8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) April 25, 2012

LSI CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE	1-10317	94-2712976
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1621 Barber Lane

Milpitas, California 95035

(Address of principal executive offices, including zip code)

(408) 433-8000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EXHIBIT 99.1

Item 2.02 Results of Operation and Financial Condition.

On April 25, 2012, LSI Corporation issued a news release regarding its financial results for the quarter ended April 1, 2012. A copy of the news release is furnished as Exhibit 99.1 to this Form 8-K and is incorporated by reference herein.

The news release contains non-GAAP financial information. Management believes that the presentation of non-GAAP net income (loss), non-GAAP gross margin, non-GAAP operating expenses, non-GAAP taxes, and non-GAAP net income (loss) per basic and diluted share provides important supplemental information to management and investors about financial and business trends relating to the company’s results of operations. Management believes that the use of these non-GAAP financial measures also provides consistency and comparability with our past financial reports.

Management has historically used these non-GAAP measures when evaluating operating performance because we believe that the inclusion or exclusion of the items described below provides an additional measure of our core operating results and facilitates comparisons of our core operating performance against prior periods and our business model objectives. We have chosen to provide this information to investors to enable them to perform additional analyses of past, present and future operating performance and as a supplemental means to evaluate our ongoing core operations. Externally, we believe that these non-GAAP measures continue to be useful to investors in their assessment of our operating performance and their valuation of the company.

Internally, these non-GAAP measures are significant measures used by management for purposes of:

• evaluating the core operating performance of the company;

• establishing internal budgets;

• calculating return on investment for development programs and growth initiatives;

• comparing performance with internal forecasts and targeted business models;

• strategic planning;

• evaluating and valuing potential acquisition candidates and how their operations compare to the company’s operations; and

• benchmarking performance externally against our competitors.

How we calculate our non-GAAP financial measures

Non-GAAP net income (loss), non-GAAP gross margin, non-GAAP operating expenses, non-GAAP taxes and non-GAAP net income (loss) per basic and diluted share are important to the company for the reasons noted above and exclude the following items:

• Stock-based compensation. Stock-based compensation relates primarily to LSI stock awards such as stock options and restricted stock units. Stock-based compensation is a non-cash expense that varies in amount from period to period and is dependent on market forces that are difficult to predict. As a result of this unpredictability, management excludes this item from its internal operating forecasts and models. Management believes that non-GAAP measures adjusted for stock-based compensation provide investors with a basis to measure the company’s core performance against the performance of other companies without the variability created by stock-based compensation.

• Purchase accounting effect on inventory. This is an acquisition-related charge. It results from marking to fair value an acquired company’s inventory at the time of acquisition. This charge is not factored into management’s evaluation of potential acquisitions or our performance after completion of acquisitions, because it is not related to our core operating performance, and the frequency and amount of this type of charge can vary significantly based on the size and timing of our acquisitions. Excluding this data provides investors with a basis to compare the company against the performance of other companies without this variability.

• Amortization of acquisition-related intangibles. This relates to purchased technology in acquisitions such as existing technology, patents and trademarks. This charge is not factored into management’s evaluation of potential acquisitions or our performance after completion of acquisitions, because it is not related to our core operating performance, and the frequency and amount of this type of charge can vary significantly based on the size and timing of our acquisitions and the maturities of the businesses being acquired. Excluding this data provides investors with a basis to compare the company against the performance of other companies without this variability.

• Restructuring of operations and other items, net. This represents charges/losses and gains that are not directly related to the company’s ongoing or core business results. Management regularly excludes such items from internal operating forecasts and models because they are not considered a core operating activity for the company and because the frequency and variability in the nature of the charges can vary significantly from period to period. Excluding this data provides investors with a basis to compare the company against the performance of other companies without this variability.

• Other charges and gains. Other charges and gains consist of gains or losses on investments and certain non-operating gains and losses that occur on an infrequent basis and vary greatly in amount. We do not regularly trade public equity securities nor do we typically use these securities to fund our ongoing operations. Management excludes these items because they do not affect our core operations. Excluding this data provides investors with a basis to compare the company against the performance of other companies without this variability.

• Non-GAAP income tax expense/benefit. This item represents the additional amount of tax expense or benefit that the company would accrue if it used non-GAAP results instead of GAAP results in the calculation of its tax liability.

