LSI Logic Reports First Quarter 2001 Revenues and Profits

The LSI Logic 2001 First Quarter News Release Follows This Summary



- First Quarter Revenues of $517 million.



- Net income EBG* of $9.5 million.



- Diluted per share EBG of 3 cents; compared to First Call consensus

estimate of 3 cents.



- Cash and short-term investments of $1.1 billion.



* Earnings before goodwill amortization and other special items.



LSI Logic Takes Steps to Reduce Expenditures and Enhance Competitive Position

For Future Growth



Apr 24, 2001, 01:00 ET from LSI Logic Corporation

    MILPITAS, Calif., April 24 /PRNewswire Interactive News Release/ --
 LSI Logic Corporation (NYSE:   LSI) today reported 2001 first quarter revenues
 of $517 million, a 31 percent decrease from the $751 million reported in the
 fourth quarter, and 16 percent lower than the $615 million recorded in the
 first quarter of 2000.
     First quarter 2001 net income, before amortization of goodwill and other
 special items (EBG), was $9.5 million or 3 cents a diluted share, compared
 to $116 million or 34 cents a diluted share in the fourth quarter, and
 $88 million or 26 cents a diluted share in the first quarter of 2000.
     "Our first quarter financial results were impacted by the abrupt decline
 of the U.S. economy, weakened end-demand and the widespread accumulation of
 inventory in the supply chain," said Wilfred J. Corrigan, LSI Logic chairman
 and chief executive officer. "While our visibility is limited, there are
 indicators that point to the resumption of revenue growth in the second half
 of the year."
     "We announced an accretive transaction to acquire C-Cube Microsystems to
 expand our position in global communications and consumer markets. We signed a
 process technology collaboration agreement with TSMC, allowing us to more
 rapidly deliver advanced products to the marketplace and to reduce our
 development costs. We also announced the closure of our Colorado Springs
 facility, consolidating our manufacturing to our world-class Gresham and
 Tsukuba fabs. LSI Logic will compete from a position of strength when the
 industry rebounds with leading-edge technology for the communications, storage
 and consumer markets."
     Bryon Look, LSI Logic executive vice president and chief financial
 officer, said the company will take a $120 million to $150 million charge for
 fixed asset write-downs, severance, direct exit costs and other expenses
 associated with the August closure of the company's Colorado Springs
 manufacturing facility. The restructuring charge will be incurred in the
 second quarter, and other related charges will be recorded in the second and
 third quarters of 2001.
     "LSI Logic has responded aggressively to rapidly changing economic
 conditions," said Look. "We have taken action to reduce expenditures, invest
 in our future and strengthen our balance sheet. We are prepared for the
 anticipated resumption of growth in our targeted vertical markets."
     LSI Logic also learned today that the Federal Trade Commission has granted
 early termination of the waiting period under the Hart-Scott-Rodino Antitrust
 Improvements Act with respect to its exchange offer for all of the outstanding
 shares of C-Cube common stock. In addition, LSI Logic anticipates that its
 registration statement filed in connection with the exchange offer will be
 declared effective by the Securities and Exchange Commission on April 26.
 The exchange offer commenced on April 13, and is scheduled to expire at
 midnight EDT on May 10, unless extended.
 
     LSI Logic Business Outlook
     LSI Logic expects 2001 Q2 revenues to decline approximately 10-15 percent
 sequentially from the $517 million reported in the first quarter.
     The company anticipates reporting a second quarter loss of 7 cents a
 diluted share on an EBG basis.
     Second quarter gross margin is expected to be approximately 38 percent.
     The company does not anticipate selling any equity investments in the
 second quarter.
     The 2001 tax rate is expected to be 25 percent.
     Capital spending for 2001 is anticipated to be approximately $500 million.
     Second quarter depreciation is projected to be about $99 million.
 
     NOTE:  The company's financial guidance will be limited to the comments
 made on today's public conference call and contained in the Business Outlook
 section of this news release.
 
