The LSI Logic 2002/fourth quarter news release follows this summary
Fourth quarter news release highlights
- Revenues of $480 million, consistent with previous guidance
- Revenues increased 18 percent over the $406 million in Q4 2001.
- Pro forma* profitability for second sequential quarter.
- Per share pro forma* net income of 1 cent, meets consensus estimate.
- GAAP** net loss of 8 cents a diluted share.
- Generated positive operating cash flow for third consecutive quarter.
* Earnings before acquisition-related amortization and other special items
** Generally Accepted Accounting Principles
LSI Logic generates positive operating cash flow for 3rd consecutive quarter; revenues up 18% Q4 2001 - Q4 2002
MILPITAS, Calif., January 22, 2003 – LSI Logic Corporation (NYSE: LSI) today reported revenues of $480 million in the fourth quarter of 2002, a 1.5 percent sequential decrease compared to the $487 million reported in the third quarter, and an increase of 18 percent over the $406 million reported in the fourth quarter of 2001.
The 2002 fourth quarter GAAP** net loss was $31 million or 8 cents a diluted share. The third quarter net loss was $28 million or 7 cents a diluted share. The company reported a GAAP net loss of $250 million or 68 cents a diluted share in the fourth quarter of 2001.
Pro forma* 2002 fourth quarter net income was $5 million or 1 cent a diluted share. Pro forma third quarter 2002 net income was $17 million or 4 cents a share. The company reported a pro forma net loss of $74 million or 20 cents a diluted share in the fourth quarter of 2001.
Cash and short-term investments increased $47 million to $990 million at the end of the fourth quarter. During the quarter, the company repurchased $48 million of convertible notes, reducing its outstanding convertible debt.
"After generating 11 percent sequential revenue growth in the third quarter, our order input rate slowed in the fourth quarter," said Wilfred Corrigan, LSI Logic chairman and chief executive officer. "The strength of our two storage businesses was offset by declines in Consumer and Communications. As a result of this lower fourth quarter order-input rate, we are projecting first quarter revenues in the range of $370 million to $390 million. Entering 2003, our outlook is for the first quarter to be the low point for revenues, and for the second quarter to be up substantially.
"Consumer, Storage Components and Storage Systems are expected to be the drivers for the second quarter improvement. The Communications sector has the least visibility, but generally we believe the enterprise sector is stabilizing while the WAN sector is unlikely to demonstrate improvement until late 2003 or 2004. We expect our overall business will regain momentum in the second quarter and return to pro forma profitability in the third quarter."
LSI Logic recorded 2002 revenues of $1.82 billion, a 2 percent increase over the $1.78 billion in 2001. The GAAP 2002 net loss was $292 million or 79 cents a diluted share. The Pro Forma 2002 net loss was $42 million or 11 cents a diluted share. "We are generating positive operating cash flow, controlling operating expenses and reducing our long-term debt," said Bryon Look, LSI Logic chief financial officer.
** Generally Accepted Accounting Principles
* Earnings before acquisition-related amortization and other special items.
LSI Logic business outlook
LSI Logic expects Q1 2003 revenues to be in the range of $370 million to $390 million.
The company anticipates reporting a pro forma first quarter net loss of about 18-20 cents a diluted share and a gross margin of approximately 30-32 percent.
Operating expenses are expected to be in the range of $175 million to $180 million.
The first quarter pro forma tax provision is expected to be a charge of approximately $6 million.
Capital spending is anticipated to be under $20 million in the first quarter and less than $100 million for 2003.
First quarter depreciation is projected to be about $60 million.
The first quarter diluted common share count is expected to be approximately 373 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
LSI Logic introduced StreamSlice™, the first offering of its RapidChip™ configurable product family. Featuring 20 gigabits per second of full-duplex throughput, StreamSlice targets high-end switches, routers and other communications applications.
Korea-based LG Electronics selected the LSI Logic DiMeNsion™ 8600 (DMN-8600) single-chip DVD recorder system processor for its next-generation DVD recorder products.
LSI Logic announced a Serial Attached SCSI (SAS) co-development product plan that includes leading disk drive manufacturers Fujitsu, Maxtor and Seagate. Using its Fusion-MPT architecture LSI Logic's SAS product development assures a first-to-market product path for customers and hard disk drive partners and their customers.