We use non-GAAP net income computed as described above as the numerator in the calculation of non-GAAP net income per basic and diluted share. We calculate the basic and diluted share amounts used in the denominator in accordance with GAAP rules, using non-GAAP net income rather than GAAP net income.

Limitations of relying on non-GAAP financial measures

Some of the limitations of relying on non-GAAP financial measures include:

• Stock-based compensation. LSI’s stock-based incentive plans are important components of our employee incentive compensation arrangements and are reflected in our GAAP results. Stock-based compensation should be considered for a complete view of the costs of our compensation arrangements.

• Purchase accounting effect on inventory. Acquisitions have been an important part of our business strategy and the corresponding acquisition-related charges reflect the costs of choosing acquisitions as a form of growth strategy.

• Amortization of acquisition-related intangibles. Acquisitions have been an important part of our business strategy and the corresponding acquisition-related charges reflect the costs of choosing acquisitions as a form of growth strategy.

• Restructuring of operations and other items, net. This item reflects charges for severance, exit costs associated with leased facilities, asset impairment charges and gains on sales of assets that are no longer strategic. While no longer strategic to the future of the company, such items reflect the costs of decisions made as part of running a business and are critical to a complete view of our historical results.

• Other charges and gains. These amounts should be included for a complete view of our historical performance even though they are not related to our core operations.

• Non-GAAP income tax expense/benefit. This item represents the additional amount of tax expense or benefit that the company would accrue if it used non-GAAP results instead of GAAP results in the calculation of its tax liability. The limitation in it is that it does not include the effect of all the items excluded from the non-GAAP financial statements.

All supplemental non-GAAP financial measures should be read in conjunction with the comparable information presented in accordance with generally accepted accounting principles in the United States of America.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	News Release issued April 25, 2012.*

* Furnished, not filed.

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 hereunto duly authorized.

LSI CORPORATION

By:	/s/ Bryon Look
	Bryon Look
	Executive Vice President, Chief Financial Officer and Chief Administrative Officer

Date: April 25, 2012

EXHIBIT INDEX

Exhibit No.	Description
99.1	News Release issued April 25, 2012.*

* Furnished, not filed.

EX-99.1

Exhibit 99.1

NEWS RELEASE

cc12-23/C1212

LSI Reports First Quarter 2012 Results

Revenue up 19% quarter-over-quarter, driven by hard disk recovery, flash storage processor demand and new product cycles

MILPITAS, Calif., April 25, 2012 – LSI Corporation (NYSE: LSI) today reported results for its first quarter ended April 1, 2012.

First Quarter 2012 Highlights

• First quarter 2012 revenues from continuing operations* of $622 million

• First quarter 2012 GAAP** income from continuing operations of 13 cents per diluted share

• First quarter 2012 non-GAAP*** income from continuing operations of 20 cents per diluted share

• First quarter 2012 operating cash flows of $50 million

Second Quarter 2012 Business Outlook

• Projected revenues from continuing operations* of $630 million to $670 million

• GAAP** income from continuing operations in the range of $0.03 to $0.13 per share

• Non-GAAP*** income from continuing operations in the range of $0.15 to $0.21 per share

* On May 6, 2011, LSI completed the sale of its external storage systems business. The financial results of the external storage systems business have been classified as discontinued operations in LSI’s financial statements. Our ongoing business is referred to as “continuing operations.”

** Generally Accepted Accounting Principles.

*** Excludes stock-based compensation, amortization of acquisition-related intangibles, purchase accounting effect on inventory, restructuring of operations and other items, net, gain on remeasurement of a pre-acquisition equity interest to fair value and gain/loss on sale/write-down of investments. It also excludes the income tax effect associated with the above-mentioned items. It also excludes, in the case of non-GAAP net income, gain from the sale of the external storage systems business.

“Our performance in the first quarter demonstrates the positive results of our multi-year growth strategy and our ability to outgrow the storage and networking markets we serve. The significant revenue growth was driven by better-than-expected growth in our HDD business, strength in our new SandForce flash business and contribution from various new product cycles,” said Abhi Talwalkar, LSI president and CEO. “Going forward, LSI is firmly established as a central player in some of the most critical growth trends in computing, including cloud, Big Data, mobile networking and flash, with products that are bringing exciting new levels of speed and productivity to our customers.”