     LSI Logic Announcements
     -- LSI Logic Corporation and C-Cube Microsystems Inc. announced a
        definitive merger agreement in which LSI Logic has agreed to acquire
        C-Cube in a stock-for-stock transaction valued at approximately
        $878 million. The transaction is expected to be accretive to LSI Logic
        earnings (EBG) in 2001.
        http://www.lsilogic.com/news/financial_news/fr20010326.html
     -- LSI Logic and Taiwan Semiconductor Manufacturing Company announced an
        agreement to combine their efforts for development of advanced process
        technologies and to collaborate on state-of-the-art manufacturing.
        http://www.lsilogic.com/news/corporate_news/cr20010404.html
     -- LSI Logic announced plans to close its Colorado Springs manufacturing
        facility in August, taking a $120 million to $150 million charge for
        fixed asset write-downs, severance, direct exit costs and other
        closure-related expenses.
        http://www.lsilogic.com/news/corporate_news/cr20010411.html
     -- BBC Research & Development and LSI Logic received the Queen's Award for
        Industry in the "Innovation" category for the jointly developed
        single-chip terrestrial television (DTT) demodulator.
        http://www.lsilogic.com/news/corporate_news/cr20010423.html
     -- LSI Logic licensed NewLogic Technology's Bluetooth intellectual
        property core in order to offer this capability for integration into
        custom and standard chips for next-generation communications products.
        http://www.lsilogic.com/news/corporate_news/cr20010416.html
     -- LSI Logic introduced the LSI403Z digital signal processor, intended for
        the Small Office Home Office (SOHO) and residential gateway
        applications.
        http://www.lsilogic.com/news/product_news/pr20010306.html
     -- LSI Logic introduced the newest product in the company's
        SignalSphere(TM) wireless family, the CBP 4.0, a highly integrated
        single-chip CDMA baseband processor supporting the 3G standard.
        http://www.lsilogic.com/news/product_news/pr20010319.html
     -- Conexant Systems Inc. licensed LSI Logic's ZSP?400 digital signal
        processor (DSP) core for integration across its product lines
        supporting wireless mobile and communications applications. Broadcom,
        Brecis Communications, Virata and IBM also to license LSI Logic's open
        architecture DSP core.
        http://www.lsilogic.com/news/corporate_news/cr20010316.html
     -- LSI Logic announced two products in the SpeedREACH(TM) family, designed
        to fuel the growth of the consumer ADSL market by providing better
        performance at a lower cost for both central office and customer
        premise equipment applications.
        http://www.lsilogic.com/news/product_news/pr20010129.html
     -- LSI Logic announced the availability of its Fusion-MPT(TM) architecture
        integrated mirroring for servers and high-end workstations. The new
        integrated mirroring feature provides fault-tolerant solutions for NAS
        (Network Attached Storage) connected servers.
        http://www.lsilogic.com/news/product_news/pr20010316.html
     -- LSI Logic introduced a set of environmentally friendly, lead-free ball
        grid array packages widely used in communications and storage products.
        These advanced lead-free packaging solutions comply with government
        directives and environmental regulations in the United States, Europe
        and Japan.
        http://www.lsilogic.com/news/product_news/pr20010314.html
     -- LSI Logic announced the first fully integrated Ethernet switch for HP
        Procurve Networking 10/100/1000 switches that achieves the highest
        level of integration in the industry today.
        http://www.lsilogic.com/news/product_news/pr20010115.html
 
     LSI Logic Conference Call Information:  LSI Logic will hold a conference
 call today at 2 p.m. PDT to discuss first quarter financial results. The
 access number is 212-346-0184. The call will be webcast real time through
 www.StreetFusion.com. A replay of the call will be available today at
 approximately 5 p.m. PDT and will be available for 48 hours. The number is
 800-633-8284, (858-812-6440, international) access code 18521690. The replay
 will also be available over the Internet at the StreetFusion website. The
 StreetFusion replay will be available until May 1.
     LSI Logic has filed a Registration Statement on Form S-4 and a Schedule
 TO. C-Cube has filed a Solicitation/Recommendation Statement on Schedule 14D-9
 with the Securities and Exchange Commission in connection with LSI Logic's
 exchange offer for the outstanding shares of C-Cube. LSI Logic and C-Cube have
 mailed a prospectus, the Schedule 14D-9 and related tender offer materials to
 shareholders of C-Cube. These documents contain important information about
 the transaction. Investors and security holders are urged to read these
 documents carefully. Investors and security holders can obtain free copies of
 these documents through the website maintained by the U.S. Securities and
 Exchange Commission at http://www.sec.gov . In addition to the Registration
 Statement, Schedule TO, Prospectus and Schedule 14D-9, LSI Logic and C-Cube
 file annual, quarterly and special reports, proxy statements and other
 information with the Securities and Exchange Commission. You may read and copy
 any reports, statements or other information filed by LSI Logic or C-Cube at
 the SEC public reference room at 450 Fifth Street, N.W., Washington, DC 20549
 or at any of the commission's other public reference rooms in New York, N.Y.
 or Chicago, Ill. Please call the Securities and Exchange Commission at
 800-SEC-0330 for further information on the public reference rooms.
 LSI Logic's and C-Cube's filings with the Securities and Exchange Commission
 are also available to the public from commercial document-retrieval services
 and at the website maintained by the commission, http://www.sec.gov .
     Safe Harbor for Forward-Looking Statements:  The statements by LSI Logic
 management and the above statements regarding acceleration or deceleration of
 future bookings, revenues and earnings, gross margins, gains from investment
 income, tax rates, capital spending, and future depreciation estimates made in
 this news release include forward-looking statements within the meaning of
 Section 27A of the Securities Act of 1933, as amended and Section 21E of the
 Securities and Exchange Act of 1934, as amended. The company's actual results
 in future periods may be materially different from any performance suggested
 in this news release. Risks and uncertainties to which the company is subject
 may include, but may not necessarily be limited to fluctuations in the timing
 and volumes of customer demand, the rate of depletion of customer inventory
 buildup, and the company's achievement of revenue objectives and other
 financial targets. Other risks and uncertainties include, but are not
 necessarily limited to the timing and success of new product introductions,
 the continued availability of appropriate levels of manufacturing capacity and
 the realization of benefits from the company's strategic relationships and
 investments. The extent to which the company's plans for future cost
 reductions are realized may also impact its future performance. 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. In the context of forward-looking information provided in this news
 release, reference is made to the discussion of risk factors detailed in the
 company's filings from time to time with the Securities and Exchange
 Commission, including but not limited to filings made during the past
 12 months.
     LSI Logic Corporation is a leading designer and manufacturer of
 communications and storage semiconductors for applications that access,
 interconnect and store data, voice and video. In addition, the company
 supplies storage network solutions for the enterprise. LSI Logic is
 headquartered at 1551 McCarthy Boulevard, Milpitas, CA 95035, 866-574-5741
 (within U.S.), 719-533-7679 (outside U.S.), http://www.lsilogic.com .
 
