LSI Reports Second Quarter 2009 Results

   

 

MILPITAS, Calif., July 29, 2009 – 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 $570 million

  

$520 million to $570 million

Gross Margin

34 – 39%

$34 million to $46 million

43 – 45%

Operating Expenses

$232 million to $250 million

$21 million to $29 million

$211 million to $221 million

Net Other Income

0

 

0

Tax

Approximately $6 million

 

Approximately $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.

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