LSI Reports Fourth Quarter and Full Year 2012 Results
LSI Reports Fourth Quarter and Full Year 2012 Results
23% revenue growth year-over-year
PR Newswire
SAN JOSE, Calif., Jan. 23, 2013
SAN JOSE, Calif., Jan. 23, 2013 /PRNewswire/ -- LSI Corporation (NASDAQ: LSI)
today reported results for its fourth quarter and full year ended December 31,
2012.
(Logo: http://photos.prnewswire.com/prnh/20120222/SF57952LOGO)
Fourth Quarter and Full Year 2012 Highlights
o Fourth quarter 2012 revenues from continuing operations* of $600 million,
up 15% year-over-year
o Fourth quarter 2012 GAAP** income from continuing operations of $0.05 per
diluted share
o Fourth quarter 2012 non-GAAP*** income from continuing operations of $0.18
per diluted share
o Fourth quarter 2012 operating cash flows of $95 million
o Full year 2012 revenues of $2.51 billion, up 23% year over year
First Quarter 2013 Business Outlook
o Projected revenues from continuing operations* of $535 million to $575
million
o GAAP** income from continuing operations in the range of ($0.03) to $0.06
per share
o Non-GAAP*** income from continuing operations in the range of $0.09 to
$0.15 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.
"2012 was a year of exciting progress for LSI as we delivered 23% revenue
growth, strong expansion in operating margin and earnings per share from
continuing operations, and record design wins. We introduced several important
new products, and customers are increasingly looking to new LSI solutions for
mega datacenters, mobile networks and flash," said Abhi Talwalkar, LSI's
president and CEO. "LSI's intelligent silicon offers proven solutions as
businesses turn to the cloud and look for new ways to accelerate their ability
to quickly analyze, store, share and protect data. While there is uncertainty
in the macro environment and softness in some end markets, we are centered in
dynamic new growth cycles that are expected to drive long-term growth in our
flash, server and networking businesses."
Fourth quarter 2012 revenues from continuing operations were $600 million, in
line with guidance, compared to $523 million generated from continuing
operations in the fourth quarter of 2011, and compared to $624 million
generated from continuing operations in the third quarter of 2012.
Fourth quarter 2012 GAAP** income from continuing operations was $29 million
or $0.05 per diluted share, compared to fourth quarter 2011 GAAP income from
continuing operations of $11 million or $0.02 per diluted share. Third quarter
2012 GAAP income from continuing operations was $40 million or $0.07 per
diluted share. Fourth quarter 2012 GAAP income from continuing operations
included a net charge of $72 million from special items, consisting primarily
of approximately $30 million of amortization of acquisition-related items, $25
million of stock-based compensation expense, $16 million of net restructuring
and other items, and $1 million income tax effect.
Fourth quarter 2012 non-GAAP*** income from continuing operations was $101
million or $0.18 per diluted share, compared to fourth quarter 2011 non-GAAP
income from continuing operations of $73 million or $0.13 per diluted share.
Third quarter 2012 non-GAAP income from continuing operations was $99 million
or $0.17 per diluted share.
Cash and short-term investments totaled approximately $676 million at quarter
end. The company completed fourth-quarter purchases of approximately 7 million
shares of its common stock for approximately $46 million. In 2012 the company
purchased approximately 36 million shares of its common stock for
approximately $273 million.
LSI recorded full-year 2012 revenues from continuing operations of $2.51
billion, a 23% increase compared to $2.04 billion in 2011.
"We delivered solid profitability and results in 2012, making good progress on
our gross margin targets and generating strong cash flows," said Bryon Look,
LSI's CFO. "With a strong balance sheet, zero debt and $479 million remaining
on our share buyback authorization, we are in a good position to continue to
return capital to our shareholders."
LSI 1Q2013 Business Outlook for Continuing Operations
GAAP** Special Items Non-GAAP***
Revenue $535 million to $575 $535 million to
million $575 million
$18 million
Gross Margin 48% to 52% to $28 53% to 55%
million
$257 million to $277 $32 million $225 million to
Operating Expenses million to $42 $235 million
million
Net Other Income $4 million $4 million
Tax Approximately $8 Approximately $8
million million
(Loss)/Income from ($0.09) to
Continuing Operations Per ($0.03) to $0.06 ($0.12) $0.09 to $0.15
Share
Diluted Share Count 570 million 570 million
Capital spending is projected to be around $25 million in the first quarter
and approximately $80 million in total for 2013.