     Editor's Notes:
     1. All LSI Logic news releases (financial, acquisitions, manufacturing,
        products, technology etc.) are issued exclusively by PR Newswire and
        are immediately thereafter posted on the company's external website,
        http://www.lsilogic.com .
     2. The LSI Logic logo design is a registered trademark of LSI Logic
        Corporation.
     3. All other brand or product names may be trademarks or registered
        trademarks of their respective companies.
 
 
                               LSI LOGIC CORPORATION
             Pro Forma Consolidated Condensed Statements of Operations
                      (In thousands, except per share amounts)
                                    (Unaudited)
 
                                                         Three Months Ended
                                                      March 31,      March 31,
                                                        2001           2000
 
     Revenues                                        $517,199       $615,186
 
     Costs and expenses:
       Cost of revenues                               311,145        354,400
       Research and development                       118,767         80,229
       Selling, general and administrative             78,971         70,240
 
         Total costs and expenses                     508,883        504,869
 
     Income from operations                             8,316        110,317
 
     Interest expense                                  (9,940)        (9,704)
     Interest income and other, net                     8,979          7,129
     Recurring investment income                        5,302          9,500
 
     Income before income taxes                        12,657        117,242
     Provision for income taxes                         3,164         29,311
 
     Pro forma net income                              $9,493        $87,931
 
     Pro forma earnings per share:
       Basic                                            $0.03          $0.29
       Diluted                                          $0.03          $0.26
 
     Shares used in computing per share amounts:
       Basic                                          320,369        302,682
       Diluted                                        330,384        349,159
 
     Pro forma statements of operations are intended to present the Company's
 operating results, excluding special items described below, for the periods
 presented.
     During the three month period ended March 31, 2001, the special items
 represented amortization of acquisition related items including intangibles
 and non-cash deferred stock compensation.
     During the three month period ended March 31, 2000, the special items
 represented restructuring of operations and other non-recurring items, net and
 other special items. The other special items consisted of an unplanned gain on
 sale of equity securities, charges associated with the elimination of a
 non-strategic product area and the write-off of debt issuance costs resulting
 from repayment of bank debt during the quarter.
     The pro forma statements are prepared using the Company's calculated tax
 rate of 25% when excluding special items.
     In computing diluted pro forma earnings per share for the three month
 period ended March 31, 2000, pro forma net income was increased by $2,750 for
 interest, net of taxes, on the $345 million convertible notes considered
 dilutive common stock equivalents.
     A reconciliation from pro forma net income to the reported results is
 presented on the following page.
     The format presented above is not intended to be in accordance with
 Generally Accepted Accounting Principles.
 
 
                               LSI LOGIC CORPORATION
             Reconciliation of Pro Forma Net Income to Reported Results
                      (In thousands, except per share amounts)
                                    (Unaudited)
 
                                                         Three Months Ended
                                                      March 31,      March 31,
                                                         2001          2000
 
     Pro forma net income                              $9,493        $87,931
     Special items:
       Amortization of acquisition related items
        including intangibles and non-cash deferred
        stock compensation                            (48,356)       (11,836)
     Restructuring of operations and other
      non-recurring items, net                             --         (2,781)
     Other special items                                   --         12,383
     Tax benefit                                        7,615            546
 
         Total special items                          (40,741)        (1,688)
 
     Net (loss)/ income                              $(31,248)       $86,243
 
     Basic earnings per share:
       Pro forma net income                             $0.03          $0.29
       Special items **                                 (0.13)         (0.01)
 
       Net (loss)/ income                              $(0.10)         $0.28
 
     Diluted earnings per share*:
       Pro forma net income                             $0.03          $0.26
       Special items **                                 (0.13)         (0.01)
 
       Net (loss)/ income                              $(0.10)         $0.25
 
     Shares used in computing per share amounts:
       Basic                                          320,369        302,682
       Diluted                                        320,369        349,159
 
     * In computing diluted earnings per share for the three month period
        ended March 31, 2001, common stock equivalents were excluded from the
        computation of diluted earnings per share as a result of their
        antidilutive effect. In computing diluted earnings per share for the
        three month period ended March 31, 2000, net income was increased by
        $2,750 for interest, net of taxes, on the $345 million convertible
        notes considered dilutive common stock equivalents.
     ** This line item includes rounding adjustments and the difference in
        diluted shares for pro forma purposes ascompared to GAAP.
 
