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Technology Stocks : LSI Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Ross who wrote (18881)	6/14/1999 6:31:00 PM
From: shane forbes	Respond to of 25814

You're right. The key difference and this is why this time is different (at least for a few more months) is the pickup in analog. Yet as I've said before there has been too dramatic a jump here and I am not sure if this is just catch up or something else. Earlier I used to say that when the chips recover it will be like a spring that has been pushed and pushed for a long time all of a sudden recoiling. Sproing! In early October I knew I had my sign. This year the jumps in revs in the analog companies is the proof for this boy's pudding. As to LSI, that Sony PS II deal is a lot more useful that most people think. Further the Symbios Storage Systems add another layer of protection. Assured cash flow reduces the risk of equity ownership. What you have to do is to isolate all the risks and quantify them. Easier said than done. But there are ways to do it and the actuaries could be helpful here since they are risk assessors <cheap plug for former profession>. -- ending song: Repeat 12-- 'The base revenues for LSI were $1.85 billion in 1998. Except for a IPR&D accounting writeoff (bogus), the Symbios assets that LSI bought were not subsequently written off. What did take place was a $5.4 million Symbios Integration Accrual. Per the 10-K, page 42, this accrual comprised '$4 million related to involuntary separation and relocation benefits for approximately 300 Symbios positions and $1.4 million in other exit costs primarily relating to the closing of Symbios sales offices and the termination of certain contractual relationships.' Therefore it appears that the $75 mil restructuring charge taken later was for the 'old LSI' and has very little negative bearing on Symbios continuing operations. LSI valued Symbios at a fair value of $804 million - $324 million for tangible assets, $214 million for current technology, $37 million for assembled workforce and trademarks, $83 million for goodwill, and $146 million for IPR&D (this part was written off). In this context, $5.4 million is puny and irrelevant. Symbios' assets (read: ability to generate revenue) only strengthened after integration with LSI. They did not weaken. Further, LSI has not indicated that they discontinued anything significant in the Symbios product line. Because they used purchase accounting (versus pooling) LSI can't use pro-forma Q1, Q2, Q3 or full-year 1998 numbers going forward. It is NOT because, as Jock mumbles grandiosely: "It would be a terrible disservice to the company, shareholders, and the public in general.". Give me a freakin' break.' ---