<PAGE> 1
Filed pursuant to Rule 424(b)(1)
Registration Statement No. 33-57629
PROSPECTUS
2,750,000 SHARES
[LOGO] LSI LOGIC CORPORATION
COMMON STOCK
------------------------
All of the 2,750,000 shares of Common Stock offered hereby are being sold
by LSI Logic Corporation
(the "Company").
The Company's Common Stock is traded on the New York Stock Exchange
("NYSE") under the symbol "LSI." On February 14, 1995, the last reported sale
price of the Company's Common Stock on the NYSE was $52 per share. See "Price
Range of Common Stock."
------------------------
See "Certain Factors" for certain factors relevant to an investment in the
Common Stock offered hereby.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Price to Underwriting Discounts Proceeds to
Public and Commissions(1) Company(2)
- -----------------------------------------------------------------------------------------------------
Per Share....................... $52.00 $2.07 $49.93
- -----------------------------------------------------------------------------------------------------
Total(3)........................ $143,000,000 $5,692,500 $137,307,500
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
</TABLE>
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(2) Before deducting estimated expenses of $300,000 payable by the Company.
(3) The Company has granted the Underwriters a 30-day option to purchase up to
412,500 additional shares of Common Stock on the same terms and conditions
as set forth above, solely to cover over-allotments, if any. If such option
is exercised in full, the total Price to Public, Underwriting Discounts and
Commissions and Proceeds to Company will be $164,450,000, $6,546,375, and
$157,903,625, respectively. See "Underwriting."
------------------------
The shares of Common Stock offered by this Prospectus are offered by the
Underwriters subject to prior sale, to withdrawal, cancellation or modification
of the offer without notice, to delivery to and acceptance by the Underwriters
and to certain other conditions. It is expected that delivery of the
certificates for the shares of Common Stock will be made at the offices of
Lehman Brothers Inc., New York, New York, on or about February 22, 1995.
------------------------
LEHMAN BROTHERS
GOLDMAN, SACHS & CO.
MONTGOMERY SECURITIES
PRUDENTIAL SECURITIES INCORPORATED
February 14, 1995
<PAGE> 2
AVAILABLE INFORMATION
LSI Logic Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy and information statements and other
information with the Securities and Exchange Commission (the "Commission").
Reports, proxy statements and other information filed by the Company with the
Commission pursuant to the Exchange Act may be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices
located at Seven World Trade Center, 13th Floor, New York, New York 10048 and at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material also can be obtained from the Public Reference Branch of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Such reports, proxy statements and other information can also be
inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street,
New York, New York 10005.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is hereby made to the Registration Statement.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed with the Commission (File No. 0-11674)
pursuant to the Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
January 1, 1995 filed pursuant to Section 13 of the Exchange Act.
2. The Company's Definitive Proxy Statement dated March 25, 1994 in
connection with the Annual Meeting of Stockholders held May 6, 1994
filed pursuant to Section 14 of the Exchange Act.
3. Report on Form 8-K, dated January 26, 1995, filed pursuant to Section 13
of the Exchange Act.
4. The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A filed with the Commission on August
29, 1989 pursuant to Section 12(b) of the Exchange Act.
5. The description of the Company's Preferred Shares Purchase Rights
contained in its Registration Statement on Form 8-A filed with the
Commission on November 21, 1988 pursuant to Section 12(a) of the
Exchange Act.
6. All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of this Prospectus and prior to the termination of this
offering. Any statement incorporated herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein, in a Prospectus Supplement or in any
other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement.
Any statement so modified or superseded shall not be deemed, except as
so modified or superseded, to constitute a part of the Registration
Statement or this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or oral
request of such person, a copy of any and all of the documents which are
incorporated herein by reference (other than exhibits to such documents, unless
such exhibits are specifically incorporated by reference into such document).
Requests for such documents should be directed to LSI Logic Corporation,
Investor Relations, 1551 McCarthy Boulevard, Mail Stop D-105, Milpitas,
California 95035, or by calling (408) 433-8585.
------------------------
The LSI Logic logo and CoreWare are registered trademarks of the Company.
All other brand names or trademarks appearing in this Prospectus are the
property of their respective holders.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
2
<PAGE> 3
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and consolidated financial statements, including notes thereto,
appearing elsewhere in, or incorporated by reference into, this Prospectus.
Unless otherwise indicated, the information contained in this Prospectus assumes
no exercise of the Underwriters' over-allotment option.
THE COMPANY
LSI Logic Corporation (the "Company") is a leader in the design,
development, manufacture and marketing of high performance application-specific
integrated circuits ("ASICs"). The Company uses advanced process technology and
computer-aided design methodology to design and develop highly complex ASICs and
other integrated circuits. The Company's sub-micron process technologies
combined with its product libraries, including CoreWare libraries, provide the
Company with the ability to integrate system level solutions on a single chip.