 
                               LSI LOGIC CORPORATION
                  Consolidated Condensed Statements of Operations
                      (In thousands, except per share amounts)
                                    (Unaudited)
 
                                                      Three Months Ended
                                                    March 31,      March 31,
                                                         2001           2000
 
     Revenues                                        $517,199       $615,186
 
     Costs and expenses:
       Cost of revenues                               311,145        365,500
       Research and development                       118,767         80,229
       Selling, general and administrative             78,971         70,240
       Restructuring of operations and other
        non-recurring items, net                           --          2,781
       Amortization of acquisition related items
        including intangibles and non-cash
        deferred stock compensation *                  48,356         11,836
 
         Total costs and expenses                     557,239        530,586
 
     (Loss)/ income from operations                   (40,040)        84,600
 
     Interest expense                                  (9,940)      (10,893)
     Interest income and other, net                     8,979          7,129
     Gain on sale of equity securities                  5,302         34,172
 
      (Loss)/ income before income taxes              (35,699)       115,008
      (Benefit)/ provision for income taxes            (4,451)        28,765
 
     Net (loss)/ income                              $(31,248)       $86,243
 
     (Loss)/ earnings per share:
       Basic                                          $ (0.10)         $0.28
       Diluted ***                                    $ (0.10)         $0.25
 
     Shares used in computing per share amounts:
       Basic                                          320,369        302,682
       Diluted                                        320,369        349,159
 
 
     *   The amortization of acquisition related items including intangibles
         and non-cash deferred stock compensation for the quarter ended
         March 31, 2001 are comprised of the following items:
 
          Amortization of continuing intangibles                    $27,089
          Amortization of non-cash deferred stock
           compensation **                                           21,267
                                                                    $48,356
 
     **  On July 1, 2000, FASB Interpretation ("FIN") No. 44, "Accounting For
         Certain Transactions Involving Stock Compensation" was adopted by the
         Company. The acquisition of DataPath Systems, Inc. closed on
         July 14, 2000 and Syntax Systems, Inc. closed on November 29, 2000,
         after the effective date of the new interpretation. In accordance with
         FIN No. 44, the intrinsic value of the options and restricted stock
         awards assumed as part of the transaction and not vested as of the
         closing date was recorded as deferred compensation and included as a
         component of stockholders' equity. The deferred compensation is being
         amortized over the respective vesting periods of the options and
         awards.
 
     *** In computing diluted earnings per share for the three month period
         ended March 31, 2001, common stock equivalents were excluded from the
         computation of diluted earnings per share as a result of their
         antidilutive effect. In computing diluted earnings per share for the
         three month period ended March 31, 2000, net income was increased by
         $2,750 for interest, net of taxes, on the $345 million convertible
         notes considered dilutive common stock equivalents.
 
 
                               LSI LOGIC CORPORATION
                       Consolidated Condensed Balance Sheets
                                   (In millions)
                                    (Unaudited)
 
                                                     March 31,    December 31,
     Assets                                            2001           2000
     Current assets:
       Cash and short-term investments               $1,059.6       $1,133.2
       Accounts receivable, net                         359.6          522.7
       Inventories                                      358.9          290.4
       Prepaid expenses and other current assets        133.3          125.9
 
         Total current assets                         1,911.4        2,072.2
 
     Property and equipment, net                      1,333.9        1,278.7
     Goodwill and other intangibles                     554.4          580.9
     Other assets                                       282.9          265.7
 
         Total assets                                $4,082.6       $4,197.5
 
     Liabilities and Stockholders' Equity
     Current liabilities:
       Current liabilities                             $558.1         $626.0
       Current portion of long-term debt, capital
        lease obligations and short-term borrowings       0.6            1.0
 
         Total current liabilities                      558.7          627.0
 
     Long-term debt, capital lease obligations
      and other noncurrent liabilities                1,055.0        1,066.7
 
         Total liabilities                            1,613.7        1,693.7
 
     Minority interest in consolidated subsidiaries       5.6            5.7
 
     Stockholders' equity:
       Common stock                                   1,946.9        1,934.7
       Deferred stock compensation                     (141.7)        (163.0)
       Retained earnings                                641.0          672.2
       Accumulated other comprehensive income            17.1           54.2
 
         Total stockholders' equity                   2,463.3        2,498.1
 
         Total liabilities and stockholders' equity  $4,082.6       $4,197.5
 
 
                               LSI LOGIC CORPORATION
                           Selected Financial Information
                         (In millions, except where noted)
                                    (Unaudited)
 
                                                     Three Months Ended
                                                March 31,  Dec. 31,  March 31,
                                                  2001       2000       2000
 
     Semiconductor revenues                      $455.0     $642.5    $530.4
     SAN Systems revenues                         $62.2     $108.1     $84.8
     Total revenues                              $517.2     $750.6    $615.2
     Percentage change in revenues-qtr./qtr.(a)  -31.1%       3.2%      5.2%
     Percentage change in revenues-yr./yr.(b)    -15.9%      28.3%     32.7%
 
 
     Capital additions                           $186.8     $247.9     $80.7
     Depreciation / amortization(c)               $89.5      $87.8     $80.3
 
     Days sales outstanding                          63         63        58
     Days of inventory                              104         62        63
     Current ratio                                  3.4        3.3       3.8
     Quick ratio                                    2.5        2.6       2.9
 
     R&D as a percentage of revenues              23.0%      14.7%     13.0%
     SG&A as a percentage of revenues             15.3%      11.0%     11.4%
     Gross margin as a percentage of revenues     39.8%      43.8%     40.6%
 
     Employees(d)                                 7,298      7,221     6,557
     Revenues per employee (in thousands)(e)     $283.5     $415.8    $375.3
     Diluted shares (in thousands)(f)           330,384    353,408   349,159
 
 
     (a)Represents sequential quarter growth in revenues.
     (b)Represents growth in revenues in the quarter presented as compared to
         the same quarter of the previous year.
     (c)Excludes amortization of acquisition related intangibles and non-cash
         deferred stock compensation.
     (d)Actual number of employees at the end of each period presented.
     (e)Revenue per employee is calculated by annualizing revenue for each
         quarter presented and dividing it by the number of employees.
     (f)Shares used in determining pro forma diluted earnings per share.
 
