MILPITAS, Calif., July 29 /PRNewswire-FirstCall/ -- LSI Corporation (NYSE: LSI) today reported results for its second quarter ended July 5, 2009.
Second Quarter News Release Summary
- Second quarter 2009 revenues of $521 million
- Second quarter 2009 GAAP* net loss of ($0.09) per share
- Second quarter 2009 non-GAAP** net income of $0.01 per share
- Second quarter operating cash flows of $69 million
Third Quarter 2009 Business Outlook
- Projected revenues of $520 million to $570 million
- GAAP* net loss in the range of ($0.12) to ($0.02) per share
- Non-GAAP** net income in the range of $0.00 to $0.06 per share
* Generally Accepted Accounting Principles.
** Excludes goodwill and other intangible asset impairment charges,
stock-based compensation, amortization of acquisition-related
intangibles, restructuring of operations and other items, net, loss
on write-down of debt/equity securities and gain on repurchase of
convertible subordinated notes. It also excludes the income tax
effect associated with the above mentioned items.
Second quarter 2009 revenues were $521 million, an 8% increase sequentially compared to $482 million reported in the first quarter of 2009. Second quarter 2009 revenues decreased 25% year-over-year compared to $692 million reported in the second quarter of 2008.
Second quarter 2009 GAAP* net loss was $61 million or 9 cents per share, compared to first quarter 2009 GAAP net loss of $104 million or 16 cents per share. Second quarter 2009 GAAP results compare to second quarter 2008 GAAP net loss of $14 million or 2 cents per share. Second quarter 2009 GAAP net loss included a net charge of $69 million from special items, consisting primarily of $43 million of amortization of acquisition-related items, $17 million of stock-based compensation expense, and $8.6 million in net restructuring and other items.
Second quarter 2009 non-GAAP** net income was $7 million or 1 cent per diluted share compared to first quarter 2009 non-GAAP net loss of $18 million or 3 cents per share. Second quarter non-GAAP net income compares to second quarter 2008 non-GAAP net income of $83 million or 13 cents per diluted share.
Cash and short-term investments totaled approximately $874 million at quarter end. LSI redeemed $243 million of convertible notes in the second quarter and increased net cash, or cash and short-term investments minus debt, by $44 million.
"Although the economic environment remains uncertain, our second quarter revenues came in significantly above the midpoint of our guidance range with growth in both our storage and networking businesses," said Abhi Talwalkar, LSI president and chief executive officer. "LSI is now beginning to realize tangible results from our work over the past several years to transform the company. Our core businesses are significantly stronger than before, and we are now well positioned to drive long-term growth."
Bryon Look, LSI CFO and chief administrative officer, said, "By maintaining tight controls on spending, our operating expenses decreased sequentially, delivering improvements in our operating results. We also continued to effectively manage our balance sheet, redeeming short-term convertible debt during the quarter while increasing our net cash position."
LSI Third Quarter 2009 Business Outlook
GAAP* Special Items Non-GAAP**
Revenue $520 million to $520 million to
$570 million $570 million
Gross Margin 34 - 39% $34 million to 43 - 45%
$46 million
Operating Expenses $232 million to $21 million to $211 million to
$250 million $29 million $221 million
Net Other Income 0 0
Tax Approximately Approximately
$6 million $6 million
Net (Loss)/Income
Per Share ($0.12) to ($0.02) ($0.08) to ($0.12) $0.00 to $0.06
Diluted Share Count 650 million 655 million
Capital spending is projected to be around $15 million in the third quarter and approximately $45 million in total for 2009.
Depreciation and software amortization is projected to be around $23 million in the third quarter and approximately $90 million in total for 2009.