LSI Logic announced the DoMiNoFX™ brand representing a "Visibly Superior" digital media processing technology that provides consumers with assured high-quality digital entertainment devices.
LSI Logic Corporation introduced the PCI-X 2.0 physical layer (PHY) interface core, which includes a multi-functional I/O buffer and the industry's first PHY hardmacro, the LSI Logic Xoom™ core. The core, an addition to the CoreWareÒ design program, supports the emerging PCI-X 2.0 266 DDR standard and targets the server and storage markets.
LSI Logic Corporation announced an agreement to supply its high-performance Ultra320 PCI RAID storage adapters to NEC Corporation, solidifying its position as the premier provider of RAID technology for Japan's market leading server manufacturer.
LSI Logic Corporation announced the industry's first single-chip hard disk drive (HDD) and DVD recorder processor, the DiMeNsion™ 8650 (DMN-8650), for use in dual-drive digital recorders. The new processor enables the time-shift of live TV, enhanced archiving to DVD disks, and full support for DV camcorders.
Lite-On Information Technology Corporation selected the LSI Logic DVD&MORE™ (DVD and Multimedia Optical Recording Entertainment) manufacturing kit as the basis for its newest DVD & PLUS Combo Series product, LVR-1001.
LSI Logic Corporation enhanced its CoreWare® design program by introducing two new cores that support the emerging PCI Express standard. The company's new Link and Physical Layer (PHY) interface cores provide customers with faster time-to-market for their next generation server, storage and communication products. The announcement marks another level of innovation in LSI Logic's leading physical (PHY) layer and serial protocol expertise.
Vianix selected the LSI Logic ZSP400™ DSP to power its Managed Audio Sound Compression - MASC™ technology for embedded applications. The selection expands the market for LSI Logic's open architecture ZSP™ digital signal processor (DSP) cores to include a full range of digital voice storage and transmission applications.
LSI Logic Corporation announced two new single-chip multi-format audio/video codecs, DMN-8100 and DMN-8150, allowing consumers to capture video content from any analog/digital camcorder, VCR or TV tuner and send it to a PC over a USB 2.0 connection.
LSI Logic Corporation announced the availability of its Physical RTL Optimization (PRO) flow, developed to identify physical design issues early in complex system-on-a-chip (SoC) design cycles. LSI Logic is first in the industry to directly link routing and congestion problems in physical design back to the RTL code, allowing engineers to quickly and predictably resolve major physical design issues at the RTL stage.
LSI Logic introduced the LSI5201, a versatile, dual-port 1 Gigabit per second iSCSI host bus adapter (HBA). With the addition of the LSI5201, LSI Logic offers high-performance and proven interoperable iSCSI, SCSI and Fibre Channel storage adapter solutions for storage area networks (SANs).
LSI Logic and Emuzed are providing PC manufacturers with the technology needed to enable TV, PVR (personal video recorder) and video capture functionalities. LSI Logic is providing its DVxplore® codec processor for Emuzed's "Maui" PCI PVR cards to enable cutting-edge video compression.
LSI Logic announced the availability of its MegaRAID ATA 133-2 RAID storage adapter, designed to increase performance and reliability of storage environments.
LSI Logic conference call information
LSI Logic will hold a conference call today at 2 p.m. PST to discuss 2002 and fourth quarter financial results. The number is 1-203-748-8964. Internet users can access the conference call by visiting http://www.firstcallevents.com/service/ajwz371638311gf12.html or http://www.lsilogic.com/investors/. A replay of the call will be available today at approximately 5 p.m. PST and will be available for 48 hours. The number is 1-800-945-1517. (International, 1-402-220-0676). The webcast replay will be available until January 29.
Safe harbor for forward looking statements
This news release and the statements by LSI Logic management include forward-looking statements that may involve a number of risks and uncertainties. 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. In the context of forward-looking information, reference is made to the discussion of risk factors described in the company's SEC reports filed during the past 12 months. 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 development of news products, 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, competing technologies, products and other competitive factors 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.
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.