MILPITAS, Calif., April 27, 2011 /PRNewswire/ -- LSI Corporation
(NYSE: LSI) today reported results for its first quarter ended
April 3, 2011.
On March 9, 2011, LSI entered into
a definitive agreement to sell its external storage systems
business to NetApp, Inc. The transaction is expected to be
completed in May, 2011, and the financial results of this business
have been classified as discontinued operations in the company's
financial statements. The company's guidance for the first quarter
included expected financial results for the external storage
systems business, therefore financial measures including and
excluding this business have been provided in this news
release.
First Quarter 2011 News Release Summary
- First quarter 2011 revenues from continuing operations of
$473 million
- First quarter 2011 GAAP* income from continuing operations of
3 cents per diluted share
- First quarter 2011 non-GAAP** income from continuing operations
of 10 cents per diluted share
- First quarter operating cash flows of $108 million
Second Quarter 2011 Business Outlook
- Projected revenues from continuing operations of $465 million to $495 million
- GAAP* (loss)/income from continuing operations in the range of
($0.02) to $0.07 per share
- Non-GAAP** income from continuing operations in the range of
$0.07 to $0.13 per share
*
|
Generally Accepted Accounting
Principles.
|
|
**
|
Excludes goodwill and other
intangible asset impairment, stock-based compensation, amortization
of acquisition-related intangibles, purchase accounting effect on
inventory, restructuring of operations and other items, net, and
gain/loss on sale/write-down of investments. It also excludes the
income tax effect associated with the above mentioned
items.
|
|
|
|
First quarter 2011 revenues from continuing operations were
$473 million, essentially flat year
over year compared to $473 million
generated from continuing operations in the first quarter of 2010,
and compared to $471 million
generated from continuing operations in the fourth quarter of
2010.
Including results from discontinued operations, first quarter
2011 revenues would have been $629
million, a 1% decrease year over year compared to
$637 million reported in the first
quarter of 2010, and compared to $664
million reported in the fourth quarter of 2010.
First quarter 2011 GAAP* income from continuing operations was
$19 million or 3 cents per diluted share, compared to first
quarter 2010 GAAP income from continuing operations of $14 million or 2
cents per diluted share. First quarter 2011 GAAP results
compare to fourth quarter 2010 GAAP income from continuing
operations of $5 million or
1 cent per diluted share. First
quarter 2011 GAAP income from continuing operations included a net
charge of $47 million from special
items, consisting primarily of $30
million of amortization of acquisition-related items,
$14 million of stock-based
compensation expense, and $3 million
of net restructuring and other items.
First quarter 2011 GAAP net income was $10 million or 2
cents per diluted share, compared to first quarter 2010 GAAP
net income of $23 million or
3 cents per diluted share. First
quarter 2011 GAAP net income compares to fourth quarter 2010 GAAP
net loss of $13 million or
2 cents per share.
First quarter 2011 non-GAAP** income from continuing operations
was $65 million or 10 cents per diluted share, compared to first
quarter 2010 non-GAAP income from continuing operations of
$78 million or 12 cents per diluted share. Fourth quarter 2010
non-GAAP income from continuing operations was $53 million or 8
cents per diluted share.
First quarter 2011 non-GAAP net income was $82 million or 13
cents per diluted share, compared to first quarter 2010
non-GAAP net income of $92 million or
14 cents per diluted share. Fourth
quarter 2010 non-GAAP net income was $90
million or 14 cents per
diluted share.
Cash and short-term investments totaled approximately
$682 million at quarter end. The
company completed first-quarter purchases of approximately 15
million shares of its common stock for approximately $97 million.
"Our first quarter revenues were strong, bolstered by market
share gains with key hard disk drive system-on-chip customers that
partially offset normal seasonal patterns," said Abhi Talwalkar, LSI president and chief
executive officer. "I'm also pleased with our execution in the
quarter, which contributed to both solid gross margin performance
and effective operating expense control. We're now well positioned
to achieve our current business model and to establish a new,
richer business model as we transition to becoming a leading,
pure-play provider of semiconductors that enable growing storage
and networking applications."