LSI Conference Call Information
LSI will hold a conference call today at 2 p.m. PDT to discuss second quarter financial results and the third quarter 2009 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: our reliance on major customers and suppliers; our ability to keep up with rapid technological change; our ability to compete successfully in competitive markets; the successful transition of the operations of Agere Systems to our enterprise resource planning system; 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)
July 5, April 5, December 31,
Assets 2009 2009 2008
------ ---- ---- ----
Current assets:
Cash and short-term investments $873.6 $1,073.8 $1,119.1
Accounts receivable, net 267.9 273.3 304.0
Inventories 158.7 201.2 220.5
Prepaid expenses and other current
assets 140.5 136.7 155.9
----- ----- -----
Total current assets 1,440.7 1,685.0 1,799.5
Property and equipment, net 217.5 226.6 236.0
Goodwill and identified intangible
assets, net 988.5 1,022.9 1,065.6
Other assets 235.6 243.5 243.1
----- ----- -----
Total assets $2,882.3 $3,178.0 $3,344.2
-------- -------- --------
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Current portion of long-term debt $350.0 $244.6 $245.1
Other current liabilities 464.1 490.0 552.4
----- ----- -----
Total current liabilities 814.1 734.6 797.5
Long-term debt, net of current
portion - 350.0 350.0
Pension, tax and other liabilities 750.8 750.8 755.8
----- ----- -----
Total liabilities 1,564.9 1,835.4 1,903.3
------- ------- -------
Stockholders' equity:
Common stock and additional paid-in
capital 6,111.7 6,088.4 6,065.3
Accumulated deficit (4,525.8) (4,464.3) (4,360.8)
Accumulated other comprehensive
loss (268.5) (281.5) (263.6)
------ ------ ------
Total stockholders' equity 1,317.4 1,342.6 1,440.9
------- ------- -------
Total liabilities and
stockholders' equity $2,882.3 $3,178.0 $3,344.2
-------- -------- --------
LSI CORPORATION
Consolidated Statements of Operations (GAAP)
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
------------------ ----------------
July 5, April 5, June 29, July 5, June 29,
2009 2009 2008 2009 2008
---- ---- ---- ---- ----
Revenues $520,665 $482,279 $692,063 $1,002,944 $1,352,810
Cost of
revenues 301,333 276,584 360,492 577,917 717,370
Purchase
accounting
effect on
inventory 2,550 - - 2,550 -
Amortization of
acquisition
related
intangibles 33,867 33,610 44,103 67,477 86,358
Stock-based
compensation
expense 2,022 2,013 2,572 4,035 4,633
----- ----- ----- ----- -----
Total cost
of revenues 339,772 312,207 407,167 651,979 808,361
------- ------- ------- ------- -------
Gross profit 180,893 170,072 284,896 350,965 544,449
------- ------- ------- ------- -------
Research and
development 141,724 147,422 162,546 289,146 324,440
Stock-based
compensation
expense 7,195 7,862 7,569 15,057 15,392
----- ----- ----- ------ ------
Total
research
and
development 148,919 155,284 170,115 304,203 339,832
------- ------- ------- ------- -------
Selling,
general and
administrative 64,819 66,519 80,473 131,338 158,181
Amortization of
acquisition
related
intangibles 9,123 9,123 14,491 18,246 27,925
Stock-based
compensation
expense 7,785 8,115 9,506 15,900 17,417
----- ----- ----- ------ ------
Total selling,
general and
admini-
strative 81,727 83,757 104,470 165,484 203,523
------ ------ ------- ------- -------
Restructuring of
operations and
other items,
net 6,010 25,205 20,719 31,215 25,283
----- ------ ------ ------ ------
Loss from
operations (55,763) (94,174) (10,408) (149,937) (24,189)
Interest
expense (6,864) (7,236) (8,959) (14,100) (17,937)
Interest
income and
other, net 6,344 5,863 8,220 12,207 22,851
----- ----- ----- ------ ------
Loss before
income taxes (56,283) (95,547) (11,147) (151,830) (19,275)
Provision for
income taxes 5,200 8,000 2,500 13,200 8,000
----- ----- ----- ------ -----
Net loss $(61,483) $(103,547) $(13,647) $(165,030) $(27,275)
-------- --------- -------- --------- --------
Net loss per share:
Basic $(0.09) $(0.16) $(0.02) $(0.25) $(0.04)
------ ------ ------ ------ ------
Diluted $(0.09) $(0.16) $(0.02) $(0.25) $(0.04)
------ ------ ------ ------ ------
Shares used in
computing per
share amounts:
Basic 650,300 648,459 639,872 649,360 650,867
------- ------- ------- ------- -------
Diluted 650,300 648,459 639,872 649,360 650,867
------- ------- ------- ------- -------
A reconciliation of net loss on the GAAP basis to non-GAAP net income or
loss is included below.
