EXHIBIT 99.1
FOR IMMEDIATE RELEASE APRIL 24, 2002
INVESTOR RELATIONS CONTACT: MEDIA RELATIONS CONTACT:
DIANA MATLEY KEVIN BRETT
408-433-4365 408-433-7150
diana@lsil.com kbrett@lsil.com
CC02-77
LSI LOGIC REPORTS Q1 2002 FINANCIAL RESULTS
The LSI Logic 2002 first quarter news release follows this summary
FIRST QUARTER NEWS RELEASE HIGHLIGHTS
- - First Quarter Revenues grow to $413 million.
- - Per share pro forma* net loss of 12 cents, compared to First Call consensus
estimate of loss of 14 cents.
- - Bookings increase 15 percent sequentially.
- - Second quarter revenue expected to increase 3-6 percent.
- - Expected second quarter bottom line improvement to a pro forma* net loss of
about 9 cents.
- - On-track to profitability in second half of 2002.
* Earnings before acquisition-related amortization and other special
items.
LSI LOGIC EXCEEDS Q1 BOTTOM LINE EXPECTATIONS;
ON COURSE FOR 2002 SECOND HALF PROFITABILITY
MILPITAS, CALIFORNIA -- LSI Logic Corporation (NYSE: LSI) today reported $413
million in revenues in the first quarter of 2002, a 1.6 percent increase over
the $406 million reported in the fourth quarter of 2001, and a 20 percent
decrease from the $517 million reported in the first quarter of 2001.
Pro forma 2002 first quarter net loss was $42 million or 12 cents a diluted
share, a $32 million improvement over the pro forma fourth quarter 2001 net loss
of $74 million or 20 cents a diluted share. The company reported pro forma net
income of $9.5 million or 3 cents a diluted share in the first quarter of 2001.
Cash and short-term investments totaled $967 million at the end of the 2002
first quarter.
"LSI Logic revenues grew in the first quarter and exceeded bottom line
expectations, despite normal seasonality in the consumer electronics sector,"
said Wilfred J. Corrigan, LSI Logic chairman and chief executive officer. "Our
Communications, Storage and Storage Systems businesses gathered momentum in the
first quarter as the high-technology sector underwent the first stages of
recovery.
"We anticipate that all of our businesses -- Communications, Consumer, Storage
Components and Storage Systems -- will grow in the second quarter. Our backlog
is increasing and bookings in the first three weeks of the present quarter are
running ahead of the comparable period in the first quarter. We are projecting
the restoration of profitability in the second half of 2002. We are confident
that the industry recovery is underway and we expect that resurgent
communications, consumer and storage markets will drive the next industry growth
cycle."
The first quarter (GAAP*) net loss was $172 million or 47 cents a diluted share,
a $78 million improvement over the fourth quarter (GAAP) net loss of $250
million or 68 cents a diluted share. The 2001 first quarter (GAAP) net loss was
$31 million or 10 cents a diluted share.
"The company embarked on a series of strategic actions during 2001 and the first
quarter, specifically designed to realign operating expenses, streamline
manufacturing and refocus company resources on markets where we have leadership
positions," said Bryon Look, LSI Logic executive vice president and chief
financial officer. "We believe the direct result of these actions will be an
accelerated return to profitability and a stronger LSI Logic competitive
presence in our targeted communications, consumer and storage markets."
* Generally Accepted Accounting Principles (GAAP)
LSI LOGIC BUSINESS OUTLOOK
LSI Logic expects 2002 Q2 revenues to grow between 3 to 6 percent sequentially
from the $413 million reported in the first quarter.
The company anticipates reporting a pro forma second quarter loss of about 9
cents a diluted share and gross margin in the range of 35-37 percent.
The company does not anticipate selling any equity investments in the second
quarter.
The second quarter pro forma tax provision is expected to be a charge of
approximately $4 million.
Capital spending is expected to be less than $30 million in the second quarter
and under $200 million for 2002.
Second quarter depreciation is projected to be about $64 million.
