LSI Reports Second Quarter 2010 Results
MILPITAS, Calif., July 28, 2010 - LSI Corporation (NYSE: LSI) today reported results for its second quarter ended July 4, 2010.
Second Quarter 2010 News Release Summary
• Second quarter 2010 revenues of $639 million
• Second quarter 2010 GAAP* net income of 1 cent per diluted share
• Second quarter 2010 non-GAAP** net income of 11 cents per diluted share
• Second quarter operating cash flows of $68 million
Third Quarter 2010 Business Outlook
• Projected revenues of $625 million to $655 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.
Second quarter 2010 revenues were $639 million, a 23% increase year-over-year compared to $521 million reported in the second quarter of 2009, and compares to $637 million reported in the first quarter of 2010.
Second quarter 2010 GAAP* net income was $7 million or 1 cent per diluted share, compared to second quarter 2009 GAAP net loss of $61 million or 9 cents per share. Second quarter 2010 GAAP results compare to first quarter 2010 GAAP net income of $23 million or 3 cents per diluted share. First quarter GAAP results included a net tax benefit of $19 million. Second quarter 2010 GAAP net income included a net charge of $64 million from special items, consisting primarily of $40 million of amortization of acquisition-related items, $18 million of stock-based compensation expense, and $5 million of net restructuring and other items.
Second quarter 2010 non-GAAP** net income was $71 million or 11 cents per diluted share, compared to second quarter 2009 non-GAAP net income of $7 million or 1 cent per diluted share. First quarter 2010 non-GAAP net income was $92 million or 14 cents per diluted share. First quarter non-GAAP results also included the aforementioned net tax benefit of $19 million.
Cash and short-term investments totaled approximately $670 million at quarter end. During the quarter, LSI repaid $350 million of outstanding convertible notes, becoming debt free. The company also completed second-quarter purchases of approximately 10 million shares of its common stock for approximately $55 million under its $250 million share repurchase program.
"Despite some isolated customer inventory adjustments late in the quarter that modestly affected our sequential revenue growth, tight operating expense control and higher gross margins enabled us to deliver a solid bottom-line performance," said Abhi Talwalkar, LSI president and chief executive officer. "While improving end market demand for enterprise IT products continues to bode well for us, our outlook for the third quarter is one of tempered optimism as macro-economic conditions appear to be somewhat fluid at the present time."
Bryon Look, LSI CFO and chief administrative officer, said, "We delivered sound financial results in the second quarter. First-half operating cash flows nearly tripled from the year-ago period while net cash improved by 28% on the same basis. We also repaid all our remaining debt and continued to purchase shares of the company's common stock through our previously announced share repurchase program."
Capital spending is projected to be around $15 million in the third quarter and approximately $55 million in total for 2010.
Depreciation and software amortization is projected to be around $26 million in the third quarter and approximately $104 million in total for 2010.
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 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.