LSI Logic Reports Record 1997 Revenues; Net Income Increases
8 Percent From 1996 to 1997
Thursday January 22, 4:05 pm Eastern Time
MILPITAS, Calif., Jan. 22 /PRNewswire/ -- LSI Logic Corporation (NYSE: LSI - news) today reported 1997 record revenues of
$1.290 billion, a 4 percent increase over the $1.239 billion for 1996.
Revenues for the fourth quarter of 1997 were $323.0 million, a 7 percent increase over the $301.8 million in the fourth quarter of
1996, and a 1 percent decrease from the $326.8 million in the third quarter of last year.
Net income for 1997 was $159.2 million or $1.11 per share on a diluted basis, an 8 percent increase over the $147.2 million net
income for 1996. Fourth quarter 1997 net income, before the cumulative effect of a change in an accounting principle, was $32.2
million or 23 cents per share on a diluted basis. The change in the accounting principle resulted in fourth quarter earnings per share
of 22 cents on a diluted basis.
''Despite a very challenging business environment during the course of 1997, LSI Logic produced record revenues and increased
profitability,'' said Wilfred J. Corrigan, LSI Logic Corporation chairman and chief executive officer. ''Further growth in the global
semiconductor industry is expected for 1998, and we expect LSI Logic to at least meet if not exceed the industry's overall growth
rate.''
1997 Product and Technology Highlights
O Introduction of LSI Logic's G11(TM) technology with an effective gate length of 0.18-micron, which blends
high-performance, increased density and low-power operation for the consumer, computer and communication markets.
O Alliance with Compaq Computer Corporation [NYSE:CPQ - news] to provide custom and standard ASICs
(Application-Specific Integrated Circuits) for the Compaq Netelligent 5226 Manageable Ethernet Switch.
O Partnership with Motorola's Information Systems Group (ISG) on a licensing agreement in which Motorola's V.34 software
modems will be embedded into LSI Logic's leading custom semiconductors.
O Technology alliance with Minolta Co. Ltd., for the specification, validation and application of LSI Logic's DCAM digital
camera system-on-a-chip products.
O Announcement by LSI Logic and Micron Technology, Inc. of an embedded DRAM technology development alliance to
develop and produce digital logic integrated circuits that can embed from 64 to 128 Meg of conventional DRAM on a single
chip.
O Agreement with the British Broadcasting Corporation to jointly develop a single-chip digital terrestrial television solution,
bringing multiple channel options to all European households.
O Acquisition of Mint Technology, Inc., an engineering services company providing expertise in the area of system
architecture and system level design verification used in the development of complex chips.
O Provision of seven custom ASICs to Cisco Systems for the Cisco 12000, the company's next generation router.
O Winner of an Emmy Award from the Academy of Television Arts and Sciences for the development of a real-time motion
estimation encoder for General Instruments Corporation.
O Dataquest designation of LSI Logic as number two behind Sony for semiconductor shipments used in next generation
consumer electronic systems in 1996.
O Introduction of LSI Logic's FlexStream(TM) Deep Submicron Design System, reducing the time and manpower demanded
for very complex system-on-a-chip designs up to 75 percent.
O Announcement of LSI Logic's 16/32-Bit Tiny RISC(TM) microprocessor, the smallest MIPS16-RISC microprocessor ever
developed for system-on-a-chip applications.
Safe Harbor for forward looking statements: Statements in this news release looking forward in time involve known and unknown
risks and uncertainties, which may cause the company's actual results in future periods to be materially different from any
performance suggested in this release. Such factors may include, but may not necessarily be limited to fluctuations in customer
demand, both in timing and volumes, and in currency exchange rates. Also, the company's ability to have available an appropriate
amount of production capacity in a timely manner can significantly impact the company's financial performance. The timing of new
technology and product introductions and risk of early obsolescence are also important factors. Further, the company operates in
an industry sector where securities values are highly volatile and may be influenced by economic 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 with the Securities and Exchange Commission during the past 12 months.