The second quarter diluted common share count will be approximately 370 million.
NOTE: The company's financial guidance will be limited to the comments made on
today's public conference call and contained in the Business Outlook section of
this news release. The company assumes no obligation to update the information
contained in this news release.
LSI LOGIC BUSINESS, TECHNOLOGY AND PRODUCT ANNOUNCEMENTS
- - LSI Logic introduced its G90(TM) product, a next generation system-on-a-chip
capability, creating new possibilities for customers requiring accelerated
time-to-market with increased integration and system-level functionality. The
new family of 90-nanometer SoC products is designed for global communications,
consumer and storage markets.
http://www.lsilogic.com/news/product_news/pr20020415.html
- - LSI Logic consolidated its Communications Business and ASIC technology and
product development activities to better serves the company's customer base. The
consolidation reflects the fact that ASICs are the primary technology that LSI
Logic employs in serving its networking, broadband and other communications
customers.
http://www.lsilogic.com/news/corporate_news/cr20020212.html
- - Continuing its leadership in high performance system-on-a-chip (SoC) ASIC
designs, LSI Logic announced the industry's first implementation of the 266MHz
ARM(R) Jazelle(TM) microprocessor core in 0.11-micron ASIC technology for
customer SoC designs.
http://www.lsilogic.com/news/product_news/pr20020416b.html
- - LSI Logic announced the supplying of high-performance I/O and system ASICs to
Sun Microsystems for its eight-way Sun Fire V880 server family. The Sun-designed
chipset includes two 1.2 million gate ASICs from LSI Logic.
http://www.lsilogic.com/news/product_news/pr20020130.html
- - LSI Logic became the first company to make commercially available its full
line of Ultra320 SCSI host bus adapters (HBAs). Value Added Resellers (VARs),
system integrators and distribution channel suppliers can now offer HBAs that
provide twice the data throughput of previous generation Ultra 160 SCSI
products.
http://www.lsilogic.com/news/product_news/pr20020312a.html
- - JVC (Victor Company of Japan, Limited) selected LSI Logic's DoMiNo(TM)
Network Media Processing technology for its next-generation professional video
products. JVC will use LSI Logic's advanced technology to develop a host of
professional products such as HDTV for content creation and distribution.
http://www.lsilogic.com/news/product_news/pr20020401.html
- - LSI Logic Storage Systems, Inc. announced the development and successful
implementation of a new process to assist energy companies in quickly locating
oil and gas reserves. LSI Logic's new solution reduces energy-company cycle
times for making critical, fully informed drilling and production decisions.
http://www.lsilogic.com/news/product_news/pr20020311b.html
- - LSI Logic announced the availability of a System Packet Interface Level 4
(SPI-4) Phase 2 intellectual-property core, targeted for communications and
storage markets. The core will allow designers to architect their ASICs with
verified
interoperability, simplifying interface design and reducing time to market for
high-speed networking applications.
http://www.lsilogic.com/news/product_news/pr20020226b.html
- - LSI Logic Storage Systems, Inc. announced an alliance with MidStream(TM)
Technologies to provide complete end-to-end, high performance, multi-edge,
streaming storage solutions for cable news providers, movie studios, record
companies and online video providers.
http://www.lsilogic.com/news/product_news/pr20020408b.html
- - LSI Logic Storage Systems, Inc. and eMotion, Inc. announced that the two
companies would offer high performance storage and digital media management
solution to broadcast and entertainment companies. The turnkey solution will be
based on LSI Logic's MetaStor(R) E-Series products and eMotion's
MediaPartner(TM) Enterprise, one of three media management solutions offered by
eMotion.
http://www.lsilogic.com/news/product_news/pr20020408a.html
- - TANDBERG Television, a global supplier of open solutions for digital
broadcasting, selected LSI Logic's DoMiNo Network Media Processing technology
for its next generation of professional video distribution products. TANDBERG is
utilizing DoMiNo to develop next generation products for use in mobile and
portable ("wireless camera") applications.