The Company focuses its product marketing strategy primarily on original
equipment manufacturers in the electronic data processing, telecommunications
and certain office automation industries and, within these industries,
emphasizes digital video, networking, desktop and personal computing and
wireless communication applications. The Company increasingly directs its
marketing and selling efforts towards a limited number of customers that are
acknowledged industry leaders in these markets. The Company's customers include
Alcatel NV, AT&T, Cisco Systems, Inc., Compaq Computer Corporation, Digital
Equipment Corporation, Hewlett-Packard Company, International Business Machines
Corporation, Intel Corporation, Matsushita Electric Industrial Co., Ltd.,
Newbridge Networks Corporation, Oki Electric Industry Co., Ltd., Siemens AG,
Silicon Graphics, Inc., Sony Corporation and Sun Microsystems, Inc.
THE OFFERING
<TABLE>
<S> <C>
Common Stock offered by the Company.......... 2,750,000 shares
Common Stock to be outstanding after the
offering................................... 59,893,581 shares(1)
NYSE Symbol.................................. LSI
Use of Proceeds.............................. Capital expenditures and general corporate purposes.
See "Use of Proceeds."
</TABLE>
- ---------------
(1) Based on shares outstanding at December 31, 1994. Excludes 3,677,353 shares
issuable as of December 31, 1994 upon exercise of options granted under the
Company's 1991 Equity Incentive Plan, 1982 Incentive Stock Option Plan and
1986 Directors' Stock Option Plan. Also excludes 5,867,350 shares reserved
for issuance upon conversion of the Company's 5 1/2% Convertible
Subordinated Notes due 2001.
3
<PAGE> 4
CERTAIN FACTORS
In addition to the other information in this Prospectus and incorporated
herein by reference, the following factors should be carefully considered in
evaluating the Company and its business before purchasing shares of Common Stock
offered hereby.
DEPENDENCE ON NEW PROCESS TECHNOLOGIES AND PRODUCTS. The Company believes
that its future success depends, in part, on its ability to improve its existing
technologies and to develop and implement new process technologies in order to
continue to reduce semiconductor die size, improve device performance and
manufacturing yields, adapt products and processes to technological changes and
adopt emerging industry standards. If the Company is not able to successfully
implement new process technologies and achieve volume production of new products
at acceptable yields using new manufacturing processes, the Company's operating
results will be adversely affected. In addition, the Company must continue to
develop and introduce new products that compete effectively on the basis of
price and performance and that satisfy customer requirements. New product
development often requires long-term forecasting of market trends, development
and implementation of new processes and technologies and a substantial capital
commitment. The Company intends the CoreWare library elements it offers to be
based upon industry standard functions, protocols and interfaces, thereby
positioning them to be useful in a wide variety of systems applications. The
Company is increasingly emphasizing engineering development and acquisition of
CoreWare building blocks and integration of CoreWare libraries into its design
capabilities. There can be no assurance, however, that the cores selected for
investment of the Company's financial and engineering resources will be
developed or acquired in a timely manner or will enjoy market acceptance.
MANUFACTURING RISKS. Disruption of operations at any of the Company's
primary manufacturing facilities, particularly the Company's Japanese
facilities, or any of its subcontractors for any reason, including work
stoppages, fire, earthquake or other natural disasters, would cause delays in
shipments of the Company's products. There can be no assurance that alternate
capacity, particularly wafer production capacity, would be available on a timely
basis or at all, or that if available, it could be obtained on favorable terms.
The Company has been operating most of its manufacturing facilities at or close
to capacity during the last year. Although the Company currently has plans to
increase its production capacity through the installation of new production
equipment at its Japanese manufacturing facilities and its other facilities and
is evaluating other ways to increase capacity, there is no assurance that the
Company will be able to expand its manufacturing capacity to meet expected
future demand, which could result in a loss of customers and could materially
and adversely affect the Company's operating results. In addition, if demand for
the Company's products does not absorb the additional capacity, the increase in
fixed costs and operating expenses related to increases in production capacity
may materially and adversely affect the Company's operations.
FLUCTUATIONS IN OPERATING RESULTS. The Company believes that its future
operating results will continue to be subject to quarterly variations based upon
a wide variety of factors, including the cyclical nature of both the
semiconductor industry and the markets addressed by the Company's products, the
ability to develop and implement new technologies, the availability and extent
of utilization of manufacturing capacity, changes in product mix, fluctuations
in manufacturing yields, the timing of new product introductions, price erosion,
exchange rate fluctuations and other competitive factors. As a participant in
the semiconductor industry, the Company operates in a technologically advanced,
rapidly changing and highly competitive environment. The Company predominantly
sells custom products to customers operating in a similar environment.
