LSI: Fiscal 4Q07 Financial Results

LSI Corporation reported results for its fourth quarter and full year ended December 31, 2007.

• Fourth quarter 2007 revenues of $741 million, exceeding guidance
• Fourth quarter 2007 GAAP net loss of $2.88 per share, including an estimated goodwill impairment charge of $2.88 per share
• Fourth quarter 2007 non-GAAP net income of 13 cents per diluted share, exceeding guidance
• Fourth quarter operating cash flows of $110 million
• Full-year 2007 revenues of $2.6 billion
• Cash and short-term investments of $1.4 billion
• Projected revenues of $620 million to $650 million
• GAAP net loss in the range of 1 to 9 cents per share
• Non-GAAP net income in the range of 5 to 9 cents per diluted share

Fourth quarter 2007 revenues were $741 million, a 41% increase
year-over-year compared to $524 million reported in the fourth quarter
of 2006, and up 2% sequentially compared to $727 million reported in
the third quarter of 2007. Adjusting for the sale of the mobility
business, fourth quarter revenues increased 12.2% sequentially compared
to the third quarter of 2007.

Fourth quarter 2007 GAAP net loss was $2.0 billion or $2.88 per
share, compared to fourth quarter 2006 GAAP net income of $59 million
or 14 cents per diluted share. Fourth quarter 2007 GAAP results compare
to third quarter 2007 GAAP net loss of $141 million or 20 cents per
share. Fourth quarter 2007 GAAP net loss included a net charge of $2.1
billion from special items, including an estimated $2.0 billion
non-cash charge for impairment of goodwill, $38.6 million in the
amortization of acquisition-related items, $29 million of restructuring
costs, $21.5 million of stock-based compensation expense and $6.0
million of acquired in-process R&D.

Fourth quarter 2007 non-GAAP net income was $94 million or 13
cents per diluted share, compared to fourth quarter 2006 non-GAAP net
income of $75 million or 18 cents per diluted share. Third quarter 2007
non-GAAP net income was $44 million or 6 cents per diluted share.

Cash and short-term investments totaled approximately $1.4 billion
at quarter end. LSI also announced today that to date it has purchased
approximately 102.6 million shares of its common stock for
approximately $771 million under two repurchase authorizations totaling
$1 billion.

"Our strong fourth quarter results were driven by higher than
expected seasonal demand for our storage products, with revenues and
non-GAAP earnings significantly exceeding our guidance," said Abhi
Talwalkar, LSI president and chief executive officer. "In our core
focus areas of storage and networking, revenues increased more than 12%
sequentially, reflecting greater than 25% growth in storage systems and
double-digit growth in storage semiconductors."
"With many new design wins across our storage and networking areas
now firmly in hand, I am confident that we are well positioned to grow
as these designs ramp to production in the future," added Talwalkar.

LSI recorded full year 2007 revenues of $2.60 billion, a 31%
increase compared to $1.98 billion in 2006. The company reported 2007
GAAP net loss of $2.49 billion or $3.88 per share. Full-year 2007 GAAP
net loss included a net charge of $2.66 billion from special items,
including an estimated $2.0 billion non-cash charge for impairment of
goodwill, $192 million in the amortization of acquisition-related
items, $189 million of acquired in-process R&D, $148 million of
restructuring costs, $77 million of stock-based compensation expense,
and $48 million from the purchase accounting effect on inventory.
Full-year 2007 GAAP results compare to full year 2006 GAAP net profit
of $170 million or 42 cents per diluted share.

Non-GAAP net income for 2007 was $168 million or 26 cents per
diluted share compared to 2006 non-GAAP net income of $236 million or
58 cents per diluted share.

Bryon Look, LSI chief financial officer, said, "In the fourth
quarter we made significant progress on revenue growth, gross margin
expansion, operating expense reduction and cash generation. Despite
uncertain economic conditions, our business remains healthy and our
forward looking guidance for the first quarter is within our expected
range of seasonality."

LSI Corporation