LSI TO CUT WORK FORCE BY 17%
Wednesday October 14, 8:02 am Eastern Time
Company Press Release
SOURCE: LSI Logic Corporation
LSI Logic Announces Comprehensive Plan To Improve
Profitability; LSI Logic Reports Third Quarter Results; Symbios Acquisition
Charges
MILPITAS, Calif., Oct. 14 /PRNewswire/ -- LSI Logic Corporation (NYSE: LSI - news) today reported combined third quarter operating results, reflecting the acquisition of storage solutions leader Symbios, Inc., and announced a comprehensive restructuring
plan to capitalize upon synergies created by the purchase.
LSI Q3 Earnings, Symbios Purchase, Restructuring Summary
The complete news release on LSI Logic's third quarter 1998 results follows this summary:
Revenues Income EPS
LSI/Symbios Consolidated* $390M ($283M) ($2.01)
(including special charges)
LSI Logic $301M $21M 15 cents
(excluding Symbios acquisition and special charges)
LSI Logic also announced the following:
Special charges totaling $326 million including: In-process R&D charges of $225 million related to the acquisition of Symbios, Inc.; Pre-tax non-recurring charges of $101 million, including $75 million for restructuring. Reduce global workforce by approximately 1,200 jobs, or about 17 percent. Close an 11-year-old wafer fab in Tsukuba, Japan.
Close a test facility in Colorado Springs and an assembly plant in Ft. Collins.
Consolidate LSI Logic-Symbios design centers, sales offices, and administrative functions to eliminate redundancies.
Goodwill of $243 million, resulting from the Symbios acquisition.
* Reflects Symbios, Inc. acquisition on August 7, 1998.
Third Quarter 1998 Results
LSI Logic total corporate revenues were $390 million in the third quarter ended September 30. Including special charges associated with the purchase of Symbios, Inc. and non-recurring charges related to restructuring activities, the company reported a
net loss of $283 million or $2.01 a diluted share. In-process R&D and restructuring are included among the special charges.
Excluding special charges, earnings were $19 million or 14 cents a diluted share. These results include Symbios since August 7.
Revenues for LSI Logic (excluding Symbios) in the third quarter were $301 million, down 8 percent from $327 million in the same period a year ago. Excluding special charges LSI Logic's net income would have been $21 million or 15 cents a share on a diluted share basis, down 52 percent from net income of $44 million or 31 cents a diluted share in the third quarter a year ago.
Business Climate Commentary
''The unprecedented three-year slowdown in the worldwide semiconductor industry and the global economic downturn has made it necessary to implement a comprehensive restructuring plan to reduce costs,'' said Wilfred J. Corrigan chairman and chief
executive officer. ''The recent acquisition of Symbios, Inc. is also providing the company with the unique opportunity to position itself for growth once the global industry environment improves.''
''This comprehensive plan, when completed, positions LSI Logic for stronger profitability in 1999,'' said Corrigan. ''Next year, LSI Logic will be offering next-generation 0.18-micron ASIC technology, new system-on-a-chip building blocks, and a number of new standard products and board solutions.''
Restructuring and Cost Reduction Plan
''We have made substantial progress integrating the two companies, which will be completed in the fourth quarter,'' said Corrigan.
''Substantial efficiencies will be accomplished through this combination, and the Symbios acquisition will be accretive to LSI Logic earnings in 1999.
''When the integration process is complete and the restructuring plan is fully implemented, LSI Logic will be well positioned with a range of products and services to serve high-volume major customers in the networking, storage components, consumer,
telecommunications, computer and storage systems markets.''
The company announced the following actions:
Reduction in the company's workforce by 1,200 jobs or 17 percent.
Reduction of existing wafer fabrication capacity by approximately
30 percent through the closure of an 11-year old factory in Tsukuba, Japan,
and the reduction of asset values at three other facilities.
Consolidation of test and assembly plants and a reduction of capacity at the company's Fremont, California facilities. Closure of a test facility in Colorado Springs and an assembly plant in Ft. Collins, Colorado. Transference of Colorado production test functions to offshore contractors.
Consolidation of LSI Logic and Symbios design centers, sales offices and administrative functions to more efficiently serve customers and to eliminate redundancies.
As a result of these actions, LSI Logic will take a total of $326 million in pre-tax charges in the third quarter, including $225 million for in-process R&D related to the Symbios acquisition. The company will incur pre-tax non-recurring charges of $101 million,
including $75 million for restructuring. The company will also record goodwill of $243 million, resulting from the acquisition of Symbios, Inc.
''Considering that we are presently completing the integration of Symbios and implementing our restructuring plan, we see the fourth quarter as a transition quarter,'' said Corrigan. ''Heading into the new year and beyond, the decisive actions we are taking
today are expected to result in greater profitability and a stronger competitive position for LSI Logic in 1999.''
Third Quarter Highlights
LSI Logic Corporation and Hyundai Electronics America announced the completion of LSI Logic's strategic $760 million acquisition of Symbios, Inc. The purchase increases LSI Logic's presence in global storage markets and enhances the company's intellectual property offerings to major customers.
LSI Logic opened a sales, marketing and design facility in Beijing to address the rapidly growing Chinese consumer electronics market. The company also announced a joint engineering agreement with DSP Center of Beijing to support original equipment manufacturers of consumer DVD players.
NEC chooses LSI Logic's advanced SCSI technology for its newest line of high-performance EXPRESS 5800 servers. The company's SCSI I/O processor was integrated into two NEC PC server models. The SCSI I/O processor transfers data at speeds up to 80 Mbps on a wide SCSI bus, and upgrades an earlier SCSI device, which was used in a previous version of the product line.
LSI Logic announced that it will supply Hitachi Home Electronics, U.K. with a comprehensive channel-to-source digital terrestrial silicon solution for Hitachi's newest line of digital set-top boxes and integrated TVs. The highly integrated chipset makes it easy for digital TV designers to quickly produce a performance-optimized digital terrestrial solution at a very competitive cost.
Minolta selected LSI Logic's DCAM(TM)-101 single-chip image processor as the hardware engine for its Dimage EX ZOOM 1500, the first of a new series of high-performance digital cameras offering photorealistic images and high- speed continuous capture.
LSI Logic introduced a new DVD (digital video disk) decoder chip, enabling consumer electronic manufacturers to develop consumer DVD players that accurately play back movie soundtracks encoded with DTS (digital theater systems) Digital Surround.
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 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.
biz.yahoo.com
|
