EXHIBIT 99.1
FOR IMMEDIATE RELEASE JANUARY 16, 2002
MEDIA CONTACT: KEVIN BRETT INVESTOR CONTACT: DIANA MATLEY
408-433-7150 408-433-4365
kbrett@lsil.com diana@lsil.com
CC02-22
LSI LOGIC RESTRUCTURES OPERATIONS TO
SPEED RETURN TO PROFITABILITY BY 2ND HALF OF 2002
COMPANY WILL MEET Q4 2001 GUIDANCE
MILPITAS, CA - LSI Logic Corporation (NYSE: LSI) today announced a series of
actions to reduce costs and tailor company expenses to current revenues, putting
the company on track for its return to profitability in the second half of the
year.
These actions include: Restructuring Tsukuba, Japan manufacturing operations;
divesting CDMA handset and DSL standard product business units and reducing the
worldwide workforce by 1,400 positions or 20 percent.
These cost reductions are expected to reduce cost of sales and operating
expenses by about $30 million per quarter. The company will take a related
charge in the range of $50 million to $70 million in the first quarter of 2002
to cover these actions.
LSI Logic will meet its guidance for 2001 fourth quarter revenue growth of
between 0-5 percent sequentially from the $397 million reported in the third
quarter. The company will also meet its projection of pro forma fourth quarter
loss of 23 cents, an improvement over the pro forma third quarter loss of 29
cents.
"We believe that both our semiconductor component and storage systems businesses
have bottomed and we expect our overall revenues to grow in line with the
semiconductor industry this year," said Wilfred J. Corrigan, LSI Logic chairman
and chief executive officer. "However, we are taking these actions to bring into
line our cost structure with our present revenue stream and to return to
profitability as expeditiously as possible."
"We are emphasizing our core strengths and concentrating on those parts of the
communications, storage and consumer electronics businesses where we have
leadership positions," said Corrigan. "At the same time, we have made the
decision to divest our CDMA wireless handset and DSL standard product business
units. We are in discussions to sell these businesses."
LSI Logic is consolidating its U.S. manufacturing activities and process R&D
into the corporation's Gresham, Oregon campus. Earlier, the company closed its
Colorado Springs and Santa Clara manufacturing facilities. The company is
restructuring its manufacturing operations in Tsukuba, Japan.
Bryon Look, LSI Logic executive vice president and chief financial officer, said
the expanded cost-reduction program is designed to put LSI Logic on the fast
track to positive cash flow and profitability.
LSI Logic will report its 2001 and fourth quarter financial results Wednesday,
January 23 at the close of market. At that time, LSI Logic will provide guidance
for the 2002 first quarter.
SAFE HARBOR FOR FORWARD LOOKING STATEMENTS: This release contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended and Section 21E of the Securities and Exchange Act of
1934, as amended, and other projections by LSI Logic management which involve
risks and uncertainties regarding future events and the future financial
performance of LSI Logic. Readers are cautioned that these forward-looking
statements are only predictions and may differ materially from actual future
events or results. Readers are referred to the documents filed by LSI Logic with
the SEC, specifically the most recent reports on Form 10-K, 10-Q and 8-K, each
as it may be amended from time to time, which identify important risk factors
that could cause actual results to differ from those contained in the
forward-looking statements. Forward-looking statements include risks associated
with the efficacy of actions taken by management to reduce costs, restructure
manufacturing operations, divest business units, and reduce the size of the
workforce. Further risks include realizing neither the magnitude of the cost
savings expected from management actions, nor the acceleration or deceleration
of future revenue growth, earnings, profitability or cash flow. The company's
actual results in future periods may be materially different from any
performance suggested in this news release. Risks and uncertainties to which the
company is subject may include, but may not necessarily be limited to
fluctuations in the timing and volumes of customer demand, the rate of depletion
of customer inventory buildup, and the company's achievement of revenue
objectives and other financial targets. Other risks and uncertainties that many
affect the company's actual results include, but are not necessarily limited to
the timing and success of new product introductions, the continued availability
of appropriate levels of manufacturing capacity, the
realization of benefits from the company's strategic relationships, and
investments and disruptions in general economic activity caused by the effects
of terrorist activities and armed conflict. The company operates in an industry
sector where securities' values are highly volatile and may be influenced by the
cyclical nature of the industry, the unpredictability of the economy and other
factors beyond the company's control.
LSI Logic Corporation (NYSE: LSI) is a leading designer and manufacturer of
communications, consumer and storage semiconductors for applications that
access, interconnect and store data, voice and video. In addition, the company
supplies storage network solutions for the enterprise. LSI Logic is
headquartered at 1551 McCarthy Boulevard, Milpitas, CA 95035, 866-574-5741
(within U.S.), 719-533-7679 (outside U.S.), http://www.lsilogic.com.
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Editor's Notes:
1. All LSI Logic news releases (financial, acquisitions, manufacturing,
products, technology etc.) are issued exclusively by PR Newswire and are
immediately thereafter posted on the company's external website,
http://www.lsilogic.com.
2. The LSI Logic logo design is a registered trademark of LSI Logic
Corporation.
3. All other brand or product names may be trademarks or registered trademarks
of their respective companies.