Bryon Look, LSI CFO and chief
administrative officer, said, "First-quarter operating cash flows
of $108 million were healthy while
our balance sheet remained strong and debt free. Our net cash
position increased to $682 million
after purchasing nearly 15 million shares of our common stock
during the quarter."
LSI Second
Quarter 2011 Business Outlook
For
Continuing Operations
|
|
|
GAAP*
|
Special Items
|
Non-GAAP**
|
|
Revenue
|
$465 million to $495
million
|
|
$465 million to $495
million
|
|
Gross Margin
|
45.5% – 50.0%
|
$20 million to $30
million
|
52.0% – 54.0%
|
|
Operating
Expenses
|
$205 million to $225
million
|
$15 million to $25
million
|
$190 million to $200
million
|
|
Net Other
(Loss)/Income
|
$5 million
|
|
$5 million
|
|
Tax
|
Approximately $7
million
|
|
Approximately $7
million
|
|
(Loss)/Income From Continuing
Operations Per Share
|
($0.02) to $0.07
|
($0.06) to ($0.09)
|
$0.07 to $0.13
|
|
Diluted Share
Count
|
610 million
|
|
610 million
|
|
|
|
|
|
Capital spending is projected to be around $20 million in the second quarter and
approximately $55 million in total
for 2011.
Depreciation and software amortization is projected to be around
$17 million in the second quarter and
approximately $75 million in total
for 2011.
LSI Conference Call Information
LSI will hold a conference call today at 2 p.m. PDT to discuss first quarter financial
results and the second quarter 2011 business outlook. Internet
users can access the conference call at http://www.lsi.com/webcast.
Subsequent to the conference call, a replay will be available at
the same web address.
Forward-Looking Statements: This news release contains
forward-looking statements that are based on the current opinions
and estimates of management. These statements are subject to
certain risks and uncertainties that could cause actual results to
differ materially from those anticipated in the forward-looking
statements. Factors that could cause LSI's actual results to differ
materially from those set forth in the forward-looking statements
include, but are not limited to: a delay in the closing of the sale
of our external storage systems business to NetApp; our ability to
eliminate costs related to our external storage systems business;
our ability to repurchase our common stock at prices we believe to
be advantageous; the impact of the recent earthquake, tsunami and
nuclear power plant events in Japan; our reliance on major customers and
suppliers; our ability to keep up with rapid technological change;
our ability to compete successfully in competitive markets;
fluctuations in the timing and volumes of customer demand; the
unavailability of appropriate levels of manufacturing capacity; and
general industry and market conditions. For additional information,
see the documents filed by LSI with the Securities and Exchange
Commission, and specifically the risk factors set forth in the
company's most recent reports on Form 10-K and 10-Q. LSI disclaims
any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
About LSI
LSI Corporation (NYSE: LSI) is a leading provider of innovative
silicon, systems and software technologies that enable products
which seamlessly bring people, information and digital content
together. The company offers a broad portfolio of capabilities and
services including custom and standard product ICs, adapters,
systems and software that are trusted by the world's best known
brands to power leading solutions in the Storage and Networking
markets. More information is available at www.lsi.com.
Editor's Notes:
- All LSI news releases (financial, acquisitions, manufacturing,
products, technology, etc.) are issued exclusively by PR Newswire
and are immediately thereafter posted on the company's external
website, http://www.lsi.com.
- LSI and the LSI & Design logo are trademarks or registered
trademarks of LSI Corporation.
- All other brand or product names may be trademarks or
registered trademarks of their respective companies.