First quarter 2012 revenues from continuing operations were $622 million, above the high end of updated guidance, compared to $473 million generated from continuing operations in the first quarter of 2011, and compared to $523 million generated from continuing operations in the fourth quarter of 2011.

First quarter 2012 GAAP** income from continuing operations was $75 million or 13 cents per diluted share, compared to first quarter 2011 GAAP income from continuing operations of $19 million or 3 cents per diluted share. Fourth quarter 2011 GAAP income from continuing operations was $11 million or 2 cents per diluted share. First quarter 2012 GAAP income from continuing operations included a net charge of $42 million from special items, consisting primarily of approximately $31 million of stock-based compensation expense, $30 million of amortization of acquisition-related items, $15 million of net restructuring and other items, $14 million of purchase accounting effect on inventory, a $43 million favorable income tax effect and a $6 million gain on remeasurement of a pre-acquisition equity interest to fair value.

First quarter 2012 non-GAAP*** income from continuing operations was $117 million or 20 cents per diluted share, compared to first quarter 2011 non-GAAP income from continuing operations of $65 million or 10 cents per diluted share. Fourth quarter 2011 non-GAAP income from continuing operations was $73 million or 13 cents per diluted share.

Cash and short-term investments totaled approximately $623 million at quarter end. The company completed first-quarter purchases of approximately 4.6 million shares of its common stock for approximately $38 million, and on a cumulative basis, LSI has repurchased a total of 77 million shares and utilized approximately $537 million of the company’s current $750 million share repurchase program.

“In the first quarter, LSI delivered double-digit revenue growth and demonstrated significant progress towards our business model and non-GAAP operating margin target,” said Bryon Look, LSI CFO and chief administrative officer. “Year over year, our revenues grew 32% and non-GAAP income from operations increased 80%.”

LSI 2Q2012 Business Outlook for Continuing Operations

	GAAP**	Special Items	Non-GAAP***
Revenue	$630 million to $670 million		$630 million to $670 million
Gross Margin	47% – 51%	$20 million to $30 million	52% – 54%
Operating Expenses	$255 million to $275 million	$30 million to $40 million	$225 million to $235 million
Net Other Income	$3 million		$3 million
Tax	Approximately $11 million		Approximately $11 million
(Loss)/Income from Continuing Operations Per Share	$0.03 to $0.13	($0.08) to ($0.12)	$0.15 to $0.21
Diluted Share Count	600 million		600 million

Capital spending is projected to be around $20 million in the second quarter and approximately $125 million in total for 2012.

Depreciation and software amortization is projected to be around $16 million in the second quarter and approximately $65 million in total for 2012.

LSI Conference Call Information

LSI will hold a conference call today at 2 p.m. PDT to discuss first quarter 2012 financial results and the second quarter 2012 business outlook. Internet users can access the conference call at http://www.lsi.com/webcast. Subsequent to the conference call, a replay will be available at the same web address.

Forward-Looking Statements: This news release contains forward-looking statements that are based on the current opinions and estimates of management. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could cause LSI’s actual results to differ materially from those set forth in the forward-looking statements include, but are not limited to: our ability to successfully integrate and manage the SandForce business and retain its key employees; our ability to achieve anticipated synergies and to develop integrated new products following our acquisition of SandForce; our ability to eliminate costs related to the external storage systems business that we sold in 2011; our ability to repurchase our common stock at prices we believe to be advantageous; the impact of the 2011 floods in Thailand; our reliance on major customers and suppliers; our ability to keep up with rapid technological change; our ability to compete successfully in competitive markets; fluctuations in the timing and volumes of customer demand; the unavailability of appropriate levels of manufacturing capacity; and general industry and macro-economic conditions. For additional information, see the documents filed by LSI with the Securities and Exchange Commission, and specifically the risk factors set forth in the company’s most recent reports on Form 10-K and 10-Q. LSI disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

About LSI

LSI Corporation (NYSE: LSI) designs semiconductors and software that accelerate storage and networking in datacenters and mobile networks. Our technology is the intelligence critical to enhanced application performance, and is applied in solutions created in collaboration with our partners. More information is available at www.lsi.com.

LSI and the LSI & Design logo are trademarks or registered trademarks of LSI Corporation. All other brand or product names may be trademarks or registered trademarks of their respective companies.

