-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, tC52S8vbxIFlLRLUEFfvj+JGCTIvAqwgNnYYmuDiluViZUgWcPJaKQl3d7nd1AA7 HC1BGDdIfO8Usg3eTahc3g== 0000703360-94-000020.txt : 19941122 0000703360-94-000020.hdr.sgml : 19941122 ACCESSION NUMBER: 0000703360-94-000020 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19941002 FILED AS OF DATE: 19941116 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LSI LOGIC CORP CENTRAL INDEX KEY: 0000703360 STANDARD INDUSTRIAL CLASSIFICATION: 3674 IRS NUMBER: 942712976 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10317 FILM NUMBER: 94560462 BUSINESS ADDRESS: STREET 1: 1551 MCCARTHY BLVD STREET 2: MS D-106 CITY: MILPITAS STATE: CA ZIP: 95035 BUSINESS PHONE: 408-433-8000 MAIL ADDRESS: STREET 1: 1551 MCCARTHY BLVD STREET 2: MS D-106 CITY: MILPITAS STATE: CA ZIP: 95035 10-Q 1 FORM 10-Q 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 October 2, 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 October 31, 1994 there were 56,949,482 shares of registrant's Common Stock, $.01 par value, outstanding. LSI LOGIC CORPORATION Form 10-Q FOR THE QUARTER ENDED OCTOBER 2, 1994 INDEX Page No. PART I Financial Information Item 1 Financial Statements Consolidated Condensed Balance Sheets - September 30, 1994 and December 31, 1993 3 Consolidated Condensed Statements of Operations - Three-Month and Nine-Month Periods Ended September 30, 1994 and 1993 4 Consolidated Condensed Statements of Cash Flows - Nine-Month Periods Ended September 30, 1994 and 1993 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 PART I Item 1. Financial Statements
LSI LOGIC CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands, except per share amounts) (Unaudited) September 30, December 31, 1994 1993 ASSETS Cash and cash equivalents $ 223,491 $121,319 Short-term investments 178,155 80,764 Accounts receivable, less allowance for doubtful accounts of $3,362 and $2,470 158,332 124,384 Inventories 98,352 69,066 Prepaid expenses and other current assets 37,796 30,165 Total current assets 696,126 425,698 Property and equipment, at cost less accumulated depreciation and amortization 451,320 385,063 Other assets 59,129 41,945 Total assets $ 1,206,575 $852,706 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 146,741 $ 66,822 Accrued salaries, wages and benefits 21,713 24,397 Accrued restructuring costs 25,316 29,503 Other accrued liabilities 33,043 28,353 Income taxes payable 33,179 17,079 Current portion of long-term obligations and short-term borrowings 24,470 22,727 Total current liabilities 284,462 188,881 Long-term obligations 294,973 246,314 Deferred income taxes 5,774 6,337 Minority interest in subsidiaries 125,279 118,740 Stockholders' equity: Preferred shares; 2,000 shares authorized - - Common stock; $.01 par value; 73,500 shares authorized; 56,890 and 49,728 shares outstanding 569 497 Additional paid-in capital 387,837 273,933 Retained earnings (accumulated deficit) 30,588 (41,673) Cumulative translation adjustment 77,093 59,677 Total stockholders' equity 496,087 292,434 Total liabilities and stockholders' equity $ 1,206,575 $852,706 See accompanying notes to unaudited consolidated condensed financial statements.