Accordingly, changes in the conditions of any 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 and stock price. To the extent
the Company's performance may not meet expectations published by external
sources, public reaction could result in a sudden and significantly adverse
impact on the market price of the Company's securities, particularly on a
short-term basis.
COMPETITION. The semiconductor industry in general and the markets in which
the Company competes in particular are intensely competitive, exhibiting both
rapid technological changes and continued price erosion. The Company's
competitors include many large domestic and foreign companies which have
substantially greater financial, technical and management resources than the
Company, as well as emerging
4
<PAGE> 5
companies attempting to sell products to specialized markets such as those
addressed by the Company. Several major diversified electronics companies,
including Fujitsu, Ltd., Toshiba Corporation and NEC Corporation, and a number
of United States semiconductor manufacturers, including AT&T, Motorola Inc. and
Texas Instruments Incorporated, offer ASIC products or other products which are
competitive to the product lines of the Company. In addition, there is no
assurance that certain large customers, some of whom have licensed elements of
the Company's process and product technologies, will not develop internal design
and production operations to produce their own ASICs.
CURRENCY RISKS. In countries in which the Company is conducting business in
a local currency, currency exchange fluctuations could adversely affect the
Company's revenues and costs. A substantial portion of the costs of the
Company's manufacturing operations are denominated in Japanese yen. In addition,
the Company purchases a substantial portion of its raw materials and equipment
from foreign suppliers and incurs labor costs in foreign locations. A portion of
these transactions are denominated in currencies other than in U.S. dollars,
principally in Japanese yen. International sales are generally denominated in
local currencies. The Company also has borrowings denominated in yen, which
totaled approximately 14 billion yen (approximately $142 million) at December
31, 1994. Such transactions and borrowings expose the Company to exchange rate
fluctuations for the period of time from inception of the transaction until it
is settled. In recent years, the yen has fluctuated substantially against the
U.S. dollar. However, the Company has entered and will from time to time enter
into hedging transactions in order to minimize exposure to currency rate
fluctuations. There can be no assurance that such hedging transactions will
minimize exposure to currency rate fluctuations or that fluctuations in currency
exchange rates in the future will not have an adverse impact on the Company's
results of operations.
INTELLECTUAL PROPERTY AND LITIGATION. Although the Company believes that
the protection afforded by its patents, patent applications and trademarks has
value, the rapidly changing technology in the semiconductor industry makes the
Company's future success dependent primarily upon the technical competence and
creative skills of its personnel rather than on patent and trademark protection.
As is typical in the semiconductor industry, the Company has from time to time
received, and may in the future receive, communications from other parties
asserting patent rights, mask work rights, copyrights or trademark rights that
such other parties allege cover certain of the Company's products, processes,
technologies or information. Several such assertions relating to patents are in
various stages of evaluation. The Company is considering whether to seek
licenses with respect to certain of these claims. Litigation has arisen with
respect to one of these assertions. Based on industry practice, the Company
believes that licenses or other rights, if necessary, could be obtained on
commercially reasonable terms for such existing or future claims. Nevertheless,
no assurance can be given that licenses can be obtained, or if obtained will be
on acceptable terms or that litigation or other administrative proceedings will
not occur. The inability to obtain certain licenses or other rights or to obtain
such licenses or rights on favorable terms, or litigation arising out of such
other parties assertions, both existing and future, could have a material
adverse effect on the Company's future operating results.
CYCLICAL NATURE OF THE SEMICONDUCTOR INDUSTRY. The semiconductor industry
is characterized by rapid technological change, rapid product obsolescence and
price erosion. The semiconductor industry historically has been characterized by
wide fluctuations in product supply and demand. From time to time the industry
also has experienced significant downturns, often in connection with, or in
anticipation of, maturing product cycles (of both the semiconductor companies
and their customers) and declines in general economic conditions. These
downturns have been characterized by diminished product demand, production
overcapacity and subsequent accelerated erosion of average selling prices, and
in some cases, have lasted for more than a year. For example, the Company
believes that its operating results were adversely affected by an industry-wide
downturn in the demand for semiconductors beginning in 1990, culminating in the
Company's 1992 restructuring charge and reorganization of its operations.
Currently, the semiconductor industry in general, including the Company, is
experiencing a period of increased demand. There is no assurance that these
conditions will continue. The Company may experience substantial
period-to-period fluctuations in future operating results due to general
industry conditions, events occurring in the worldwide economy or a significant
industry-wide downturn.