Investor Relations Contact:	Media Relations Contact:
Sujal Shah	Greg Thomas
610-712-5471	408-433-4236
sujal.shah@lsi.com	greg.thomas@lsi.com

LSI CORPORATION

Condensed Consolidated Balance Sheets

(In millions)

(Unaudited)

	April 1, 2012			December 31, 2011			April 3, 2011
Assets
Current assets:
Cash and short-term investments	$	623.1		$	935.5		$	682.3
Accounts receivable, net		302.1			246.5			286.1
Inventories		200.8			180.0			155.0
Prepaid expenses, assets held for sale and other current assets		62.4			60.7			304.7
Total current assets		1,188.4			1,422.7			1,428.1
Property and equipment, net		235.1			180.6			188.0
Goodwill and identified intangible assets, net		832.0			506.2			592.0
Other assets		111.6			122.6			146.8
Total assets	$	2,367.1		$	2,232.1		$	2,354.9
Liabilities and Stockholders' Equity
Current liabilities	$	470.3		$	460.9		$	484.3
Pension, tax and other liabilities		693.5			712.2			611.0
Total liabilities		1,163.8			1,173.1			1,095.3
Stockholders' equity:
Common stock and additional paid-in capital		5,691.4			5,629.2			5,932.3
Accumulated deficit		(3,961.8	)		(4,037.0	)		(4,358.3	)
Accumulated other comprehensive loss		(526.3	)		(533.2	)		(314.4	)
Total stockholders' equity		1,203.3			1,059.0			1,259.6
Total liabilities and stockholders' equity	$	2,367.1		$	2,232.1		$	2,354.9

LSI CORPORATION

Consolidated Statements of Operations (GAAP)

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended
	April 1, 2012			December 31, 2011			April 3, 2011
Revenues	$	622,424		$	523,140		$	473,264
Cost of revenues		296,152			264,364			225,459
Amortization of acquisition-related intangibles		21,390			20,354			21,818
Purchase accounting effect on inventory		14,458			—			—
Stock-based compensation expense		3,512			1,597			1,813
Total cost of revenues		335,512			286,315			249,090
Gross profit		286,912			236,825			224,174
Research and development		157,563			139,061			136,124
Stock-based compensation expense		12,308			5,360			6,223
Total research and development		169,871			144,421			142,347
Selling, general and administrative		66,419			63,705			54,917
Amortization of acquisition-related intangibles		8,667			8,319			8,319
Stock-based compensation expense		15,014			4,881			5,631
Total selling, general and administrative		90,100			76,905			68,867
Restructuring of operations and other items, net		15,462			21,033			2,806
Income/(loss) from operations		11,479			(5,534	)		10,154
Interest income and other, net		14,656			8,124			4,288
Income from continuing operations before income taxes		26,135			2,590			14,442
Benefit from income taxes		(49,062	)		(8,818	)		(4,104	)
Income from continuing operations		75,197			11,408			18,546
Loss from discontinued operations, net of taxes		—			(13,194	)		(8,392	)
Net income/(loss)	$	75,197		$	(1,786	)	$	10,154
Basic income/(loss) per share:
Income from continuing operations	$	0.13		$	0.02		$	0.03
Loss from discontinued operations	$	—		$	(0.02	)	$	(0.01	)
Net income/(loss)	$	0.13		$	0.00		$	0.02
Diluted income/(loss) per share:
Income from continuing operations	$	0.13		$	0.02		$	0.03
Loss from discontinued operations	$	—		$	(0.02	)	$	(0.01	)
Net income/(loss)	$	0.13		$	0.00		$	0.02
Shares used in computing per share amounts:
Basic		566,709			563,721			615,450
Diluted		590,556			573,018			629,733

Reconciliations of certain GAAP measures to non-GAAP measures are included below.

