SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] Quarterly Report Under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Quarter Ended July 3, 1994
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from _______________ to
_______________
Commission File Number: 0-11674
LSI LOGIC CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-2712976
(State of Incorporation) (I.R.S. Employer
Identification Number)
1551 McCarthy Boulevard
Milpitas, California 95035
(Address of principal executive offices)
(408) 433-8000
(Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. YES [x] NO [ ]
As of August 5, 1994 there were 53,064,286 shares of registrant's
Common Stock, $.01 par value, outstanding.
LSI LOGIC CORPORATION
Form 10-Q
FOR THE QUARTER ENDED JULY 3, 1994
INDEX
Page
No.
PART I Financial Information
Item 1 Financial Statements
Consolidated Balance Sheets - June 30, 1994 and
December 31, 1993 3
Consolidated Statements of Operations - Three-Month
and Six-Month Periods Ended June 30, 1994 and 1993 4
Consolidated Statements of Cash Flows - Six-Month Periods
Ended June 30, 1994 and 1993 5
Notes to Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of
Results of Operations and Financial Condition 9
PART II Other Information
Item 1 Legal Proceedings 13
Item 4 Submission of Matters to a Vote of Security Holders 13
Item 6 Exhibits and Reports on Form 8-K 13
PART I
Item 1. Financial Statements
<TABLE>
<CAPTION>
LSI LOGIC CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands, except per share amounts)
(Unaudited)
June 30, December 31,
1994 1993
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 205,504 $121,319
Short-term investments 145,345 80,764
Accounts receivable, less allowance for
doubtful accounts of $3,122 and $2,470 151,512 124,384
Inventories 94,306 69,066
Prepaid expenses and other current asset 28,394 30,165
Total current assets 625,061 425,698
Property and equipment, at cost less
accumulated depreciation and amortization 430,272 385,063
Other assets 54,003 41,945
Total assets $1,109,336 $852,706
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 93,470 $ 66,822
Accrued salaries, wages and benefits 23,015 24,397
Accrued restructuring costs 26,270 29,503
Other accrued liabilities 38,332 28,353
Income taxes payable 20,823 17,079
Current portion of long-term debt, capital
lease obligations and short-term
borrowings 19,188 22,727
Total current liabilities 221,098 188,881
Long-term debt, capital lease obligations
and other long-term liabilities 393,752 246,314
Deferred income taxes 5,774 6,337
Minority interest in subsidiaries 124,618 118,740
Stockholders' equity:
Preferred shares; 2,000 shares authorized - -
Common stock; $.01 par value; 73,500
shares authorized; 51,054 and 49,728
shares outstanding 511 497
Additional paid-in capital 284,313 273,933
Accumulated deficit 1,122 (41,673)
Cumulative translation adjustment 78,148 59,677
Total stockholders' equity 364,094 292,434
Total liabilities and stockholders'
equity $1,109,336 $852,706
</TABLE>
See accompanying notes to unaudited consolidated condensed
financial statements.
<TABLE>
<CAPTION>
LSI LOGIC CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Revenues $212,106 $177,080 $405,919 $346,009
Costs and expenses:
Cost of revenues 123,337 108,246 238,724 212,166
Research and development 22,467 19,408 45,608 38,405
Selling, general and
administrative 31,102 29,007 60,559 58,215
Total costs and expenses 176,906 156,661 344,891 308,786
Income from operations 35,200 20,419 61,028 37,223
Interest expense 5,665 2,384 9,453 4,557
Interest income and other 4,127 2,512 8,923 4,207
Income before income taxes
and minority interest 33,662 20,547 60,498 36,873
Provision for income taxes 9,425 6,164 16,938 11,062
Income before minority
interest 24,237 14,383 43,560 25,811
Minority interest in net
income (loss) of
subsidiaries 799 1,313 767 2,126
Net income $ 23,438 $ 13,070 $ 42,793 $23,685
Net income per share:
Primary $ 0.44 $ 0.27 $ 0.82 $ 0.49
Fully diluted $ 0.41 $ 0.77
Common share and common
share equivalents used
in computing per share
amounts:
Primary 53,112 48,874 51,949 48,137
Fully diluted 64,051 60,345
</TABLE>
See accompanying notes to unaudited consolidated condensed
financial statements.
