Thread: FYI. M2
LSI Logic Reports Record Q2 and First Half 1999 Revenues
1999 Second Quarter Financial Highlights
-- Record Q2 revenues of $501 million; exceeds $500 million mark for the
first time in a quarter.
-- Q2 revenues up 49 percent compared to Q2 1998.
-- Sixth quarter of sequential revenue growth; up 8 percent from the $464
million in Q1 1999.
-- Per share EBG* was 21 cents, compared to First Call consensus estimate
of 18 cents.
-- Gross margin expands to 37.2 percent; operating expenses decline.
-- Cash and short-term investments grow from $291 million in Q1 to
345 million in Q2.
* Earnings before goodwill amortization and special items.
LSI Logic Reports 49 Percent Q2 Revenue Growth Over Q2 1998
MILPITAS, Calif., July 21 /PRNewswire/ -- LSI Logic Corporation
(NYSE: LSI) today reported 1999 second quarter revenues of $501 million, a
49 percent increase over the $336 million posted in the second quarter of
1998.
The 1999 second quarter revenues were also 8 percent higher than the
$464 million reported in the first quarter of this year, marking the sixth
quarter of sequential sales growth.
Net income before amortization of goodwill and other special items was
$31 million or 21 cents a diluted share, up from $11 million or 8 cents a
diluted share in the first quarter. The second quarter net income figure
declined slightly from the $33 million or 23 cents a diluted share in the
second quarter of 1998.
Gross margin improved to 37.2 percent in the second quarter from the
34.9 percent in the first quarter of the year. Operating expenses declined as
a percentage of revenues, and cash and short-term investments grew from
$291 million in the first quarter of 1999 to $345 million in the second
quarter.
"LSI Logic is now on a $2 billion annual run rate and we are growing
faster than the global semiconductor industry," said Wilfred J. Corrigan, LSI
Logic chairman and chief executive officer. "We are successfully executing our
Internet-driven business strategy of providing system-on-a-chip solutions for
our high-volume customers competing in high-growth vertical markets."
LSI Logic reported record first half revenues of $965 million in the first
six months of 1999, up 44 percent from $669 million in the first half of 1998.
First half net income before goodwill amortization and other special items was
$42 million or 28 cents a diluted share, compared to $65 million or 45 cents a
diluted share.
LSI Logic Global Market Overview
"We are well on our way to achieving the goals in our financial model,"
said Doug Norby, LSI Logic executive vice president and chief financial
officer. "Our revenues grew. Our gross margin expanded. Operating expenses
fell. Our cash position strengthened."
During the second quarter, the company took steps to enhance its product
portfolio by means of the $106 million acquisition of SEEQ Technology, Inc.
"We are continually exploring strategic acquisitions that build upon our
existing intellectual property library and increase LSI Logic's leadership
position in our designated high-growth vertical markets," said John Daane, LSI
Logic executive vice president of Communications, Computer and ASIC Products.
"The SEEQ acquisition immediately bolstered our product offerings for
customers competing in the networking space."
"We are seeing renewed strength in the Asian economies and China is
emerging as a major consumer market for LSI Logic," said Elie Antoun, LSI
Logic executive vice president for Consumer Products. "The second quarter for
our Consumer Division was sequentially higher than the first quarter, and we
expect the second half of the year to be stronger."
Second Quarter 1999 Business and Technology Highlights
-- LSI Logic was the No. 1 performing S&P 500 common stock in the first
half of 1999, growing 189 percent in that time period.
-- LSI Logic completed the $106 million acquisition of SEEQ Technology,
Inc., a leading semiconductor designer of data communications devices
for the Internet-driven networking market.
-- LSI Logic and Silterra (Malaysia) announced a technology licensing and
manufacturing relationship, valued at $120 million to LSI Logic.
-- LSI Logic delivered its 500th CoreWare(R) design to a high-volume
customer, just five years after introducing the landmark design process
that makes system-on-a chip solutions a reality for a wide variety of
customers competing in high-growth markets.
-- LSI Logic acquired ZSP Corporation, a leading-edge company developing
high performance DSP products for customers competing in high-growth
communications markets.
