- Current report filing (8-K)
October 26 2011 - 4:31PM
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) October 26, 2011
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 incorporation)
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(Commission
File Number)
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(IRS Employer
Identification 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))
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TABLE OF CONTENTS
2
Item 2.02 Results of Operation and Financial Condition.
On October 26, 2011, LSI Corporation issued a news release regarding its financial results for the quarter ended October 2, 2011. 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 net income (loss), non-GAAP gross margin, non-GAAP operating expenses, non-GAAP taxes, 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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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 net income (loss), non-GAAP
gross margin, non-GAAP operating expenses, non-GAAP taxes 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 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 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 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
. 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.
5
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 October 26, 2011.*
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6
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: October 26, 2011
7
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 October 26, 2011.*
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8
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