The LSI Logic 2001 Third Quarter News Release Follows This Summary:
- Third Quarter Revenues of $397 million.
- Per share pro forma* loss of 29 cents, compared to First Call consensus estimate of loss of 31 cents.
- Fourth quarter revenue expected to grow 0-5 percent.
- Bottom line to improve in fourth quarter.
* Earnings before goodwill amortization and other special items.
LSI Logic Third Quarter Results Exceed First Call Consensus; Fourth Quarter Revenue Expected to Grow 0-5 Percent
MILPITAS, Calif., Oct. 23 /PRNewswire/ -- LSI Logic Corporation (NYSE: LSI - news) today reported 2001 third quarter revenues of $397 million, a 15 percent decrease from the $465 million reported in the second quarter, and 45 percent lower than the $728 million recorded in the third quarter of 2000.
The third quarter 2001 pro forma net loss, before amortization of goodwill and other special items, was $104 million or minus 29 cents a diluted share, compared to second quarter net loss of $21 million or minus 6 cents a diluted share, and third quarter 2000 net income of $114 million or 33 cents a diluted share. Cash and short-term investments total $775 million.
"LSI Logic's third quarter financial results were impacted by weakness in the overall economy, the cyclical semiconductor industry downturn and the continued work down of inventory in the supply chain, particularly in the communications sector," said Wilfred J. Corrigan, LSI Logic chairman and chief executive officer. "We have undertaken a series of cost-reduction measures, including the consolidation of U.S. wafer operations at Gresham, Oregon and the transfer of our process research and development from Santa Clara, California to Gresham."
"In the third quarter, our consumer business continued to grow. Storage components and storage systems bottomed during the past quarter and we anticipate some growth for both of these businesses in the fourth quarter. In networking, the enterprise sector appears to be stabilizing, while the weakness in wide area networking is expected to continue into the first quarter. In broadband, the access business is expected to reach bottom in the fourth quarter. Overall, we anticipate revenue growth in the range of 0-5 percent in the fourth quarter."
Bryon Look, LSI Logic executive vice president and chief financial officer, said the company is taking approximately $294 million in charges, including $230 million in non-cash charges. These charges are primarily a result of the company's cost-reduction actions and strategic acquisitions. These charges include: in-process research and development ($19 million), amortization of acquisition-related items ($85 million), additional excess inventory and related charges ($50 million), restructuring of operations ($132 million), and other non-recurring and special items ($8 million).
LSI Logic Business Outlook
LSI Logic expects 2001 Q4 revenues to grow between 0 to 5 percent sequentially from the $397 million reported in the third quarter.
The company anticipates reporting a pro forma fourth quarter loss of about 23 cents a diluted share and gross margin in the range of 30-31 percent.
The company does not anticipate selling any equity investments in the fourth quarter.
The fourth quarter and 2001 pro forma tax rate is expected to be 0 percent.
Fourth quarter capital spending is expected to be about $50 million and approximately $400 million for 2001.
Fourth quarter depreciation is projected to be about $80 million.
