Qlogic Corporation

On January 14, 2004, the Registrant reported its financial results for its fiscal third quarter ended December 28, 2003. A copy of the press release issued by the Registrant concerning the foregoing results is furnished herewith as Exhibit 99.1 and is incorporated by reference.

The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filings of the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference in such filing. The information in this report, including the exhibit hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

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.

Editor’s Contact:
Steve Sturgeon
QLogic Corporation
Phone: (949) 389-6268
steve.sturgeon@qlogic.com

Investor’s Contact:
Michael Roe
QLogic Corporation
Phone: (949) 389-6440
michael.roe@qlogic.com

QLOGIC REPORTS THIRD QUARTER
RESULTS FOR FISCAL YEAR 2004
Revenues and Net Income Reach Record Levels

Aliso Viejo, Calif., January 14, 2004 – QLogic Corporation (Nasdaq:QLGC), the company that powers storage area networks (SANs), today announced its third quarter financial results for the period ended December 28, 2003.

Net revenues on a GAAP basis for the third quarter of fiscal 2004 were a record $137.1 million, up 4% sequentially from the $132.3 million reported in the second quarter of fiscal 2004. Fibre Channel revenues for the third quarter were up 6% sequentially to a record $107.2 million and represented 78% of the Company’s total revenue. Net income on a GAAP basis for the third quarter of fiscal 2004 was a record $35.0 million, or $0.36 per share on a diluted basis. This was an increase of 2% sequentially from the $34.2 million, or $0.35 per share on a diluted basis, reported in the second quarter of fiscal 2004.

During the third quarter of fiscal 2004, net revenues increased 20% from the $114.2 million reported in the comparable quarter last year on a GAAP basis. Fibre Channel revenues for the third quarter were up 33% from the comparable quarter last year. Third quarter net income on a GAAP basis increased 27% from the $27.5 million, or $0.29 per share on a diluted basis, reported in the third quarter of last year.

Net revenues for the first nine months of fiscal 2004 were $395.6 million, up 24% from the $320.2 million reported in the comparable period last year on a GAAP basis. Net income on a GAAP basis for the first nine months of fiscal 2004 was $100.8 million, or $1.05 per share on a diluted basis. This was an increase of 37% from the $73.6 million, or $0.77 per share on a diluted basis, reported in the comparable period last year.

Pro forma net income for the third quarter of fiscal 2004 was a record $37.9 million, or $0.39 per share on a diluted basis, up 5% sequentially from the $36.1 million, or $0.37 per share on a diluted basis, for the second quarter of fiscal 2004. Pro forma net income for the third quarter increased 30% from the $29.1 million, or $0.31 per share on a diluted basis, for the third quarter of last year.

During the first nine months of fiscal 2004, the Company’s pro forma net income was $107.7 million, or $1.12 per share on a diluted basis. This was an increase of 31% from the $82.5 million, or $0.86 per share on a diluted basis, reported in the comparable period last year.

The pro forma non-GAAP results are a supplement to financial statements based on GAAP and these results include adjustments for merger related stock compensation charges, legal settlements, Fibre Channel sales discounts for stock warrants and an impairment of an investment in a technology company. QLogic uses pro forma information to evaluate its on-going operating performance and believes this presentation provides investors with additional insight into its underlying operating results and business trends. A reconciliation between the GAAP and pro forma non-GAAP results is included in the accompanying financial data.

“We are very pleased with the Company’s performance during the third quarter and the achievement once again of both record revenues and net income. The continued growth in our revenues during the third quarter was the result of a significant increase in sales of our Fibre Channel products, led by double-digit sequential revenue growth in our Fibre Channel host bus adapters as well as strong sequential growth in our switch business,” said H.K. Desai, the Company’s chairman, chief executive officer and president. “We continue to believe that this performance in our core Fibre Channel business is growing faster than the market rate, which indicates a favorable gain in market share.”

The Company’s balance sheet was again highlighted by an increase in cash and short-term investments, ending the quarter with $739.1 million. During the first nine months of fiscal 2004, cash and short-term investments increased by $95.9 million, net of the $19.5 million the Company used to purchase its common stock pursuant to the previously authorized stock repurchase program.

QLogic’s fiscal 2004 third quarter conference call is scheduled today at 2:30 p.m. Pacific Time (5:30 p.m. Eastern Time). H.K. Desai, chairman of the board, chief executive officer and president, and Frank Calderoni, senior vice president and chief financial officer, will host the conference call. The call is being webcast live via the Internet at www.qlogic.com or via CCBN. Phone access to participate in the conference call is available at (913) 981-5571, passcode: 636635.

The quarterly financial information that the Company intends to discuss during the conference call is included in this press release and will be available on the Company’s website at www.qlogic.com for 12 months following the conference call. To listen to a webcast replay of the conference call, please visit the Investor Relations section of the Company’s website at www.qlogic.com. The webcast replay will be available for 12 months following the conference call. An audio replay of the conference call will also be available through January 30, 2004 by calling (719) 457-0820, passcode: 636635.