<TABLE>
<CAPTION>
LSI LOGIC CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
June 30,
1994 1993
<S> <C> <C>
Operating activities:
Net income $ 42,793 $ 23,685
Adjustments:
Depreciation and amortization 49,964 31,293
Minority interest in net income of subsidiaries 767 2,126
Changes in:
Accounts receivable (21,805) 4,238
Inventories (20,610) (3,861)
Prepaid and other assets (4,643) (6,741)
Accounts payable 22,626 (39,362)
Accrued and other liabilities 6,708 5,527
Accrued restructuring costs (3,418) (4,602)
Net cash provided by operating activities 72,382 12,303
Investing activities:
Purchases, net of maturities and sales,
of debt and equity securities
available-for-sale (73,053) -
Change in other investments 8,123 9,527
Acquisition of stock from minority
interest holders (10,051) -
Purchases of property and
equipment, net of retirements (53,765) (39,207)
Net cash used for investing activities (128,746) (29,680)
Financing activities:
Issuance of Convertible Subordinated Notes 143,750 -
Long-term debt borrowings - 40,000
Repayment of long-term debt and capital
lease obligations (16,302) (15,097)
Borrowings of short-term debt, net - (3,704)
Issuance of common stock 8,995 15,195
Tax benefit from employee stock plans 1,400 -
Net cash provided by financing activities 137,843 36,394
Effect of exchange rate changes on cash and cash
equivalents 2,706 10,298
Increase in cash and cash equivalents 84,185 29,315
Cash and cash equivalents at beginning
of period 121,319 87,103
Cash and cash equivalents at end of period $ 205,504 $116,418
Cash paid during the period for:
Interest $ 4,748 $ 8,983
Income taxes $ 8,847 $ 357
</TABLE>
See accompanying notes to unaudited consolidated condensed
financial statements.
LSI LOGIC CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - In the opinion of the Company, the accompanying unaudited
consolidated financial statements contain all adjustments
(consisting only of normal recurring adjustments) necessary to
present fairly the financial information included therein. While
the Company believes that the disclosures are adequate to make the
information not misleading, it is suggested that these financial
statements be read in conjunction with the audited financial
statements and accompanying notes included in the Company's Annual
Report to Stockholders incorporated by reference in the Company's
Annual Report on Form 10-K for the year ended January 2, 1994.
For financial reporting purposes, the Company reports on a 13 or 14
week quarter and a 52 or 53 week year ending on the Sunday closest
to December 31. For presentation purposes, the consolidated
financial statements refer to the quarter's calendar month end for
convenience. The results of operations for the three month and
six-month periods ended June 30, 1994 are not necessarily
indicative of the results to be expected for the full year.
Note 2 - Effective January 3, 1994, the Company adopted the
Statement of Financial Accounting Standards No. 115 (SFAS 115),
"Accounting for Certain Investments in Debt and Equity Securities."
This statement requires investments in debt and equity securities
to be classified as "held-to-maturity," "trading," or
"available-for-sale." Investments in debt and equity securities
classified as held-to-maturity are reported at amortized cost;
securities classified as trading are reported at fair value with
unrealized gains and losses included in earnings; and, securities
available-for-sale are reported at fair value with unrealized gains
and losses, net of related tax, if any, reported as a separate
component of stockholders' equity. Realized gains and losses are
based on the book value of specific securities sold. Fair market
value of the Company's investments approximate cost. The
cumulative effect of adoption on January 3, 1994, is considered
immaterial.
Note 3 - Balance sheet detail (in thousands):
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
<S> <C> <C>
Inventories:
Raw materials $ 15,700 $ 11,667
Work-in-process 59,132 34,997
Finished goods 19,474 22,402
Total $ 94,306 $ 69,066
Property and equipment:
Property and equipment,
at cost $847,202 $750,186
Accumulated depreciation
and amortization (416,930) (365,123)
Property and equipment,
net $430,272 $385,063
</TABLE>
property and equipment includes capitalized interest of
approximately $8.7 million (net of $.9 million accumulated
amortization) and $9.6 million at June 30, 1994 and December 31,
1993, respectively. Property and equipment include preproduction
engineering costs of $27.4 million at June 30, 1994 and December
31, 1993. Accumulated amortization of preproduction engineering
costs was $3.7 million at June 30, 1994. There was no accumulated
amortization for preproduction engineering at December 31, 1993.
