EXHIBIT 99.1
FOR IMMEDIATE RELEASE OCTOBER 23, 2002
INVESTOR RELATIONS CONTACT: MEDIA RELATIONS CONTACT:
DIANA MATLEY KEVIN BRETT
408-433-4365 408-433-7150
diana@lsil.com kbrett@lsil.com
CC02-136
LSI LOGIC REPORTS Q3 2002 PRO FORMA PROFITABILITY
The LSI Logic 2002 third quarter news release follows this summary
THIRD QUARTER NEWS RELEASE HIGHLIGHTS
- - Revenues advanced sequentially 11 percent to $487 million.
- - Revenues increased 23 percent over the $397 million in Q3 2001.
- - Per share pro forma* net income of 4 cents compared to First Call
consensus pro forma net loss estimate of 2 cents.
- - Lower per share GAAP** net loss of 7 cents compared to Q2 net loss of 17
cents per share.
- - Fourth quarter of sequential revenue growth.
- - Generated positive operating cash flow.
- - Improved gross margin to 41 percent.
- - Fourth quarter revenue expected to be in the range of $475 million to
$500 million.
- - Fourth quarter pro forma net income projected to be about 0-2 cents per
share.
* Earnings before acquisition-related amortization and other special items.
** Generally Accepted Accounting Principles
LSI LOGIC REPORTS Q3 PRO FORMA PROFITABILITY
REVENUES INCREASE 11 PERCENT SEQUENTIALLY
MILPITAS, CALIFORNIA -- LSI Logic Corporation (NYSE: LSI) today reported $487
million in revenues in the third quarter of 2002, an 11 percent sequential
increase over the $438 million reported in the second quarter, and a 23 percent
increase from the $397 million reported in the third quarter of 2001.
"Against the backdrop of a gradual and uneven recovery for the worldwide
semiconductor industry, LSI Logic returned to pro forma profitability and
generated double-digit revenue growth," said Wilfred J. Corrigan, LSI Logic
chairman and chief executive officer. "During the third quarter, we unveiled our
revolutionary RapidChip(TM) semiconductor platform, expanding our customer base
to include the underserved middle of the global logic market. We also
strengthened our product offerings and engineering expertise in Storage
Components and Storage Systems through the strategic acquisition of the Mylex
business unit, which generated approximately $7 million in revenues in the last
month of the quarter.
"Our semiconductor businesses -- Consumer, Communications and Storage Components
- -- led the way in the third quarter. In the second quarter, our Storage Systems
business served as LSI Logic's main growth driver. The recent performance of all
of these businesses validates the advantage of a balanced market portfolio."
The 2002 third quarter GAAP net loss was reduced to $28 million or 7 cents a
diluted share, a $34 million improvement over the net loss of $62 million or 17
cents a diluted share in the second quarter. Cash and short-term investments
totaled $943 million at the end of the third quarter. During the quarter, the
company repurchased $87 million of its 2005 convertible notes, reducing its
outstanding convertible debt.
Pro forma 2002 third quarter net income was $17 million or 4 cents a diluted
share, a $37 million or 10 cents per share improvement over the pro forma second
quarter 2002 net loss of $21 million or 6 cents a share. The company reported a
pro forma net loss of $104 million or 29 cents a diluted share in the third
quarter of 2001.
"During the third quarter, LSI Logic increased revenues, generated positive
operating cash flow, improved gross margin, and kept expenditures under
control," said Bryon Look, LSI Logic chief financial officer. "All of these
factors contributed to an earlier than expected return to pro forma
profitability. We are now focusing our sights on building upon this financial
progress and positioning the company for further improvement in 2003."
LSI LOGIC BUSINESS OUTLOOK
LSI Logic expects 2002 Q4 revenues to be in the range of $475 million to $500
million.
The company anticipates reporting pro forma fourth quarter net income of about
0-2 cents a diluted share and a gross margin of approximately 40 percent.
The fourth quarter pro forma tax provision is expected to be a charge of
approximately $6 million.
Capital spending is expected to be about $20 million in the fourth quarter and
approximately $50 million for 2002.
Fourth quarter depreciation is projected to be about $60 million.
The fourth quarter diluted common share count will be approximately 376 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.
