LSI Reports Third Quarter 2008 Results
MILPITAS, Calif., October 22, 2008 – LSI Corporation (NYSE: LSI) today reported results for its third quarter ended September 28, 2008.
Third Quarter News Release Summary
- Third quarter 2008 revenues of $714 million
- Third quarter 2008 GAAP* net income of 2 cents per share
- Third quarter 2008 non-GAAP** net income of 14 cents per diluted share
- Third quarter operating cash flows of $56 million
- Cash and short-term investments of $1.2 billion
Fourth Quarter 2008 Business Outlook
- Projected revenues of $670 million to $710 million
- GAAP* net (loss)/income in the range of ($0.07) to $0.03 per share
- Non-GAAP** net income in the range of 8 to 14 cents per diluted share
* Generally Accepted Accounting Principles.
** Excludes goodwill impairment, stock-based compensation, amortization of acquisition-related intangibles, restructuring of operations and other items, net, purchase accounting effect on inventory, loss on write-down of debt/equity securities and acquired in-process research and development. It also excludes the income tax effect associated with the above mentioned items.
Growth in Storage Semiconductors Drives Solid Quarterly Results
Third quarter 2008 revenues were $714 million, a 2% decrease year-over-year compared to $727 million reported in the third quarter of 2007, and up 3% sequentially compared to $692 million reported in the second quarter of 2008. Adjusting for the sale of the consumer and mobility businesses, third quarter revenues increased 14% year-over-year compared to the third quarter of 2007.
Third quarter 2008 GAAP* net income was $11 million or 2 cents per diluted share, compared to third quarter 2007 GAAP net loss of $141 million or 20 cents per share. Third quarter 2008 GAAP results compare to second quarter 2008 GAAP net loss of $14 million or 2 cents per share. Third quarter 2008 GAAP net income included a net charge of $83 million from special items, consisting primarily of $60.5 million of amortization of acquisition-related items, $16.9 million of stock-based compensation expense, $1.7 million in write-down of investments, and $1.6 million in net restructuring and other items.
Third quarter 2008 non-GAAP** net income was $94 million or 14 cents per diluted share, compared to third quarter 2007 non-GAAP net income of $44 million or 6 cents per share. Second quarter 2008 non-GAAP net income was $83 million or 13 cents per diluted share.
Cash and short-term investments totaled approximately $1.2 billion at quarter end.
"Healthy demand in the quarter for our HDD and SAN semiconductors provided a foundation for delivering solid results," said Abhi Talwalkar, LSI president and chief executive officer. "We are also pleased by our progress in securing new opportunities, with recently announced Tier 1 OEM wins for next-generation HDD, SSD and 6Gb/s SAS products.
"Although fourth quarter visibility is limited, we are confident that our strategic focus, continuing design win momentum and strong financial position leave us well positioned for the foreseeable future," added Talwalkar.
Bryon Look, LSI chief financial officer, said, "Significantly higher gross margins and continued focus on cost control contributed to third quarter EPS near the high end of our guidance range. Compared to the same quarter in 2007 we have grown revenue in our core businesses by 14% while significantly reducing quarterly operating expenses."
LSI Fourth Quarter 2008 Business Outlook
||$670 million to $710 million
||$670 million to $710 million|
||38.5 – 41.5%
||$40 to $50 million
||45.5 – 47.5%|
||$265 million to $285 million
||$30 to $40 million
||$235 million to $245 million|
|Net Other Income
||Approximately $10 million
|Net (Loss)/Income Per Share
||($0.07) to $0.03
||($0.11) to ($0.15)
||$0.08 to $0.14|
|Diluted Share Count
Capital spending is projected to be around $10 million in the fourth quarter and approximately $60 million in total for 2008.
Fourth quarter depreciation and software amortization is expected to be approximately $20 million.
LSI Conference Call Information
LSI will hold a conference call today at 2 p.m. PDT to discuss third quarter financial results and the fourth quarter 2008 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; our ability to achieve anticipated synergies following our acquisition of Agere Systems; fluctuations in the timing and volumes of customer demand; the unavailability of appropriate levels of manufacturing capacity; our ability to successfully and timely transition our assembly and test operations to third parties; 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.
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 http://www.lsi.com
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Q3 2008 Financial Tables (PDF, 24KB)