LSI Logic Reports 7%
Sequential Revenue Growth in Q1
Provides Q2 Business Outlook
First Quarter News Release Summary
- Revenues of $450 million; 7 percent sequential growth.
- Semiconductor revenues grew 17 percent sequentially.
- GAAP* net income of 1 cent per diluted share.
- Net income, excluding special items**, of 6 cents per diluted share.
- Gross margin of 42 percent.
- Generated positive operating cash flow for 12th consecutive quarter
Second Quarter Business Outlook
- Projected revenue of $450 million to $465 million.
- GAAP* net income range of 1 - 3 cents per diluted share.
- Net income, excluding special items**, in the range of 5 - 7 cents per diluted share.
* Generally Accepted Accounting Principles.
** Acquisition-related amortization, restructuring and other special items.
Consumer and Storage Components Drive Revenues
MILPITAS, Calif, April 27, 2005 – LSI Logic Corporation (NYSE: LSI) today reported first quarter 2005 revenues of $450 million, a 7 percent sequential increase compared to the $420 million reported in the fourth quarter of 2004, and approximately even with the $452 million reported in the first quarter of 2004.
First quarter 2005 GAAP* net income was $5 million or 1 cent per diluted share. The first quarter 2005 GAAP result compares to fourth quarter 2004 GAAP net loss of $197 million or 51 cents per diluted share, which included a non-cash charge totaling $178 million associated with the company’s Gresham manufacturing campus. First quarter 2004 GAAP net income was $9 million or 2 cents per diluted share.
First quarter 2005 net income, excluding special items**, improved to $25 million or 6 cents per diluted share compared to fourth quarter 2004 net income, excluding special items, of $15 million or 4 cents per diluted share. Excluding special items, first quarter 2004 net income was $25 million or 6 cents per diluted share.
Cash and short-term investments grew by $51 million to $866 million at the end of the first quarter of 2005. LSI Logic generated $59 million in cash from operations, representing the company’s 12th consecutive quarter of positive operating cash flow.
“Continued growth of existing products, the ramp of new products and the work down of supply chain inventory contributed to LSI Logic’s sequential revenue growth and profitability in the first quarter,“ said Wilfred J. Corrigan, LSI Logic chairman and chief executive officer. “In Storage Components, LSI Logic demonstrated across-the-board strength in Storage ASICs, Storage Standard Products and RAID Storage Adapters. Our Engenio storage systems subsidiary experienced a seasonal decline in the first quarter. In Communications, we saw a modest increase in the enterprise networking space, while telecommunications was unchanged. Our RapidChip® platform design wins continued to grow in the first quarter as we introduced the Integrator2TM and Xtreme2TM slice families and received increasing production orders for our Platform ASIC products. In Consumer, the company overcame traditional first quarter seasonality as a result of strong demand for our new products shipped into our diverse DVD recorder customer base across all geographies, the fast ramp of our digital audio products and better-than-anticipated demand for our video game products.
“In Storage Components, we have established first-mover positions with major OEMs with our products for enterprise HDD controllers, SAS (Serial Attached SCSI), SATA and RAID adapters. In Consumer, we are the market leader with our industry leading DoMiNoTM architecture-based products in the DVD recorder space. We intend to leverage our technology and marketplace advantages across the board in the coming quarters.”
“We reported sequential revenue growth and profitability above previous guidance in a quarter that is typically affected by seasonality,” said Bryon Look, LSI Logic chief financial officer. “We are executing our financial plan and generating positive operating cash flow. We are anticipating sustained profitability on both a GAAP and excluding special items basis.”
| GAAP* | Excluding Special** Items | Revenue | |
|---|---|---|---|
| 41-43 percent | 41-43 percent | Operating Expenses | Approximately $18 million |
| $(2) to $(3) million | $(2) to $(3) million | Tax Provision | |
| $0.01 to $0.03 | $0.05 to $0.07 | Diluted Share Count |
Capital spending is projected to be around $20 million in the second quarter, and approximately $60 million in total for 2005.
Second quarter depreciation and software amortization is expected to be approximately $23 million.
* Generally Accepted Accounting Principles
