- Current report filing (8-K)
March 17 2010 - 12:12PM
Edgar (US Regulatory)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 17, 2010
LSI CORPORATION
(Exact name of registrant as specified in its charter)
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DELAWARE
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1-10317
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94-2712976
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(State or other jurisdiction of
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(Commission File Number)
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(IRS Employer Identification
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incorporation)
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No.)
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1621 Barber Lane
Milpitas, California 95035
(Address of principal executive offices, including zip code)
(408) 433-8000
(Registrants telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 7.01 Regulation FD Disclosure.
On March 17, 2010, LSI Corporation issued a news release updating its guidance for the first
quarter of fiscal year 2010 and announcing the adoption of a stock repurchase program by its board
of directors pursuant to which up to $250 million of LSIs common stock may be repurchased. A copy
of the news release is furnished as Exhibit 99.1 to this Form 8-K and is incorporated by reference
herein.
The news release contains non-GAAP financial information. Management believes that the presentation
of non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP net income (loss) per basic and
diluted share provides important supplemental information to management and investors about
financial and business trends relating to the companys results of operations. Management believes
that the use of these non-GAAP financial measures also provides consistency and comparability with
our past financial reports.
Management has historically used these non-GAAP measures when evaluating operating performance
because we believe that the inclusion or exclusion of the items described below provides an
additional measure of our core operating results and facilitates comparisons of our core operating
performance against prior periods and our business model objectives. We have chosen to provide this
information to investors to enable them to perform additional analyses of past, present and future
operating performance and as a supplemental means to evaluate our ongoing core operations.
Externally, we believe that these non-GAAP measures continue to be useful to investors in their
assessment of our operating performance and their valuation of the company.
Internally, these non-GAAP measures are significant measures used by management for purposes of:
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evaluating the core operating performance of the company;
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establishing internal budgets;
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calculating return on investment for development programs and growth initiatives;
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comparing performance with internal forecasts and targeted business models;
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strategic planning;
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evaluating and valuing potential acquisition candidates and how their operations
compare to the companys operations; and
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benchmarking performance externally against our competitors.
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How we calculate our non-GAAP financial measures
Non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP net income (loss) per basic and
diluted share are important to the company for the reasons noted above and exclude the following
items:
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Stock-based compensation.
Stock-based compensation relates
primarily to LSI stock awards such as stock options and
restricted stock units. Stock-based compensation is a
non-cash expense that varies in amount from period to
period and is dependent on market forces that are difficult
to predict. As a result of this unpredictability,
management excludes this item from its internal operating
forecasts and models. Management believes that non-GAAP
measures adjusted for stock-based compensation provide
investors with a basis to measure the companys core
performance against the performance of other companies
without the variability created by stock-based
compensation.
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Purchase accounting effect on inventory.
This is an
acquisition-related charge. It results from marking to fair
value an acquired companys inventory at the time of
acquisition. This charge is not factored into managements
evaluation of potential acquisitions or our performance
after completion of acquisitions, because it is not related
to our core operating performance, and the frequency and
amount of this type of charge can vary significantly based
on the size
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and timing of our acquisitions. Excluding this
data provides investors with a basis to compare the company
against the performance of other companies without this
variability.
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Amortization of acquisition-related intangibles.
This
relates to purchased technology in acquisitions such as
existing technology, patents and trademarks. This charge is
not factored into managements evaluation of potential
acquisitions, or our performance after completion of
acquisitions, because it is not related to our core
operating performance, and the frequency and amount of this
type of charge can vary significantly based on the size and
timing of our acquisitions and the maturities of the
businesses being acquired. Excluding this data provides
investors with a basis to compare the company against the
performance of other companies without this variability.
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Restructuring of operations and other items, net.
This
represents charges/losses and gains that are not directly
related to the companys ongoing or core business results.
Management regularly excludes such items from internal
operating forecasts and models because they are not
considered a core operating activity for the company and
because the frequency and variability in the nature of the
charges can vary significantly from period to period.
Excluding this data provides investors with a basis to
compare the company against the performance of other
companies without this variability.
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Goodwill and other intangible asset impairment charges.
This item reflects the write down of goodwill and other
intangible assets to their fair values. Because of the
infrequent nature of this charge, management does not
include this type of item in internal operating forecasts
and models. Excluding this data provides investors with a
basis to compare the companys core operating results in
different periods without this variability.
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Other charges and gains.
Other charges and gains consist of
gains or losses on equity investments and certain
non-operating gains and losses that occur on an infrequent
basis and vary greatly in amount. We do not regularly trade
public equity securities nor do we typically use these
securities to fund our ongoing operations. Management
excludes these items because they do not affect our core
operations. Excluding this data provides investors with a
basis to compare the company against the performance of
other companies without this variability.
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Non-GAAP income tax expense/benefit.
This item represents
the additional amount of tax expense or benefit that the
company would accrue if it used non-GAAP results instead of
GAAP results in the calculation of its tax liability.
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We use non-GAAP net income computed as GAAP net income excluding the impact of the items described
above as the numerator in the calculation of non-GAAP net income per basic and diluted share. We
calculate the basic and diluted share amounts used in the denominator in accordance with GAAP
rules, using non-GAAP net income rather than GAAP net income.
Limitations of relying on non-GAAP financial measures
Some of the limitations of relying on non-GAAP financial measures include:
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Stock-based compensation.
LSIs stock-based incentive plans
are important components of our employee incentive
compensation arrangements and are reflected in our GAAP
results. Stock-based compensation should be considered for
a complete view of the costs of our compensation
arrangements.
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Purchase accounting effect on inventory.
Acquisitions have
been an important part of our business strategy and the
corresponding acquisition-related charges reflect the costs
of choosing acquisitions as a form of growth strategy.
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Amortization of acquisition-related intangibles.
Acquisitions have been an important part of our business
strategy and the corresponding acquisition-related charges
reflect the costs of choosing acquisitions as a form of
growth strategy.
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Restructuring of operations and other items, net.
This item
reflects charges for severance, exit costs associated with
leased facilities, asset impairment charges and gains on
sales of assets that are no longer strategic. While no
longer strategic to the future of the company, such items
reflect the costs of decisions made as part of running a
business and are critical to a complete view of our
historical results.
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Goodwill and other intangible asset impairment charges
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This amount should be included for a complete view of our
historical performance including the impact of declines of
the value of our assets.
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Other charges and gains.
These amounts should be included
for a complete view of our historical performance even
though they are not related to our core operations.
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Non-GAAP income tax expense/benefit.
This item represents
the additional amount of tax expense or benefit that the
company would accrue if it used non-GAAP results instead of
GAAP results in the calculation of its tax liability. The
limitation in it is that it does not include the effect of
all the items excluded from the non-GAAP financial
statements.
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All supplemental non-GAAP financial measures should be read in conjunction with the comparable
information presented in accordance with generally accepted accounting principles in the United
States of America.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit No.
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Description
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99.1
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News Release issued March 17, 2010.*
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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LSI CORPORATION
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By:
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/s/ Bryon Look
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Bryon Look
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Executive Vice President, Chief Financial Officer and
Chief Administrative Officer
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Date: March 17, 2010
EXHIBIT INDEX
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Exhibit No.
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Description
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99.1
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News Release issued March 17, 2010.*
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