LSI: Fiscal 1Q12 Financial Results

LSI Corporation reported results for its first quarter ended April 1, 2012.
 
First Quarter 2012 Highlights

• Revenues from continuing operations of $622 million
• GAAP income from continuing operations of 13 cents per diluted share
• Non-GAAP income from continuing operations of 20 cents per diluted share
• Operating cash flows of $50 million

Second Quarter 2012 Business Outlook

• Projected revenues from continuing operations of $630 million to $670 million
• GAAP income from continuing operations in the range of $0.03 to $0.13 per share
• Non-GAAP income from continuing operations in the range of $0.15 to $0.21 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. The ongoing business is referred to as ‘continuing operations.’

"Our performance in the first quarter demonstrates the positive results of our multi-year growth strategy and our ability to outgrow the storage and networking markets we serve. The significant revenue growth was driven by better-than-expected growth in our HDD business, strength in our new SandForce flash business and contribution from various new product cycles," said Abhi Talwalkar, LSI president and CEO. "Going forward, LSI is firmly established as a central player in some of the most critical growth trends in computing, including cloud, Big Data, mobile networking and flash, with products that are bringing exciting new levels of speed and productivity to our customers."
 
First quarter 2012 revenues from continuing operations were $622 million, above the high end of updated guidance, compared to $473 million generated from continuing operations in the first quarter of 2011, and compared to $523 million generated from continuing operations in the fourth quarter of 2011.
 
First quarter 2012 GAAP income from continuing operations was $75 million or 13 cents per diluted share, compared to first quarter 2011 GAAP income from continuing operations of $19 million or 3 cents per diluted share. Fourth quarter 2011 GAAP income from continuing operations was $11 million or 2 cents per diluted share. First quarter 2012 GAAP income from continuing operations included a net charge of $42 million from special items, consisting primarily of approximately $31 million of stock-based compensation expense, $30 million of amortization of acquisition-related items, $15 million of net restructuring and other items, $14 million of purchase accounting effect on inventory, a $43 million favorable income tax effect and a $6 million gain on remeasurement of a pre-acquisition equity interest to fair value.
 
First quarter 2012 non-GAAP income from continuing operations was $117 million or 20 cents per diluted share, compared to first quarter 2011 non-GAAP income from continuing operations of $65 million or 10 cents per diluted share. Fourth quarter 2011 non-GAAP income from continuing operations was $73 million or 13 cents per diluted share.
 
Cash and short-term investments totaled approximately $623 million at quarter end. The company completed first-quarter purchases of approximately 4.6 million shares of its common stock for approximately $38 million, and on a cumulative basis, LSI has repurchased a total of 77 million shares and utilized approximately $537 million of the company’s current $750 million share repurchase program.
 
"In the first quarter, LSI delivered double-digit revenue growth and demonstrated significant progress towards our business model and non-GAAP operating margin target," said Bryon Look, LSI CFO and CAOer. "Year over year, our revenues grew 32% and non-GAAP income from operations increased 80%."
 
LSI 2Q2012 Business Outlook for Continuing Operations (GAAP)

• Revenue: $630 million to $670 million
• Gross Margin: 47% – 51%
• Operating Expenses: $255 million to $275 million
• ​Net Other Income: ​$3 million​
• Tax​: Approximately $11 million​​
• (Loss)/Income from Continuing Operations Per Share​: $0.03 to $0.13
• Diluted Share Count: ​600 million

Capital spending is projected to be around $20 million in the second quarter and approximately $125 million in total for 2012.

Depreciation and software amortization is projected to be around $16 million in the second quarter and approximately $65 million in total for 2012.