Lattice Semiconductor(LSCC) - 2023 Q3 - Quarterly Report

Financial Performance - Revenue for Q3 2023 was $192.169 million, a 11.4$172.509 million in Q3 2022[66] - Gross margin for Q3 2023 was 70.0%, up from 68.8% in Q3 2022, reflecting a 120 basis point improvement[76] - Total revenue for the first nine months of 2023 was $566.558 million, a 17.0$484.396 million in the same period of 2022[66] - Gross margin for the first nine months of 2023 was 69.8%, up from 68.1% in the same period of 2022, reflecting a 170 basis point improvement[76] Revenue Breakdown - Revenue from the Industrial and Automotive end market increased by 28% in Q3 2023 compared to Q3 2022, driven by strong customer adoption[71] - Revenue from the Communications and Computing end market decreased by 6% in Q3 2023 compared to Q3 2022, primarily due to softer demand[70] - Revenue from Asia decreased to $117.335 million (61.1$122.860 million (71.2%) in Q3 2022[74] - Revenue from the Consumer end market decreased by 24% for the first nine months of 2023 compared to the same period in 2022, primarily due to macroeconomic weakness[72] - Revenue attributable to distributors was 90% for Q3 2023, consistent with Q3 2022, indicating stable distribution channels[75] Expenses - Research and development expenses increased by 20.8% to $42.048 million in Q3 2023 compared to$34.820 million in Q3 2022[77] - Selling, general, and administrative expenses for Q3 2023 were $33.2 million, a 4.0$31.9 million in Q3 2022, representing 17.3% of revenue[78] - Amortization of acquired intangible assets was $870,000 in Q3 2023, flat compared to$869,000 in Q3 2022, and decreased by 10.3% to $2.6 million for the first nine months of fiscal 2023[79] - Restructuring costs decreased by 34.8$1.5 million in Q3 2023 from $2.3 million in Q3 2022, representing 0.8$954,000 in Q3 2023 from an expense of $1.3 million in Q3 2022, a change of 175.3$4.1 million in Q3 2023, up 1,050.8% from $356,000 in Q3 2022, driven by increased worldwide income[84] Cash Flow and Investments - Cash and cash equivalents decreased by 21.5$114.4 million as of September 30, 2023, down from $145.7 million at the end of 2022[89] - Cash provided by operating activities for the first nine months of fiscal 2023 was$197.6 million, an increase of $40.8 million compared to$156.8 million in the same period of fiscal 2022[91] - Net cash used by investing activities increased to $25.3 million in the first nine months of fiscal 2023 from$21.4 million in the same period of fiscal 2022, primarily due to increased capital expenditures[92] - Net cash used by financing activities rose to $203.1 million in the first nine months of fiscal 2023, up$57.1 million from $146.0 million in the same period of fiscal 2022[93] Balance Sheet and Working Capital - Accounts receivable, net increased by approximately$11.9 million, or 12.7%, to $105.9 million as of September 30, 2023, compared to$94.0 million on December 31, 2022[94] - Inventories decreased by $6.4 million, or 5.8$104.0 million as of September 30, 2023, from $110.4 million on December 31, 2022, primarily due to increased product shipments[95] - Days sales outstanding increased by 1 day to 50 days as of September 30, 2023, compared to 49 days on December 31, 2022[94] - Days of inventory on hand decreased by 22 days to 165 days as of September 30, 2023, from 187 days on December 31, 2022[95] Future Outlook and Risk Management - The company may consider future acquisition opportunities to extend its product or technology portfolios and expand product offerings[88] - As of September 30, 2023, the company had no used or unused credit arrangements beyond the secured revolving loan facility described in the 2022 Credit Agreement[97] - The company has established policies to protect against market risks related to foreign currency exchange rates and interest rates, with no material changes reported since the previous disclosures[99] - The share repurchase program details are available in the quarterly report, indicating ongoing capital management strategies[98]