-- LSI Logic introduced the SC2000 Source Decoder, a fully integrated
single-chip solution that enables sophisticated multimedia capabilities
for a set-top box by supporting a full spectrum of video and audio
utilizing multiple broadcast standards.
-- LSI Logic and the Tao Group entered into a strategic relationship in
which Tao will mount its JBC Virtual Machine for running Java
applications on LSI Logic's set-top box reference platforms.
-- LSI Logic and ARM announced the licensing of the ARM9E processor core
from ARM to LSI Logic. The processor core combines both control and
digital signal processing (DSP) capabilities in a single-processor
architecture.
-- Cabletron Systems selected LSI Logic's GigaBlaze(R) system-on-a-chip
ASIC transceiver core for SmartSwitch, Cabletron's highest capacity ATM
switch for core networks.
-- LSI Logic introduced a portfolio of Ultra3 SCSI solutions for
next-generation desktop, workstation and server systems. The product
offerings include rich host controller standard products, host adapter
boards and bus expanders.
-- LSI Logic unveiled the PCI Fibre Channel SAN controller standard
product to meet the increased demand for networked storage and cluster
resources also known as Storage Area Networks (SANs).
Safe Harbor for Forward Looking Statements: Statements 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
Exchange Act of 1934, as amended. The company's actual results in future
periods may be materially different from any performance suggested in this
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 and the achievement of revenue objectives by the company.
Other risks and uncertainties include, but are not necessarily limited to the
timing and success of new product introductions and the integration of
acquired entities. The extent to which the company's plans for future cost
reductions are realized also may impact its future performance. 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 (NYSE: LSI), 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 Boulevard, Milpitas, CA 95035, 408-433-8000, www.lsilogic.com.
NOTE: CoreWare, GigaBlaze and The System on a Chip Company are registered
trademarks of LSI Logic. Java is a trademark of Sun Microsystems Inc. AREM9E
is a trademark of ARM Limited.
LSI LOGIC CORPORATION
Pro Forma Consolidated Condensed Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
Revenues $501,012 $336,272 $964,629 $669,002
Costs and expenses:
Cost of revenues 314,398 179,844 616,289 367,392
Research and development 75,046 65,943 151,569 130,857
Selling, general
and administrative 62,783 52,404 124,272 97,601
Total costs and expenses 452,227 298,191 892,130 595,850
Income from operations 48,785 38,081 72,499 73,152
Interest expense (9,620) (95) (20,200) (175)
Interest income and other 2,459 5,470 4,195 13,480
Income before income taxes 41,624 43,456 56,494 86,457
Provision for income taxes 10,406 10,864 14,124 21,614
Pro forma net income $31,218 $32,592 $42,370 $64,843
Pro forma earnings per share:
Basic $0.21 $0.23 $0.29 $0.45
Diluted $0.21 $0.23 $0.28 $0.45
Shares used in computing
per share amounts:
Basic 145,622 143,168 144,883 142,868
Diluted 151,947 144,719 149,614 144,377
Pro forma net income is intended to present the Company's operating
results, excluding amortization of goodwill and special items, for the three
and six-month periods ended June 30, 1999 and 1998.
During the three-month period ended June 30, 1999, the special items were
acquired in-process research and development related to the acquisition of a
non-public technology company and expenses related to the merger with Seeq
Technology, Inc. During the six-month period ended June 30, 1999, the special
items also included the reversal of restructuring reserves and the cumulative
effect of change in accounting principle in addition to the items included in
the three-month period ended June 30, 1999. During the three and six-month
periods ended June 30, 1998, there were no special items other than
amortization of goodwill.
The Company reported an overall tax provision of $7,530 and $10,691 for
the three-month periods ended June 30, 1999 and 1998, respectively, and
$9,160 and $20,890 for the six-month periods ended June 30, 1999 and 1998,
respectively. However, the pro forma statements include a provision of
$10,406 and $10,864 for the three-month periods ended June 30, 1999 and
1998 and $14,124 and $21,614 for the six-month periods ended June 30, 1999 and
1998, respectively, using the Company's normal 25% tax rate to calculate
pro forma net income.
|