http://www.lsilogic.com/news/product_news/pr20020403.html
- - LSI Logic and Seagate Technology introduced the breakthrough Serial ATA
interface in Seagate's next-generation desktop PC hard disc drives. LSI Logic's
interconnect chip technology joins Seagate's drive-level ATA developments,
enabling the first full-speed native Serial ATA hard-drive solution.
http://www.lsilogic.com/news/product_news/pr20020225.html
- - Extending its industry leadership in Ultra320 technology, LSI Logic announced
full production volumes of the SCSI controller. Leading hard disc driver
manufacturers and server makers will be shipping in volume in Q2/Q3.
http://www.lsilogic.com/news/product_news/pr20020418.html
- - LSI Logic Storage Systems, Inc. announced its snapshot technology has been
validated by the Oracle Storage Compatibility Program (OSCP) making the
technology broadly available for Oracle database users.
http://www.lsilogic.com/news/product_news/pr20020226c.html
LSI LOGIC CONFERENCE CALL INFORMATION: LSI Logic will hold a conference call
today at 2 p.m. PDT to discuss 2002 first quarter financial results. The number
is 1-785-832-1523. Internet users can access the conference call by visiting
www.videonewswire.com/event.asp?id=3996. A replay of the call will be available
today at approximately 5 p.m. PDT and will be available for 48 hours. The number
is 1-800-839-2871 (International, 1-402-271-9155). The webcast replay will be
available until May 1.
SAFE HARBOR FOR FORWARD LOOKING STATEMENTS: This news release and the statements
by LSI Logic management include 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. Readers are cautioned that
these forward-looking statements are only predictions and may differ materially
from the actual future events or results. Readers are referred to the documents
filed by LSI Logic with the SEC, and specifically the most recent reports on
Form 10-K, 10-Q and 8-K. Forward-looking statements include the efficacy of cost
reduction measures and reduction of operating expenses, projections of growth in
the communications, consumer, storage components and storage systems businesses,
estimates of revenue growth, earnings, gross margins, gains from investment
income, tax rates, capital spending and depreciation made in this news release.
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 may
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 extent to which the company may not realize the cost savings
it expects from the reduction in operating expenses may also impact its future
performance. 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. In the context of forward-looking information provided in
this news release, reference is made to the discussion of risk factors detailed
in the company's filings from time to time with the Securities and Exchange
Commission, including but not limited to filings made during the past 12 months.
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.), 408-954-3108 (outside U.S.), http://www.lsilogic.com.
# # #
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.
LSI LOGIC CORPORATION
Pro Forma Consolidated Condensed Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
-------------------------
March 31, March 31,
2002 2001
--------- ---------
Revenues $ 412,509 $ 517,199
--------- ---------
Costs and expenses:
Cost of revenues 265,909 311,145
Research and development 114,343 118,767
Selling, general and administrative 58,180 78,971
--------- ---------
Total costs and expenses 438,432 508,883
--------- ---------
(Loss)/income from operations (25,923) 8,316
Interest expense (15,834) (9,940)
Interest income and other, net 3,646 8,979
Recurring investment income -- 5,302
--------- ---------
(Loss)/income before income taxes (38,111) 12,657
Provision for income taxes 4,250 3,164
--------- ---------
Pro forma net (loss)/income $ (42,361) $ 9,493
--------- ---------
Pro forma (loss)/earnings per share:
Basic $ (0.12) $ 0.03
--------- ---------
Diluted $ (0.12) $ 0.03
--------- ---------
Shares used in computing per share amounts:
Basic 367,578 320,369
--------- ---------
Diluted 367,578 330,384
--------- ---------
Pro forma statements of operations are intended to present the Company's
operating results, excluding special items described below, for the periods
presented.
During the three month period ended March 31, 2002, the special items
represented additional excess inventory and related charges, amortization of
acquisition related items including intangibles and non-cash deferred stock
compensation, restructuring of operations and other non-recurring items, net,
and a $22 million tax benefit as a result of changes in the tax laws in the
first quarter of 2002.