                      MAKE YOUR OPINION COUNT - Click Here
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SOURCE LSI Logic Corporation
    MILPITAS, Calif., April 24 /PRNewswire Interactive News Release/ --
 LSI Logic Corporation (NYSE:   LSI) today reported 2001 first quarter revenues
 of $517 million, a 31 percent decrease from the $751 million reported in the
 fourth quarter, and 16 percent lower than the $615 million recorded in the
 first quarter of 2000.
     First quarter 2001 net income, before amortization of goodwill and other
 special items (EBG), was $9.5 million or 3 cents a diluted share, compared
 to $116 million or 34 cents a diluted share in the fourth quarter, and
 $88 million or 26 cents a diluted share in the first quarter of 2000.
     "Our first quarter financial results were impacted by the abrupt decline
 of the U.S. economy, weakened end-demand and the widespread accumulation of
 inventory in the supply chain," said Wilfred J. Corrigan, LSI Logic chairman
 and chief executive officer. "While our visibility is limited, there are
 indicators that point to the resumption of revenue growth in the second half
 of the year."
     "We announced an accretive transaction to acquire C-Cube Microsystems to
 expand our position in global communications and consumer markets. We signed a
 process technology collaboration agreement with TSMC, allowing us to more
 rapidly deliver advanced products to the marketplace and to reduce our
 development costs. We also announced the closure of our Colorado Springs
 facility, consolidating our manufacturing to our world-class Gresham and
 Tsukuba fabs. LSI Logic will compete from a position of strength when the
 industry rebounds with leading-edge technology for the communications, storage
 and consumer markets."
     Bryon Look, LSI Logic executive vice president and chief financial
 officer, said the company will take a $120 million to $150 million charge for
 fixed asset write-downs, severance, direct exit costs and other expenses
 associated with the August closure of the company's Colorado Springs
 manufacturing facility. The restructuring charge will be incurred in the
 second quarter, and other related charges will be recorded in the second and
 third quarters of 2001.
     "LSI Logic has responded aggressively to rapidly changing economic
 conditions," said Look. "We have taken action to reduce expenditures, invest
 in our future and strengthen our balance sheet. We are prepared for the
 anticipated resumption of growth in our targeted vertical markets."
     LSI Logic also learned today that the Federal Trade Commission has granted
 early termination of the waiting period under the Hart-Scott-Rodino Antitrust
 Improvements Act with respect to its exchange offer for all of the outstanding
 shares of C-Cube common stock. In addition, LSI Logic anticipates that its
 registration statement filed in connection with the exchange offer will be
 declared effective by the Securities and Exchange Commission on April 26.
 The exchange offer commenced on April 13, and is scheduled to expire at
 midnight EDT on May 10, unless extended.
 
     LSI Logic Business Outlook
     LSI Logic expects 2001 Q2 revenues to decline approximately 10-15 percent
 sequentially from the $517 million reported in the first quarter.
     The company anticipates reporting a second quarter loss of 7 cents a
 diluted share on an EBG basis.
     Second quarter gross margin is expected to be approximately 38 percent.
     The company does not anticipate selling any equity investments in the
 second quarter.
     The 2001 tax rate is expected to be 25 percent.
     Capital spending for 2001 is anticipated to be approximately $500 million.
     Second quarter depreciation is projected to be about $99 million.
 
     NOTE:  The company's financial guidance will be limited to the comments
 made on today's public conference call and contained in the Business Outlook
 section of this news release.
 
