Jan 26, 2005 -- Milpitas, California ¡V LSI Logic Corporation (NYSE: LSI) today reported fourth quarter 2004 revenues of $420 million, a sequential increase of 10 percent compared to the $380 million reported in the third quarter of 2004, and a 9 percent decrease compared to the $463 million reported in the fourth quarter of 2003.
Cash and short-term investments grew to $815 million at the end of the fourth quarter of 2004. LSI Logic generated positive operating cash flow for the 11th consecutive quarter.
Fourth quarter 2004 GAAP* net loss was $197 million or 51 cents per diluted share, including a $178 million non-cash charge associated with the company¡¦s Gresham manufacturing facility. The fourth quarter GAAP result compares to third quarter GAAP net loss of $282 million or 73 cents per diluted share, including a $206 million non-cash charge associated with the company¡¦s Gresham manufacturing facility. Fourth quarter 2003 GAAP net income was $8 million or 2 cents per diluted share.
Fourth quarter 2004 net income, excluding special items**, was $15 million or 4 cents per diluted share compared to a net loss, excluding special items, of $25 million or 7 cents per diluted share in the third quarter. Excluding special items, fourth quarter 2003 net income was $25 million or 6 cents per diluted share.
¡§In Q4, we saw sequential growth in Storage Systems, Storage Components and Consumer Products,¡§ said Wilfred J. Corrigan, LSI Logic chairman and chief executive officer. ¡§The adjustment in our customers¡¦ supply chain inventory that began in Q2 appears to be substantially over in Storage Systems, Storage Components and Consumer Products. We are anticipating a small seasonal decline in the first quarter with revenues in the range of $400 million to $415 million.
¡§In semiconductors, LSI Logic has technology and market share leadership positions in several high-growth sectors, including DVD recorders, Ultra320 SCSI controllers, SAS (Serial Attached SCSI), Fibre Channel, RAID adapters and our RapidChip„µ Platform ASICs. Our Engenio storage systems subsidiary demonstrated strong growth in the fourth quarter and expanded its OEM base with its range of leading modular, scalable storage systems. All of these products are expected to drive company revenue growth in 2005.¡¨
LSI Logic recorded 2004 revenues of $1.70 billion, compared to $1.69 billion in 2003.
GAAP 2004 net loss was $464 million or $1.21 per diluted share, which includes the $384 million non-cash charge associated with the Gresham manufacturing facility. The 2003 GAAP net loss was $309 million or 82 cents per diluted share. LSI Logic reported 2004 net income, excluding special items, of $43 million or 11 cents per diluted share compared to a 2003 net loss, excluding special items, of $16 million or 4 cents per diluted share.
The company¡¦s 2004 gross margin was 43.3 percent, a 330-basis point improvement over 2003. The company generated $91 million in cash from operations in 2004. LSI Logic reduced its convertible debt in 2004 by $69 million through open market purchases.
¡§In the fourth quarter, we generated revenue growth above expectations and our gross margin improved over the prior quarter,¡¨ said Bryon Look, LSI Logic chief financial officer. ¡§We continued to improve our cost structure and align our resources to the highest value opportunities. We maintained our strong focus on cash flows, continuing to generate positive cash flow as we grew revenues. LSI Logic was profitable, excluding special items, in both our semiconductor and our storage systems segments. ¡§
LSI Logic First Quarter Business Outlook
| GAAP* | Special Items** | Excluding Special** Items | |
|---|---|---|---|
| Revenue | $400 million to $415 million | $400 million to $415 million | |
| Gross Margin | 41.5-43.5 percent | 41.5-43.5 percent | |
| Operating Expenses | $174 million to $179 million | Approximately $20 million | $154 million to $159 million |
| Net Other Income (Exp.) | $(2) to $(3) million | $(2) to $(3) million | |
| Tax Provision | $6 million | $6 million | |
| Net Loss Per Share | ($0.04) to ($0.01) | Approximately $0.05 | $0.01 to $0.04 |
| Diluted Share Count | 388 million | 394 million |
Capital spending is projected to be around $20 million in the first quarter, and approximately $80 million in total for 2005.
First quarter depreciation and software amortization is expected to be approximately $22 million.
* Generally Accepted Accounting Principles
** Acquisition-related amortization, restructuring and other special items.
NOTE: The company¡¦s financial guidance will be limited to the comments made on today¡¦s public conference call and contained in the First Quarter Business Outlook section of this news release.
Financial tables
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LSI Logic Conference Call InformationLSI Logic will hold a conference call today at 2 p.m. PST to discuss fourth quarter/2004 financial results and the first quarter business outlook. The number is 1-303-205-0033. 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 5 p.m. PST 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 11020471#.
About LSI LogicLSI Logic Corporation (NYSE: LSI) focuses on the design and production of high-performance semiconductors for Consumer, Communications and Storage applications that access, interconnect and store data, voice and video. LSI Logic engineers incorporate reusable, industry-standard intellectual property building blocks that serve as the heart of leading-edge systems. LSI Logic serves its global OEM, channel and distribution customers with Platform ASICs, standard-cell ASICs, standard products, host bus adapters, RAID controllers and software. 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