During the three month period ended March 31, 2001, the special items
represented amortization of acquisition related items including intangibles and
non-cash deferred stock compensation.
For the three month period ended March 31, 2002, the pro forma statements are
prepared using the Company's calculated tax expense of $4,250 when excluding
special items. For the three month period ended March 31, 2001, the pro forma
statements are prepared using the Company's calculated tax rate of 25% when
excluding special items.
In computing diluted pro forma loss per share for the three month period ended
March 31, 2002, common stock equivalents were excluded from the computation of
diluted loss per share as a result of their antidilutive effect.
A reconciliation from pro forma net (loss)/income to the reported results is
presented on the following page.
The format presented above is not intended to be in accordance with Generally
Accepted Accounting Principles.
LSI LOGIC CORPORATION
RECONCILIATION OF PRO FORMA NET (LOSS)/INCOME TO REPORTED RESULTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
Three Months Ended
-------------------------
March 31, March 31,
2002 2001
--------- ---------
Pro forma net (loss)/income $ (42,361) $ 9,493
--------- ---------
Special items:
Additional excess inventory and related charges (40,754) --
Amortization of acquisition related items including
intangibles and non-cash deferred stock compensation (46,078) (48,356)
Restructuring of operations and other non-recurring items, net (65,060) --
Tax benefit 22,500 7,615
--------- ---------
Total special items (129,392) (40,741)
--------- ---------
Net loss $(171,753) $ (31,248)
--------- ---------
Basic (loss)/earnings per share:
Pro forma net (loss)/income $ (0.12) $ 0.03
Special items** (0.35) (0.13)
--------- ---------
Net loss $ (0.47) $ (0.10)
--------- ---------
Diluted (loss)/earnings per share*:
Pro forma net (loss)/income $ (0.12) $ 0.03
Special items** (0.35) (0.13)
--------- ---------
Net loss $ (0.47) $ (0.10)
--------- ---------
Shares used in computing per share amounts:
Basic 367,578 320,369
--------- ---------
Diluted 367,578 320,369
--------- ---------
* In computing diluted loss per share for the three month periods ended March
31, 2002 and 2001, common stock equivalents were excluded from the
computation of diluted loss per share as a result of their antidilutive
effect.
** This line item includes rounding adjustments.
LSI LOGIC CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
Three Months Ended
-------------------------
March 31, March 31,
2002 2001
--------- ---------
Revenues $ 412,509 $ 517,199
--------- ---------
Costs and expenses:
Cost of revenues:
Cost of revenues 265,909 311,145
Additional excess inventory and related charges 40,754 --
Research and development 114,343 118,767
Selling, general and administrative 58,180 78,971
Restructuring of operations and other non-recurring items, net 65,060 --
Amortization of acquisition related items including
intangibles and non-cash deferred stock compensation* 46,078 48,356
--------- ---------
Total costs and expenses 590,324 557,239
--------- ---------
Loss from operations (177,815) (40,040)
Interest expense (15,834) (9,940)
Interest income and other, net 3,646 8,979
Gain on sale of equity securities -- 5,302
--------- ---------
Loss before income taxes (190,003) (35,699)
Benefit for income taxes (18,250) (4,451)
--------- ---------
Net loss $(171,753) $ (31,248)
--------- ---------
Loss per share:
Basic $ (0.47) $ (0.10)
--------- ---------
Diluted** $ (0.47) $ (0.10)
--------- ---------
Shares used in computing per share amounts:
Basic 367,578 320,369
--------- ---------
Diluted 367,578 320,369
--------- ---------
* The amortization of acquisition related items including intangibles and
non-cash deferred stock compensation for the three month period ended March
31, 2002 are comprised of the following items:
Amortization of intangibles $ 19,157
Amortization of non-cash deferred stock compensation 26,921
--------
$ 46,078
--------
On January 1, 2002, we adopted Statement of Financial Accounting Standard
("SFAS") No. 142 "Goodwill and Other Intangible Assets". SFAS No. 142
changes the accounting for goodwill from an amortization method to an
impairment-only approach. As a result of the adoption of SFAS No. 142,
amortization of goodwill and intangibles will be lower by approximately $112
million in 2002 as compared to 2001 and approximately $952 million of
goodwill and indefinite-lived intangibles will no longer be amortized. For
more information regarding the adoption of SFAS No. 142, please refer to our
Annual Report on Form 10-K for the fiscal year ended December 31, 2001.
