8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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): July 25, 2006

QLOGIC CORPORATION

(Exact name of registrant as specified in its charter)

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)

Registrant’s telephone number, including area code: (949) 389-6000

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:

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

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

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

o 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 Operations and Financial Condition

     On July 25, 2006, the Registrant reported the financial results for its fiscal first quarter ended July 2, 2006. 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.

Item 9.01 Financial Statements and Exhibits

     (d) Exhibits

99.1       Press Release*, dated July 25, 2006, reporting the financial results of QLogic Corporation for its fiscal first quarter ended July 2, 2006.

* The press release is being furnished pursuant to Item 9.01, and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

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.

	QLOGIC CORPORATION
July 25, 2006	/s/ Anthony J. Massetti
	Anthony J. Massetti
	Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit
Number	Description of Document
99.1	Press Release, dated July 25, 2006, reporting the financial results of QLogic Corporation for its fiscal first quarter ended July 2, 2006.

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Editor’s Contact:
Christine Flavio
QLogic Corporation
Phone: (650) 934-8057
christine.flavio@qlogic.com

Investor’s Contact:
Tony Massetti
QLogic Corporation
Phone: (949) 389-7533
tony.massetti@qlogic.com

QLOGIC REPORTS FIRST QUARTER
RESULTS FOR FISCAL YEAR 2007
Record Revenue Level Achieved

Aliso Viejo, Calif., July 25, 2006 – QLogic Corporation (Nasdaq:QLGC), the leader in Fibre Channel host bus adapters (HBAs), stackable switches and blade server switches today announced its first quarter financial results for the period ended July 2, 2006.

Net revenue for the first quarter of fiscal 2007 was a record $136.7 million and increased 18% from $115.4 million in the comparable quarter last year. During the first quarter of fiscal 2007, revenue from SAN Infrastructure Products, which includes HBAs, switches and silicon, was $127.4 million, an increase of 19% from the comparable quarter last year and 5% sequentially.

Income from continuing operations on a GAAP basis for the first quarter of fiscal 2007 was $21.1 million, or $0.13 per share on a diluted basis, and included stock-based compensation expense, acquisition-related charges and the related income tax effects totaling $12.6 million. The stock-based compensation expense was the result of the Company’s adoption of Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment (“SFAS 123R”) in the current quarter. Income from continuing operations on a GAAP basis for the first quarter of last year, which did not include any amounts for SFAS 123R or acquisition-related charges, was $28.3 million, or $0.15 per share on a diluted basis.

The Company generated $40.0 million in cash from operations during the first quarter of fiscal 2007. The Company’s balance sheet at the end of first quarter of fiscal 2007 was highlighted by $558.4 million of cash and short-term investments.

“We are pleased with our financial performance during the first quarter, which included the achievement of record revenue. This revenue performance was highlighted by a 19% increase in HBA revenue from the first quarter of last year,” said H. K. Desai, the Company’s chief executive officer and president. “Based on this momentum, the Company is well-positioned for continued growth in its existing core business and we expect that our emerging markets will provide an opportunity for future revenue growth.”

The Company uses certain non-GAAP measures to supplement financial statements based on GAAP. A summary of these non-GAAP financial measures and a complete reconciliation of each non-GAAP measure to the most directly comparable GAAP measure, as well as a description of the reasons that management believes that these non-GAAP financial measures provide useful information to investors and the additional purposes for which management uses these non-GAAP financial measures is presented in the accompanying financial schedules.

Non-GAAP income from continuing operations for the first quarter of fiscal 2007 was $33.7 million, or $0.21 per share on a diluted basis. These non-GAAP results for the first quarter are comparable to the $34.5 million, or $0.21 per share on a diluted basis, reported for the fourth quarter of fiscal 2006 and reflect an improvement over the $28.3 million, or $0.15 per share on a diluted basis, reported for the first quarter of fiscal 2006.

QLogic’s fiscal 2007 first quarter conference call is scheduled for today at 2:30 p.m. Pacific Time (5:30 p.m. Eastern Time). H.K. Desai, chief executive officer and president, and Tony Massetti, 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 and via CCBN. Phone access to participate in the conference call is available at (719) 457-2642, pass code: 6894740.

The financial information that the Company intends to discuss during the conference call will be available on the Company’s website at www.qlogic.com for 12 months following the conference call. A replay of the conference call will be available via webcast for 12 months on the Company’s website at www.qlogic.com. An audio replay of the conference call will also be available through August 8, 2006 at (719) 457-0820 or (888) 203-1112, pass code: 6894740.