Note 4 - During the third quarter of 1992, the Company recorded a
$101.8 million restructuring charge which consisted primarily of
estimated costs associated with consolidations in the Company's
worldwide manufacturing operations, write-down and discontinuance
of certain commodity standard product inventories, severance costs
and other costs. The Company's strategic consolidation of
worldwide manufacturing operations and facilities encompassed the
phase-out and closure of the Company's German assembly and test
operations, the write-down of U.S. manufacturing assets pertaining
to older process technologies which, in certain instances, had
become redundant; and estimated operating losses attributable to
the period of the phase-out and closure of such operations or the
write-down of such assets.
In 1993, the Company sold certain assets from its discontinued
German assembly and test operation, transferred certain Canadian
manufacturing equipment to its U.S. operations, continued
phase-down of its older process-technology manufacturing facility
in the U.S. and began consolidation and phase-out of some of its
other U.S. manufacturing facilities.
During the first half of 1994 the Company continued its strategic
consolidation of worldwide operations that were contemplated by the
Company's 1992 restructuring. As the Company's discontinued German
manufacturing facility remains unsold at this time, management has
determined that additional reserves are necessary to further
write-down the facility to its estimated net realizable value. In
the second quarter of 1994, the Company delayed the phase-out of
its manufacturing facility in the U.S. in response to unexpected
levels of customer demand. Management has determined that remaining
reserves attributable to this facility may not need to be fully
utilized. As excess reserves associated with the U.S. facility
offset the reserves needed in connection with the German facility,
overall restructuring reserves remaining at June 30, 1994 are
considered adequate to cover uncertainties associated with the
completion of the 1992 restructuring.
Note 5 - During March 1994, the Company issued $143,750,000 of 5
1/2% Convertible Subordinated Notes (Notes) due 2001. The Notes
are subordinated to all existing and future senior debt, are
convertible at any time after 60 days following issuance into
shares of the Company's common stock at a conversion price of
$24.50 per share, and are redeemable at the option of the Company,
in whole or in part, at any time on or after March 18, 1997. Each
holder of these Notes has the right to cause the Company to
repurchase all of such holder's Notes at 100% of their principal
amount plus accrued interest subject to certain events and
circumstances. Interest is payable semiannually. The proceeds
from this offering will be used for capital expenditures and for
general corporate purposes.
Note 6 - In July, 1994, the Company called for redemption all of
its $98 million, 6-1/4% convertible subordinated debentures.
Subsequently, approximately $97 million of the bonds were converted
to common stock.
Note 7 - The Company's effective tax rate differs from the
statutory rate due to the Company's ability to partially utilize
prior loss carryovers and due to the mix of expected earnings in
its foreign subsidiaries.
Note 8 - Primary income per common share and common equivalent
share is computed using the weighted average number of common
shares outstanding during the respective periods, including
dilutive stock options, as applicable. Fully-dilutive income per
common share and common equivalent share is computed by adjusting
net income and primary shares outstanding for the potential effect
of the conversion of the weighted average subordinated debentures
outstanding during the period. Fully-dilutive earnings per share
computations are based on the most advantageous (to the security
holder) conversion or exercise rights that become effective within
ten years following the period reported upon.
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition
General
As a participant in the semiconductor industry, the Company
operates in a technologically advanced, rapidly changing and highly
competitive environment. The Company predominately sells custom
products to customers operating in a similar environment.
Accordingly, changes in the circumstances of the Company's
customers may have a greater impact on the Company than if the
Company offered standard products that could be sold to many
purchasers. While the Company cannot predict what effect these
various factors may have on its financial results,the aggregate
effect of these and other factors could result in significant
volatility in the Company's future performance. To the extent the
Company's performance may not satisfy expectations published by
external sources, public reaction could result in a sudden and
significant adverse impact on the market price of the Company's
securities, particularly on a short-term basis.
The Company's future operating results are and will continue to be
subject to quarterly variations based upon a wide variety of
factors, many of which are beyond the Company's control, including
sudden fluctuations in customer requirements, rapid price declines,
unexpected product obsolescence, currency exchange rate
fluctuations and other economic conditions affecting customer
demand and the Company's cost of operations in one or more of the
global markets in which the Company does business. While the
Company attempts to identify and respond to these conditions in a
timely manner, they represent significant risks to the Company's
performance.
While management believes that the discussion and analysis in this
report is adequate for a fair presentation of the information,
management recommends that this discussion and analysis be read in
conjunction with Management's Discussion and Analysis included in
the Company's 1993 Annual Report to Stockholders incorporated by
reference in the Company's Annual Report on Form 10-K for the year
ended January 2, 1994.
