us today from the company are Mr. Darin G. Billerbeck, the company's President and CEO, and Mr. Joe Bedewi, Lattice's Chief Financial Officer. Both executives will be available for Q&A after the prepared comments.
If you have not yet received a copy of today's results release, please email Global IR Partners using email@example.com, or you can get a copy of the release off of the Investor Relations section at Lattice Semiconductor's website.
Before we begin the formal remarks, I'll review the Safe Harbor Statement. It's our intention that this call will comply with the requirements of SEC Regulation FD. This call includes and constitutes the company's official guidance for the third quarter of fiscal 2011. If at any time after this call we communicate any material changes to this guidance, we intend that such updates will be done using a public forum such as a press release or publicly-announced conference call.
The matters that we discuss today, other than the historical information, include forward-looking statements relating to our future financial performance and other performance expectations. Investors are cautioned that forward-looking statements are neither promises nor guarantees. They involve risks and uncertainties that may cause actual results to differ materially from those projected in the forward-looking statements. Some of those risks and uncertainties are detailed in our filings with the Securities and Exchange Commission including our fiscal year 2010 Form 10-K filed on March 11 and our quarterly reports on Form 10-Q. The company disclaims any obligation to publicly update or revise any such forward-looking statements to reflect events or circumstances that occur after this call.
Our prepared remarks also will be presented within the requirements of SEC Regulation G regarding generally-accepted accounting principles or GAAP.
I would like to now turn the call over to Mr. Darin Billerbeck. Please go ahead, sir.
Darin G. Billerbeck
Thank you, David; and thanks, everybody, for joining us on the call today.
The second quarter was another record quarter for us, with our highest quarterly revenues in a decade. The results were in line with guidance, as we continued to execute on our business strategy and accelerate our new products to market. Based on our results and analyst market data, we continue to gain market segment shares.
In terms of specific results for the second quarter, revenue of $83.9 million was up 2% from the $82.6 million in Q1 of 2011 and up 9% from the $77.1 million in Q2 of 2010. The $2 million in Japan-related safety stock pull-ons seen in Q1 was not experienced in Q2. Gross margins came in at 60.4% compared to 60% in Q1 of 2011 and 61.2% in Q2 of 2010.
The revenue mix of new, mainstream and mature was 49%, 27% and 24% of revenue, respectively, in Q2. This compares to new at 44%, mainstream at 32% and mature at 24% in Q1 of 2011. New products were up 11% quarter on quarter following sequential growth of 16% in Q1. This segment again outpaced the company's overall growth. Mainstream products were down 12% quarter on quarter due to the decline in the Military segment. Mature products were consistent with the recent quarter trends.
Revenue from FPGA products represented 33% of the total revenue in Q2 compared to 38% in Q1. PLD products represented 67% of the total revenue in Q2, compared to 62% in Q1. PLD product growth was broad-based, but particularly strong in MachXO, 4000ZE and Mixed Signal product families. Another revenue record was set by our Mixed Signal products which reached a high of 7% of our total revenue. Quarter on quarter, Mixed Signal grew 22%.
On a geographic basis, revenue from Asia, including Japan, increased to 65% of total revenue compared to last quarter's 61%. This is primarily due to the recovery of demand in Japan. Revenue from North America decreased quarter on quarter to 13% of revenue, compared to 18% of revenue in Q1. Europe increased slightly to 22% of revenue compared to 21% of revenue in Q1.
On an end-market basis, Communications increased to 47% of revenue in Q2 compared to 44% in Q1. We benefited from continued 3G demand along with some added 2G upside orders. Computing was unchanged at 13% of revenue in Q2, compared to 13% in Q1. Industrial and Other came in at 30% of revenue in Q2 compared to 31% in Q1. The slight decrease reflects the previously mentioned decline in Military revenue. Consumer dropped from 12% of revenue in Q1 to 10% in Q2.