5
<PAGE> 6
THE COMPANY
LSI Logic Corporation (the "Company") is a leader in the design,
development, manufacture and marketing of high performance application-specific
integrated circuits ("ASICs"). The Company uses advanced process technology and
computer-aided design methodology to design and develop highly complex ASICs and
other integrated circuits. The Company's sub-micron process technologies
combined with its product libraries, including CoreWare libraries, provide the
Company with the ability to integrate system level solutions on a single chip.
The Company has increasingly directed its marketing and selling efforts
toward selected customers in high growth end markets which are characterized by
increasingly shortened product cycles and ongoing changes in technological
standards and performance requirements. As a result, customers in these markets
tend to benefit from the flexibility of customized ASIC design methodology to
help differentiate their products while still complying with existing and
emerging global industry standards such as Ethernet and ATM (Asynchronous
Transfer Mode) in the networking market, PCI bus interface in the personal
computer market and MPEG2 (Motion Picture Experts Group) for video compression
applications in the digital video market.
The Company focuses its product marketing strategy primarily on original
equipment manufacturers in the electronic data processing, telecommunications
and certain office automation industries and, within these industries,
emphasizes digital video, networking, desktop and personal computing and
wireless communication applications. The Company increasingly directs its
marketing and selling efforts towards a limited number of customers that are
acknowledged industry leaders in these markets. The Company's customers include
Alcatel NV, AT&T, Cisco Systems, Inc., Compaq Computer Corporation, Digital
Equipment Corporation, Hewlett-Packard Company, International Business Machines
Corporation, Intel Corporation, Matsushita Electric Industrial Co., Ltd.,
Newbridge Networks Corporation, Oki Electric Industry Co., Ltd., Siemens AG,
Silicon Graphics, Inc., Sony Corporation and Sun Microsystems, Inc.
The Company's CoreWare product library approach and its sub-micron process
technologies permit system-level integration of functional cores or elements
including microprocessor "engines," logic blocks (including industry standard
functions, protocols and interfaces), memory and customer-specific proprietary
logic functions on a single piece of silicon. Examples of these elements include
the MIPS microprocessor core family and cores implementing Ethernet, MPEG, JPEG
and ATM standards. This methodology enables customers to improve the
performance, reliability and further differentiate their products while
shortening product development cycles, lowering development costs and optimizing
the customer's application.
The Company's proprietary computer-aided design tools are highly integrated
with the Company's manufacturing process requirements, thereby providing high
predictability that a product's physical performance will mirror the computer
simulation of the chip and affording high predictability of performance of
products developed using the Company's design methodology. The Company's
sophisticated design tools, advanced process technology and sub-micron
manufacturing capability are intended to provide customers with highly
integrated solutions that work right the first time.
The Company provides customers with a comprehensive approach and a
continuum of solutions for the design and manufacture of leading-edge ASICs.
This allows customers substantial flexibility in how they proceed with an ASIC
design project. A customer may establish product specifications for
implementation into a particular chip design by the customer's engineers, by the
Company's engineers on a "turn-key" basis or through a collaborative effort. The
Company's design environment includes expanded interface capabilities to certain
third party EDA software design tools from companies such as Cadence Design
Systems, Inc., Mentor Graphics Corporation and Synopsys, Inc.
The Company has developed and uses advanced manufacturing process
technologies, including 0.6-micron and 0.5-micron CMOS processes, for its
advanced product offerings. As process technology becomes more sophisticated,
allowing greater density and increased functionality on a single chip, the
system-on-a-chip is becoming the foundation of the Company's approach to the
marketplace.
6
<PAGE> 7
The Company believes that owning its wafer manufacturing facilities not
only provides better access to capacity but also improves quality,
cost-effectiveness, responsiveness to customers, its ability to implement
leading-edge process technology and time-to-market as compared to companies that
do not own their own wafer fabrication facilities. The Company's manufacturing
operations are located in the United States, Japan and Hong Kong. The Company
performs substantially all of its packaging, assembly and final test operations
through third party subcontractors in various locations. During 1994, the
Company's United States production operations received ISO-9002 certification,
an important international measure for quality.
The Company markets its products and services on a worldwide basis through
its direct sales, marketing and field technical staff of approximately 750
employees (including its majority-owned subsidiaries in Europe, Canada and
Japan), and through independent sales representatives and distributors. The
Company operates over 25 design centers around the world to assist customers in
product design activities. The Company's network of design centers allows the
Company to provide its customers with highly experienced engineers to interact
with its customers' engineering management and system architects to develop
designs for new products and to provide continuing after-sale customer support.