LSI
CORPORATION
|
|
Condensed
Consolidated Balance Sheets
|
|
(In
millions)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
April
3,
|
|
December
31,
|
|
April
4,
|
|
Assets
|
|
|
|
2011
|
|
2010
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and short-term
investments
|
|
$ 682.3
|
|
$
676.6
|
|
$ 1,015.5
|
|
Accounts
receivable, net
|
|
286.1
|
|
326.6
|
|
298.6
|
|
Inventories
|
|
155.0
|
|
186.8
|
|
185.8
|
|
Prepaid expenses
and other current assets
|
|
68.4
|
|
73.3
|
|
107.2
|
|
Assets held for
sale
|
|
236.3
|
|
0.5
|
|
17.2
|
|
|
|
|
|
|
|
|
|
|
|
Total
current assets
|
|
1,428.1
|
|
1,263.8
|
|
1,624.3
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment,
net
|
|
188.0
|
|
223.2
|
|
215.4
|
|
Goodwill and identified
intangible assets, net
|
|
592.0
|
|
749.8
|
|
887.7
|
|
Other assets
|
|
146.8
|
|
188.1
|
|
223.1
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$ 2,354.9
|
|
$
2,424.9
|
|
$ 2,950.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders'
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Current portion of
long-term debt
|
|
$
-
|
|
$
-
|
|
$ 350.0
|
|
Other current
liabilities
|
|
484.3
|
|
484.6
|
|
509.4
|
|
|
|
|
|
|
|
|
|
|
|
Total
current liabilities
|
|
484.3
|
|
484.6
|
|
859.4
|
|
|
|
|
|
|
|
|
|
|
|
Pension, tax and other
liabilities
|
|
611.0
|
|
622.8
|
|
618.9
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
1,095.3
|
|
1,107.4
|
|
1,478.3
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
Common stock and
additional paid-in capital
|
|
5,932.3
|
|
6,004.3
|
|
6,141.6
|
|
Accumulated
deficit
|
|
(4,358.3)
|
|
(4,368.5)
|
|
(4,386.0)
|
|
Accumulated other
comprehensive loss
|
|
(314.4)
|
|
(318.3)
|
|
(283.4)
|
|
|
|
|
|
|
|
|
|
|
|
Total
stockholders' equity
|
|
1,259.6
|
|
1,317.5
|
|
1,472.2
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
|
$ 2,354.9
|
|
$
2,424.9
|
|
$ 2,950.5
|
|
|
|
|
|
|
|
|
|
|
LSI
CORPORATION
|
|
Consolidated
Statements of Operations (GAAP)
|
|
(In
thousands, except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
|
April
3,
|
|
December
31,
|
|
April
4,
|
|
|
2011
|
|
2010
|
|
2010
|
|
|
|
|
|
|
|
|
Revenues
|
$ 473,264
|
|
$
470,657
|
|
$ 472,672
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
225,459
|
|
217,059
|
|
227,627
|
|
Amortization of
acquisition-related intangibles
|
21,818
|
|
28,914
|
|
28,835
|
|
Stock-based
compensation expense
|
1,813
|
|
1,821
|
|
1,416
|
|
Total cost
of revenues
|
249,090
|
|
247,794
|
|
257,878
|
|
|
|
|
|
|
|
|
Gross profit
|
224,174
|
|
222,863
|
|
214,794
|
|
|
|
|
|
|
|
|
Research and
development
|
136,124
|
|
136,087
|
|
132,842
|
|
Stock-based
compensation expense
|
6,223
|
|
4,654
|
|
6,020
|
|
Total
research and development
|
142,347
|
|
140,741
|
|
138,862
|
|
|
|
|
|
|
|
|
Selling, general
and administrative
|
54,917
|
|
55,231
|
|
55,730
|
|
Amortization of
acquisition-related intangibles
|
8,319
|
|
8,949
|
|
8,948
|
|
Stock-based
compensation expense
|
5,631
|
|
5,226
|
|
5,687
|
|
Total
selling, general and administrative
|
68,867
|
|
69,406
|
|
70,365
|
|
|
|
|
|
|
|
|
Restructuring of
operations and other items, net
|
2,806
|
|
(1,043)
|
|
1,620
|
|
|
|
|
|
|
|
|