LSI LOGIC BUSINESS, TECHNOLOGY AND PRODUCT ANNOUNCEMENTS
o LSI Logic introduced its innovative semiconductor platform, RapidChip(TM),
which is expected to expand the company's customer base by opening up
underserved logic market segments, which are expected to exceed $11 billion
in 2006. The first RapidChip products will begin shipping early next year.
http://www.lsilogic.com/news/product_news/pr20020904.html
o LSI Logic completed its accretive acquisition of the assets of the Mylex
business unit from IBM Corporation. The acquisition expands the business
opportunities, product offerings and engineering expertise of the company's
Storage Components and Storage Systems businesses.
http://www.lsilogic.com/news/corporate_news/cr20020903.html
o LSI Logic Storage Systems, Inc. announced the general availability of the
5884, its new 2-gigabit per second Fibre Channel storage controller,
providing cost effective modular storage systems with industry-leading
performance for both bandwidth-intensive and transaction-based applications.
The 5884-storage controller's fifth generation architecture is the latest
and highest performing design from LSI Logic Storage Systems.
http://www.lsilogic.com/news/product_news/pr20021001.html
o LSI Logic introduced the industry's first wire bond packaging for copper/low
K processes called Pad on I/O(TM). The LSI Logic Pad on I/O packaging
technology provides best-in-class
signal I/O density and up to 50 percent die-area reduction offering reduced
costs for ASIC/SoC/RapidChip designers.
http://www.lsilogic.com/news/product_news/pr20021021a.html
o Infineon Technologies and LSI Logic entered into a joint development
agreement to share existing intellectual property, jointly develop new IP
and collaborate on the design of integrated circuits for hard disk drive
(HDD) applications. The agreement, which allows each company to market
system-on-a-chip ICs developed individually or jointly, gives the companies
access to all of the advanced functionality needed to meet the requirements
for desktop and mobile HDD products.
http://www.lsilogic.com/news/product_news/pr20020820.html
o LSI Logic announced a single-chip RAID product that supports
RAID-on-Motherboard (ROMB) and RAID adapter solutions. The LSI Logic
LSI53C1035 Ultra320 SCSI RAID controller targets high-volume server
applications and delivers the benefits of Fusion-MPT(TM), a common interface
architecture supporting all existing host-based interconnect technologies
with MegaRAID(R), a market leading, proven firmware engine to deliver top
performance. http://www.lsilogic.com/news/product_news/pr20021014c.html
o LSI Logic announced two multi-gigabit Gflx(TM) 0.11 micron transceiver cores
into its GigaBlaze(R) CoreWare(R) family. These GigaBlaze
serial/deserializer cores offer low power, PHY layer support and flexibility
in support of emerging interface standards including Serial ATA, Serial
Attached SCSI (SAS), Fibre Channel and other leading standards for the
storage and computing markets.
http://www.lsilogic.com/news/product_news/pr20021014a.html
o Pioneer Corporation selected LSI Logic's DVxcel(TM) MPEG-2 CODEC as a key
component for its most advanced consumer recordable products. Pioneer is
leveraging LSI Logic's advanced DVD technology for its first dual-drive DVD
recorder, the DVR-77H, and its fourth-generation single drive DVD recorder,
the DVR-55. http://www.lsilogic.com/news/product_news/pr20020930.html
o Skyworks Solutions, Inc. became the first licensee of LSI Logic's recently
introduced ZSP(TM)500 digital signal processor (DSP) core, the industry's
highest performance DSP for consumer multimedia and mobile applications.
Skyworks plans to incorporate the lower power, superscaler architecture core
into next generation high-end 2.5G and 3G mobile communications systems
solutions.
http://www.lsilogic.com/news/product_news/pr20020925b.html
o LSI Logic partnered with InterActual(TM) Technologies, Inc. to provide DVD
manufacturers with silicon and software needed for "Enhanced DVD" or the
playback of additional on-disc and online DVD features. Through a licensing
agreement, LSI Logic will integrate InterActual's DVD software technology
with its high-performance DVD system processor, ZiVA(TM)-5.
http://www.lsilogic.com/news/product_news/pr20020924.html
o LSI Logic announced the general availability of its double data rate (DDR)
SRAM interface core, which is ideal for storage, computing, printer and
communications applications. The LSI Logic DDR core, which greatly
simplifies ASIC design for interfaces to DDR SDRAM memory, reaches data
rates of up to 400 megabits per second per pin at 200MHz.