LSI LOGIC CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 1994 1993 1994 1993 Revenues $240,218 $183,761 $646,137 $529,770 Costs and expenses: Cost of revenues 138,219 112,001 376,943 324,167 Research and development 26,834 19,134 72,442 57,539 Selling, general and administrative 30,645 29,910 91,204 88,125 Total costs and expenses 195,698 161,045 540,589 469,831 Income from operations 44,520 22,716 105,548 59,939 Interest expense 4,822 2,538 14,275 7,095 Interest income and other 3,263 1,818 12,186 6,025 Income before income taxes and minority interest 42,961 21,996 103,459 58,869 Provision for income taxes 12,028 6,599 28,966 17,661 Income before minority interest 30,933 15,397 74,493 41,208 Minority interest in net income of subsidiaries 1,465 1,022 2,232 3,148 Net income $ 29,468 $ 14,375 $ 72,261 $ 38,060 Net income per share: Primary $ 0.52 $ 0.29 $ 1.35 $ 0.78 Fully diluted $ 0.49 $ 1.26 Common share and common share equivalents used in computing per share amounts: Primary 56,394 50,249 53,496 48,936 Fully diluted 63,938 61,886 See accompanying notes to unaudited consolidated condensed financial statements.
LSI LOGIC CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Nine Months Ended September 30, 1994 1993 Operating activities: Net income $ 72,261 $ 38,060 Adjustments: Depreciation and amortization 78,121 47,438 Minority interest in net income of subsidiaries 2,232 3,148 Change in: Accounts receivable (27,333) (21,984) Inventories (24,340) 4,218 Prepaid and other assets (24,559) (6,011) Accounts payable 75,482 (30,788) Accrued and other liabilities 11,439 18,624 Accrued restructuring costs (4,472) (6,201) Net cash provided by operating activities 158,831 46,504 Investing activities: Purchases of debt and equity securities available-for-sale, net of maturities and sales (89,806) - Change in other short-term debt and equity securities (7,989) (18,038) Acquisition of stock from minority interest holders (10,710) - Purchases of property and equipment, net of retirements (102,553) (75,139) Net cash used for investing activities (211,058) (93,177) Financing activities: Issuance of Convertible Subordinated Notes 143,750 - Proceeds from borrowings 5,061 57,588 Repayment of debt obligations (17,724) (19,226) Issuance of common stock 15,471 23,852 Tax benefit from employee stock plans 1,400 - Net cash provided by financing activities 147,958 62,214 Effect of exchange rate changes on cash and cash equivalents 6,441 14,971 Increase in cash and cash equivalents 102,172 30,512 Cash and cash equivalents at beginning of period 121,319 87,103 Cash and cash equivalents at end of period $223,491 $117,615 Non-Cash Transactions: Conversion of subordinated debentures to common stock $ 97,105 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 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 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 nine-month periods ended September 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." The Company classifies its investments as held-to-maturity, which are reported at amortized cost, and as available-for-sale, which 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 and were not material during the three months and nine months ended September 30, 1994. Fair market value of the Company's investments approximate cost. The cumulative effect of adoption on January 3, 1994, was not material. Note 3 - Balance sheet detail (in thousands):
September 30, December 31, 1994 1993 Inventories: Raw materials $ 12,855 $ 11,667 Work-in-process 60,919 34,997 Finished goods 24,578 22,402 Total $ 98,352 $ 69,066 Property and equipment: Property and equipment, at cost $897,507 $750,186 Accumulated depreciation and amortization (446,187) (365,123) Property and equipment, net $451,320 $385,063
Property and equipment includes capitalized interest of approximately $8.2 million (net of $1.4 million accumulated amortization) and $9.6 million at September 30, 1994 and December 31, 1993, respectively. Property and equipment includes preproduction engineering costs of $27.4 million at September 30, 1994 and December 31, 1993. Accumulated amortization of preproduction engineering costs was $5.7 million at September 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 nine months 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 September 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. Cash paid for interest expense was $15.5 million and $8.6 million during the nine months ended September 30, 1994 and 1993, respectively. Note 6 - In July, 1994, the Company called for redemption all of its $98 million, 6 1/4% convertible subordinated debentures. In July and August 1994, substantially all of the debentures were converted into approximately 4.9 million shares of common stock at a price of $20 per share. Note 7 - The Company's effective tax rate differs from the statutory rate due to the Company's ability to utilize certain deferred benefits for which a valuation allowance was previously required. Cash paid for income taxes was $13.7 million and $0.4 million during the nine months ended September 30, 1994 and 1993, respectively. 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 third quarter and first nine months of 1994 were $240.2 million and $646.1 million, representing an increase of 31% and 22%, respectively, over the comparable periods of 1993. The composition of revenues by major element was as follows:
Three Months Ended Nine Months Ended September 30, September 30, 1994 1993 1994 1993 Component products 90% 87% 88% 86% Design and services 10% 13% 12% 14% 100% 100% 100% 100%
Total component revenues grew 36% to $216.5 million in the third quarter and 25% to $566.0 million in the first nine months of 1994 from $159.5 million and $454.1 million compared to comparable periods in 1993. The increase in revenue dollars in the third quarter and first nine months of 1994 compared to the third quarter and first nine months of 1993 were primarily due to increased revenues from application specific integrated circuit (ASIC) products. Higher ASIC component revenues in the third quarter of 1994 compared to the third quarter of 1993 were primarily the result of increase unit shipments. Higher ASIC component revenues and higher ASIC component revenues as a percentage of total revenues in the first nine months of 1994 compared to the first nine months of 1993 was due to both higher average selling prices and increased unit shipments. Total dollar revenues from design and services increased approximately $1 million in the third quarter of 1994 and $4.3 million in the first nine months of 1994 compared to the same periods in 1993. The increase for the nine month period was primarily attributable to a one-time $7 million sale in the second quarter of 1994 involving certain product and marketing rights. Key elements of the statements of operations, expressed as a percentage of revenues, were as follows:
Three Months Ended Nine Months Ended September 30, September 30, 1994 1993 1994 1993 Gross profit margin 42.5% 39.1% 41.7% 38.8% Research and development expenses 11.2% 10.4% 11.2% 10.9% Selling, general and administrative expenses 12.8% 16.3% 14.1% 16.6% Income from operations 18.5% 12.4% 16.3% 11.3%
Gross profit, as a percentage of revenues, increased during the third quarter and first nine months of 1994 over the comparable 1993 periods. The majority of the increases in gross margin are attributable to an increased product demand for ASIC products, higher average selling prices during the third quarter of 1994 and the nine months ended September 30, 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 and third quarters of 1994, the Company continued to substantially increase sales of product manufactured at this new facility, which began volume production in the first quarter of 1994. Costs of revenues for the third quarter and first nine months 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 third quarter of 1994 and increased 7.5% in the first nine months 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 continue 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 third quarter and first nine months of 1994 may not be indicative of results in future periods. Research and development (R&D) expenses for the third quarter and first nine months of 1994 related primarily to advanced process technology and new product development and increased approximately $7.7 million (40%) and $14.9 million (26%), 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 3.5% and 2.5% as a percentage of revenues during the third quarter and first nine months of 1994, respectively, compared to the same periods in 1993 as management continued its cost containment efforts. In summary, total operating costs and expenses for the third quarter and first nine months of 1994 were $195.7 million and $540.6 million, respectively, an increase over $161.0 million and $469.8 million for the third quarter and first nine months of 1993, respectively. However, operating income as a percentage of revenues increased to 18.5% and 16.3% in the third quarter and first nine months of 1994 from 12.4% and 11.3%, respectively, for the comparable periods in 1993. Interest expense for the third quarter and first nine months of 1994 increased by $2.3 million and $7.2 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 fourth 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 third quarter and first nine months of 1994 increased $1.5 million and $6.2 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 third quarter of 1994 and net foreign currency exchange gains, partially offset by bond redemption costs. The Company recorded a provision for income taxes for the third quarter and first nine months 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. Minority interest for the third quarter of 1994 increased slightly