Depreciation and software amortization is projected to be around $15 million
in the first quarter and approximately $60 million in total for 2013.
LSI Conference Call Information
LSI will hold a conference call today at 2 p.m. PST to discuss fourth quarter
and full year 2012 financial results and the first quarter 2013 business
outlook. Internet users can access the conference call at
http://www.lsi.com/webcast. Subsequent to the conference call, a replay will
be available at the same web address.
Forward-Looking Statements: This news release contains forward-looking
statements that are based on the current opinions and estimates of management.
These statements 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's actual results to
differ materially from those set forth in the forward-looking statements
include, but are not limited to: our ability to successfully integrate and
manage the SandForce business and retain its key employees; our ability to
achieve anticipated synergies and to develop integrated new products following
our acquisition of SandForce; our ability to repurchase our common stock at
prices we believe to be advantageous; our reliance on major customers and
suppliers; our ability to keep up with rapid technological change; our ability
to compete successfully in competitive markets; fluctuations in the timing and
volumes of customer demand; the unavailability of appropriate levels of
manufacturing capacity; and general industry and macro-economic conditions.
For additional information, see the documents filed by LSI with the Securities
and Exchange Commission, and specifically the risk factors set forth in the
company's most recent reports on Form 10-K and 10-Q. LSI disclaims any
intention or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
About LSI
LSI Corporation (NASDAQ: LSI) designs semiconductors and software that
accelerate storage and networking in datacenters, mobile networks and client
computing. Our technology is the intelligence critical to enhanced application
performance, and is applied in solutions created in collaboration with our
partners. More information is available at www.lsi.com.
LSI, the LSI & Design logo and the Storage.Networking.Accelerated. tagline are
trademarks or registered trademarks of LSI Corporation.
All other brand or product names may be trademarks or registered trademarks of
their respective companies.
LSI CORPORATION
Condensed Consolidated Balance Sheets
(In millions)
(Unaudited)
December 31, September 30, December 31,
Assets 2012 2012 2011
Current assets:
Cash and short-term $ $ $
investments 676.0 643.0 935.5
Accounts receivable, net 264.1 256.5 246.5
Inventories 206.3 209.1 180.0
Prepaid expenses and other 87.2 64.6 60.7
current assets
Total current assets 1,233.6 1,173.2 1,422.7
Property and equipment, net 269.7 250.2 180.6
Goodwill and identified 741.1 771.9 506.2
intangible assets, net
Other assets 113.2 108.1 122.6
Total assets $ 2,357.6 $ $
2,303.4 2,232.1
Liabilities and Stockholders'
Equity
Current liabilities $ $ $
506.9 476.8 460.9
Pension, tax and other 684.6 628.6 712.2
liabilities
Total liabilities 1,191.5 1,105.4 1,173.1
Stockholders' equity:
Common stock and additional 5,578.7 5,579.6 5,629.2
paid-in capital
Accumulated deficit (3,834.3) (3,863.4) (4,037.0)
Accumulated other (578.3) (518.2) (533.2)
comprehensive loss
Total stockholders' 1,166.1 1,198.0 1,059.0
equity
Total liabilities and $ 2,357.6 $ $
stockholders' equity 2,303.4 2,232.1
LSI CORPORATION
Consolidated Statements of Operations (GAAP)
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Year Ended
December September December December December
31, 30, 31, 31, 31,
2012 2012 2011 2012 2011
$ $ $ $ $
