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LSI Logic Reports 7% Sequential Revenue Growth in Q1, Provides Q2 Business Outlook
First Quarter News Release Summary
** Acquisition-related amortization, restructuring and other special items. LSI Logic Reports 17% Sequential Semiconductor Revenue Growth Consumer and Storage Components Drive Revenues MILPITAS, Calif, April 27, 2005 ¡V 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.¡¨ LSI Logic Second Quarter Business Outlook
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** Acquisition-related amortization, restructuring and other special items. NOTE: The company¡¦s financial guidance will be limited to the comments made on today¡¦s public conference call and contained in the Second Quarter Business Outlook section of this news release. LSI Logic Conference Call Information LSI Logic will hold a conference call today at 2 p.m. PDT to discuss first quarter financial results and the second quarter business outlook. The number is 1-303-275-2170. Internet users can access the conference call by visiting http://www.lsilogic.com/investors. A replay of the call will be available today at approximately 4:30 p.m. PDT and will be available for 48 hours. The replay access numbers are 1-800-405-2236 within the U.S. and 1-303-590-3000 for all other locations, passcode 11027936#. Financial tables Click here to read Q1 2005 Financial Tables About LSI LogicLSI Logic Corporation (NYSE: LSI) focuses on the design and production of high-performance semiconductors for Consumer, Communications and Storage applications that access, interconnect and store data, voice and video. LSI Logic engineers incorporate reusable, industry-standard intellectual property building blocks that serve as the heart of leading-edge systems. LSI Logic serves its global OEM, channel and distribution customers with standard-cell ASICs, Platform ASICs, standard products, host bus adapters, RAID controllers and software. In addition, the company supplies storage network solutions for the enterprise. LSI Logic is headquartered at 1621 Barber Lane, Milpitas, CA 95035. http://www.lsilogic.com. Safe Harbor for Forward Looking Statements Statements, which include the following: projected revenues for the second quarter of 2005; projected GAAP net income for the second quarter of 2005; projected net income, excluding special items, for the second quarter of 2005; the company¡¦s expectation for sustained profitability on both a GAAP and excluding special items basis; continued technology and market share leadership positions in several sectors, including HDD controllers, SAS (Serial Attached SCSI), SATA and RAID adapters in Storage Components and DVD recorders in Consumer; the company¡¦s ability to generate positive operating cash flow, control operating expenses and drive sustained revenue growth and profitability; projected capital spending in the second quarter of 2005 and for the year; expected second quarter depreciation and software amortization. Forward-looking statements also include projections of gross margins, operating expenses, net other income (exp.), tax provisions, earnings/loss per share and diluted share count. These forward-looking statements are based on the opinions and estimates of management at the time the statements are made and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could cause LSI Logic¡¦s actual results to differ materially from those set forth in the forward-looking statements include, but are not limited to: fluctuations in the timing and volumes of customer demand especially in our DVD recorders, Ultra 320 SCSI controllers, SAS (Serial Attached SCSI), Fibre Channel, RAID adapters and RapidChip„µ Platform ASICs products; the rate of depletion of customer inventory buildup; the company¡¦s failure to achieve revenue objectives; the company¡¦s failure to meet financial targets and failure to execute financial plan; the company¡¦s inability to generate positive operating cash flow, control operating expenses or drive sustained revenue growth; the company¡¦s inability to leverage technology marketplace advantages; and the unavailability of appropriate levels of manufacturing capacity. For additional information, readers are referred to the documents filed by LSI Logic with the SEC, and specifically the risk factors set forth in the company¡¦s most recent reports on Form 10-K, 10-Q and 8-K.
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