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 March 30, 1997
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 April 25, 1997 there were 141,539,089 shares of registrant's Common Stock,
$.01 par value, outstanding.
<PAGE>
LSI LOGIC CORPORATION
Form 10-Q
FOR THE QUARTER ENDED MARCH 30, 1997
INDEX
Page
No.
PART I Financial Information
Item 1 Financial Statements
Consolidated Condensed Balance Sheets - March 31, 1997
and December 31, 1996 3
Consolidated Condensed Statements of Operations - Three-
Month Periods Ended March 31, 1997 and 1996 4
Consolidated Condensed Statements of Cash Flows - Three-
Month Periods Ended March 31, 1997 and 1996 5
Notes to Consolidated Condensed 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 6 Exhibits and Reports on Form 8-K 13
<PAGE>
PART I
Item 1. Financial Statements
<TABLE>
<CAPTION>
LSI LOGIC CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands, except per share amount)
(Unaudited)
March 31, December 31,
1997 1996
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 214,377 $ 147,059
Short-term investments 544,210 570,223
Accounts receivable, less allowance for
doubtful accounts of $3,961 and $3,116 185,628 184,977
Inventories 80,723 90,410
Other current assets 69,508 58,385
----------- -----------
Total current assets 1,094,446 1,051,054
Property and equipment, net 803,424 811,659
Other assets 93,367 90,001
----------- -----------
Total assets $ 1,991,237 $ 1,952,714
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 134,139 $ 104,109
Accrued salaries, wages and benefits 35,509 26,000
Other accrued liabilities 47,741 67,921
Income taxes payable 79,999 77,696
Current portion of long-term obligations
and short-term borrowings 46,776 69,612
----------- -----------
Total current liabilities 344,164 345,338
----------- -----------
Long-term obligations 159,572 281,136
----------- -----------
Deferred income taxes 8,351 4,907
----------- -----------
Minority interest in subsidiaries 4,914 5,114
----------- -----------
Commitments and contingencies - -
----------- -----------
Stockholders' equity:
Preferred shares; 2,000 shares authorized - -
Common stock; $.01 par value; 250,000 shares
authorized; 141,142 and 129,006 shares outstanding 1,411 1,290
Additional paid-in capital 981,153 837,151
Retained earnings 490,781 452,374
Cumulative translation adjustment 891 25,404
----------- -----------
Total stockholders' equity 1,474,236 1,316,219
----------- -----------
Total liabilities and stockholders' equity $ 1,991,237 $ 1,952,714
=========== ===========
See accompanying notes to unaudited consolidated condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LSI LOGIC CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
1997 1996
<S> <C> <C>
Revenues $ 308,388 $ 311,352
Costs and expenses:
Cost of revenues 164,120 176,849
Research and development 50,384 40,945
Selling, general and administrative 45,058 41,185
---------- ----------
Total costs and expenses 259,562 258,979
---------- ----------
Income from operations 48,826 52,373
Interest expense (1,497) (3,208)
Interest income and other 6,087 9,627
---------- ----------
Income before income taxes 53,416 58,792
Provision for income taxes 15,009 16,508
---------- ----------
Net income $ 38,407 $ 42,284
========== ==========
Net income per share:
Primary $ 0.29 $ 0.32
========== ==========
Fully diluted $ 0.28 $ 0.31
========== ==========
Common share and common share equivalents
used in computing per share amounts:
Primary 132,789 131,774
========== ==========
Fully diluted 143,933 143,509
========== ==========
See accompanying notes to unaudited consolidated condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LSI LOGIC CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31,
1997 1996
<S> <C> <C>
Operating activities:
Net income $ 38,407 $ 42,284
Adjustments:
Depreciation and amortization 39,649 33,310
Minority interest in net income of subsidiaries 185 149
Change in:
Accounts receivable (5,888) 3,429
Inventories 7,094 12,736
Other assets (9,553) 3,904
Accounts payable 32,659 (6,372)
Accrued and other liabilities 3,582 1,421
Accrued restructuring costs - (134)
---------- ----------
Net cash provided by operating activities 106,135 90,727
Investing activities:
Purchases of debt and equity securities (252,544) (290,446)
Maturities and sales of debt and equity securities 278,283 256,746
Purchase of restricted equity securities (4,395) (6,252)
Purchases of property and equipment, net of retirements
and refinancings (71,565) (85,415)
Acquisition of stock from minority interest holders - (664)
---------- ----------
Net cash used for investing activities (50,221) (126,031)
Financing activities:
Proceeds from borrowings 34,193 78,176
Repayment of debt obligations (20,308) (45,920)
Issuance of common stock 2,414 6,447
Repurchase of common stock - (27,241)
---------- ----------
Net cash provided by financing activities 16,299 11,462
Effect of exchange rate changes on cash and cash
equivalents (4,895) (2,550)
---------- -----------
Increase (decrease) in cash and cash equivalents 67,318 (26,392)
Cash and cash equivalents at beginning of period 147,059 172,780
---------- ----------
Cash and cash equivalents at end of period $ 214,377 $ 146,388
========== ==========
See accompanying notes to unaudited consolidated condensed financial statements.