from the third quarter of 1993 and decreased slightly for the first nine months of 1994 compared to the same period in 1993. The fluctuations in minority interest were 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 $199.6 million during the first nine months of 1994 to $401.6 million, and working capital increased by $174.8 million to $411.7 million at September 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 nine months of 1994, the Company generated $158.8 million of cash and equivalents from its operating activities, compared to $46.5 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 inventories, prepaid and other assets and accounts receivable. During the first nine months of 1994, $211.1 million of cash and equivalents were used for investing activities compared to $93.2 million during the comparable period of 1993. The primary investing activities consisted of 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, the purchase of short-term debt securities, and the repurchase of LSI Logic K.K. minority owned stock. Net capital expenditures for the nine months ended September 30, 1994 totaled approximately $102.6 million. Based on current business outlook, management expects net capital expenditures of approximately $70 to $80 million for the last quarter of 1994. Financing activities generated $148.1 million of cash and equivalents during the first nine months of 1994 compared to $62.2 million for the same period of 1993. The Company repaid U.S., Japanese and European debt totaling approximately $17.7 million during the first nine months 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. In July, 1994, the Company called for redemption all of its $98 million, 6 1/4% convertible subordinated debentures. In July and August 1994, substantially all of the bonds were converted into approximately 4.9 million shares of common stock at a price of $20 per share. During the first nine months 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 September 30, 1994 are considered adequate to cover uncertainties associated with the completion of the 1992 restructuring. The Company utilizes various instruments, primarily forward exchange and currency swap contracts, to manage its risk associated with currency fluctuations on intercompany loans and certain net non-U.S. dollar denominated asset and liability positions. At September 30, 1994, the Company had various forward exchange and currency swap contracts outstanding totaling approximately $75 million. The majority of these contracts are for periods less than one year. In August 1994, the Company increased its revolving bank credit agreement from $25 million to $60 million and extended the maturity date to August 31, 1997. No amount is outstanding under this credit agreement. The Company believes that its existing liquid resources, together with cash generated from operations and the established revolving credit agreement, are sufficient to satisfy anticipated operating cash requirements through 1994. 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 6 Exhibits and Reports on Form 8-K (a) Exhibits 11.1 Calculation of Earnings Per Share 27.0 Financial Data Schedule (b) Reports on Form 8-K On August 10, 1994, the Company filed a Report on Form 8-K, Item 5, announcing that 4,856,000 shares of the Company's common stock were issued in connection with the conversion of the Company's 6 1/4% Convertible Subordinated Debentures due 2002. 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: November 15, 1994 By /s/ Albert A. Pimentel Albert A. Pimentel Senior Vice President Finance and Chief Financial Officer EX-11 2 EXHIBIT 11.1
Exhibit 11.1 LSI LOGIC CORPORATION CALCULATION OF EARNINGS PER SHARE (In thousands, except per share amounts) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 1994 1993 1994 1993 Primary Earnings Per Share Net income $29,468 $14,375 $72,261 $38,060 Average common and common equivalent shares: Average common shares outstanding 54,640 48,425 51,799 47,106 Dilutive options 1,754 1,824 1,697 1,830 56,394 50,249 53,496 48,936 Earnings per common and common equivalent share $ 0.52 $ 0.29 $ 1.35 $ 0.78 Fully Diluted Earnings Per Share Net income $29,468 $72,261 Interest expense on convertible subordinated debt, net of tax effect 1,780 5,651 Adjusted net income $31,248 $77,912 Average common and common equivalent shares on a fully diluted basis: Average common shares outstanding 56,119 55,529 Convertible subordinated debt 5,867 4,238 Dilutive options 1,952 2,119 63,938 61,886 Fully diluted earnings per common and common equivalent share $ 0.49 $ 1.26
EX-27 3 ART. 5 FDS FOR 3RD QUARTER 10-Q
5 1,000 9-MOS DEC-31-1994 SEP-30-1994 223,491 178,155 161,694 3,362 98,352 696,126 897,507 446,187 1,206,575 284,462 143,750 569 0 0 495,518 1,206,575 646,137 646,137 376,943 376,943 0 0 14,275 103,459 28,966 72,261 0 0 0 72,261 1.35 1.26
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