Results of Operations
Revenues for the second quarter and first half of 1994 were $212.1
million and $405.9 million, representing an increase of 20% and
17%, respectively, compared to comparable periods of 1993. The
composition of revenues by major element was as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Component products 86% 86% 86% 85%
Design and services 14% 14% 14% 15%
100% 100% 100% 100%
</TABLE>
Total component revenues grew 18% to $181.8 million in the second
quarter and 17% to $349.8 million in the first half of 1994 from
$153.6 million and $298.7 million compared to comparable periods in
1993. The increase in revenue dollars in the second quarter and
first half of 1994 compared to the second quarter and first half of
1993 were primarily due to increased revenues from application
specific integrated circuit (ASIC) products. Higher ASIC component
revenues in the second quarter of 1994 compared to the second
quarter of 1993 were primarily the result of increased unit
shipments. Higher ASIC component revenues and higher component
revenues as a percentage of total revenues in the first half of
1994 compared to the first half of 1993 was due to both higher
average selling prices and increased unit shipments. Total dollar
revenues from design and services increased approximately $7
million in the second quarter of 1994 and $9 million in the first
half of 1994 compared to the same periods in 1993. These increases
were primarily attributable to a one-time $7 million sale involving
certain product and marketing rights.
Key elements of the statements of operations, expressed as a
percentage of revenues, were as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Gross profit margin 41.9% 38.9% 41.2% 38.7%
Research and development
expenses 10.6% 11.0% 11.2% 11.1%
Selling, general and
administrative expenses 14.7% 16.4% 14.9% 16.8%
Income from operations 16.6% 11.5% 15.0% 10.8%
</TABLE>
Gross profit, as a percentage of revenues, increased during the
second quarter and first half of 1994 over the comparable 1993
periods. The majority of the increases in gross margin are
attributable to the one-time $7 million sale of product and
marketing rights. Excluding this one-time sale, gross margins
increased 1% in the second quarter of 1994 and 1.5% in the first
half of 1994 compared to the same periods in 1993. These
improvements are the result of increased product demand for ASIC
products, higher average selling prices during the first quarter of
1994, and the increased use of lower cost third-party
subcontractors, partially offset by the higher costs of revenues
associated with the output from the Japanese affiliate's new
submicron wafer manufacturing facility. In the second quarter of
1994, the Company substantially increased sales of product
manufactured at this new facility, which began volume production in
the first quarter of 1994. Costs of revenues for the second
quarter and first half of 1994 reflect the depreciation,
amortization of preproduction engineering and other manufacturing
costs attributable to this facility, and the increased costs of
operating in Japan due to the continued strengthening of the Yen in
relation to the U.S. Dollar. Gross profits from design and
services revenue as a percentage of revenue decreased slightly in
the second quarter of 1994 and increased 15% in the first half of
1994 compared to the same periods in 1993. The Company's gross
profit margins are largely dependent upon factory capacity and
utilization, availability of certain raw materials, terms
negotiated with third-party subcontractors, foreign currency
exchange rate fluctuations and product mix. Volume production
capability is expected to increase throughout 1994, thereby
significantly increasing factory capacity by the end of 1994. A
new wafer fabrication facility initially operates at higher fixed
costs. In the event that demand for the Company's products does
not absorb this additional capacity at a sufficient rate or delays
occur in the ramp up of the new facility, the Company's gross
profit margins could be negatively impacted in future periods.
Accordingly, gross profit margins for the second quarter and first
half of 1994 may not be indicative of expected results for the
remainder of the fiscal year.
Research and development (R&D) expenses for the second quarter and
first half of 1994 related primarily to advanced process technology
and new product development and increased approximately $3.1
million (16%) and $7.2 million (19%), respectively, from the
comparable periods in 1993. The Company is committed to
technological leadership in the ASIC markets and anticipates
continued investment in R&D at a rate of between 10-12% of revenues
in future periods. The Company's R&D investments are primarily for
the development of advanced manufacturing processes, development of
new advanced products and enhancements to the Company's design
automation software capability.
Selling, general and administrative (SG&A) expenses decreased
approximately 2% as a percentage of revenues during both the second
quarter and first half of 1994 compared to the first quarter of
1993 as management continued its cost containment efforts.