LSI Logic Corporation, The System on a Chip Company(R), is a leading supplier of custom high-performance semiconductors with
operations worldwide. The company enables customers to build complete systems on a single chip with its CoreWare(R) design
program, thereby increasing performance, lowering system costs and accelerating time to market. LSI Logic develops
application-optimized products in partnership with trendsetting customers and operates leading edge, high-volume manufacturing
facilities to produce submicron chips. The company maintains a high level of quality, as demonstrated by its ISO 9000
certifications. LSI Logic is headquartered at 1551 McCarthy Blvd., Milpitas, California 95035, 408-433-8000, www.lsilogic.com.
NOTE: The LSI Logic logo design, CoreWare and The System on a Chip Company are registered trademarks. All other brand and
product names may be trademarks of their respective companies.
Additional information about LSI Logic Corporation is available at lsilogic.com. Full text copies of news releases are
also available by fax (800-457-4286). To request copies of annual reports or other investor information, phone 800-574-4286.
LSI LOGIC CORPORATION
Consolidated Condensed Statements of Operations
(In thousands, except per share amounts)
Three Months Ended Year Ended
(unaudited)
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1997 1996 1997 1996
Revenues $323,036 $301,788 $1,290,275 $1,238,694
Costs and expenses:
Cost of revenues 178,305 166,625 675,153 695,002
Research and development 60,021 50,176 226,219 184,452
Selling, general and
administrative 47,312 42,801 190,680 166,823
Acquired in-process research
and development -- -- 2,850 --
Total costs and expenses 285,638 259,602 1,094,902 1,046,277
Income from operations 37,398 42,186 195,373 192,417
Interest expense -- (3,369) (1,497) (13,610)
Interest income and other 7,341 3,807 29,560 25,809
Income before income taxes
and cumulative effect 44,739 42,624 223,436 204,616
of change in accounting
principle
Provision for income taxes 12,575 11,963 62,748 57,432
Income before cumulative
effect of change in $32,164 $30,661 $160,688 $147,184
accounting principle
Cumulative effect of change
in accounting principle (1,440) -- (1,440) --
Net income $30,724 $30,661 $159,248 $147,184
Basic earnings per share
Income before cumulative
effect of change in $0.23 $0.24 $1.16 $1.14
accounting principle
Cumulative effect of change
in accounting principle ($0.01) -- ($0.01) --
Net income $0.22 $0.24 $1.15 $1.14
Diluted earnings per share*
Income before cumulative
effect of change in $0.23 $0.23 $1.12 $1.07
accounting principle
Cumulative effect of change
in accounting principle ($0.01) -- ($0.01) --
Net income $0.22 $0.23 $1.11 $1.07
Shares used in computing
per share amounts:
Basic 140,752 128,860 138,576 128,899
Diluted 142,526 142,961 144,027 143,008
* Diluted earnings per share are based on average common and common equivalent shares outstanding. In computing diluted
earnings per share for the periods presented, net income is increased for interest (net of tax effect) on the convertible debentures
($0 and $1,279,000 for the three month period and year ended December 31, 1997, respectively; $1,524,000 and $6,166,000 for the
three month period and year ended December 31, 1996, respectively) considered dilutive common stock equivalents.
LSI LOGIC CORPORATION
Consolidated Condensed Balance Sheets
(In millions)
December 31, December 31,
Assets 1997 1996
Current Assets:
Cash and short-term investments $490.9 $717.3
Accounts receivable, net 210.1 185.0
Inventories 102.3 90.4
Prepaid expenses and other current assets 67.2 58.4
Total current assets 870.5 1,051.1
Property and equipment, net 1,123.9 811.6
Other assets 132.5 90.0
Total assets $2,126.9 $1,952.7
Liabilities And Stockholders' Equity
Current liabilities $373.6 $275.7
Current portion of long-term debt,
capital lease obligations
and short-term borrowings 44.6 69.6
Total current liabilities 418.2 345.3
Long-term debt, capital lease obligations
and other long-term liabilities 137.5 142.3
Convertible subordinated debt 0.0 143.8
Total liabilities 555.7 631.4
Minority interest in consolidated
subsidiaries 5.2 5.1
Stockholders' equity:
Common stock 966.8 838.4
Retained earnings 611.6 452.4
Cumulative translation adjustment (12.4) 25.4
Total stockholders' equity 1,566.0 1,316.2
Total liabilities and
stockholders' equity $2,126.9 $1,952.7
SOURCE: LSI Logic Corporation
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