LSI Reports Third Quarter 2009 Results
MILPITAS, Calif., October 28, 2009 - LSI Corporation (NYSE: LSI) today reported results for its third quarter ended October 4, 2009.
Third Quarter News Release Summary
Third quarter 2009 revenues of $578 million
Third quarter 2009 GAAP* net income of $0.08 per diluted share
Third quarter 2009 non-GAAP** net income of $0.18 per diluted share
Third quarter operating cash flows of $69 million
Fourth Quarter 2009 Business Outlook
Projected revenues of $605 million to $645 million
GAAP* net (loss)/income in the range of ($0.04) to $0.05 per share
Non-GAAP** net income 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 loss on write-down of debt/equity securities. It also excludes the income tax effect associated with the above mentioned items.
Third quarter 2009 revenues were $578 million, an 11% increase sequentially compared to $521 million reported in the second quarter of 2009. Third quarter 2009 revenues decreased 19% year over year compared to $714 million reported in the third quarter of 2008.
Third quarter 2009 GAAP* net income was $52 million or 8 cents per diluted share, compared to second quarter 2009 GAAP net loss of $61 million or 9 cents per share. Third quarter GAAP results included a $65 million tax benefit, or 10 cents per diluted share, primarily related to the settlement of a multi-year foreign tax audit. Third quarter 2009 GAAP results compare to third quarter 2008 GAAP net income of $11 million or 2 cents per diluted share. Third quarter 2009 GAAP net income included a net charge of $66 million from special items, consisting primarily of $43 million of amortization of acquisition-related items, $15 million of stock-based compensation expense, $6.6 million in net restructuring and other items, and $1.7 million in write-down of investments.
Third quarter 2009 non-GAAP** net income was $119 million or 18 cents per diluted share compared to second quarter 2009 non-GAAP net income of $7 million or 1 cent per diluted share. Third quarter non-GAAP results included earnings of 10 cents per diluted share reflecting the above-mentioned tax benefit. Third quarter non-GAAP net income compares to third quarter 2008 non-GAAP net income of $94 million or 14 cents per diluted share.
Cash and short-term investments totaled approximately $907 million at quarter end.
"With the economy demonstrating signs that a modest recovery is underway, our third quarter revenues exceeded our guidance range, supported by healthy sequential growth across our businesses overall," said Abhi Talwalkar, LSI president and chief executive officer. "As businesses resume spending on information technology, we are now poised to realize the benefits of the winning recipe we have worked to put in place over the last several years."
Bryon Look, LSI CFO and chief administrative officer, said, "We delivered a very solid third quarter, with improved profitability stemming from strong top-line growth, expanding gross margins across both our semiconductor and storage systems businesses, and continued focus on effectively managing our operating expenses. Operating cash flows were healthy at $69 million and our net cash position increased to $557 million."
LSI Fourth Quarter 2009 Business Outlook
Capital spending is projected to be around $15 million in the fourth quarter and approximately $45 million in total for 2009.
Depreciation and software amortization is projected to be around $22 million in the fourth 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 third quarter financial results and the fourth 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.
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; 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 http://www.lsi.com.
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