The Company was incorporated in California on November 6, 1980 and
reincorporated in Delaware on June 11, 1987. Its principal offices are located
at 1551 McCarthy Boulevard, Milpitas, California 95035, and its telephone number
at that location is (408) 433-8000. Except where otherwise indicated, references
to the "Company" means LSI Logic Corporation and its majority- and wholly-owned
subsidiaries.
7
<PAGE> 8
USE OF PROCEEDS
The net proceeds from the sale of Common Stock offered hereby are estimated
to be $137,007,500 ($157,603,625 if the Underwriters' over-allotment option is
exercised in full) after deducting the estimated underwriters' discounts and
commissions and expenses payable by the Company in connection with the offering.
The Company intends to use such net proceeds primarily to strengthen its
financial position and for capital expenditures, principally to purchase
equipment for its Japanese manufacturing facilities, and general corporate
purposes. During 1995, the Company expects to make net capital expenditures of
approximately $150 million. In addition, the Company, from time to time, may
consider acquisitions of, or investments in, complementary businesses, assets or
technologies. At the present time, however, the Company has no agreements or
understandings, nor are there any negotiations pending, with respect to any
material acquisitions. The Company believes that the net proceeds from the sale
of the Common Stock in this offering, together with existing cash balances, cash
flow from operations and available equipment lease financing, will be sufficient
to meet the Company's liquidity and capital requirements for the next 12 months.
The Company believes that success in its industry requires substantial financial
strength and flexibility. Accordingly, the Company may seek additional equity or
debt financing to fund further expansion of its fabrication capacity or for
other purposes. Pending such uses, the Company will invest the net proceeds in
short- or medium-term income producing investments.
DIVIDEND POLICY
The Company has paid no cash dividends on its Common Stock since its
incorporation and anticipates that for the foreseeable future it will continue
to retain any earnings for use in its business.
PRICE RANGE OF COMMON STOCK
The Company's Common Stock is traded on the NYSE under the symbol LSI. The
following table sets forth, for the periods indicated, high and low sale prices
for the Common Stock on the NYSE.
<TABLE>
<CAPTION>
HIGH LOW
--- ---
<S> <C> <C>
FISCAL 1993
First Quarter............................................. $14 1/8 $10 1/4
Second Quarter............................................ 15 1/2 10 1/2
Third Quarter............................................. 19 1/4 14 1/4
Fourth Quarter............................................ 17 1/8 13
FISCAL 1994
First Quarter............................................. 23 15 1/2
Second Quarter............................................ 26 3/8 16 3/4
Third Quarter............................................. 35 3/4 22 7/8
Fourth Quarter............................................ 45 3/8 34 5/8
FISCAL 1995
First Quarter (through February 14, 1995)................. 52 1/4 36 1/2
</TABLE>
On February 14, 1995, the last reported sale price of the Common Stock on
the NYSE was $52 per share. As of December 31, 1994, there were 1,732 holders of
record of the Common Stock of the Company.
8
<PAGE> 9
CAPITALIZATION
The following table sets forth the consolidated short-term debt and
capitalization of the Company at December 31, 1994 and as adjusted to give
effect to the issuance and sale by the Company of the 2,750,000 shares of Common
Stock offered hereby, and the application of the estimated net proceeds
therefrom. The financial data in the following table should be read in
conjunction with the Company's audited consolidated financial statements (and
notes thereto) at December 31, 1994, incorporated herein by reference.
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1994
------------------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS, EXCEPT SHARE
AMOUNTS)
<S> <C> <C>
Current portion of long-term debt, capital lease obligations
and short-term borrowings(1)................................. $ 24,167 $ 24,167
======== =========
Long-term debt, capital lease obligations and other
long-term liabilities, less current portion(1)............... $288,496 $ 288,496
-------- -----------
Minority interest in subsidiaries(2)........................... 122,173 122,173
-------- -----------
Stockholders' equity(3):
Preferred Stock, $.01 par value, 2,000,000 shares
authorized, none outstanding.............................. -- --
Common Stock, $.01 par value, 73,500,000 shares authorized,
57,143,581 shares issued and outstanding, 59,893,581
shares
issued and outstanding as adjusted........................ 571 599
Additional paid-in capital................................... 401,840 538,820
Retained earnings............................................ 67,070 67,070
Cumulative translation adjustment............................ 75,425 75,425
-------- -----------
Total stockholders' equity................................ 544,906 681,914
-------- -----------
Total capitalization................................. $955,575 $ 1,092,583
======== =========
</TABLE>
- ---------------
(1) For additional information regarding short-term debt, long-term debt and
stockholders' equity, see Notes 6 and 7 of Notes to Consolidated Financial
Statements included in the Company's Annual Report on Form 10-K for the
fiscal year ended January 1, 1995. See "Incorporation of Certain Documents
by Reference."