Revenues 2,506,087 2,043,958
600,128 623,962 523,140
Cost of revenues 275,538 287,390 264,364 1,162,414 991,914
Amortization of
acquisition-related 21,318 21,348 20,354 85,404 82,659
intangibles
Purchase
accounting effect on - - - 14,458 -
inventory
Stock-based 2,858 2,573 1,597 11,946 6,921
compensation expense
Total cost of 299,714 311,311 286,315 1,274,222 1,081,494
revenues
Gross profit 300,414 312,651 236,825 1,231,865 962,464
Research and 165,758 156,318 139,061 643,230 552,342
development
Stock-based 11,613 11,170 5,360 47,064 23,646
compensation expense
Total research 177,371 167,488 144,421 690,294 575,988
and development
Selling, general 64,919 69,722 63,705 270,965 241,820
and administrative
Amortization of
acquisition-related 8,667 8,667 8,319 34,668 33,276
intangibles
Stock-based 10,291 13,643 4,881 49,290 20,343
compensation expense
Total selling,
general and 83,877 92,032 76,905 354,923 295,439
administrative
Restructuring of
operations and other 16,480 4,221 21,033 42,654 23,719
items, net
Income/(loss) from 22,686 48,910 (5,534) 143,994 67,318
operations
Interest income 7,606 5,855 8,124 37,711 26,472
and other, net
Income from
continuing operations 30,292 54,765 2,590 181,705 93,790
before income taxes
Provision
for/(benefit from) 1,202 15,100 (8,818) (20,960) 3,778
income taxes
Income from 29,090 39,665 11,408 202,665 90,012
continuing operations
(Loss)/income from
discontinued - - (13,194) - 241,479
operations, net of
taxes
$ $ $ $ $
Net income/(loss) 202,665
29,090 39,665 (1,786) 331,491
Basic income/(loss)
per share:
Income from $ $ $ $ $
continuing
operations 0.05 0.07 0.02 0.36 0.15
(Loss)/income $ $ $ $ $
from discontinued
operations - - (0.02) - 0.42
$ $ $ $ $
Net income/(loss)
0.05 0.07 0.00 0.36 0.57
Diluted income/(loss)
per share:
Income from $ $ $ $ $
continuing
operations 0.05 0.07 0.02 0.35 0.15
(Loss)/income $ $ $ $ $
from discontinued
operations - - (0.02) - 0.40
$ $ $ $ $
Net income/(loss)
0.05 0.07 0.00 0.35 0.55
Shares used in
computing per share
amounts:
Basic 552,761 555,197 563,721 559,459 585,704
Diluted 568,611 572,022 573,018 580,548 600,893
Reconciliations of certain GAAP measures to non-GAAP
measures are included below.
Three Months Ended Year Ended
December September December December December
Reconciliation of 31, 30, 31, 31, 31,
GAAP net income to
non-GAAP net income: 2012 2012 2011 2012 2011
GAAP income from $ $ $ $ $
continuing operations 202,665
29,090 39,665 11,408 90,012
Special items:
a) Stock-based
compensation expense 2,858 2,573 1,597 11,946 6,921
- cost of revenues
b) Stock-based
compensation expense 11,613 11,170 5,360 47,064 23,646
- R&D
c) Stock-based
compensation expense 10,291 13,643 4,881 49,290 20,343
- SG&A
d) Amortization of
acquisition-related 21,318 21,348 20,354 85,404 82,659
intangibles - cost of
revenues
e) Amortization of
acquisition-related 8,667 8,667 8,319 34,668 33,276
intangibles - SG&A
f) Purchase
accounting effect on - - - 14,458 -
inventory
g) Restructuring of
operations and other 16,480 4,221 21,033 42,654 23,719
items, net
h) Gain on sale of - (2,550) - (2,550) -
investments
i) Gain on
re-measurement of a
pre-acquisition - - - (5,765) -
equity interest to
fair value
j) Income tax 833 - - (42,365) -
effect
Total special
items from continuing 72,060 59,072 61,544 234,804 190,564
operations
Non-GAAP income from $ $ $ $ $
continuing operations 437,469
101,150 98,737 72,952 280,576
Non-GAAP income from
continuing operations
per share:
$ $ $ $ $
Basic
0.18 0.18 0.13 0.78 0.48
$ $ $ $ $
Diluted
0.18 0.17 0.13 0.75 0.47
GAAP net $ $ $ $ $
income/(loss) 202,665
29,090 39,665 (1,786) 331,491
Special items:
a) Total special
items from continuing 72,060 59,072 61,544 234,804 190,564