     LSI Logic Announcements
     -- LSI Logic Corporation and C-Cube Microsystems Inc. announced a
        definitive merger agreement in which LSI Logic has agreed to acquire
        C-Cube in a stock-for-stock transaction valued at approximately
        $878 million. The transaction is expected to be accretive to LSI Logic
        earnings (EBG) in 2001.
        http://www.lsilogic.com/news/financial_news/fr20010326.html
     -- LSI Logic and Taiwan Semiconductor Manufacturing Company announced an
        agreement to combine their efforts for development of advanced process
        technologies and to collaborate on state-of-the-art manufacturing.
        http://www.lsilogic.com/news/corporate_news/cr20010404.html
     -- LSI Logic announced plans to close its Colorado Springs manufacturing
        facility in August, taking a $120 million to $150 million charge for
        fixed asset write-downs, severance, direct exit costs and other
        closure-related expenses.
        http://www.lsilogic.com/news/corporate_news/cr20010411.html
     -- BBC Research & Development and LSI Logic received the Queen's Award for
        Industry in the "Innovation" category for the jointly developed
        single-chip terrestrial television (DTT) demodulator.
        http://www.lsilogic.com/news/corporate_news/cr20010423.html
     -- LSI Logic licensed NewLogic Technology's Bluetooth intellectual
        property core in order to offer this capability for integration into
        custom and standard chips for next-generation communications products.
        http://www.lsilogic.com/news/corporate_news/cr20010416.html
     -- LSI Logic introduced the LSI403Z digital signal processor, intended for
        the Small Office Home Office (SOHO) and residential gateway
        applications.
        http://www.lsilogic.com/news/product_news/pr20010306.html
     -- LSI Logic introduced the newest product in the company's
        SignalSphere(TM) wireless family, the CBP 4.0, a highly integrated
        single-chip CDMA baseband processor supporting the 3G standard.
        http://www.lsilogic.com/news/product_news/pr20010319.html
     -- Conexant Systems Inc. licensed LSI Logic's ZSP?400 digital signal
        processor (DSP) core for integration across its product lines
        supporting wireless mobile and communications applications. Broadcom,
        Brecis Communications, Virata and IBM also to license LSI Logic's open
        architecture DSP core.
        http://www.lsilogic.com/news/corporate_news/cr20010316.html
     -- LSI Logic announced two products in the SpeedREACH(TM) family, designed
        to fuel the growth of the consumer ADSL market by providing better
        performance at a lower cost for both central office and customer
        premise equipment applications.
        http://www.lsilogic.com/news/product_news/pr20010129.html
     -- LSI Logic announced the availability of its Fusion-MPT(TM) architecture
        integrated mirroring for servers and high-end workstations. The new
        integrated mirroring feature provides fault-tolerant solutions for NAS
        (Network Attached Storage) connected servers.
        http://www.lsilogic.com/news/product_news/pr20010316.html
     -- LSI Logic introduced a set of environmentally friendly, lead-free ball
        grid array packages widely used in communications and storage products.
        These advanced lead-free packaging solutions comply with government
        directives and environmental regulations in the United States, Europe
        and Japan.
        http://www.lsilogic.com/news/product_news/pr20010314.html
     -- LSI Logic announced the first fully integrated Ethernet switch for HP
        Procurve Networking 10/100/1000 switches that achieves the highest
        level of integration in the industry today.
        http://www.lsilogic.com/news/product_news/pr20010115.html
 
     LSI Logic Conference Call Information:  LSI Logic will hold a conference
 call today at 2 p.m. PDT to discuss first quarter financial results. The
 access number is 212-346-0184. The call will be webcast real time through
 www.StreetFusion.com. A replay of the call will be available today at
 approximately 5 p.m. PDT and will be available for 48 hours. The number is
 800-633-8284, (858-812-6440, international) access code 18521690. The replay
 will also be available over the Internet at the StreetFusion website. The
 StreetFusion replay will be available until May 1.
     LSI Logic has filed a Registration Statement on Form S-4 and a Schedule
 TO. C-Cube has filed a Solicitation/Recommendation Statement on Schedule 14D-9
 with the Securities and Exchange Commission in connection with LSI Logic's
 exchange offer for the outstanding shares of C-Cube. LSI Logic and C-Cube have
 mailed a prospectus, the Schedule 14D-9 and related tender offer materials to
 shareholders of C-Cube. These documents contain important information about
 the transaction. Investors and security holders are urged to read these
 documents carefully. Investors and security holders can obtain free copies of
 these documents through the website maintained by the U.S. Securities and
 Exchange Commission at http://www.sec.gov . In addition to the Registration
 Statement, Schedule TO, Prospectus and Schedule 14D-9, LSI Logic and C-Cube
 file annual, quarterly and special reports, proxy statements and other
 information with the Securities and Exchange Commission. You may read and copy
 any reports, statements or other information filed by LSI Logic or C-Cube at
 the SEC public reference room at 450 Fifth Street, N.W., Washington, DC 20549
 or at any of the commission's other public reference rooms in New York, N.Y.
 or Chicago, Ill. Please call the Securities and Exchange Commission at
 800-SEC-0330 for further information on the public reference rooms.
 LSI Logic's and C-Cube's filings with the Securities and Exchange Commission
 are also available to the public from commercial document-retrieval services
 and at the website maintained by the commission, http://www.sec.gov .
     Safe Harbor for Forward-Looking Statements:  The statements by LSI Logic
 management and the above statements regarding acceleration or deceleration of
 future bookings, revenues and earnings, gross margins, gains from investment
 income, tax rates, capital spending, and future depreciation estimates made in
 this news release include forward-looking statements within the meaning of
 Section 27A of the Securities Act of 1933, as amended and Section 21E of the
 Securities and Exchange Act of 1934, as amended. The company's actual results
 in future periods may be materially different from any performance suggested
 in this news release. Risks and uncertainties to which the company is subject
 may include, but may not necessarily be limited to fluctuations in the timing
 and volumes of customer demand, the rate of depletion of customer inventory
 buildup, and the company's achievement of revenue objectives and other
 financial targets. Other risks and uncertainties include, but are not
 necessarily limited to the timing and success of new product introductions,
 the continued availability of appropriate levels of manufacturing capacity and
 the realization of benefits from the company's strategic relationships and
 investments. The extent to which the company's plans for future cost
 reductions are realized may also impact its future performance. 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. In the context of forward-looking information provided in this news
 release, reference is made to the discussion of risk factors detailed in the
 company's filings from time to time with the Securities and Exchange
 Commission, including but not limited to filings made during the past
 12 months.
     LSI Logic Corporation is a leading designer and manufacturer of
 communications and storage semiconductors for applications that access,
 interconnect and store data, voice and video. In addition, the company
 supplies storage network solutions for the enterprise. LSI Logic is
 headquartered at 1551 McCarthy Boulevard, Milpitas, CA 95035, 866-574-5741
 (within U.S.), 719-533-7679 (outside U.S.), http://www.lsilogic.com .
 