(2) Excludes the effect of the Company's January 26, 1995 acquisition of all
minority-owned common shares (a 45% interest) of its Japanese manufacturing
subsidiary as well as the defeasance of the resultant debt. These activities
had the effect of reducing minority interest in subsidiaries by $92.8
million, reducing cash by $125.9 million and increasing property and
equipment by $33.1 million.
(3) Excludes, as of December 31, 1994, (i) 2,708,519 shares reserved for
issuance upon exercise of outstanding options granted under the Company's
1991 Equity Incentive Plan and 1,395,462 shares which remain available for
future grant under such plan, (ii) 873,834 shares reserved for issuance upon
exercise of outstanding options under the Company's 1982 Incentive Stock
Option Plan, (iii) approximately 674,784 shares reserved for issuance under
the Company's Employee Stock Purchase Plan and (iv) 95,000 shares reserved
for issuance upon exercise of outstanding options granted under the 1986
Directors' Stock Option Plan and 33,750 shares which remain available for
future grant under such plan. Also excludes 5,867,350 shares of Common Stock
reserved for issuance upon conversion of the Company's 5 1/2% Convertible
Subordinated Notes due 2001, which Notes are convertible at any time at a
rate of one share of Common Stock per $24.50 principal amount of Notes
converted, subject to adjustment in certain circumstances. Excludes 100,000
shares of Preferred Stock reserved for issuance in certain circumstances in
connection with the Company's Preferred Shares Rights Agreement dated as of
November 16, 1988.
9
<PAGE> 10
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data presented below for, and as of the
end of, each of the years in the five-year period ended December 31, 1994 have
been derived from the consolidated financial statements of the Company, which
have been audited by Price Waterhouse LLP, independent accountants. The selected
consolidated financial data presented below for each of the four fiscal quarters
of 1993 and of 1994 have been derived from unaudited consolidated financial
statements of the Company. In the opinion of the Company's management, the
unaudited consolidated financial statements include all adjustments, consisting
of only normal recurring adjustments, necessary to fairly state the information
set forth therein. Such data should be read in conjunction with the consolidated
financial statements, related notes and other financial information incorporated
by reference herein. See "Incorporation of Certain Documents by Reference."
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------
1990 1991 1992 1993 1994
-------- -------- --------- -------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA(1):
Revenues................................................................ $655,491 $697,838 $ 617,468 $718,812 $ 901,830
-------- -------- --------- -------- ----------
Costs and expenses:
Cost of revenues...................................................... 443,759 457,692 408,318 438,523 520,150
Research and development.............................................. 60,196 80,802 78,825 78,995 98,978
Selling, general and administrative................................... 117,318 136,811 129,254 117,452 124,936
Restructuring of operations........................................... 44,000 5,626 101,785 -- --
-------- -------- --------- -------- ----------
Total costs and expenses............................................ 665,273 680,931 718,182 634,970 744,064
-------- -------- --------- -------- ----------
Income (loss) from operations........................................... (9,782) 16,907 (100,714) 83,842 157,766
Interest expense........................................................ (21,256) (19,371) (11,567) (9,621) (18,455)
Interest income and other............................................... 12,517 14,722 12,413 6,500 16,858
-------- -------- --------- -------- ----------
Income (loss) before income taxes, minority interest and extraordinary
credit................................................................ (18,521) 12,258 (99,868) 80,721 156,169
Provision for income taxes.............................................. 11,685 6,129 8,521 24,221 43,679
-------- -------- --------- -------- ----------
Income (loss) before minority interest and extraordinary credit......... (30,206) 6,129 (108,389) 56,500 112,490
Minority interest in net income (loss) of subsidiaries.................. 1,065 (2,212) 1,819 2,750 3,747
-------- -------- --------- -------- ----------
Income (loss) before extraordinary credit............................... (31,271) 8,341 (110,208) 53,750 108,743
Extraordinary credit resulting from the retirement of debt.............. 955 -- -- -- --
-------- -------- --------- -------- ----------
Net income (loss)....................................................... $(30,316) $ 8,341 $(110,208) $ 53,750 $ 108,743
======== ======== ========= ======== =========
Primary income (loss) per share:
Net income (loss) before extraordinary credit......................... $ (0.74) $ 0.19 $ (2.48) $ 1.09 $ 1.98
Extraordinary credit.................................................. 0.02 -- -- -- --
-------- -------- --------- -------- ----------