Since 1993, over 50 million QLogic products have shipped inside servers, workstations, RAID subsystems, tape libraries, disk and tape drives. These products were delivered to small, medium and large enterprises around the world. Powering solutions from leading companies like Cisco, Dell, EMC, Fujitsu, Hitachi, HP, IBM, Network Appliance, Quantum, StorageTek and Sun Microsystems, the broad line of QLogic controller chips, host bus adapters, network switches and management software move data from storage devices through the network fabric to servers. A member of the S&P 500 and NASDAQ 100, QLogic was recently named to Fortune’s 100 Fastest Growing Companies list for the fourth consecutive year and to Forbes’ Best 200 Small Companies for the fifth consecutive year. In addition, QLogic was named to Business Week’s list of 100 Hot Growth Companies for 2003. For more information visit www.qlogic.com.

Note: All QLogic-issued press releases appear on the Company’s website (www.qlogic.com). Any announcement that does not appear on the QLogic website has not been issued by QLogic.

Disclaimer — Forward Looking Statements
This press release contains statements relating to future results of the Company (including certain beliefs and projections regarding business trends) that are “forward-looking statements” as defined within the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected or implied in the forward-looking statements. The Company wishes to advise readers that these potential risks and uncertainties include, but are not limited to: the volatility of the Company’s stock price; fluctuations in operating results; the dependence on the storage area network market; the ability to maintain and gain market or industry acceptance of the Company’s products; the dependence on a limited number of customers and fluctuations or cancellations in orders from customers; the ability to compete effectively with other companies; a reduction in sales efforts by current distributors; the dependence on relationships with certain silicon chip suppliers and other subcontractors; the complexity of the Company’s products; terrorist activities and resulting military actions; international, economic, regulatory, political and other risks; changes in semiconductor foundry capacity; the ability to maintain or expand upon strategic alliances; the strain on resources caused by rapid growth and expansion; the ability to attract and retain key personnel; and the ability to protect proprietary rights or to satisfactorily resolve any infringement claims.

More detailed information on these and additional factors which could affect the Company’s operating and financial results are described in the Company’s Forms 10-K, 10-Q and other reports, filed or to be filed with the Securities and Exchange Commission. The Company urges all interested parties to read these reports to gain a better understanding of the many business and other risks that the Company faces. The forward looking statements contained in this press release are made only as of the date hereof, and the Company undertakes no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

Trademarks and registered trademarks are the property of the companies with which they are associated.


			Three Months Ended						Nine Months Ended

			Dec. 28,		Sep. 28,		Dec. 29,		Dec. 28,		Dec. 29,
			2003		2003		2002		2003		2002

Gross revenues			$	137,064	$	132,267	$	114,167	$	395,566	$	323,472
Stock-based sales discounts				—		—		—		—		3,228

	Net revenues			137,064		132,267		114,167		395,566		320,244
Cost of revenues				42,881		42,366		40,908		127,249		118,215

	Gross profit			94,183		89,901		73,259		268,317		202,029
Operating expenses:
	Engineering and development			21,514		21,482		21,540		65,731		59,352
	Selling and marketing			13,846		12,436		10,955		38,011		33,008
	General and administrative			5,944		4,408		3,530		14,443		10,375

		Total operating expenses		41,304		38,326		36,025		118,185		102,735

Operating income				52,879		51,575		37,234		150,132		99,294
Interest and other income				3,495		3,556		5,417		12,463		12,196

Income before income taxes				56,374		55,131		42,651		162,595		111,490
Income taxes				21,422		20,950		15,138		61,786		37,906

Net income			$	34,952	$	34,181	$	27,513	$	100,809	$	73,584

Net income per share:
	Basic		$	0.37	$	0.36	$	0.29	$	1.07	$	0.79
	Diluted		$	0.36	$	0.35	$	0.29	$	1.05	$	0.77
Number of shares used in per share computations:
	Basic			94,458		94,282		93,553		94,252		93,369
	Diluted			96,823		96,360		95,231		96,395		95,337


			Three Months Ended						Nine Months Ended

			Dec. 28,		Sep. 28,		Dec. 29,		Dec. 28,		Dec. 29,
			2003		2003		2002		2003		2002

Net revenues			$	137,064	$	132,267	$	114,167	$	395,566	$	323,472
Cost of revenues				42,881		42,366		40,908		127,249		118,215

	Gross profit			94,183		89,901		73,259		268,317		205,257
Operating expenses:
	Engineering and development			19,644		19,590		19,973		59,857		54,650
	Selling and marketing			13,846		12,436		10,955		38,011		33,008
	General and administrative			4,194		4,408		3,530		12,693		10,375

		Total operating expenses		37,684		36,434		34,458		110,561		98,033

Operating income				56,499		53,467		38,801		157,756		107,224
Interest and other income				3,495		3,556		5,417		12,463		15,196

Income before income taxes				59,994		57,023		44,218		170,219		122,420
Income taxes				22,106		20,950		15,138		62,470		39,964

Net income			$	37,888	$	36,073	$	29,080	$	107,749	$	82,456

Net income per share:
	Basic		$	0.40	$	0.38	$	0.31	$	1.14	$	0.88
	Diluted		$	0.39	$	0.37	$	0.31	$	1.12	$	0.86
Number of shares used in per share computations:
	Basic			94,458		94,282		93,553		94,252		93,369
	Diluted			96,823		96,360		95,231		96,395		95,337

