LSI: Fiscal 2Q09 Financial Results

LSI Corporation reported results for its second quarter ended July 5, 2009.

Second Quarter News Release Summary:

• Second quarter 2009 revenues of $521 million
• Second quarter 2009 GAAP net loss of ($0.09) per share
• Second quarter 2009 non-GAAP net income of $0.01 per share
• Second quarter operating cash flows of $69 million

Third Quarter 2009 Business Outlook:

• Projected revenues of $520 million to $570 million
• GAAP net loss in the range of ($0.12) to ($0.02) per share
• Non-GAAP net income in the range of $0.00 to $0.06 per share

Second quarter 2009 revenues were $521 million, an 8% increase sequentially compared to $482 million reported in the first quarter of 2009. Second quarter 2009 revenues decreased 25% year-over-year compared to $692 million reported in the second quarter of 2008.

Second quarter 2009 GAAP net loss was $61 million or 9 cents per share, compared to first quarter 2009 GAAP net loss of $104 million or 16 cents per share. Second quarter 2009 GAAP results compare to second quarter 2008 GAAP net loss of $14 million or 2 cents per share. Second quarter 2009 GAAP net loss included a net charge of $69 million from special items, consisting primarily of $43 million of amortization of acquisition-related items, $17 million of stock-based compensation expense, and $8.6 million in net restructuring and other items.

Second quarter 2009 non-GAAP net income was $7 million or 1 cent per diluted share compared to first quarter 2009 non-GAAP net loss of $18 million or 3 cents per share. Second quarter non-GAAP net income compares to second quarter 2008 non-GAAP net income of $83 million or 13 cents per diluted share.

Cash and short-term investments totaled approximately $874 million at quarter end. LSI redeemed $243 million of convertible notes in the second quarter and increased net cash, or cash and short-term investments minus debt, by $44 million.

"Although the economic environment remains uncertain, our second quarter revenues came in significantly above the midpoint of our guidance range with growth in both our storage and networking businesses," said Abhi Talwalkar, LSI president and chief executive officer. "LSI is now beginning to realize tangible results from our work over the past several years to transform the company. Our core businesses are significantly stronger than before, and we are now well positioned to drive long-term growth."

Bryon Look, LSI CFO and chief administrative officer, said: "By maintaining tight controls on spending, our operating expenses decreased sequentially, delivering improvements in our operating results. We also continued to effectively manage our balance sheet, redeeming short-term convertible debt during the quarter while increasing our net cash position."

Capital spending is projected to be around $15 million in the third quarter and approximately $45 million in total for 2009.

Depreciation and software amortization is projected to be around $23 million in the third quarter and approximately $90 million in total for 2009.