Reconciliation Three Months Ended Six Months Ended
of GAAP net loss ------------------ ----------------
to non-GAAP net July 5, April 5, June 29, July 5, June 29,
income/(loss): 2009 2009 2008 2009 2008
----------------- ---- ---- ---- ---- ----
GAAP net loss $(61,483) $(103,547) $(13,647) $(165,030) $(27,275)
-------- --------- -------- --------- --------
Special items:
a) Stock-based
compensation
expense - cost of
revenues 2,022 2,013 2,572 4,035 4,633
b) Stock-based
compensation
expense - R&D 7,195 7,862 7,569 15,057 15,392
c) Stock-based
compensation
expense - SG&A 7,785 8,115 9,506 15,900 17,417
d) Amortization of
acquisition
related
intangibles -
cost of revenues 33,867 33,610 44,103 67,477 86,358
e) Amortization of
acquisition
related
intangibles - SG&A 9,123 9,123 14,491 18,246 27,925
f) Purchase
accounting
effect on
inventory 2,550 - - 2,550 -
g) Restructuring
of operations and
other items, net 6,010 25,205 20,719 31,215 25,283
h) Write-down of
debt and equity
securities - - 2,827 - 2,827
i) Income tax
effect of above
items - - (4,751) - (4,845)
--- --- ------ --- ------
Total special
items 68,552 85,928 97,036 154,480 174,990
------ ------ ------ ------- -------
Non-GAAP net
income/(loss) $7,069 $(17,619) $83,389 $(10,550) $147,715
------ -------- ------- -------- --------
Non-GAAP net
income/ (loss)
per share:
Basic $0.01 $(0.03) $0.13 $(0.02) $0.23
----- ------ ----- ------ -----
Diluted $0.01 $(0.03) $0.13 $(0.02) $0.23
----- ------ ----- ------ -----
Shares used in
computing non-
GAAP per share
amounts:
Basic 650,300 648,459 639,872 649,360 650,867
------- ------- ------- ------- -------
Diluted 652,389 648,459 643,106 649,360 652,293
------- ------- ------- ------- -------
Reconciliation of
GAAP to non-GAAP
shares used in Three Months Ended Six Months Ended
the calculation ------------------ ----------------
of diluted per July 5, April 5, June 29, July 5, June 29,
share amounts: 2009 2009 2008 2009 2008
-------------- ---- ---- ---- ---- ----
Diluted shares
used in per-share
computation -
GAAP 650,300 648,459 639,872 649,360 650,867
Dilutive stock
awards 2,089 - 3,234 - 1,426
------- ------- ------- ------- -------
Diluted shares used
in per-share
computation - non-
GAAP 652,389 648,459 643,106 649,360 652,293
------- ------- ------- ------- -------
LSI CORPORATION
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
------------------ ----------------
July 5, April 5, June 29, July 5, June 29,
2009 2009 2008 2009 2008
---- ---- ---- ---- ----
Operating activities:
Net loss $(61,483) $(103,547) $(13,647) $(165,030) $(27,275)
Adjustments:
Depreciation and
amortization * 66,239 65,079 79,290 131,318 157,618
Stock-based
compensation
expense 17,002 17,990 19,647 34,992 37,442
Non-cash
restructuring of
operations and
other items (8) (1) 46 (9) (3,245)
Gain on redemption
of convertible
subordinated
notes (149) - - (149) -
Write-down of debt
and equity
securities - - 2,827 - 2,827
Loss/(gain) on sale
of property and
equipment 17 100 (11) 117 (23)
Non-cash foreign
exchange loss/
(gain) 4,268 (12,384) (7,869) (8,116) 5,049
Changes in deferred
tax assets and
liabilities (84) 73 2,014 (11) 4,129
Changes in assets
and liabilities:
Accounts
receivable,
net 5,364 30,690 (27,253) 36,054 47,019
Inventories 54,242 19,340 17,620 73,582 (99)
Prepaid
expenses
and other
assets 11,015 32,443 (5,275) 43,458 (9,592)
Accounts
payable 10,147 (63,535) (11,376) (53,388) (50,808)
Accrued and
other
liabilities (37,658) 3,905 (28,762) (33,753) (39,590)
------- ----- ------- ------- -------