http://www.lsilogic.com/news/product_news/pr20021008b.html
o LSI Logic Storage Systems, Inc. announced the general availability of its
new E5600 and E5600HPCx storage systems, assisting customers with high
performance computing (HPC) applications. The E5600 storage systems, which
are based on the company's 2 gigabit per second Fibre Channel 5884 storage
controller, enable HPC customers to process high-bandwidth programs and
complex transactions faster, increasing the return on their storage
investment.
http://www.lsilogic.com/news/product_news/pr20021008a.html
o LSI Logic announced distribution availability of its Ultra320 PCI SCSI RAID
family. These RAID solutions deliver enterprise-class performance,
reliability and availability essential in both high-end servers and
workstations. LSI Logic is the leading supplier of host-based RAID to the
global PC and server markets with nearly 2 million RAID solutions shipped to
OEMs, ODMs and system integrators and resellers worldwide.
http://www.lsilogic.com/news/product_news/pr20020905.html
o Samsung Electronics selected the LSI Logic ZiVA(TM)-4 DVD decoder for its
latest family of DVD players. Samsung has used over 11 million ZiVA- branded
decoders in their DVD products to realize the benefits of superior video and
audio quality for their customers.
http://www.lsilogic.com/news/product_news/pr20020729.html
o LSI Logic announced it is the first semiconductor company to offer ASIC
implementation of the Serial ATA 1.0 high-speed interface technology with
the introduction of two new intellectual property cores. Both the LSI Logic
ATA 1.0 Link & Transport core and the 1.5Gbs Serial ATA 1.0 Physical Layer
(PHY) core are now available to customers for integration into an ASIC
solution.
http://www.lsilogic.com/news/product_news/pr20020909b.html
o SCM Microsystems selected LSI Logic's DVxcel(TM) MPEG-2 codec as a key
component for its DVD Creation Station 200, DCS 200. The DCS 200 is the only
product available that allows consumers to capture DVD-quality video from
camcorder, VCR or TV as well as read photos and other files from all types
of flash card media.
http://www.lsilogic.com/news/product_news/pr20020815.html
LSI LOGIC CONFERENCE CALL INFORMATION
LSI Logic will hold a conference call today at 2 p.m. PDT to discuss 2002-third
quarter financial results. The number is 1-785-832-1077. Internet users can
access the conference call by visiting
http://www.firstcallevents.com/service/ajwz366043293gf12.html. 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 1-800-695-1564. (International, 1-402-530-9025). The webcast
replay will be available until October 30.
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 projections of
growth in the communications, consumer, storage components and storage systems
businesses, estimates of revenue growth, earnings, gross margins, tax
provisions, capital spending, depreciation and common share count 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 include, but are not necessarily
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 due to worsening global business
conditions or 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.
ABOUT LSI LOGIC
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 1621 Barber Lane, Milpitas, CA 95035, 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 Nine Months Ended
---------------------------- -----------------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2002 2001 2002 2001
----------- ----------- ----------- -----------
Revenues $486,964 $ 396,675 $1,337,241 $1,379,093
======== ========= ========== ==========
Costs and expenses:
Cost of revenues 288,433 286,640 823,974 882,544
Research and development 114,423 135,634 341,599 381,813
Selling, general and administrative 59,054 80,128 174,600 236,579
-------- --------- ---------- ----------
Total costs and expenses 461,910 502,402 1,340,173 1,500,936
======== ========= ========== ==========
Income/ (loss) from operations 25,054 (105,727) (2,932) (121,843)
Interest expense (10,079) (10,037) (41,399) (29,841)
Interest income and other, net 9,470 11,598 15,737 36,148
======== ========= ========== ==========
Income/ (loss) before income taxes 24,445 (104,166) (28,594) (115,536)
Provision for income taxes 7,938 -- 18,188 --
-------- --------- ---------- ----------
Pro forma net income/ (loss) $ 16,507 $(104,166) $ (46,782) $ (115,536)
-------- --------- ---------- ----------
Pro forma earnings/ (loss) per share:
Basic $ 0.04 $ (0.29) $ (0.13) $ (0.34)
======== ========= ========== ==========
Diluted $ 0.04 $ (0.29) $ (0.13) $ (0.34)
======== ========= ========== ==========
Shares used in computing per share amounts:
Basic 370,948 364,441 369,707 343,441
-------- ---------- ---------- ----------
Diluted 372,538 364,441 369,707 343,441
-------- ---------- ---------- ----------
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 September 30, 2002, the special items
represented acquired in-process research and development, amortization of
acquisition related items including intangibles and non-cash deferred stock
compensation, restructuring of operations and other non-recurring items, net,
related to the revaluation of assets held for sale in accordance with Statement
of Financial Accounting Standards No. 144 "Accounting for the Impairment or
Disposal of Long-Lived Assets" adopted by the Company on January 1, 2002, and
other special items. The other special items consisted of gains associated with
repurchases of a portion of the Company's $500 million 4% Convertible
Subordinated Notes, gains on miscellaneous asset sales and a write down of
certain equity securities.
