LSI Reports Second Quarter 2012 Results

Revenues grow 6% quarter over quarter; company sees continued strong demand for flash-based products

(PRNewswire) — �LSI Corporation (NYSE: LSI) today reported results for its second quarter ended July 1, 2012.

Second Quarter 2012 Highlights

  • Second quarter 2012 revenues from continuing operations* of $660 million
  • Second quarter 2012 GAAP** income from continuing operations of $0.10 per diluted share
  • Second quarter 2012 non-GAAP*** income from continuing operations of $0.21 per diluted share
  • Second quarter 2012 operating cash flows of $117 million

 Third Quarter 2012 Business Outlook

  • Projected revenues from continuing operations* of $620 million to $660 million
  • GAAP** income from continuing operations in the range of $0.02 to $0.11 per share
  • Non-GAAP*** income from continuing operations in the range of $0.14 to $0.20 per share

*

On May 6, 2011, LSI completed the sale of its external storage systems business. The financial results of the external storage systems business have been classified as discontinued operations in LSI's financial statements. Our ongoing business is referred to as "continuing operations."

**

Generally Accepted Accounting Principles.

***

Excludes stock-based compensation, amortization of acquisition-related intangibles, purchase accounting effect on inventory, restructuring of operations and other items, net, gain on remeasurement of a pre-acquisition equity interest to fair value, gain/loss on sale/write-down of investments and, in the case of non-GAAP net income, gain from the sale of the external storage systems business. It also excludes the income tax effect associated with the above-mentioned items.

"We are pleased with our performance in the second quarter as we delivered strong growth and further expanded our profitability in a challenging macroeconomic environment," said Abhi Talwalkar, LSI's president and CEO. "Demand, particularly for our flash-related products, was driven by rapid adoption across client and datacenter computing where customers are increasingly turning to LSI to enhance or accelerate application performance."

Second quarter 2012 revenues from continuing operations were $660 million, in line with guidance, compared to $501 million generated from continuing operations in the second quarter of 2011, and compared to $622 million generated from continuing operations in the first quarter of 2012.

Second quarter 2012 GAAP** income from continuing operations was $59 million or $0.10 per diluted share, compared to second quarter 2011 GAAP income from continuing operations of $28 million or $0.05 per diluted share. First quarter 2012 GAAP income from continuing operations was $75 million or $0.13 per diluted share. Second quarter 2012 GAAP income from continuing operations included a net charge of $62 million from special items, consisting primarily of approximately $26 million of stock-based compensation expense, $30 million of amortization of acquisition-related items and $6 million of net restructuring and other items.

Second quarter 2012 non-GAAP*** income from continuing operations was $121 million or $0.21 per diluted share, compared to second quarter 2011 non-GAAP income from continuing operations of $60 million or $0.10 per diluted share. First quarter 2012 non-GAAP income from continuing operations was $117 million or $0.20 per diluted share.

Cash and short-term investments totaled approximately $601 million at quarter end. The company completed second-quarter purchases of approximately 18 million shares of its common stock for approximately $138 million. On a cumulative basis, LSI has repurchased a total of 95 million shares and utilized approximately $675 million of the company's current $750 million share repurchase program.

"We are making good progress toward our business model targets with strong year over year growth in sales and operating profits," said Bryon Look, LSI's chief financial officer. "We are generating solid operating cash flows and with our share buyback program we continue to return capital to our shareholders."

 

LSI 3Q2012 Business Outlook for Continuing Operations



GAAP**

Special Items

Non-GAAP***

Revenue

$620 million to $660 million


$620 million to $660 million

Gross Margin

47% – 51%

$20 million to $30 million

52% – 54%

Operating Expenses

$258 million to $278 million

$30 million to $40 million

$228 million to $238 million

Net Other Income

$3 million


$3 million

Tax

Approximately $12 million


Approximately $12 million

(Loss)/Income from Continuing Operations Per Share

$0.02 to $0.11

($0.09) to ($0.12)

$0.14 to $0.20

Diluted Share Count

570 million


570 million


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