Operating income
|
10,154
|
|
13,759
|
|
3,947
|
|
|
|
|
|
|
|
|
Interest
expense
|
-
|
|
-
|
|
(3,894)
|
|
Interest income and
other, net
|
4,288
|
|
7,701
|
|
(8,807)
|
|
|
|
|
|
|
|
|
Income/(loss) before income
taxes
|
14,442
|
|
21,460
|
|
(8,754)
|
|
(Benefit)/provision for income
taxes
|
(4,104)
|
|
16,905
|
|
(23,102)
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
18,546
|
|
4,555
|
|
14,348
|
|
|
|
|
|
|
|
|
(Loss)/income from discontinued
operations, net of tax
|
(8,392)
|
|
(17,956)
|
|
8,172
|
|
|
|
|
|
|
|
|
Net income/(loss)
|
$ 10,154
|
|
$
(13,401)
|
|
$ 22,520
|
|
|
|
|
|
|
|
|
Basic income/(loss) per
share:
|
|
|
|
|
|
|
Income from
continuing operations
|
$
0.03
|
|
$
0.01
|
|
$
0.02
|
|
(Loss)/income from
discontinued operations
|
$
(0.01)
|
|
$
(0.03)
|
|
$
0.01
|
|
Net
Income
|
$
0.02
|
|
$
(0.02)
|
|
$
0.03
|
|
|
|
|
|
|
|
|
Diluted income/(loss) per
share:
|
|
|
|
|
|
|
Income from
continuing operations
|
$
0.03
|
|
$
0.01
|
|
$
0.02
|
|
(Loss)/income from
discontinued operations
|
$
(0.01)
|
|
$
(0.03)
|
|
$
0.01
|
|
Net
Income
|
$
0.02
|
|
$
(0.02)
|
|
$
0.03
|
|
|
|
|
|
|
|
|
Shares used in computing per
share amounts:
|
|
|
|
|
|
|
Basic
|
615,450
|
|
616,809
|
|
656,528
|
|
|
|
|
|
|
|
|
Diluted
|
629,733
|
|
616,809
|
|
664,315
|
|
|
|
|
|
|
|
|
A reconciliation of certain GAAP
measures to non-GAAP measures is included below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
April
3,
|
|
December
31,
|
|
April
4,
|
|
Reconciliation of GAAP net
income/(loss) to non-GAAP net income:
|
2011
|
|
2010
|
|
2010
|
|
|
|
|
|
|
|
|
GAAP income from continuing
operations
|
$ 18,546
|
|
$
4,555
|
|
$ 14,348
|
|
|
|
|
|
|
|
|
Special items:
|
|
|
|
|
|
|
a) Stock-based
compensation expense - cost of revenues
|
1,813
|
|
1,821
|
|
1,416
|
|
b) Stock-based
compensation expense - R&D
|
6,223
|
|
4,654
|
|
6,020
|
|
c) Stock-based
compensation expense - SG&A
|
5,631
|
|
5,226
|
|
5,687
|
|
d) Amortization of
acquisition-related intangibles - cost of revenues
|
21,818
|
|
28,914
|
-
|
28,835
|
|
e) Amortization of
acquisition-related intangibles - SG&A
|
8,319
|
|
8,949
|
|
8,948
|
|
f) Restructuring of
operations and other items, net
|
2,806
|
|
(1,043)
|
|
1,620
|
|
g) Write-down of
investments
|
-
|
|
-
|
|
11,600
|
|
Total
special items from continuing operations
|
46,610
|
|
48,521
|
|
64,126
|
|
|
|
|
|
|
|
|
Non-GAAP income from continuing
operations
|
$ 65,156
|
|
$
53,076
|
|
$ 78,474
|
|
|
|
|
|
|
|
|
Non-GAAP income from continuing
operations per share
|
|
|
|
|
|
|
Basic
|
$
0.11
|
|
$
0.09
|
|
$
0.12
|
|
|
|
|
|
|
|
|
Diluted
|
$
0.10
|
|
$
0.08
|
|
$
0.12
|
|
|
|
|
|
|
|
|
GAAP net
income/(loss)
|
$ 10,154
|
|
$
(13,401)
|
|
$ 22,520
|
|
|
|
|
|
|
|
|
Special items:
|
|
|
|
|
|
|
a) Total special items
from continuing operations
|
46,610
|
|
48,521
|
|
64,126
|
|
b) Stock-based
compensation expense - discontinued operations
|
319
|
|
2,856
|
|
3,308
|
|
c) Amortization of
acquisition-related intangibles - discontinued
operations
|
886
|
|
2,453
|
|
2,453
|
|
d) Restructuring of
operations - discontinued operations
|
23,811
|
|
49,548
|
|
-
|
|
|
|
|
|
|
|
|
Non-GAAP net income
|
$ 81,780
|
|
$