During the nine month period ended September 30, 2002, the special items
represented all the items mentioned above in addition to additional excess
inventory and related charges and a $22 million tax benefit as a result of
changes in the tax laws.
During the three and nine month periods ended September 30, 2001, the special
items represented additional excess inventory and related charges, acquired
in-process research and development, amortization of acquisition related items
including intangibles and non-cash deferred stock compensation, restructuring of
operations and other non-recurring items, net, and other special items. The
other special items consisted of a write down of certain equity securities and
the write-off of debt issuance costs associated with a master lease and security
agreement.
For the three and nine month periods ended September 30, 2002, the pro forma
statements are prepared using the Company's calculated tax expense of $7,938 and
$18,188, respectively, when excluding special items. For the three and nine
month periods ended September 30, 2001, the pro forma statements are prepared
using a calculated rate of 0%, when excluding special items.
For the three months ended September 30, 2002, 1,590 shares were considered
dilutive common stock equivalents and included in the computation of diluted pro
forma earnings per share. In computing the diluted pro forma loss per share for
the nine month period ended September 30, 2002 and the three and nine month
periods ended September 30, 2001, all common stock equivalents were excluded as
a result of their antidilutive effect.
A reconciliation from pro forma net income/ (loss) 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 INCOME/ (LOSS) TO REPORTED RESULTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
Three Months Ended Nine Months Ended
------------------------ ------------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2002 2001 2002 2001
--------- --------- --------- ---------
Pro forma net income/ (loss) $ 16,507 $(104,166) $ (46,782) $(115,536)
======== ========= ========= =========
Special items:
Additional excess inventory and related charges -- (50,038) (45,526) (158,064)
Amortization of acquisition related items including
intangibles and non-cash deferred stock compensation (33,877) (84,530) (122,951) (204,195)
Acquired in-process research and development (1,922) (19,100) (1,922) (96,600)
Restructuring of operations and other non-recurring items, net (12,985) (132,531) (71,640) (192,370)
Other special items 4,651 (7,717) 4,651 (14,244)
Tax benefit -- -- 22,500 39,198
-------- --------- --------- ---------
Total special items (44,133) (293,916) (214,888) (626,275)
-------- --------- --------- ---------
Net loss $(27,626) $(398,082) $(261,670) $(741,811)
-------- --------- --------- ---------
Basic earnings/ (loss) per share:
Pro forma net income/ (loss) $ 0.04 $ (0.29) $ (0.13) $ (0.34)
Special items** (0.11) (0.80) (0.58) (1.82)
-------- --------- --------- ---------
Net loss $ (0.07) $ (1.09) $ (0.71) $ (2.16)
======== ========= ========= =========
Diluted earnings/ (loss) per share*:
Pro forma net income/ (loss) $ 0.04 $ (0.29) $ (0.13) $ (0.34)
Special items** (0.11) (0.80) (0.58) (1.82)
-------- --------- --------- ---------
Net loss $ (0.07) $ (1.09) $ (0.71) $ (2.16)
======== ========= ========= =========
Shares used in computing per share amounts:
Basic 370,948 364,441 369,707 343,441
-------- --------- --------- ---------
Diluted 370,948 364,441 369,707 343,441
-------- --------- --------- ---------
* In computing diluted loss per share for the three and nine month periods
ended September 30, 2002 and 2001, all common stock equivalents were
excluded 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 Nine Months Ended
-------------------------- --------------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2002 2001 2002 2001
----------- ----------- ----------- -----------
Revenues $ 486,964 $ 396,675 $ 1,337,241 $ 1,379,093
----------- ----------- ----------- -----------
Costs and expenses:
Cost of revenues:
Cost of revenues 288,433 286,640 823,974 882,544
Additional excess inventory and related charges -- 50,038 45,526 158,064
