Lattice Semiconductor Corporation (LSCC)
Q3 2012 Earnings Conference Call
October 18, 2012, 17:00 PM ET
Darin Billerbeck -- President and CEO
Joe Bedewi -- CFO
David Pasquale -- Global IR Partners
Nick Clare -- Baird
Ruben Roy -- Mizuho Securities
Richard Shannon -- Craig-Hallum
Ian Ing -- Lazard Capital Markets
Bill Dezellem -- Tieton Capital
David Duley -- Steelhead Securities
Previous Statements by LSCC
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I'll now turn the call over to our host, Mr. David Pasquale, Global IR Partners. Sir, you may begin.
David Pasquale -- Global IR Partners
Thank you, operator. Welcome everyone to Lattice Semiconductor's third quarter 2012 results conference call. Joining us from the Company today are Mr. Darin 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 e-mail Global IR Partners using firstname.lastname@example.org or you can get a copy of the release off of the Investor Relations section of Lattice Semiconductor's website.
Before we begin the formal remarks, I'll review the Safe Harbor statements. It is 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 fourth quarter of fiscal 2012. 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 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 2011 Form 10-K 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.
Thank you, David, and thanks to everyone for joining us on our call today. In terms of Q3, revenue was $70.9 million. This is in line with our guidance and reflects the impact of macro weakness on our comps business. The comps softness is muting the positive impact of our continued success of our new products in both consumer and non-consumer segments.
From an operational perspective, we are finally beginning to see the benefit of our prior cost reduction actions. Those actions positively impacted Q3 and helped us deliver a 54.4% gross margin. We do not expect the business environment to change significantly over the near term. We expect continued pressure on our comps business and continued weakness in Europe.
Given our outlook, we are proactively taking additional restructuring actions to further streamline our organization and to focus our strategy in pursuing the low-density FPGA markets. The restructuring is primarily focused on consolidating sales and marketing in both the US and in Europe.
This includes the elimination of several subscale sites and middle management positions in sales and marketing. We are focusing our team on having the right people with the right experience in the right locations to give Lattice the best chance of winning. This is essential to our future's success.
We expect our latest actions to result in a 13% workforce reduction. This is on top of the 5% headcount reduction announced in Q2. I want to be clear that while we are working to better align our operating costs to the current business environment, we remain fully committed to executing on our product roadmaps and as always, we'll continue to provide excellent customer support.
In terms of added color for the third quarter, the revenue mix of new, mainstream and mature was 26%, 54% and 20% of revenue respectively in Q3. Revenues from our new product was up 34% quarter-on-quarter, reflecting the strength in our ECP3 and iCE40 product family shipments.
Revenues from new products was up 95% in Q3 2012 versus Q2 of 2011. New product growth from ECP3, MachXO, iCE40 and our power management devices is the key to our future growth. Q3 new product growth reflects our momentum in both consumer and non-consumer areas and includes several non-handset opportunities.
Mainstream products were down about 10% quarter-on-quarter. This was due to a specific customer placing higher MachXO orders in Q2 that did not repeat in Q3. Revenues from our mature product was down about 3% when compared to prior quarter due to softness in the industrial market. The revenue mix between FPGA and PLD products was 37% and 63% respectively.
Our ECP3 family continued to perform well and is driving growth in our FPGA segment. On the PLD side, we benefitted from growth in our iCE family. iCE40 is now the fastest ramping product in Lattice's history.