The fourth quarter diluted common share count will be approximately 368 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 Announcements
- LSI Logic completed the acquisition of the RAID (Redundant Array of Independent Disks) business, engineering teams and technology from American Megatrends, Inc. (AMI). LSI Logic is offering Fibre Channel, SCSI and Mega RAID technology and products to storage components customers. http://www.lsilogic.com/news/corporate_news/cr20010904.html
- LSI Logic announced the second generation of its ZSP(TM) digital signal processor (DSP) architecture, which offers greatly increased processing performance, reduced power consumption, enhanced feature set and instruction set architecture and maintains backward compatibility. http://www.lsilogic.com/news/product_news/pr20011015a.html
- Correlant Communications and LSI Logic co-developed silicon and system-level products, including a single chip DOCSIS cable modem. As a result of this alliance, multiple cable modem models featuring LSI Logic's MultiLynx products received DOCSIS 1.0 certification from Cable Laboratories, Inc. (CableLabs). http://www.lsilogic.com/news/product_news/pr20011002.html
- LSI Logic Storage Systems, Inc. announced a new MetaStor®-branded product, the E4600 offering Two Gigabit Fibre Channel host connectivity that redefines the price-performance curve enabling more customers to afford replication, back up, and disaster recovery systems. http://www.lsilogic.com/news/product_news/pr20011022a.html
- Sandia National Laboratories selected LSI Logic's E4400 MetaStor® storage system for a supercomputing application requiring speed and data reliability. The storage system includes more than 100 terabytes of storage with a data transfer rate of more than three gigabytes per second. http://www.lsilogic.com/news/product_news/pr20011016.html
- LSI Logic announced it was supplying high performance PCI-X I/O chips to Compaq Computer Corporation for its market leading ProLiant(TM) servers, marking the first time that PCI-X controller ASICs are being used in high-volume servers. http://www.lsilogic.com/news/product_news/pr20010807.html
- LSI Logic introduced the industry's most highly integrated cable tuner/receiver chip, the company's flagship product in its new wideband radio frequency (RF) VLSI product line. LSI Logic's HI-IQ(TM) tuner integrates all critical RF elements onto a single device to meet price, power and size requirements of the cable broadband access market. http://www.lsilogic.com/news/product_news/pr20010924.html
- LSI Logic announced full production volumes for its single, dual and quad board Fibre Channel 2 Gbit host adapters, setting the industry performance standard for production 2 Gbit host bus adapters. http://www.lsilogic.com/news/product_news/pr20010808.html
- LSI Logic Storage Systems, Inc. announced the general availability of new 180-gigabyte capacity, Fibre Channel disk drives for MetaStor® E-Series storage systems. The 18-gigabyte drives enable very large quantities to be stored on both new and existing MetaStor systems at very low cost. http://www.lsilogic.com/news/product_news/pr20010918b.html
- LSI Logic Storage Systems, Inc. announced SANtricity 8.0 storage manager software with a snapshot capability offering a high-speed replication tool to enable users to perform system backup and data copying without disruption to their data availability. http://www.lsilogic.com/news/product_news/pr20011022d.html
- Advanced Interconnect Technologies (AIT) licensed LSI Logic's organic laminate flip chip ball grid array (FPBGA) packaging technology, designed for use in broadband, networking, computing and storage applications. http://www.lsilogic.com/news/product_news/pr20011017.html
- Silicon Precision Industries, Ltd. licensed LSI Logic's organic laminate flip chip ball grid array (FPBGA) packaging technology. LSI Logic's FPBGA packaging technology offers a cost-effective solution for high performance ASIC and system-on-a-chip (SoC) designs. http://www.lsilogic.com/news/product_news/pr20010918a.html
- LSI Logic licensed Innovative Semiconductors, Inc.'s USB 2.0 transceiver technology for incorporation into LSI Logic's CoreWare® library of intellectual property. LSI Logic is now offering its customer base a cost-effective, scalable architecture for next-generation digital multimedia devices and computer peripherals. http://www.lsilogic.com/news/product_news/pr20011010.html
LSI Logic Conference Call Information: LSI Logic will hold a conference call today at 2 p.m. PDT to discuss third quarter financial results. The access number is 212-896-6003. Internet users can access the conference call by visiting www.lsilogic.com. 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 800-633-8284, (858-812-6440, international) access code 19778055. The replay will also be available over the Internet at www.lsilogic.com. The webcast replay will be available until October 30.
Safe Harbor for Forward Looking Statements: The statements by LSI Logic management and the above statements regarding acceleration or deceleration of future bookings, revenue growth and earnings, gross margins, gains from investment income, tax rates, capital spending, future share count and future depreciation estimates made in this news release 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. 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 many 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's plans for future cost reductions are realized 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 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.), 719-533-7679 (outside U.S.), http://www.lsilogic.com .