Research and development 114,423 135,634 341,599 381,813
Selling, general and administrative 59,054 80,128 174,600 236,579
Acquired in-process research and development 1,922 19,100 1,922 96,600
Restructuring of operations and other non-recurring items, net 12,985 132,531 71,640 192,370
Amortization of acquisition related items including
intangibles and non-cash deferred stock compensation* 33,877 84,530 122,951 204,195
----------- ----------- ----------- -----------
Total costs and expenses 510,694 788,601 1,582,212 2,152,165
----------- ----------- ----------- -----------
Loss from operations (23,730) (391,926) (244,971) (773,072)
Interest expense (10,079) (10,037) (41,399) (29,841)
Interest income and other, net 14,121 3,881 20,388 21,904
----------- ----------- ----------- -----------
Loss before income taxes (19,688) (398,082) (265,982) (781,009)
Provision/ (benefit) for income taxes 7,938 -- (4,312) (39,198)
----------- ----------- ----------- -----------
Net loss $ (27,626) $ (398,082) $ (261,670) $ (741,811)
=========== =========== =========== ===========
Loss per share:
Basic $ (0.07) $ (1.09) $ (0.71) $ (2.16)
=========== =========== =========== ===========
Diluted** $ (0.07) $ (1.09) $ (0.71) $ (2.16)
=========== =========== =========== ===========
Shares used in computing per share amounts:
Basic 370,948 364,441 369,707 343,441
----------- ----------- ----------- -----------
Diluted 370,948 364,441 369,707 343,441
----------- ----------- ----------- -----------
* The amortization of acquisition related items including intangibles and
non-cash deferred stock compensation for the three month period ended
September 30, 2002 are comprised of the following items:
Amortization of continuing intangibles $ 19,147
Amortization of newly purchased intangibles 526
Amortization of non-cash deferred stock compensation 14,204
--------
$ 33,877
========
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 in 2002 as compared
to 2001 as approximately $952 million of goodwill 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 and our current report on Form 10-Q for the six month
period ended June 30, 2002.
** In computing diluted loss per share for the three and nine month periods
ended September 30, 2002 and 2001, all common stock equivalents were
excluded as a result of their antidilutive effect.
LSI LOGIC CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(IN MILLIONS)
(UNAUDITED)
September 30, December 31,
2002 2001
------------- ------------
ASSETS
Current assets:
Cash and short-term investments $ 943.5 $1,013.3
Accounts receivable, net 301.1 191.7
Inventories 223.7 256.6
Prepaid expenses and other current assets 333.5 307.3
-------- --------
Total current assets 1,801.8 1,768.9
Property and equipment, net 782.0 944.4
Goodwill and other intangibles 1,286.8 1,319.8
Other assets 528.5 592.7
-------- --------
Total assets $4,399.1 $4,625.8
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current liabilities $ 526.2 $ 509.7
Current portion of long-term debt, capital lease
obligations and short-term borrowings 0.3 0.3
-------- --------
Total current liabilities 526.5 510.0
Long-term debt and capital lease obligations 1,287.1 1,335.8
Deferred tax and other long-term liabilities 282.5 294.2
-------- --------
Total liabilities 2,096.1 2,140.0
Minority interest in consolidated subsidiaries 7.4 5.9
======== ========
Stockholders' equity:
Common stock 2,939.1 2,909.3
Deferred stock compensation (62.3) (124.1)
Accumulated deficit (581.5) (319.8)
Accumulated other comprehensive income 0.3 14.5
-------- --------
Total stockholders' equity 2,295.6 2,479.9
-------- --------
Total liabilities and stockholders' equity $4,399.1 $4,625.8
======== ========
LSI LOGIC CORPORATION
STATEMENT OF CASH FLOWS
(IN THOUSANDS, EXCEPT WHERE NOTED)
(UNAUDITED)
Three Months Ended Nine Months Ended
------------------------ ------------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2002 2001 2002 2001
---------- ---------- ---------- ----------
Operating Activities:
Net loss (27,626) (398,082) (261,670) (741,811)
Adjustments:
Depreciation & amortization 83,827 152,216 259,755 395,830
Amortization of non-cash deferred stock compensation 14,204 26,805 64,973 75,912