	Three Months Ended
	April 1, 2012			December 31, 2011			April 3, 2011
Reconciliation of GAAP net income/(loss) to non-GAAP net income:
GAAP income from continuing operations	$	75,197		$	11,408		$	18,546
Special items:
a) Stock-based compensation expense - cost of revenues		3,512			1,597			1,813
b) Stock-based compensation expense - R&D		12,308			5,360			6,223
c) Stock-based compensation expense - SG&A		15,014			4,881			5,631
d) Amortization of acquisition-related intangibles - cost of revenues		21,390			20,354			21,818
e) Amortization of acquisition-related intangibles - SG&A		8,667			8,319			8,319
f) Purchase accounting effect on inventory		14,458			—			—
g) Restructuring of operations and other items, net		15,462			21,033			2,806
h) Gain on remeasurement of a pre-acquisition equity interest to fair value		(5,765	)		—			—
i) Income tax effect		(43,198	)		—			—
Total special items from continuing operations		41,848			61,544			46,610
Non-GAAP income from continuing operations	$	117,045		$	72,952		$	65,156
Non-GAAP income from continuing operations per share:
Basic	$	0.21		$	0.13		$	0.11
Diluted	$	0.20		$	0.13		$	0.10
GAAP net income/(loss)	$	75,197		$	(1,786	)	$	10,154
Special items:
a) Total special items from continuing operations		41,848			61,544			46,610
b) Stock-based compensation expense - discontinued operations		—			—			319
c) Amortization of acquisition-related intangibles - discontinued operations		—			—			886
d) Restructuring of operations - discontinued operations		—			(67	)		23,811
Non-GAAP net income	$	117,045		$	59,691		$	81,780
Non-GAAP net income per share:
Basic	$	0.21		$	0.11		$	0.13
Diluted	$	0.20		$	0.10		$	0.13
Shares used in computing non-GAAP per share amounts:
Basic		566,709			563,721			615,450
Diluted		590,556			573,018			629,733
Reconciliation of GAAP income/(loss) from operations to non-GAAP income from operations:
Income/(loss) from operations - GAAP	$	11,479		$	(5,534	)	$	10,154
Special items:
a) Total stock-based compensation expense		30,834			11,838			13,667
b) Total amortization of acquisition-related intangibles		30,057			28,673			30,137
c) Purchase accounting effect on inventory		14,458			—			—
d) Restructuring of operations and other items, net		15,462			21,033			2,806
Income from operations - Non-GAAP	$	102,290		$	56,010		$	56,764

LSI CORPORATION

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Three Months Ended
	April 1, 2012			December 31, 2011			April 3, 2011
Operating activities:
Net income/(loss)	$	75,197		$	(1,786	)	$	10,154
Adjustments:
Depreciation and amortization		45,368			43,357			56,007
Stock-based compensation expense		30,834			11,838			13,986
Non-cash restructuring of operations and other items, net		2,140			4,747			10,824
(Gain) on remeasurement of a pre-acquisition equity interest to fair value/write-down of investments		(5,765	)		183			—
Loss/(gain) on sale of property and equipment		25			78			(239	)
Unrealized foreign exchange loss/(gain)		1,461			(2,215	)		1,379
Deferred taxes		(43,202	)		(9,894	)		(43	)
Changes in assets and liabilities, net of assets acquired and liabilities assumed in business combination:
Accounts receivable		(44,845	)		1,850			40,471
Inventories		3,453			30,399			(12,651	)
Prepaid expenses, assets held for sale and other assets		(2,290	)		(526	)		(1,066	)
Accounts payable		47,119			(2,179	)		24,273
Accrued and other liabilities		(59,270	)		(20,436	)		(35,066	)
Net cash provided by operating activities		50,225			55,416			108,029
Investing activities:
Purchases of debt securities available-for-sale		(21,263	)		(12,284	)		(15,530	)
Proceeds from maturities and sales of debt securities available-for-sale		9,506			5,472			12,958
Purchases of property and equipment		(64,982	)		(14,079	)		(21,542	)
Proceeds from sale of property and equipment		21			22,683			310
Acquisition of SandForce, net of cash acquired		(319,231	)		—			—
Proceeds from repayments on a note receivable		—			10,000			—
Net cash (used in)/provided by investing activities		(395,949	)		11,792			(23,804	)
Financing activities:
Issuance of common stock		65,274			14,980			17,319
Purchase of common stock under repurchase program		(38,206	)		(26,999	)		(96,791	)
Net cash provided by/(used in) financing activities		27,068			(12,019	)		(79,472	)
Effect of exchange rate changes on cash and cash equivalents		(495	)		(528	)		(11	)
Net change in cash and cash equivalents		(319,151	)		54,661			4,742
Cash and cash equivalents at beginning of period		779,811			725,150			521,786
Cash and cash equivalents at end of period	$	460,660		$	779,811		$	526,528