operations
b) Stock-based
compensation expense - - - - (592)
- discontinued
operations
c) Amortization of
acquisition-related
intangibles - - - - - 886
discontinued
operations
d) Restructuring of
operations - - - (67) - 40,863
discontinued
operations
e) Gain on sale of - - - - (260,066)
business
$ $ $ $ $
Non-GAAP net income 437,469
101,150 98,737 59,691 303,146
Non-GAAP net income
per share:
$ $ $ $ $
Basic
0.18 0.18 0.11 0.78 0.52
$ $ $ $ $
Diluted
0.18 0.17 0.10 0.75 0.50
Shares used in
computing non-GAAP
per share amounts:
Basic 552,761 555,197 563,721 559,459 585,704
Diluted 568,611 572,022 573,018 580,548 600,893
LSI CORPORATION
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended Year Ended
December September December December December
31, 30, 31, 31, 31,
2012 2012 2011 2012 2011
Operating activities:
Net income/(loss) $ $ $ $ $
29,090 39,665 (1,786) 202,665 331,491
Adjustments:
Depreciation and 44,166 45,671 43,357 180,484 189,200
amortization
Stock-based 24,762 27,386 11,838 108,300 50,318
compensation expense
Non-cash
restructuring of 221 698 4,747 5,960 35,282
operations and other
items, net
Gain on sale of
investments/write-down - (2,550) 183 (2,550) 183
of investment
Gain on
re-measurement of a - - - (5,765) -
pre-acquisition equity
interest to fair value
Gain on sale of - - - - (260,066)
business
(Gain)/loss on sale
of property and (46) 2,644 78 2,528 (465)
equipment
Unrealized foreign (518) 2,655 (2,215) (598) (2,015)
exchange (gain)/loss
Deferred taxes (10,743) (72) (9,894) (53,989) (28,838)
Changes in assets
and liabilities, net of
assets acquired and
liabilities
assumed in
business combination:
Accounts (7,620) 40,348 1,850 (6,689) 80,065
receivable
Inventories 2,748 (5,091) 30,399 (2,116) (29,804)
Prepaid
expenses, assets held (13,308) 1,110 (526) (14,028) (10,782)
for sale and other
assets
Accounts payable 23,208 (25,186) (2,179) 27,543 (3,879)
Accrued and 2,895 (15,471) (20,436) (67,586) (103,915)
other liabilities
Net cash provided by 94,855 111,807 55,416 374,159 246,775
operating activities
Investing activities:
Purchases of debt
securities (37,206) (22,087) (12,284) (131,662) (50,967)
available-for-sale
Proceeds from
maturities and sales of 28,320 11,767 5,472 57,843 37,460
debt securities
available-for-sale
Purchases of other (500) - - (500) (4,000)
investments
Proceeds from sale - 2,550 - 2,550 -
of other investments
Purchases of (27,494) (25,667) (14,079) (130,779) (60,920)
property and equipment
Proceeds from sale
of property and 67 1,374 22,683 1,693 23,622
equipment
Acquisition of
business, net of cash - - - (319,231) -
acquired
Proceeds from sale
of business, net of - - - - 475,150
transaction costs
Proceeds from
maturity of a note - - 10,000 - 10,000
receivable
Net cash (used
in)/provided by (36,813) (32,063) 11,792 (520,086) 430,345
investing activities
Financing activities:
Issuance of common 20,985 8,515 14,980 111,628 81,040
stock
Purchases of common
stock under repurchase (46,338) (50,062) (26,999) (272,585) (498,786)
program
Net cash used in (25,353) (41,547) (12,019) (160,957) (417,746)
financing activities
Effect of exchange rate
changes on cash and cash (1,668) 166 (528) (1,399) (1,349)
equivalents
Net change in cash and 31,021 38,363 54,661 (308,283) 258,025
cash equivalents
Cash and cash
equivalents at beginning 440,507 402,144 725,150 779,811 521,786
of period
Cash and cash $ $ $ $ $
equivalents at end of 471,528 440,507 779,811 471,528 779,811
period
SOURCE LSI Corporation
Website: http://www.lsi.com
Contact: Investor Relations, Sujal Shah, +1-610-712-5471, sujal.shah@lsi.com;
or Media Relations, Dave Miller, +1-408-712-7813, dave.c.miller@lsi.com
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