First Quarter News Release Summary
- Revenues of $452 million, consistent with previous guidance.
- GAAP* net income of 2 cents per diluted share, exceeds previous guidance.
- Net income, excluding special items**, of 6 cents per diluted share, exceeds previous guidance.
- Gross margin improvement of 160 basis points to 44.5 percent.
- Generated positive operating cash flow for eighth consecutive quarter.
Second Quarter Business Outlook
(Excludes effect of potential second quarter storage systems IPO)
- Projected revenue range of $455 million to $470 million.
- GAAP net income range of 1-3 cents per diluted share.
- Net income range, excluding special items**, in the range of 6-8 cents per diluted share.
* Generally Accepted Accounting Principles
** Acquisition-related amortization, restructuring and other special items.
LSI Logic Q1 Revenues Grow 21 Percent Year-Over-Year
Profitable Bottom Line Results Surpass Expectations
MILPITAS, Calif., April 28 /PRNewswire-FirstCall/ -- LSI Logic Corporation (NYSE: LSI) today reported 2004 first quarter revenues of $452 million, an increase of 21 percent compared to the $373 million reported in the first quarter of 2003 and a 2 percent seasonal decrease compared to the $463 million reported in the fourth quarter of 2003.
Cash and short-term investments increased $44 million and totaled $857 million at the end of the first quarter of 2004. The company generated positive operating cash flow for the eighth consecutive quarter.
The 2004 first quarter GAAP* net income was $9 million or 2 cents per diluted share compared to a GAAP net loss of $122 million or 33 cents per diluted share in the 2003 first quarter.
The 2004 first quarter GAAP net income reflected a sequential improvement over the 2003 fourth quarter GAAP net income of $8 million or 2 cents per diluted share.
First quarter 2004 net income, excluding special items**, was $25 million or 6 cents per diluted share compared to a net loss on the same basis of $51 million or 14 cents per diluted share in the first quarter of 2003.
Excluding special items**, the 2004 first quarter net income equaled fourth quarter 2003 net income on the same basis, of $25 million or 6 cents per diluted share on seasonally lower revenues.
"LSI Logic's Storage Components business, which includes Storage ASICs, Storage Standard Products and RAID Storage Adapters, recorded a solid performance in the first quarter," said Wilfred Corrigan, LSI Logic chairman and chief executive officer. "The first quarter results for our Storage Systems business reflected normal cyclicality. In Communications, LSI Logic's sales to enterprise networking customers continued to demonstrate improvement, while telecommunications is expected to resume its long-term growth rate later this year. In Consumer, video game revenues declined seasonally as expected. However, our DVD-recordable business continued to increase sequentially as we secure new design-wins for our single chip architecture.
"Market analysts expect that 2004 will be a strong year for the semiconductor sector based upon increased IT spending and consumer electronics serving as the industry's primary growth driver. LSI Logic is focused on three target markets -- Consumer, Communications, Storage -- and serves customers in these markets with our three enabling technologies -- Standard-Cell ASICs, Platform ASICs and Standard Products."
In February, LSI Logic's wholly owned subsidiary, LSI Logic Storage Systems, Inc., filed a Form S-1 Registration Statement with the Securities and Exchange Commission (SEC). Please refer to the company's February 19, 2004 news release for further information about the filing of the registration statement.
"Platform ASIC is emerging as a major new sector in the semiconductor industry," said Joe Zelayeta, LSI Logic executive vice president of ASIC Technology and Methodology. "The lower design costs, quick time to revenue advantages and compelling benefits over alternative solutions are proving to be a significant draw for both existing LSI Logic customers as well as new customers. LSI Logic's RapidChip(TM) Platform ASIC is now well established in this sector. We are shipping production now and have design engagements that span geographies, markets and applications. We continue to capture design wins on the approximately 25 silicon platforms that we have available today and are constantly releasing new platforms to garner greater market share."
"LSI Logic recorded a solid profitable quarter with continued improvement in gross margin and bottom line results that exceeded expectations," said Bryon Look, LSI Logic chief financial officer. "LSI Logic generated positive operating cash flow for the eighth straight quarter and completed the acquisitions of Velio Communications and CrossLayer Networks. We will continue to explore strategic acquisitions that support our vertical market strategy, augment our IP portfolio and expand our product offerings for our worldwide customer base." Financial Tables
to read financial tables
LSI Logic Conference Call Information
LSI Logic will hold a conference call today at 2 p.m. PDT to discuss first quarter financial results. The number is 1-303-262-2130. Internet users can access the conference call by visiting http://www.lsilogic.com/investors. A replay of the call will be available today at approximately 4 p.m. PDT and will be available for 48 hours. The replay access numbers are 1-800-405-2236 within the U.S. and 1-303-590-3000 for all other locations, passcode 575336#.
About LSI Logic
LSI Logic Corporation 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.
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. Forward-looking statements include projected revenue range in the second quarter, forecasts of operating expenses, projections of profitability or loss, projections of the company's second quarter business outlook including: net other income, earnings, gross margins, tax provisions, capital spending, depreciation, acquisition-related amortization, restructuring expenses, other special items, common share count and increased orders. Additional forward-looking statements include projections regarding growth of the company's three target markets, resumption of long-term growth of telecommunications later in 2004, strength of the semiconductor industry in 2004 and the continued introduction of new silicon platforms and design tools. 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, ability to meet financial targets, the company's ability to develop new products, and the timing and the success of new product introductions. Other risks and uncertainties that could cause the forward-looking statements contained herein to differ from actual results include: the continued availability of appropriate levels of manufacturing capacity, the realization of benefits from the company's strategic relationships, success of competing technologies, ability to make strategic acquisitions, uncertainty of R&D investments, products and other competitive factors 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. For additional information, readers are referred to the documents filed by LSI Logic with the SEC, and specifically the company's 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.