Net cash provided
by/(used in)
operating
activities 68,912 (9,847) 27,251 59,065 123,452
------ ------ ------ ------ -------
Investing activities:
Purchases of debt
securities
available-for-
sale - (10) (62,481) (10) (106,632)
Proceeds from
maturities and
sales of debt
securities
available-for-
sale 28,063 35,882 42,299 63,945 93,203
Purchases of
equity
securities - (5,000) - (5,000) (3,500)
Purchases of
property,
equipment
and software (23,138) (25,463) (32,625) (48,601) (67,855)
Proceeds from
sale of property
and equipment 105 7 4,917 112 11,250
Acquisition of
companies, net
of cash
acquired (20,840) - (95,137) (20,840) (95,137)
Decrease/
(increase)
in non-current
assets and
deposits 13,501 - (13,300) 13,501 (13,300)
Proceeds
received from
the resolution
of a
pre-acquisition
income tax
contingency - - - - 4,821
--- --- --- --- -----
Net cash (used in)/
provided by
investing
activities (2,309) 5,416 (156,327) 3,107 (177,150)
------ ----- -------- ----- --------
Financing activities:
Redemption of
convertible
subordinated
notes (244,047) - - (244,047) -
Issuance of
common stock 6,672 1 29,203 6,673 29,549
Purchase of
common stock
under repurchase
programs - - - - (229,231)
--- --- --- --- --------
Net cash (used in)/
provided by
financing
activities (237,375) 1 29,203 (237,374) (199,682)
-------- --- ------ -------- --------
Effect of exchange
rate changes on
cash and cash
equivalents 3,221 (2,366) (944) 855 872
----- ------ ---- --- ---
Decrease in cash
and cash
equivalents (167,551) (6,796) (100,817) (174,347) (252,508)
Cash and cash
equivalents at
beginning of period 822,505 829,301 869,878 829,301 1,021,569
------- ------- ------- ------- ---------
Cash and cash
equivalents at end
of period $654,954 $822,505 $769,061 $654,954 $769,061
======== ======== ======== ======== ========
* Depreciation of fixed assets and amortization of intangible assets,
software, capitalized intellectual property, premiums on short-term
investments, debt issuance costs, and accrued debt premium.
LSI CORPORATION
Selected Financial Information (GAAP)
(In millions)
(Unaudited)
Three Months Ended
------------------
July 5, April 5, June 29,
2009 2009 2008
---- ---- ----
Semiconductor revenues $343.8 $325.0 $462.0
Storage Systems revenues $176.9 $157.3 $230.1
Total revenues $520.7 $482.3 $692.1
Percentage change in revenues-
qtr./qtr. ( a ) 8.0% -20.9% 4.7%
Percentage change in revenues-
yr./yr. ( b ) -24.8% -27.0% 3.3%
Days sales outstanding 46 51 47
Days of inventory 42 58 53
Current ratio 1.8 2.3 2.8
Quick ratio 1.4 1.8 2.2
Gross margin as a percentage of
revenues 34.7% 35.3% 41.2%
R&D as a percentage of revenues 28.6% 32.2% 24.6%
SG&A as a percentage of revenues 15.7% 17.4% 15.1%
Employees ( c ) 5,357 5,310 5,378
Revenues per employee (in
thousands) ( d ) $388.8 $363.3 $514.7
Selected Cash Flow Information:
-------------------------------
Purchases of property and
equipment ( e ) $7.7 $10.2 $14.3
Depreciation and amortization ( f ) $23.2 $22.5 $20.6
( a ) Represents a sequential quarterly change in revenues.
( b ) Represents a change in revenues in the quarter presented as
compared to the same quarter of the previous year.
( c ) Actual number of employees at the end of each period presented.
( d ) Revenues per employee is calculated by annualizing revenues for
each quarter presented and dividing it by the number of employees.
( e ) Excludes purchases of software.
( f ) Represents depreciation of fixed assets and amortization of
software.
SOURCE LSI Corporation