The above pro forma non-GAAP financial information is based on the Company’s unaudited condensed consolidated financial statements and excludes certain adjustments for merger related stock compensation charges, legal settlements, Fibre Channel sales discounts for stock warrants and an impairment of an investment in a technology company. Prior to the first quarter of fiscal 2004, the Company’s pro forma income tax expense was based on the respective effective tax rate utilized for GAAP purposes applied to the pro forma pre-tax income. However in fiscal 2004, the pro forma tax effect is being calculated on a specific item basis. The pro forma income tax expense for all periods prior to fiscal 2004 reflects the income tax expense on a specific item basis consistent with fiscal 2004. The Company uses the pro forma information to evaluate its on-going operating performance and believes this presentation provides investors with additional insight into its underlying operating results and business trends. This presentation is not in accordance with, or an alternative for, GAAP and may be different from pro forma non-GAAP presentations used by other companies.

A reconciliation of the Company’s net income and the related net income per share amounts computed in accordance with generally accepted accounting principles to the corresponding amounts included above is presented in the following table.


			Three Months Ended							Nine Months Ended

			Dec. 28,			Sep. 28,		Dec. 29,		Dec. 28,			Dec. 29,
			2003			2003		2002		2003			2002

GAAP net income			$	34,952		$	34,181	$	27,513	$	100,809		$	73,584
Items excluded from GAAP net income:
		Merger related stock compensation charges		1,870			1,892		1,567		5,874			4,702
		Legal settlements		1,750			—		—		1,750			—
		Sales discounts for stock warrants		—			—		—		—			3,228
		Technology company investment impairment		—			—		—		—			3,000
		Income tax effect		(684	)		—		—		(684	)		(2,058	)

Pro forma net income			$	37,888		$	36,073	$	29,080	$	107,749		$	82,456

Basic net income per share:
	GAAP net income		$	0.37		$	0.36	$	0.29	$	1.07		$	0.79
	Adjustments			0.03			0.02		0.02		0.07			0.09

	Pro forma net income		$	0.40		$	0.38	$	0.31	$	1.14		$	0.88

Diluted net income per share:
	GAAP net income		$	0.36		$	0.35	$	0.29	$	1.05		$	0.77
	Adjustments			0.03			0.02		0.02		0.07			0.09

	Pro forma net income		$	0.39		$	0.37	$	0.31	$	1.12		$	0.86


			Dec. 28, 2003		Mar. 30, 2003

ASSETS
Current assets:
	Cash and cash equivalents		$	159,832	$	137,810
	Short-term investments			579,268		505,387
	Accounts receivable, net			75,946		49,694
	Inventories			17,859		19,365
	Deferred income taxes			28,558		31,914
	Prepaid expenses and other current assets			2,490		4,010

		Total current assets		863,953		748,180
Property and equipment, net				63,723		59,813
Other assets				5,372		9,426

			$	933,048	$	817,419

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable		$	15,155	$	15,301
	Accrued expenses			57,515		51,383

		Total current liabilities		72,670		66,684
Total stockholders’ equity				860,378		750,735

			$	933,048	$	817,419


					Nine Months Ended

					Dec. 28,			Dec. 29,
					2003			2002

Cash flows from operating activities:
	Net income				$	100,809		$	73,584
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization				10,886			11,260
		Tax benefit from issuance of stock under stock plans				9,620			5,088
		Deferred income taxes				7,398			4,253
		Stock-based sales discounts				—			3,228
		Other non-cash charges				1,742			5,265
		Changes in operating assets and liabilities				(17,369	)		20,072

				Net cash provided by operating activities		113,086			122,750

Cash flows from investing activities:
	Net purchases of marketable securities					(75,423	)		(63,910	)
	Additions to property and equipment					(15,434	)		(11,536	)
	Acquisition of business					—			(1,695	)

			Net cash used in investing activities			(90,857	)		(77,141	)

Cash flows from financing activities:
	Proceeds from issuance of stock under stock plans					19,338			8,578
	Purchase of treasury stock					(19,545	)		—

			Net cash provided by (used in) financing activities			(207	)		8,578

Net increase in cash and cash equivalents						22,022			54,187
Cash and cash equivalents at beginning of period						137,810			76,124

Cash and cash equivalents at end of period					$	159,832		$	130,311


Delaware	0-23298	33-0537669
(State of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

26650 Aliso Viejo Parkway, Aliso Viejo, California		92656
(Address of principal executive offices)		(Zip Code)


	Item 12. Results of Operations and Financial Condition.
SIGNATURES
EXHIBIT INDEX
EXHIBIT 99.1


		QLOGIC CORPORATION

January 14, 2004		/s/ Frank A. Calderoni

		Frank A. Calderoni
		Senior Vice President and Chief Financial Officer


Exhibit
Number		Description of Document

99.1		Press Release, dated January 14, 2004, reporting the financial results of QLogic Corporation for its fiscal third quarter ended December 28, 2003.

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