</TABLE>
<PAGE>
LSI LOGIC CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - in the opinion of the Company, the accompanying unaudited
consolidated condensed 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 consolidated financial statements and
accompanying notes included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1996.
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 unaudited consolidated
condensed financial statements refer to the quarter's calendar month
end for convenience. The results of operations for the quarter ended
March 31, 1997 are not necessarily indicative of the results to be
expected for the full year.
One customer represented 20% of the Company's consolidated revenue
during the first quarter of 1997.
Note 2 - Cash equivalents and short-term investments at March 31, 1997,
consisted primarily of U.S. and foreign corporate debt securities,
commercial paper, U.S. government and agency securities, auction rate
preferred stock, and time deposits. Cash equivalents and short-term
investments held at March 31, 1997 and at December 31, 1996 approximate
fair market value. As of March 31, 1997, contractual maturities of
available-for-sale securities were $469 million and $75 million maturing
within one year and between one to five years, respectively. The Company
currently does not actively trade securities. Realized gains and losses are
based on book value of specific securities sold and were not material
during the quarters ended March 31, 1997 and 1996.
Note 3 - The Company has foreign subsidiaries which operate and sell the
Company's products in various global markets. As a result, the Company is
exposed to changes in foreign currency exchange rates and interest rates.
The Company utilizes various hedge instruments, primarily forward exchange,
currency swap, interest rate swap and currency option contracts, to manage
its exposure associated with firm intercompany and third-party transactions
and net asset and liability positions denominated in non-functional
currencies. The Company does not speculate in these financial instruments
for profit on exchange rate price fluctuations.
As of March 31, 1997, the Company has several interest rate swap contracts
outstanding which convert the interest associated with 22.25 billion yen
($180 million) of borrowings by the Company's Japanese manufacturing
subsidiary from adjustable to fixed rates (ranging from 2.65% to 3.24%).
The interest rate swaps cover payments to be made under term borrowings
through 2001.
The following table summarizes by major currency the forward exchange and
currency swap contracts outstanding (in thousands). The "buy" amounts
represent the U.S. dollar equivalent of commitments to purchase foreign
currencies, and the "sell" amounts represent the U.S. dollar equivalent of
commitments to sell foreign currencies. Foreign currency amounts are
translated at rates current at March 31, 1997.
<TABLE>
<CAPTION>
March 31, December 31,
Buy/(Sell): 1997 1996
<S> <C> <C>
Japanese Yen $ 8,083 $ 7,337
U.S. Dollar (8,146) (7,398)
</TABLE>
These forward exchange and currency swap contracts are considered
identifiable hedges. Realized and unrealized gains and losses are deferred
until settlement of the underlying commitments and are recorded in income
as part of the purchase or sale transaction when it is recognized, or as
other gains or losses when a hedged transaction is no longer expected to
occur. Deferred foreign exchange gains and losses were not material at
March 31, 1997 and December 31, 1996.
