LSI Reports First Quarter 2011 Results
MILPITAS, Calif., April 27, 2011 – 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
||$465 million to $495 million
||$465 million to $495 million|
||45.5% – 50.0%
||$20 million to $30 million
||52.0% – 54.0%|
||$205 million to $225 million
||$15 million to $25 million
||$190 million to $200 million|
|Net Other (Loss)/Income
||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
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.
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
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Q1 2011 Financial Tables (PDF, 28KB)