Net income (loss) per share........................................... $ (0.72) $ 0.19 $ (2.48) $ 1.09 $ 1.98
======== ======== ========= ======== =========
Fully diluted net income per share.................................... * * * $ 1.05 $ 1.85
======== =========
Common shares and common share equivalents used in computing per share
amounts:
Primary............................................................... 42,063 43,376 44,478 49,531 54,953
======== ======== ========= ======== =========
Fully diluted......................................................... * * * 54,813 62,714
======== =========
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-------------------------------------------------------
1990 1991 1992 1993 1994
-------- -------- --------- -------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA(2):
Working capital......................................................... $231,248 $225,193 $ 133,640 $230,513 $ 422,916
Total assets............................................................ 771,682 748,456 747,438 859,010 1,270,374
Long-term debt, capital lease obligations and other long-term
liabilities........................................................... 189,795 166,107 218,837 246,314 288,496
Stockholders' equity.................................................... 267,729 293,075 197,728 292,434 544,906
</TABLE>
10
<PAGE> 11
QUARTERLY FINANCIAL DATA(1):
<TABLE>
<CAPTION>
1993 1994
----------------------------------------- -----------------------------------------
FIRST SECOND THIRD FOURTH FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER
-------- -------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues.................................. $168,928 $177,080 $183,761 $189,043 $193,812 $212,106 $240,218 $255,694
-------- -------- -------- -------- -------- -------- -------- --------
Costs and expenses:
Cost of revenues........................ 103,921 108,246 112,001 114,355 115,387 123,337 138,219 143,207
Research and development................ 18,998 19,408 19,134 21,455 23,141 22,467 26,834 26,536
Selling, general and administrative..... 29,205 29,007 29,910 29,330 29,457 31,102 30,645 33,732
-------- -------- -------- -------- -------- -------- -------- --------
Total costs and expenses.............. 152,124 156,661 161,045 165,140 167,985 176,906 195,698 203,475
-------- -------- -------- -------- -------- -------- -------- --------
Income from operations.................... 16,804 20,419 22,716 23,903 25,827 35,200 44,520 52,219
Interest expense.......................... (2,175) (2,384) (2,538) (2,524) (3,788) (5,665) (4,822) (4,180)
Interest income and other................. 1,697 2,512 1,818 473 4,798 4,127 3,263 4,670
-------- -------- -------- -------- -------- -------- -------- --------
Income before income taxes and minority
interest................................ 16,326 20,547 21,996 21,852 26,837 33,662 42,961 52,709
Provision for income taxes................ 4,901 6,164 6,599 6,557 7,514 9,425 12,028 14,712
Minority interest in net income (loss) of
subsidiaries............................ 814 1,313 1,022 (399) (32) 799 1,465 1,515
-------- -------- -------- -------- -------- -------- -------- --------
Net income................................ $ 10,611 $ 13,070 $ 14,375 $ 15,694 $ 19,355 $ 23,438 $ 29,468 $ 36,482
======== ======== ======== ======== ======== ======== ======== ========
Primary net income per share.............. $ 0.22 $ 0.27 $ 0.29 $ 0.31 $ 0.37 $ 0.44 $ 0.52 $ 0.62
======== ======== ======== ======== ======== ======== ======== ========
Fully diluted net income per share........ * * * $ 0.30 $ 0.36 $ 0.41 $ 0.49 $ 0.59
======== ======== ======== ======== ========
Common shares and common share equivalents
used in computing per share amounts
Primary................................. 47,452 48,874 50,249 50,936 51,631 53,112 56,394 58,851
======== ======== ======== ======== ======== ======== ======== ========
Fully diluted........................... * * * 56,042 57,582 64,051 63,938 64,718
======== ======== ======== ======== ========
</TABLE>
- ---------------
* Fully diluted amount disclosures are not required because they are
substantially the same as primary amounts disclosed for these periods.
(1) The Company's fiscal year ends on the Sunday closest to December 31. For
presentation purposes, the consolidated financial statements refer to
December 31 as year end. Fiscal 1993 was a 53-week year, whereas, 1994,
1992, 1991 and 1990 were 52-week years. The fourth quarter of 1993 was a
14-week quarter, whereas the first, second and third quarters were 13-week
quarters. The additional week in the fourth quarter of 1993 did not have a
material impact on the Company's results of operations.
(2) Certain reclassifications have been made to the 1992 and 1993 consolidated
financial statements to conform to the 1994 presentation. Such
reclassifications had no effect on results of operations or stockholders'
equity. Excludes the effect of the Company's January 26, 1995 acquisition of
all minority-owned common shares (a 45% interest) of its Japanese
manufacturing subsidiary as well as the defeasance of the resulting debt.
These activities had the effect of reducing minority interest in
subsidiaries by $92.8 million, reducing cash by $125.9 million and
increasing property and equipment by $33.1 million.