Note 4 -Balance sheet and cash flow information (in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
<S> <C> <C>
Inventories:
Raw materials $ 21,569 $ 19,540
Work-in-process 45,605 53,785
Finished goods 13,549 17,085
----------- -----------
Total $ 80,723 $ 90,410
=========== ===========
<S> <C> <C>
March 31, March 31,
1997 1996
Cash Paid for:
Income taxes $ 22,000 $ 7,800
Interest 5,500 5,800
</TABLE>
During the three month period ended March 31, 1997, the Company capitalized
$2.9 million related to preproduction engineering costs for its Gresham,
Oregon manufacturing facility.
Note 5 - On February 21, 1997, the Company called for redemption of all of
its $144 million, 5 1/2% Convertible Subordinated Notes (Notes). The Notes
were convertible to common stock at a price of $12.25 per share. All Notes
were converted on March 24, 1997 for 11.7 million shares of common stock.
Note 6 - Statement of Financial Accounting Standards No. 128 (FAS 128),
"Earnings Per Share (EPS)", was issued in February 1997. Under FAS 128, the
Company will be required to disclose basic EPS and diluted EPS for all
periods for which an income statement is presented, which will replace
disclosure currently being made for primary EPS and fully-diluted EPS. FAS
128 requires adoption for fiscal periods ending after December 15, 1997.
Pro forma disclosure of basic EPS and diluted EPS for the current reporting
and comparable period in the prior year is as follows:
<TABLE>
<CAPTION>
Three months ended
March 31,
1997 1996
<S> <C> <C>
Earnings Per Share:
Basic $ 0.30 $ 0.33
Diluted $ 0.28 $ 0.31
</TABLE>
Note 7 - During the first quarter of 1997, the Company's Japanese sales
affiliate sold approximately $27.3 million of its accounts receivables
through non-recourse financing programs with two Japanese banks. These
receivables were discounted at short-term Yen borrowing rates (averaging
approximately 0.4%) and related fees were not material.
Note 8 - A discussion of certain pending legal proceedings is included in
Item 3 of the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996. The information provided therein remains
unchanged. The Company continues to believe that the final outcome of such
matters discussed will not have a material adverse effect on the Company's
consolidated financial position or results of operations. No assurance can
be given, however, that these matters will be resolved without the Company
becoming obligated to make payments or to pay other costs to the opposing
parties, with the potential for having an adverse effect on the Company's
financial position or its results of operations.
Certain additional claims and litigation against the Company have also
arisen in the normal course of business. The Company believes that it is
unlikely that the outcome of these claims and lawsuits will have a
materially adverse effect on the Company's consolidated financial position
or results of operations.
<PAGE>
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
General
The Company believes that its future operating results are and 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, price
erosion, competitive factors, the availability and extent of utilization
of manufacturing capacity, fluctuations in manufacturing yields, the timing
of new product introductions, changes in product mix, product obsolescence
and the ability to develop and implement new technologies. The Company's
operating results could also be impacted by sudden fluctuations in customer
requirements, currency exchange rate fluctuations and other economic
conditions affecting customer demand and the cost of operations in one or
more of the global markets in which the Company does business. 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 primarily 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 satisfy 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.
The Company currently has international subsidiaries which operate and sell
the Company's products in various global markets. The Company purchases
a substantial portion of its raw materials and equipment from foreign
suppliers, and incurs labor and other operating costs, particularly at its
Japanese manufacturing facility, in foreign currencies. As a result, the
Company is exposed to international factors such as changes in foreign
currency exchange rates or economic conditions of the respective countries
in which the Company operates. The Company utilizes various instruments,
primarily forward exchange, currency swap and currency option contracts,
to manage exposure associated with firm intercompany and third party
transactions and net asset and liability positions denominated in non-
functional currencies. At March 31, 1997, the Company had forward exchange
contracts outstanding (see Note 3 to the Unaudited Consolidated Condensed
Financial Statements). Despite its hedging activities, the Company
continues to be exposed to the risks associated with fluctuation of foreign
currency exchange rates, particularly the Japanese yen. There can be no
assurance that such fluctuation will not cause a material adverse effect
on the Company's financial position or results of operations.