     Editor's Notes:
     1. All LSI Logic news releases (financial, acquisitions, manufacturing,
        products, technology etc.) are issued exclusively by PR Newswire and
        are immediately thereafter posted on the company's external website,
        http://www.lsilogic.com .
     2. The LSI Logic logo design is a registered trademark of LSI Logic
        Corporation.
     3. All other brand or product names may be trademarks or registered
        trademarks of their respective companies.
 
 
                               LSI LOGIC CORPORATION
             Pro Forma Consolidated Condensed Statements of Operations
                      (In thousands, except per share amounts)
                                    (Unaudited)
 
                                                         Three Months Ended
                                                      March 31,      March 31,
                                                        2001           2000
 
     Revenues                                        $517,199       $615,186
 
     Costs and expenses:
       Cost of revenues                               311,145        354,400
       Research and development                       118,767         80,229
       Selling, general and administrative             78,971         70,240
 
         Total costs and expenses                     508,883        504,869
 
     Income from operations                             8,316        110,317
 
     Interest expense                                  (9,940)        (9,704)
     Interest income and other, net                     8,979          7,129
     Recurring investment income                        5,302          9,500
 
     Income before income taxes                        12,657        117,242
     Provision for income taxes                         3,164         29,311
 
     Pro forma net income                              $9,493        $87,931
 
     Pro forma earnings per share:
       Basic                                            $0.03          $0.29
       Diluted                                          $0.03          $0.26
 
     Shares used in computing per share amounts:
       Basic                                          320,369        302,682
       Diluted                                        330,384        349,159
 
     Pro forma statements of operations are intended to present the Company's
 operating results, excluding special items described below, for the periods
 presented.
     During the three month period ended March 31, 2001, the special items
 represented amortization of acquisition related items including intangibles
 and non-cash deferred stock compensation.
     During the three month period ended March 31, 2000, the special items
 represented restructuring of operations and other non-recurring items, net and
 other special items. The other special items consisted of an unplanned gain on
 sale of equity securities, charges associated with the elimination of a
 non-strategic product area and the write-off of debt issuance costs resulting
 from repayment of bank debt during the quarter.
     The pro forma statements are prepared using the Company's calculated tax
 rate of 25% when excluding special items.
     In computing diluted pro forma earnings per share for the three month
 period ended March 31, 2000, pro forma net income was increased by $2,750 for
 interest, net of taxes, on the $345 million convertible notes considered
 dilutive common stock equivalents.
     A reconciliation from pro forma net income to the reported results is
 presented on the following page.
     The format presented above is not intended to be in accordance with
 Generally Accepted Accounting Principles.
 
 
                               LSI LOGIC CORPORATION
             Reconciliation of Pro Forma Net Income to Reported Results
                      (In thousands, except per share amounts)
                                    (Unaudited)
 
                                                         Three Months Ended
                                                      March 31,      March 31,
                                                         2001          2000
 
     Pro forma net income                              $9,493        $87,931
     Special items:
       Amortization of acquisition related items
        including intangibles and non-cash deferred
        stock compensation                            (48,356)       (11,836)
     Restructuring of operations and other
      non-recurring items, net                             --         (2,781)
     Other special items                                   --         12,383
     Tax benefit                                        7,615            546
 
         Total special items                          (40,741)        (1,688)
 
     Net (loss)/ income                              $(31,248)       $86,243
 
     Basic earnings per share:
       Pro forma net income                             $0.03          $0.29
       Special items **                                 (0.13)         (0.01)
 
       Net (loss)/ income                              $(0.10)         $0.28
 
     Diluted earnings per share*:
       Pro forma net income                             $0.03          $0.26
       Special items **                                 (0.13)         (0.01)
 
       Net (loss)/ income                              $(0.10)         $0.25
 
     Shares used in computing per share amounts:
       Basic                                          320,369        302,682
       Diluted                                        320,369        349,159
 
     * In computing diluted earnings per share for the three month period
        ended March 31, 2001, common stock equivalents were excluded from the
        computation of diluted earnings per share as a result of their
        antidilutive effect. In computing diluted earnings per share for the
        three month period ended March 31, 2000, net income was increased by
        $2,750 for interest, net of taxes, on the $345 million convertible
        notes considered dilutive common stock equivalents.
     ** This line item includes rounding adjustments and the difference in
        diluted shares for pro forma purposes ascompared to GAAP.
 
 
                               LSI LOGIC CORPORATION
                  Consolidated Condensed Statements of Operations
                      (In thousands, except per share amounts)
                                    (Unaudited)
 
                                                      Three Months Ended
                                                    March 31,      March 31,
                                                         2001           2000
 
     Revenues                                        $517,199       $615,186
 
     Costs and expenses:
       Cost of revenues                               311,145        365,500
       Research and development                       118,767         80,229
       Selling, general and administrative             78,971         70,240
       Restructuring of operations and other
        non-recurring items, net                           --          2,781
       Amortization of acquisition related items
        including intangibles and non-cash
        deferred stock compensation *                  48,356         11,836
 
         Total costs and expenses                     557,239        530,586
 
     (Loss)/ income from operations                   (40,040)        84,600
 
     Interest expense                                  (9,940)      (10,893)
     Interest income and other, net                     8,979          7,129
     Gain on sale of equity securities                  5,302         34,172
 