** In computing diluted loss per share for the three month periods ended March
31, 2002 and 2001, common stock equivalents were excluded from the
computation of diluted loss per share as a result of their antidilutive
effect.
LSI LOGIC CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(IN MILLIONS)
(UNAUDITED)
March 31, December 31,
ASSETS 2002 2001
- ------ --------- ------------
Current assets:
Cash and short-term investments $ 967.1 $1,013.3
Accounts receivable, net 221.0 191.7
Inventories 196.3 256.6
Prepaid expenses and other current assets 318.6 307.3
-------- --------
Total current assets 1,703.0 1,768.9
Property and equipment, net 840.3 944.4
Goodwill and other intangibles 1,299.7 1,319.8
Other assets 611.0 592.7
-------- --------
Total assets $4,454.0 $4,625.8
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current liabilities $ 497.2 $ 509.7
Current portion of long-term debt, capital lease
obligations and short-term borrowings 0.3 0.3
-------- --------
Total current liabilities 497.5 510.0
Long-term debt, capital lease obligations and
other noncurrent liabilities 1,626.7 1,630.0
-------- --------
Total liabilities 2,124.2 2,140.0
Minority interest in consolidated subsidiaries 5.9 5.9
-------- --------
Stockholders' equity:
Common stock 2,914.5 2,909.3
Deferred stock compensation (100.3) (124.1)
Accumulated deficit (491.6) (319.8)
Accumulated other comprehensive income 1.3 14.5
-------- --------
Total stockholders' equity 2,323.9 2,479.9
-------- --------
Total liabilities and stockholders' equity $4,454.0 $4,625.8
======== ========
LSI LOGIC CORPORATION
SELECTED FINANCIAL INFORMATION
(IN MILLIONS, EXCEPT WHERE NOTED)
(UNAUDITED)
Three Months Ended
--------------------------------------------
March 31, Dec. 31, March 31,
2002 2001 2001
---------- ---------- ----------
Semiconductor revenues $ 352.6 $ 353.4 $ 455.0
SAN Systems revenues $ 59.9 $ 52.4 $ 62.2
Total revenues $ 412.5 $ 405.8 $ 517.2
Percentage change in revenues-qtr./qtr.(a) 1.7% 2.3% -31.1%
Percentage change in revenues-yr./yr.(b) -20.2% -45.9% -15.9%
Capital additions $ 10.4 $ 43.9 $ 186.8
Depreciation/amortization(c) $ 64.5 $ 72.5 $ 89.5
Days sales outstanding 48 43 63
Days of inventory(d) 66 83 104
Current ratio 3.4 3.5 3.4
Quick ratio 2.4 2.4 2.5
R&D as a percentage of revenues 27.7% 29.9% 23.0%
SG&A as a percentage of revenues 14.1% 17.4% 15.3%
Gross margin as a percentage of revenues(d) 35.5% 31.5% 39.8%
Employees(e) 5,632 6,742 7,298
Revenues per employee (in thousands)(f) $ 293.0 $ 240.8 $ 283.5
Diluted shares (in thousands)(g) 367,578 365,998 330,384
(a) Represents sequential quarter growth in revenues.
(b) Represents growth in revenues in the quarter presented as
compared to the same quarter of the previous year.
(c) Excludes amortization of acquisition related intangibles and non-cash
deferred stock compensation.
(d) Based on pro forma cost of revenues.
(e) Actual number of employees at the end of each period presented.
(f) Revenue per employee is calculated by annualizing revenue for
each quarter presented and dividing it by the number of employees.
(g) Shares used in determining pro forma diluted (loss)/earnings per share.