The Company's corporate headquarters and manufacturing facilities are
located near major earthquake faults. As a result, in the event of a major
earthquake the Company could suffer damage which could materially and
adversely affect the operating results and financial condition of the
Company.
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 1996 Annual
Report on Form 10-K for the year ended December 31, 1996.
Statements in this discussion and analysis contain forward looking
information and involve known and unknown risks and uncertainties, which
may cause the Company's actual results in future periods to be materially
different from any future performance suggested herein. In addition to the
factors discussed above, such factors may include, but may not necessarily
be limited to fluctuations in customer demand, both in timing and volumes,
and fluctuations in currency exchange rates. Also, the Company's ability
to have available an appropriate amount of production capacity in a timely
manner can significantly impact the Company's financial performance. The
timing of new technology and product introductions and the risk of early
obsolescence are also important factors. Further, the Company operates in
an industry sector where securities values are highly volatile and may be
influenced by economic and other factors beyond the Company's control. (See
additional discussion contained in "Risk Factors", set forth in Part 1 of
the Company's report on Form 10-K for the year ended December 31, 1996.)
Results of Operations
Revenues declined $3.0 million or 1% to $308.4 million during the first
quarter of 1997 compared to revenues in the same period in 1996. The
decline in revenues was primarily due to lower average selling prices when
expressed in dollars, partially offset by an increase in the number of
units sold. One customer represented 20% of the Company's consolidated
revenue during the first quarter of 1997.
Key elements of the statements of operations, expressed as a percentage of
revenues, were as follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1997 1996
<S> <C> <C>
Gross margin 46.8% 43.2%
Research and development expenses 16.3% 13.2%
Selling, general and administrative expenses 14.6% 13.2%
Income from operations 15.8% 16.8%
</TABLE>
Gross margin increased to 46.8% during the first quarter of 1997 from 43.2%
in the same period a year ago. The increase was primarily related to
increased manufacturing yields, largely attributable to the installation
of chemical mechanical polishing equipment by the Company during the fourth
quarter of 1996 and improvement in capacity utilization. Although the
average yen exchange rate for the first quarter of 1997 weakened by
approximately 14% from the same period in 1996, the effect on gross margin
and net income was not material due to the Company's yen denominated sales
offsetting a substantial portion of its yen denominated costs and the
Company's hedging a significant portion of its remaining yen exposures
during these periods. However, there can be no assurance that future
changes in the relative strength of the yen or mix of foreign denominated
revenues, as well as expenses, will not have a material effect on gross
margin or operating results.
The Company's operating environment, combined with the resources required
to operate in the semiconductor industry, requires managing a wide variety
of factors such as factory and capacity utilization, manufacturing yields,
product mix, availability of certain raw materials, terms negotiated with
third-party subcontractors and foreign currency exchange rate fluctuations.
Gross margin for the first quarter of 1997 may not be indicative of
expected results for the remainder of the fiscal year.
The Company is currently constructing a new manufacturing facility in
Gresham, Oregon. This new facility is expected to become operational during
the first quarter of 1998 to accommodate anticipated future capacity
requirements, based on current capacity availability. If demand does not
absorb the Company's available capacity at a sufficient rate, or if
achieved, such demand is not sustained, the Company's gross margin and
operating results could be negatively impacted in future periods.
Research and development (R&D) expenses increased approximately $9.4
million to $50.4 million during the first quarter of 1997 compared to the
same period in 1996. The increase in R&D expenses is primarily attributed
to increased compensation and staffing levels and expansions of the
Company's design centers as the Company continues to develop higher
technology sub-micron products and the related manufacturing processes,
packaging and design processes. As a percentage of revenues, R&D expenses
increased to approximately 16.3% in the first quarter of 1997 compared to
13.2% of the same period of 1996. As the Company continues its commitment
to technological leadership in the high performance semiconductor market,
it anticipates to continue with an investment rate in R&D of approximately
15% to 17% of revenues throughout the remainder of 1997.