      (Loss)/ income before income taxes              (35,699)       115,008
      (Benefit)/ provision for income taxes            (4,451)        28,765
 
     Net (loss)/ income                              $(31,248)       $86,243
 
     (Loss)/ earnings per share:
       Basic                                          $ (0.10)         $0.28
       Diluted ***                                    $ (0.10)         $0.25
 
     Shares used in computing per share amounts:
       Basic                                          320,369        302,682
       Diluted                                        320,369        349,159
 
 
     *   The amortization of acquisition related items including intangibles
         and non-cash deferred stock compensation for the quarter ended
         March 31, 2001 are comprised of the following items:
 
          Amortization of continuing intangibles                    $27,089
          Amortization of non-cash deferred stock
           compensation **                                           21,267
                                                                    $48,356
 
     **  On July 1, 2000, FASB Interpretation ("FIN") No. 44, "Accounting For
         Certain Transactions Involving Stock Compensation" was adopted by the
         Company. The acquisition of DataPath Systems, Inc. closed on
         July 14, 2000 and Syntax Systems, Inc. closed on November 29, 2000,
         after the effective date of the new interpretation. In accordance with
         FIN No. 44, the intrinsic value of the options and restricted stock
         awards assumed as part of the transaction and not vested as of the
         closing date was recorded as deferred compensation and included as a
         component of stockholders' equity. The deferred compensation is being
         amortized over the respective vesting periods of the options and
         awards.
 
     *** In computing diluted earnings per share for the three month period
         ended March 31, 2001, common stock equivalents were excluded from the
         computation of diluted earnings per share as a result of their
         antidilutive effect. In computing diluted earnings per share for the
         three month period ended March 31, 2000, net income was increased by
         $2,750 for interest, net of taxes, on the $345 million convertible
         notes considered dilutive common stock equivalents.
 
 
                               LSI LOGIC CORPORATION
                       Consolidated Condensed Balance Sheets
                                   (In millions)
                                    (Unaudited)
 
                                                     March 31,    December 31,
     Assets                                            2001           2000
     Current assets:
       Cash and short-term investments               $1,059.6       $1,133.2
       Accounts receivable, net                         359.6          522.7
       Inventories                                      358.9          290.4
       Prepaid expenses and other current assets        133.3          125.9
 
         Total current assets                         1,911.4        2,072.2
 
     Property and equipment, net                      1,333.9        1,278.7
     Goodwill and other intangibles                     554.4          580.9
     Other assets                                       282.9          265.7
 
         Total assets                                $4,082.6       $4,197.5
 
     Liabilities and Stockholders' Equity
     Current liabilities:
       Current liabilities                             $558.1         $626.0
       Current portion of long-term debt, capital
        lease obligations and short-term borrowings       0.6            1.0
 
         Total current liabilities                      558.7          627.0
 
     Long-term debt, capital lease obligations
      and other noncurrent liabilities                1,055.0        1,066.7
 
         Total liabilities                            1,613.7        1,693.7
 
     Minority interest in consolidated subsidiaries       5.6            5.7
 
     Stockholders' equity:
       Common stock                                   1,946.9        1,934.7
       Deferred stock compensation                     (141.7)        (163.0)
       Retained earnings                                641.0          672.2
       Accumulated other comprehensive income            17.1           54.2
 
         Total stockholders' equity                   2,463.3        2,498.1
 
         Total liabilities and stockholders' equity  $4,082.6       $4,197.5
 
 
                               LSI LOGIC CORPORATION
                           Selected Financial Information
                         (In millions, except where noted)
                                    (Unaudited)
 
                                                     Three Months Ended
                                                March 31,  Dec. 31,  March 31,
                                                  2001       2000       2000
 
     Semiconductor revenues                      $455.0     $642.5    $530.4
     SAN Systems revenues                         $62.2     $108.1     $84.8
     Total revenues                              $517.2     $750.6    $615.2
     Percentage change in revenues-qtr./qtr.(a)  -31.1%       3.2%      5.2%
     Percentage change in revenues-yr./yr.(b)    -15.9%      28.3%     32.7%
 
 
     Capital additions                           $186.8     $247.9     $80.7
     Depreciation / amortization(c)               $89.5      $87.8     $80.3
 
     Days sales outstanding                          63         63        58
     Days of inventory                              104         62        63
     Current ratio                                  3.4        3.3       3.8
     Quick ratio                                    2.5        2.6       2.9
 
     R&D as a percentage of revenues              23.0%      14.7%     13.0%
     SG&A as a percentage of revenues             15.3%      11.0%     11.4%
     Gross margin as a percentage of revenues     39.8%      43.8%     40.6%
 
     Employees(d)                                 7,298      7,221     6,557
     Revenues per employee (in thousands)(e)     $283.5     $415.8    $375.3
     Diluted shares (in thousands)(f)           330,384    353,408   349,159
 
 
     (a)Represents sequential quarter growth in revenues.
     (b)Represents growth in revenues in the quarter presented as compared to
         the same quarter of the previous year.
     (c)Excludes amortization of acquisition related intangibles and non-cash
         deferred stock compensation.
     (d)Actual number of employees at the end of each period presented.
     (e)Revenue per employee is calculated by annualizing revenue for each
         quarter presented and dividing it by the number of employees.
     (f)Shares used in determining pro forma diluted earnings per share.
 
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 SOURCE  LSI Logic Corporation

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