LSI Reports First Quarter 2010 Results
Company swings quarterly net income by more than $100 million year-over-year
MILPITAS, Calif., April 28, 2010 - LSI Corporation (NYSE: LSI) today reported results for its first quarter ended April 4, 2010.
First Quarter 2010 News Release Summary
First quarter 2010 revenues of $637 million
First quarter 2010 GAAP* net income of 3 cents per diluted share
First quarter 2010 non-GAAP** net income of 14 cents per diluted share
First quarter operating cash flows of $106 million
Second Quarter 2010 Business Outlook
Projected revenues of $635 million to $665 million
GAAP* net (loss)/income in the range of ($0.03) to $0.06 cents per share
Non-GAAP** net income in the range of $0.08 to $0.14 cents 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, write-down of debt and equity securities and gain on repurchase of convertible subordinated notes. It also excludes the income tax effect associated with the above mentioned items.
First quarter 2010 revenues were $637 million, a 32% increase year-over-year compared to $482 million reported in the first quarter of 2009, and essentially flat sequentially compared to $638 million reported in the fourth quarter of 2009.
First quarter 2010 GAAP* net income was $23 million or 3 cents per diluted share, compared to first quarter 2009 GAAP net loss of $104 million or 16 cents per share. First quarter GAAP results included a net tax benefit of $19 million primarily related to the expiration of statutes of limitations. First quarter 2010 GAAP results compare to fourth quarter 2009 GAAP net income of $65 million or 10 cents per diluted share. First quarter 2010 GAAP net income included a net charge of $70 million from special items, consisting primarily of $40 million of amortization of acquisition-related items, $16 million of stock-based compensation expense, $12 million of loss on write-down of equity securities, and $2 million of net restructuring and other items.
First quarter 2010 non-GAAP** net income was $92 million or 14 cents per diluted share, compared to first quarter 2009 non-GAAP net loss of $18 million or 3 cents per share. First quarter non-GAAP results also included the aforementioned net tax benefit of $19 million. Fourth quarter 2009 non-GAAP net income was $124 million or 18 cents per diluted share.
Cash and short-term investments totaled approximately $1.0 billion at quarter end. LSI also announced today that it has completed the purchase of approximately 4 million shares of its common stock for approximately $26 million under its $250 million share repurchase program.
"Our strong first quarter results reflect an improving end demand environment as well as increasing operating leverage from the steps we have taken to transform our business over the past few years," said Abhi Talwalkar, LSI president and chief executive officer. "Revenues were at the high end of our updated guidance range and well above typical seasonal patterns, further underscoring our confidence in our ability to grow faster than the markets we serve."
Bryon Look, LSI CFO and chief administrative officer, said, "First quarter revenues improved significantly on a year-over-year basis and were sequentially flat to the fourth quarter of 2009, offsetting the effects of normal seasonality. We delivered strong earnings performance relative to our upwardly revised guidance and generated solid operating cash flows of $106 million. Semiconductor revenues grew 9% sequentially, while our storage systems business achieved record first-quarter revenues."
LSI Second Quarter 2010 Business Outlook
Capital spending is projected to be around $15 million in the second quarter and approximately $55 million in total for 2010.
Depreciation and software amortization is projected to be around $26 million in the second quarter and approximately $100 million in total for 2010.
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 2010 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.
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.