Selling, general and administrative (SG&A) expenses increased $3.9 million
to $45.1 million during the first quarter of 1997 compared to the same
period in 1996. SG&A expenses increased as a percentage of revenues to
14.6% in the first quarter of 1997 compared to 13.2% for the same period
in 1996. The increase in total SG&A expenses was primarily due to increased
compensation levels and information technology costs relating to upgrading
the Company's business systems and infrastructure. The Company expects that
SG&A expenses will increase in absolute dollars although such expenses may
fluctuate as a percentage of revenue on a quarterly basis.
Interest expense decreased $1.7 million to $1.5 million during the first
quarter of 1997 compared to the same period in 1996. The decrease is
primarily attributed to interest capitalized as part of the construction
at the new manufacturing facility in Gresham, Oregon.
Interest income and other decreased $3.5 million to $6.1 million during the
first quarter of 1997 compared to the same period in 1996. The decrease
is primarily attributable to fixed asset disposals.
The Company recorded a provision for income taxes for the first quarter of
1997 with an effective rate of 28%, the same as in the first quarter of
1996. The Company's effective tax rate is lower than the U.S. statutory
rate primarily due to the Company's expected earnings mix in its foreign
subsidiaries which are taxed at lower rates and anticipated utilization of
available tax credits.
Financial Condition and Liquidity
The Company's cash, cash equivalents and short-term investments increased
$41.3 million during the first quarter of 1997 to $758.6 million from
$717.3 million at the end of 1996. The increase is primarily due to cash
provided from operations and net proceeds from short term investment and
borrowings, offset partially by purchases of fixed assets. Working capital
increased $44.6 million to $750.3 million at March 31, 1997 from $705.7
million at December 31, 1996.
During the first quarter of 1997, the Company generated $106.1 million of
cash and cash equivalents from its operating activities compared with $90.7
cash and cash equivalents provided from operating activities during the
first quarter of 1996. Cash and cash equivalents used for investing
activities during the first quarter of 1997 were $50.2 million compared to
$126.0 million during the same period in 1996. The decrease was primarily
attributable to a $59.4 million decrease in the net activity of short-term
investments and a $13.9 million decrease in the net activity of fixed asset
purchases during the first quarter of 1997 compared to the same period in
1996. Cash and cash equivalents provided by financing activities during
the first quarter of 1997 were $16.3 million compared to $11.5 million in
the first quarter of 1996. The increase is primarily attributed to the
fact that the Company did not repurchase common stock during the first
quarter of 1997, while the repurchase of common stock during the first
quarter of 1996 had utilized $27.2 million. The increase is partially
offset by a decrease of $18.3 million in net borrowings during the first
quarter of 1997 compared to the same period of 1996.
Net property and equipment was $803.4 million at March 31, 1997, a decrease
of $8.3 million compared to $811.7 million at the end of 1996. The
decrease was primarily due to $34.8 million of depreciation on fixed assets
and $45.0 million due to the effect of translation and assets transferred
to operating leases. The decrease was partially offset by $71.6 million
of fixed asset purchases (primarily construction costs related to the
Company's new wafer fabrication facility in Oregon) net of retirements.
Management expects net capital additions (excluding operating leases) to
approximate $500 million during 1997.
In December 1996, the Company entered into a credit arrangement with
several banks for a $300 million revolving line of credit expiring in
December 1999. The agreement allows for borrowings at an adjustable
interest rate. Interest payments are due quarterly. The agreement includes
financial covenants relating to senior debt ratio, quick ratio, debt
service ratio, subordinated debt and tangible net worth. At March 31, 1997,
the Company did not have any borrowings outstanding under this credit
agreement. In addition, the Company's Japanese manufacturing subsidiary,
JSI, has a 25 billion yen credit line arrangement with adjustable interest
rates and covenants relating to profitability, tangible net worth, working
capital, senior and total debt leverage and subordinated indebtedness.