89,977
|
|
$ 92,407
|
|
|
|
|
|
|
|
|
Non-GAAP net income per
share:
|
|
|
|
|
|
|
Basic
|
$
0.13
|
|
$
0.15
|
|
$
0.14
|
|
|
|
|
|
|
|
|
Diluted
|
$
0.13
|
|
$
0.14
|
|
$
0.14
|
|
|
|
|
|
|
|
|
Shares used in computing
non-GAAP per share amounts:
|
|
|
|
|
|
|
Basic
|
615,450
|
|
616,809
|
|
656,528
|
|
|
|
|
|
|
|
|
Diluted
|
629,733
|
|
626,079
|
|
690,395
|
|
|
|
|
|
|
|
LSI
CORPORATION
|
|
Consolidated
Statements of Cash Flows
|
|
(In
thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
April
3,
|
|
December
31,
|
|
April
4,
|
|
|
2011
|
|
2010
|
|
2010
|
|
Operating
activities:
|
|
|
|
|
|
|
Net income/(loss)
|
$ 10,154
|
|
$
(13,401)
|
|
$ 22,520
|
|
Adjustments:
|
|
|
|
|
|
|
Depreciation and
amortization *
|
56,007
|
|
65,954
|
|
67,017
|
|
Stock-based
compensation expense
|
13,986
|
|
14,557
|
|
16,431
|
|
Non-cash
restructuring of operations and other items, net
|
10,824
|
|
45,681
|
|
(10)
|
|
Write-down of
investments
|
-
|
|
-
|
|
11,600
|
|
(Gain)/loss on sale of
property and equipment
|
(239)
|
|
(142)
|
|
3
|
|
Unrealized foreign
exchange loss/(gain)
|
1,379
|
|
(2,063)
|
|
(2,215)
|
|
Deferred
taxes
|
(43)
|
|
3,478
|
|
98
|
|
Changes in assets
and liabilities:
|
|
|
|
|
|
|
Accounts receivable, net
|
40,471
|
|
(12,737)
|
|
40,396
|
|
Inventories
|
(12,651)
|
|
33,348
|
|
(16,441)
|
|
Prepaid expenses, assets held for sale and other
assets
|
(1,066)
|
|
506
|
|
(8,095)
|
|
Accounts payable
|
24,273
|
|
(11,672)
|
|
(8,547)
|
|
Accrued and other liabilities
|
(35,066)
|
|
(11,869)
|
|
(16,979)
|
|
Net cash provided by operating
activities
|
108,029
|
|
111,640
|
|
105,778
|
|
|
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
|
|
Purchases of debt
securities available-for-sale
|
(15,530)
|
|
(20,425)
|
|
-
|
|
Proceeds from
maturities and sales of debt securities
available-for-sale
|
12,958
|
|
20,320
|
|
11,254
|
|
Purchases of
property, equipment and software
|
(21,542)
|
|
(25,080)
|
|
(27,276)
|
|
Proceeds from sale
of property and equipment
|
310
|
|
281
|
|
22
|
|
Proceeds from a
repayment on a note receivable
|
-
|
|
10,000
|
|
-
|
|
Net cash used in investing
activities
|
(23,804)
|
|
(14,904)
|
|
(16,000)
|
|
|
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
|
|
Issuance of common
stock
|
17,319
|
|
18,826
|
|
3,635
|
|
Purchase of common stock
under repurchase programs
|
(96,791)
|
|
(32,199)
|
|
(26,208)
|
|
Net cash used in financing
activities
|
(79,472)
|
|
(13,373)
|
|
(22,573)
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes
on cash and cash equivalents
|
(11)
|
|
(558)
|
|
(2,117)
|
|
|
|
|
|
|
|
|
Net change in cash and cash
equivalents
|
4,742
|
|
82,805
|
|
65,088
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at
beginning of period
|
521,786
|
|
438,981
|
|
778,291
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end
of period
|
$ 526,528
|
|
$
521,786
|
|
$ 843,379
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Depreciation of fixed assets
and amortization of intangible assets, software, capitalized
intellectual property, premiums on short-term
|
|
|
investments, and debt issuance
costs.
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE LSI Corporation