In summary, total operating costs and expenses for the second
quarter and first half of 1994 were $176.9 million and $344.9
million, respectively, an increase over $156.7 million and $308.8
million for the second quarter and first half of 1993,
respectively. However, operating income as a percentage of
revenues increased to 16.6% and 15% in the second quarter and first
half of 1994 from 11.5% and 10.8%, respectively, for the comparable
periods in 1993.
Interest expense for the second quarter and first half of 1994
increased by $3.3 million and $4.9 million from the comparable 1993
periods. The majority of the increases resulted from discontinued
capitalization of interest upon commencement of volume production
by the Japanese affiliate's new submicron wafer fabrication
facility in the first quarter of 1994 and the issuance of $143.8
million of 5-1/2% convertible subordinated notes in March 1994.
Interest expense is expected to decrease in the third quarter of
1994 as a result of the conversion of approximately $97 million of
the Company's 6-1/4% convertible subordinated debentures during
July and August of 1994 (see discussion at Note 6 to the
Consolidated Financial Statements). Interest income and other for
the second quarter and first half of 1994 increased $1.6 million
and $4.7 million, respectively, in relation to the same periods in
1993. The majority of these increases are attributable to
increased interest earnings on higher cash and investments in the
second quarter of 1994 and foreign exchange gains related to an
intercompany loan between the U.K. and German affiliates, partially
offset by foreign exchange losses related to transactions between
the U.S. company and its Japanese affiliates.
The Company recorded a provision for income taxes for the second
quarter and first half of 1994 with an effective rate of 28%
compared to 30% for the comparable 1993 periods. The decrease in
the effective rate was primarily attributable to changes in the
composition of worldwide earnings.
The decrease in minority interest for the second quarter and first
half of 1994 from the comparable 1993 periods was attributable to
the composition of earnings and losses among certain of the
Company's international affiliates.
Financial Condition
The Company's cash, cash equivalents and short-term investments
increased $148.8 million during the first half of 1994 to $350.8
million, and working capital increased by $167.1 million to $404.0
million at June 30, 1994. The increase is primarily attributable to
the issuance of $143.8 million of convertible subordinated notes in
March, 1994, as discussed below, and cash generated by operations,
partially offset by fixed asset acquisitions.
During the first half of 1994, the Company generated $72.3 million
of cash and equivalents from its operating activities, compared to
$12.3 million during the first half of 1993. The increased net
cash provided from operations as compared to the comparable 1993
period was primarily attributable to an increase in accounts
payable and net income before depreciation which was partially
offset by increases in accounts receivable and inventories.
During the first half of 1994, $128.7 million of cash and
equivalents were used for investing activities compared to $29.7
million during the comparable period of 1993. The primary
investing activities consisted of the purchase of short-term debt
securities, the purchase of fixed assets for the Japanese
affiliate's new submicron wafer manufacturing facility in Japan and
the U.S. research and development facility, and the repurchase of
LSI Logic K.K. minority owned stock. Net capital expenditures for
the six months ended June 30, 1994 totaled approximately $53.8
million. Management expects net capital expenditures of
approximately $80 to $100 million for the second half of 1994.
Financing activities generated $137.8 million of cash and
equivalents during the first half of 1994 compared to $36.4 million
for the same period of 1993. The Company repaid Japanese and
European debt totaling approximately $16.3 million during the first
half of 1994. In addition, the Company issued $143.8 million of 5-
1/2% Convertible Subordinated Notes due in 2001. The Notes are
subordinated to all existing and future senior debt, are
convertible at any time after 60 days following issuance into
shares of the Company's common stock at a conversion price of
$24.50 per share, and are redeemable at the option of the Company,
in whole or in part, at any time on or after March 18, 1997. Each
holder of these Notes has the right to cause the Company to
repurchase all of such holder's Notes at 100% of their principal
amount plus accrued interest subject to certain events and
circumstances. Interest is payable semiannually. The proceeds
from this offering will be used for capital expenditures and for
general corporate purposes.
Effective January 3, 1994, the Company adopted the Statement of
Financial Accounting Standards No. 115 (SFAS 115), "Accounting for
Certain Investments in Debt and Equity Securities." This statement
requires investments in debt and equity securities to be classified
as "held-to-maturity," "trading," or "available-for-sale."
Investments in debt and equity securities classified as
held-to-maturity are reported at amortized cost; securities
classified as trading are reported at fair value with unrealized
gains and losses included in earnings; and, securities available-
for-sale are reported at fair value with unrealized gains and
losses, net of related tax, if any, reported as a separate
component of stockholders' equity. Realized gains and losses are
based on the book value of specific securities sold. The
cumulative effect of adoption is considered to be immaterial.