Acquired in-process research and development 1,922 19,100 1,922 96,600
Non-cash restructuring and non-recurring items, net 12,985 130,585 56,473 166,353
Gain on repurchase of Convertible Subordinated Notes (11,574) -- (11,574) --
Loss on write down of equity securities, net 9,905 4,913 9,905 11,440
Changes in working capital components, net of assets acquired
and liabilities assumed in business combinations:
Accounts receivable, net (56,996) 79,536 (106,573) 316,549
Inventories, net (15,016) 49,734 46,099 (5,029)
Prepaid expenses and other assets 20,412 (27,146) 10,452 (63,703)
Accounts payable 20,538 (39,210) (20,860) (130,376)
Accrued and other liabilities 1,071 (6,875) (5,184) (26,224)
---------- ---------- ---------- ----------
NET CASH PROVIDED BY/ (USED IN) OPERATING ACTIVITIES 53,652 (8,424) 43,718 95,541
---------- ---------- ---------- ----------
INVESTING ACTIVITIES:
Purchases of debt and equity securities available-for-sale (345,493) (173,697) (1,283,235) (1,097,075)
Maturities and sales of debt and equity securities available-for-sale 433,330 645,962 1,061,153 1,587,649
Purchases of property and equipment, net (11,082) (25,762) (23,230) (151,397)
Decrease/ (increase) in non-current assets and deposits (1,000) (320,397) (10,658) (323,290)
Acquisition of companies, net of cash acquired (50,472) (221,656) (50,472) (177,677)
---------- ---------- ---------- ----------
NET CASH PROVIDED BY/ (USED IN) INVESTING ACTIVITIES 25,283 (95,550) (306,442) (161,790)
---------- ---------- ---------- ----------
FINANCING ACTIVITIES:
Proceeds from borrowings -- 200,000 -- 200,000
Repayment of debt obligations (396) (199) (247) (1,068)
Debt issuance costs -- (1,000) -- (1,000)
Repurchase of Convertible Subordinated Notes (50,626) -- (50,626) --
Issuance of common stock, net -- 10,691 26,249 55,058
---------- ---------- ---------- ----------
NET CASH (USED IN)/PROVIDED BY FINANCING ACTIVITIES (51,022) 209,492 (24,624) 252,990
---------- ---------- ---------- ----------
Effect of exchange rate changes on cash and cash equivalents (2,465) (208) 1,600 583
---------- ---------- ---------- ----------
Increase/(decrease) in cash and cash equivalents 25,448 105,310 (285,748) 187,324
Cash and cash equivalents at beginning of period 445,942 317,909 757,138 235,895
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Cash and cash equivalents at end of period 471,390 423,219 471,390 423,219
========== ========== ========== ==========
LSI LOGIC CORPORATION
SELECTED FINANCIAL INFORMATION
(IN MILLIONS, EXCEPT WHERE NOTED)
(UNAUDITED)
Three Months Ended
--------------------------------------------
Sept. 30, June 30, Sept. 30,
2002 2002 2001
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Semiconductor revenues $ 400.3 $ 354.8 $ 351.4
Storage Systems revenues $ 86.7 $ 83.0 $ 45.3
Total revenues $ 487.0 $ 437.8 $ 396.7
Percentage change in revenues-qtr./qtr.(a) 11.2% 6.1% -14.7%
Percentage change in revenues-yr./yr.(b) 22.8% -5.9% -45.5%
Days sales outstanding 56 50 51
Days of inventory(c) 70 66 97
Current ratio 3.4 3.7 2.1
Quick ratio 2.4 2.6 1.4
R&D as a percentage of revenues 23.5% 25.8% 34.2%
SG&A as a percentage of revenues 12.1% 13.1% 20.2%
Gross margin as a percentage of revenues(c) 40.8% 38.4% 27.7%
Employees(d) 5,508 5,445 7,352
Revenues per employee (in thousands)(e) $ 353.7 $ 321.6 $ 215.8
Diluted shares (in thousands)(f) 372,538 369,672 364,441
Selected Cash Flow information
Purchase of property and equipment(g) $ 13.0 $ 8.8 $ 45.4
Depreciation / amortization(h) $ 59.1 $ 62.1 $ 82.7
In-process research and development $ 1.9 $ -- $ 19.1
Issuance of common stock for employee stock
purchase and option programs $ -- $ 25.0 $ 10.7
(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) Based on pro forma cost of revenues.
(d) Actual number of employees at the end of each period presented.
(e) Revenue per employee is calculated by annualizing revenue for each quarter
presented and dividing it by the number of employees.
(f) Shares used in determining pro forma diluted income/ (loss) per share.
(g) Represents gross addition of property and equipment.
(h) Represents depreciation of fixed assets and amortization of software.
Excludes amortization of intangibles and non-cash deferred stock
compensation.