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LSI Corp. Reports Operating Results (10-Q)

August 11, 2009 | About:
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LSI Corp. (LSI) filed Quarterly Report for the period ended 2009-07-05.

LSI Corporation is a leading provider of innovative silicon systems and software technologies that enable products that seamlessly bring people information and digital content together. The company offers a broad portfolio of capabilities and services including custom and standard product ICs adapters systems and software that are trusted by the world\'s best known brands to power leading solutions in the Storage Networking and Consumer markets. LSI Corp. has a market cap of $3.3 billion; its shares were traded at around $5.09 with a P/E ratio of 50.9 and P/S ratio of 3.1.

Highlight of Business Operations:

Our revenues for the three months ended July 5, 2009 were $520.7 million, a decrease of $171.4 million as compared to $692.1 million for the three months ended June 29, 2008. Our revenues for the six months ended July 5, 2009 were $1,002.9 million, a decrease of $349.9 million, compared to $1,352.8 million for the six months ended June 29, 2008. These decreases resulted primarily from the global economic downturn and the resulting lower end-market demand for semiconductors used in storage and networking product applications and lower demand for our mid-range storage systems.

We reported a net loss of $61.5 million, or $0.09 per diluted share, for the three months ended July 5, 2009 as compared to a net loss of $13.6 million, or $0.02 per diluted share, for the three months ended June 29, 2008. We reported a net loss of $165.0 million, or $0.25 per diluted share, for the six months ended July 5, 2009, as compared to a net loss of $27.3 million, or $0.04 per diluted share, for the six months ended June 29, 2008.

Cash, cash equivalents and short-term investments were $873.6 million as of July 5, 2009, as compared to $1,119.1 million as of December 31, 2008. During the quarter ended July 5, 2009, we used $244.0 million for the redemption of all of the outstanding 6.5% Convertible Subordinated Notes due in December 2009. For the three and six months ended July 5, 2009, we generated $68.9 million and $59.1 million, respectively, in cash provided by operating activities, as compared to $27.3 million and $123.5 million, respectively, cash provided by operating activities for the three and six months ended June 29, 2008.

We recorded charges of $6.0 million in restructuring of operations and other items, net, for the three months ended July 5, 2009. Of these charges, $4.5 million and $1.5 million were recorded in the Semiconductor segment and Storage Systems segment, respectively. We recorded charges of $31.2 million in restructuring of operations and other items, net, for the six months ended July 5, 2009, consisting of $25.0 million in charges for restructuring of operations and $6.2 million in charges for other items. Of these charges, $29.7 million and $1.5 million were recorded in the Semiconductor segment and Storage Systems segment, respectively.

We recorded charges of $20.7 million in restructuring of operations and other items, net, for the three months ended June 29, 2008, consisting of $10.0 million in charges for restructuring of operations and $10.7 million in charges for other items. The majority of the $20.7 million in charges for three months ended June 29, 2008 were recorded in the Semiconductor segment. We recorded charges of $25.3 million in restructuring of operations and other items, net, for the six months ended June 29, 2008, consisting of $13.3 million in charges for restructuring of operations and $12.0 million in charges for other items. The majority of the $25.3 million in charges for the six months ended June 29, 2008 were recorded in the Semiconductor segment.

During the six months ended July 5, 2009 and June 29, 2008, we recorded an income tax provision of $13.2 million and $8.0 million, respectively. During the six months ended July 5, 2009, we recorded a reversal of $29.8 million in liabilities, which includes previously unrecognized tax benefits of $15.7 million and interest and penalties of $14.1 million, because various statutes of limitations expired during the period and an increase of $32.9 million, which includes unrecognized tax benefits of $25.0 million and interest and penalties of $7.9 million, as a result of re-measurements of uncertain tax positions taken in prior periods based on new information. During the six months ended June 29, 2008, we recorded a reversal of an $8.8 million liability because a statute of limitations expired during the period and an increase of $2.1 million as a result of re-measurement of uncertain tax positions taken in prior periods based on new information.

Read the The complete ReportLSI is in the portfolios of Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC, Charles Brandes of Brandes Investment.

Rating: 3.4/5 (8 votes)

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