11
<PAGE> 12
UNDERWRITING
The Underwriters named below (the "Underwriters") have severally agreed,
subject to the terms and conditions of the Underwriting Agreement (the form of
which is filed as an exhibit to the Registration Statement of which this
Prospectus is a part), to purchase from the Company, and the Company has agreed
to sell to each Underwriter, the aggregate number of shares of Common Stock set
forth opposite their respective names below:
<TABLE>
<CAPTION>
NUMBER OF
NAME SHARES
------------------------------------------------------------------ ---------
<S> <C>
Lehman Brothers Inc. ............................................. 687,500
Goldman, Sachs & Co. ............................................. 687,500
Montgomery Securities............................................. 687,500
Prudential Securities Incorporated................................ 687,500
---------
Total................................................... 2,750,000
========
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters to purchase shares of Common Stock are subject to certain
conditions, and that if any of the foregoing shares of Common Stock are
purchased by the Underwriters pursuant to the Underwriting Agreement, all shares
of Common Stock agreed to be purchased by the Underwriters pursuant to the
Underwriting Agreement must be so purchased.
The Company has been advised that the Underwriters propose to offer the
shares of Common Stock directly to the public initially at the public offering
price set forth on the cover page of this Prospectus, and to certain selected
dealers (who may include the Underwriters) at such public offering price less a
concession not in excess of $1.25 per share. The Underwriters may allow and the
selected dealers may reallow a concession not in excess of $0.10 per share to
certain other brokers and dealers. After the public offering, the public
offering price, the concession to selected dealers and the reallowance to other
dealers may be changed by the Underwriters.
The Company has granted to the Underwriters an option to purchase up to an
additional 412,500 shares of Common Stock at the public offering price, less the
aggregate underwriting discounts and commissions, shown on the cover page of
this Prospectus, solely to cover over-allotments, if any. The option may be
exercised at any time up to 30 days after the date of this Prospectus. To the
extent that the Underwriters exercise such option, each of the Underwriters will
be committed, subject to certain conditions, to purchase a number of option
shares proportionate to such Underwriter's initial commitment.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute to
payments that the Underwriters may be required to make in respect thereof.
The Company has agreed that without the written consent of the
Underwriters, it will not offer, sell, contract to sell or otherwise dispose of
any shares of Common Stock or any securities, convertible or exchangeable
therefor, for a period of 90 days from the date of this Prospectus, subject to
limited exceptions.
The Company's directors and executive officers, who collectively held as of
December 31, 1994 an aggregate of shares of 3,882,030 Common Stock and options
to purchase Common Stock, have agreed that without the consent of the
Underwriters they will not offer, sell, contract to sell or otherwise dispose of
any shares of Common Stock or any securities convertible into or exchangeable
therefor for a period of 30 days from the date of this Prospectus.
From time to time, certain of the Underwriters or their affiliates have
provided, and may continue to provide, investment banking services to the
Company.
12
<PAGE> 13
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for the
Company by Wilson, Sonsini, Goodrich & Rosati, Professional Corporation
("WSGR"), Palo Alto, California, and for the Underwriters by Brobeck, Phleger &
Harrison, Palo Alto, California. Larry W. Sonsini, a member of WSGR, is an
Assistant Secretary of the Company.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K for the year ended December 31,
1994, have been so incorporated in reliance on the report of Price Waterhouse
LLP, independent accountants, given on the authority of said firm as experts in
auditing and accounting.
13
<PAGE> 14
- ------------------------------------------------------
- ------------------------------------------------------
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and, if given or
made, such information or representations must not be relied upon as having been
authorized. This Prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any securities other than the securities to
which it relates or an offer to sell or a solicitation of an offer to buy such
securities in any circumstances in which such offer or solicitation is unlawful.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that there has been no change in the
affairs of the Company since the date hereof or that the information contained
herein is correct as of any time subsequent to its date.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Available Information................... 2
Information Incorporated by Reference... 2
Prospectus Summary...................... 3
Certain Factors......................... 4
The Company............................. 6
Use of Proceeds......................... 8
Dividend Policy......................... 8
Price Range of Common Stock............. 8
Capitalization.......................... 9
Selected Consolidated Financial Data.... 10
Underwriting............................ 12
Legal Matters........................... 13
Experts................................. 13
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
2,750,000 SHARES
[LOGO]
COMMON STOCK
---------------------------
PROSPECTUS
February 14, 1995
---------------------------
LEHMAN BROTHERS
GOLDMAN, SACHS & CO.
MONTGOMERY SECURITIES
PRUDENTIAL SECURITIES INCORPORATED
- ------------------------------------------------------
- ------------------------------------------------------
