LSI: Fiscal 1Q10 Financial Results

LSI Corporation reported results for its first quarter ended April 4, 2010.

First Quarter 2010 News Release Summary

• First quarter 2010 revenues of $637 million
• First quarter 2010 GAAP net income of 3 cents per diluted share
• First quarter 2010 non-GAAP net income of 14 cents per diluted share
• First quarter operating cash flows of $106 million

Second Quarter 2010 Business Outlook

• Projected revenues of $635 million to $665 million
• GAAP net (loss)/income in the range of ($0.03) to $0.06 cents per share
• Non-GAAP net income in the range of $0.08 to $0.14 cents per share

First quarter 2010 revenues were $637 million, a 32% increase year-over-year compared to $482 million reported in the first quarter of 2009, and essentially flat sequentially compared to $638 million reported in the fourth quarter of 2009.

First quarter 2010 GAAP net income was $23 million or 3 cents per diluted share, compared to first quarter 2009 GAAP net loss of $104 million or 16 cents per share. First quarter GAAP results included a net tax benefit of $19 million primarily related to the expiration of statutes of limitations. First quarter 2010 GAAP results compare to fourth quarter 2009 GAAP net income of $65 million or 10 cents per diluted share. First quarter 2010 GAAP net income included a net charge of $70 million from special items, consisting primarily of $40 million of amortization of acquisition-related items, $16 million of stock-based compensation expense, $12 million of loss on write-down of equity securities, and $2 million of net restructuring and other items.

First quarter 2010 non-GAAP net income was $92 million or 14 cents per diluted share, compared to first quarter 2009 non-GAAP net loss of $18 million or 3 cents per share. First quarter non-GAAP results also included the aforementioned net tax benefit of $19 million. Fourth quarter 2009 non-GAAP net income was $124 million or 18 cents per diluted share.

Cash and short-term investments totaled approximately $1.0 billion at quarter end. LSI also announced today that it has completed the purchase of approximately 4 million shares of its common stock for approximately $26 million under its $250 million share repurchase program.

"Our strong first quarter results reflect an improving end demand environment as well as increasing operating leverage from the steps we have taken to transform our business over the past few years," said Abhi Talwalkar, LSI president and chief executive officer. "Revenues were at the high end of our updated guidance range and well above typical seasonal patterns, further underscoring our confidence in our ability to grow faster than the markets we serve."

Bryon Look, LSI CFO and chief administrative officer, said: "First quarter revenues improved significantly on a year-over-year basis and were sequentially flat to the fourth quarter of 2009, offsetting the effects of normal seasonality. We delivered strong earnings performance relative to our upwardly revised guidance and generated solid operating cash flows of $106 million. Semiconductor revenues grew 9% sequentially, while our storage systems business achieved record first-quarter revenues."

Capital spending is projected to be around $15 million in the second quarter and approximately $55 million in total for 2010.

Depreciation and software amortization is projected to be around $26 million in the second quarter and approximately $100 million in total for 2010.