During the first half of 1994 the Company continued its strategic
consolidation of worldwide operations contemplated by the Company's
1992 restructuring. Cash outlays during this period were not
material. As the Company's discontinued German manufacturing
facility remains unsold at this time, management has determined
that additional reserves are necessary to further write-down the
facility to its estimated net realizable value. In the second
quarter of 1994, the Company delayed the phase-out of its
manufacturing facility in the U.S. in response to unexpected levels
of customer demand. Management has determined that remaining
reserves attributable to this facility may not need to be fully
utilized. As excess reserves associated with the U.S. facility
offset the reserves needed in connection with the German facility,
overall restructuring reserves remaining at June 30, 1994 are
considered adequate to cover uncertainties associated with the
completion of the 1992 restructuring.
The Company believes that existing liquid resources and funds
generated from operations combined with its ability to borrow funds
will be adequate to meet its operating requirements and payment of
restructuring liabilities in the foreseeable future.
Part II
Item 1 Legal Proceedings
Reference is made to Item 3, Legal Proceedings, of the
Company's Annual Report on Form 10K for the fiscal year ended
January 2, 1994 for a discussion of certain pending legal
proceedings. The information provided at such reference remains
unchanged except as follows. Various pretrial motions in the Texas
Instruments Incorporated litigation matter were filed during the
first quarter of 1994, including motions regarding the
significance, if any, of the prior ITC action on the District Court
action. In August 1994, the judge in the District Court action
denied all of the pretrial motions and a trial is expected in
April, 1995.
Item 4 Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders of LSI Logic Corporation
was held on May 6, 1994 in Milpitas, California. Of the total of
50,148,844 shares outstanding as of record date, 39,845,813 were
present or represented by proxies at the meeting. The table below
presents the results of the election of the Company's board of
directors:
<TABLE>
<CAPTION>
Votes Votes
For Withheld
<S> <C> <C>
Wilfred J. Corrigan 39,728,293 117,520
Malcolm R. Currie 39,727,029 118,784
T. Z. Chu 39,726,084 119,729
James H. Keyes 39,728,599 117,214
R. Douglas Norby 39,723,699 122,114
</TABLE>
The stockholders approved an amendment to the Employee
Stock Purchase Plan, which increased the number of shares of
common stock reserved for issuance thereunder by 700,000 shares.
The proposal received 38,336,242 affirmative votes, 1,287,580
negative votes, 221,791 abstentions and 200 non votes.
The stockholders approved an amendment to the 1991 Equity
Incentive Plan, which increased the number of shares of common
stock reserved for issuance thereunder by 1,500,000 shares. The
proposal received 33,308,797 affirmative votes, 6,318,061 negative
votes, 218,755 abstentions and 200 non votes.
The stockholders ratified appointment of Price Waterhouse
as the Company's independent accountants for the fiscal year ending
January 1, 1995. The proposal received 39,621,002 affirmative
votes, 43,920 negative votes, 180,691 abstentions and 200 non
votes.
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits
11.1 Calculation of Earnings Per Share
(b) Reports on Form 8-K
None.
Signatures
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
LSI LOGIC CORPORATION
(Registrant)
By /s/ Albert A. Pimentel
Albert A. Pimentel
Senior Vice President Finance &
Chief Financial Officer
Date: August 16, 1994
<TABLE>
<CAPTION>
Exhibit 11.1
LSI LOGIC CORPORATION
CALCULATION OF EARNINGS PER SHARE
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Primary Earnings Per Share
Net income $23,438 $13,070 $42,793 $23,685
Average common and common
equivalent shares:
Average common shares
outstanding 51,492 47,194 50,343 46,447
Dilutive options 1,620 1,680 1,606 1,690
53,112 48,874 51,949 48,137
Earnings per common and
common equivalent share $ 0.44 $ 0.27 $ 0.82 $ 0.49
Fully Diluted Earnings Per share
Net income $23,438 $42,793
Interest expense on
convertible subordinated
debt, net of tax effect 2,514 3,843
Adjusted net income $25,952 $46,636
Average common and common
equivalent shares on a fully
diluted basis:
Average common shares
outstanding 51,492 50,343
Convertible subordinated
debt 10,779 8,334
Dilutive options 1,780 1,668
64,051 60,345
Fully diluted earnings
per common and common
equivalent share $ 0.41 $ 0.77
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