Borrowings under the line of credit are for a term of five years with
principle payments due semiannually beginning in July 1997. All borrowings
under this credit line have been converted to fixed rates through the use
of interest rate swaps (see Note 3 of Notes to Unaudited Consolidated
Condensed Financial Statements). As of March 31, 1997, the Company had
22.25 billion yen ($180 million) outstanding under the facility and the
Company was in compliance with the covenants. Each of the Company's
significant foreign affiliates has lines of credit available for local
currency borrowings. These foreign bank lines of credit were not material
as of March 31, 1997.
In February 1997, the Company called its $144 million of 5 1/2% Convertible
Subordinated Notes (Convertible Notes). The holders of the Convertible
Notes elected to convert the Convertible Notes to common stock at a
conversion price of $12.25 per share. The conversion resulted in the
issuance of 11.7 million shares of common stock. (See Note 5 of Notes to
Unaudited Consolidated Condensed Financial Statements).
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 and capital requirements and obligations through the
foreseeable future. The Company believes that its level of financial
resources is an important competitive factor in its industry. Accordingly,
the Company may, from time to time, seek additional equity or debt
financing. However, there can be no assurance that such additional
financing will be available when needed or, if available, will be on
favorable terms. Any future equity financing will decrease existing
stockholders' percentage equity ownership and may, depending on the price
at which the equity is sold, result in dilution.
<PAGE>
Part II
Item 1 Legal Proceedings
Reference is made to Item 3, Legal Proceedings, of the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1996 for a
discussion of certain pending legal proceedings. The information provided
at such reference remains unchanged. The Company continues to believe that
the final outcome of such matters will not have a material adverse effect
on the Company's consolidated financial position or results of operations.
No assurance can be given, however, that these matters will be resolved
without the Company becoming obligated to make payments or to pay other
costs to the opposing parties, with the potential for having an adverse
effect on the Company's financial position or its results of operations.
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits
11.1 Calculation of Earnings Per Share
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None
<PAGE>
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)
Date: May 5, 1997 By /s/ R. Douglas Norby
R. Douglas Norby
Executive Vice President Finance &
Chief Financial Officer
<PAGE>
<TABLE>
<CAPTION>
LSI LOGIC CORPORATION
CALCULATION OF EARNINGS PER SHARE
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
1997 1996
<S> <C> <C>
Primary Earnings Per Share
Net income $ 38,407 $ 42,284
======== ========
Average common and common equivalent shares:
Average common shares outstanding 129,285 129,193
Dilutive options 3,504 2,581
-------- --------
132,789 131,774
======== ========
Earnings per common and common equivalent
share $ 0.29 $ 0.32
======== ========
Fully Diluted Earnings Per share
Net income $ 38,407 $ 42,284
Interest expense on convertible subordinated
debt, net of tax effect 1,279 1,542
-------- --------
Adjusted net income $ 39,686 $ 43,826
======== ========
Average common and common equivalent shares
on a fully diluted basis:
Average common shares outstanding 129,285 129,193
Convertible subordinated debt 11,735 11,734
Dilutive options 2,913 2,582
-------- --------
143,933 143,509
======== ========
Fully diluted earnings per common and common
equivalent share $ 0.28 $ 0.31
======== ========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 214,377
<SECURITIES> 544,210
<RECEIVABLES> 189,589
<ALLOWANCES> 3,961
<INVENTORY> 80,723
<CURRENT-ASSETS> 1,094,446
<PP&E> 1,347,137
<DEPRECIATION> 543,713
<TOTAL-ASSETS> 1,991,237
<CURRENT-LIABILITIES> 344,164
<BONDS> 0
<COMMON> 1,411
0
0
<OTHER-SE> 1,472,825
<TOTAL-LIABILITY-AND-EQUITY> 1,991,237
<SALES> 308,388
<TOTAL-REVENUES> 308,388
<CGS> 164,120
<TOTAL-COSTS> 164,120
<OTHER-EXPENSES> 95,442
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,497
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</TABLE>