About QLogic

QLogic is a leading supplier of high performance storage networking solutions including Fibre Channel host bus adapters (HBAs), blade server embedded Fibre Channel switches, Fibre Channel stackable switches, iSCSI HBAs, iSCSI routers and storage services platforms for enabling advanced storage management applications. The Company is also a leading supplier of server networking products including InfiniBand host channel adapters that accelerate cluster performance. QLogic products are delivered to small-to-medium businesses and large enterprises around the world via its channel partner community. QLogic products are also powering solutions from leading companies like Cisco, Dell, EMC, Hitachi Data Systems, HP, IBM, NEC, Network Appliance and Sun Microsystems. QLogic is a member of the S&P 500 Index. For more information go to http://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 in 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 advises readers that these potential risks and uncertainties include, but are not limited to: potential fluctuations in operating results; gross margins that may vary over time; revenues may be affected by changes in IT spending levels; the stock price of the Company may be volatile; the Company’s dependence on the storage area network market; the ability to maintain and gain market or industry acceptance of the Company’s products; the Company’s dependence on a limited number of customers; seasonal fluctuations and uneven sales patterns in orders from customers; the Company’s ability to compete effectively with other companies; declining average unit sales prices of comparable products; a reduction in sales efforts by current distributors; dependence on sole source and limited source suppliers; the Company’s dependence on relationships with certain silicon chip suppliers; the complexity of the Company’s products; sales fluctuations arising from customer transitions to new products; the uncertainty associated with SOX 404 compliance; environmental compliance costs; terrorist activities and resulting military actions; international economic, regulatory, political and other risks; uncertain benefits from strategic business combinations; the ability to attract and retain key personnel; recognition of compensation expenses related to employee stock options and the Company’s employee stock purchase plan; the decreased effectiveness of equity compensation; difficulties in transitioning to smaller geometry process technologies; the ability to protect proprietary rights; the ability to satisfactorily resolve any infringement claims; reliance on third party licenses; the use of “open source” software in our products; changes in our tax provisions or adverse outcomes resulting from examination of our income tax returns; computer viruses and other tampering with the Company’s computer systems; charter documents that may discourage a business combination; and facilities of the Company and its suppliers and customers are located in areas subject to natural disasters.

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.

QLogic and the QLogic logo are registered trademarks of QLogic Corporation. Other trademarks and registered trademarks are the property of the companies with which they are associated.

QLOGIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited — in thousands, except per share amounts)

	Three Months Ended
	July 2,		April 2,		July 3,
	2006		2006		2005
Net revenues	$	136,692	$	130,450	$	115,430
Cost of revenues		43,320		38,358		33,993
Gross profit		93,372		92,092		81,437
Operating expenses:
Engineering and development		32,920		25,180		20,359
Sales and marketing		22,401		17,466		15,233
General and administrative		8,442		4,851		3,892
Purchased in-process research and development		1,910		10,510		—
Total operating expenses		65,673		58,007		39,484
Operating income		27,699		34,085		41,953
Interest and other income		6,842		15,246		6,119
Income from continuing operations before income taxes		34,541		49,331		48,072
Income taxes		13,465		17,957		19,786
Income from continuing operations		21,076		31,374		28,286
Income from discontinued operations, net of income taxes		—		1,175		13,491
Net income	$	21,076	$	32,549	$	41,777
Income from continuing operations per share:
Basic	$	0.13	$	0.19	$	0.15
Diluted	$	0.13	$	0.19	$	0.15
Income from discontinued operations per share:
Basic	$	—	$	0.01	$	0.08
Diluted	$	—	$	0.01	$	0.08
Net income per share:
Basic	$	0.13	$	0.20	$	0.23
Diluted	$	0.13	$	0.20	$	0.23
Number of shares used in per share calculations:
Basic		161,548		161,722		183,065
Diluted		162,897		164,378		185,344

QLOGIC CORPORATION

RECONCILIATION OF GAAP INCOME FROM CONTINUING OPERATIONS TO
NON-GAAP INCOME FROM CONTINUING OPERATIONS

(unaudited — in thousands, except per share amounts)

	Three Months Ended
	July 2,			April 2,			July 3,
	2006			2006			2005
GAAP income from continuing operations	$	21,076		$	31,374		$	28,286
Items excluded from GAAP income from continuing operations:
Stock-based compensation under SFAS 123R		8,664			—			—
Amortization of purchased intangible assets		3,111			201			—
Acquisition-related non-cash compensation charges		2,879			318			—
Purchased in-process research and development		1,910			10,510			—
Gain on sale of shares acquired in the sale of discontinued operations		—			(8,463	)		—
Income tax effect		(3,987	)		578			—
Total non-GAAP adjustments		12,577			3,144			—
Non-GAAP income from continuing operations	$	33,653		$	34,518		$	28,286
Diluted income from continuing operations per share:
GAAP income from continuing operations	$	0.13		$	0.19		$	0.15
Adjustments		0.08			0.02			—
Non-GAAP income from continuing operations	$	0.21		$	0.21		$	0.15

Non-GAAP Financial Measurements

The non-GAAP financial measurements contained herein are a supplement to the corresponding financial measurements prepared in accordance with generally accepted accounting principles (GAAP). The non-GAAP financial information presented excludes the items summarized in the above table. Management believes these items are not indicative of the Company’s on-going core operating performance.

The Company has presented non-GAAP income from continuing operations and non-GAAP diluted income from continuing operations per share, on a basis consistent with its historical presentation, to assist investors in understanding the Company’s core income from continuing operations and non-GAAP diluted income from continuing operations per share on an on-going basis. The non-GAAP presentation also enhances comparisons of the Company’s core net profitability with historical periods and comparisons of the Company’s core net profitability with the corresponding results for competitors. Management believes that on-going income from continuing operations and diluted income from continuing operations per share are important measures in the evaluation of the Company’s profitability. These non-GAAP financial measures exclude the adjustments described above, and thus provide an overall measure of the Company’s on-going net profitability and related profitability on a diluted per share basis.

Management uses non-GAAP income from continuing operations in its evaluation of the Company’s core after-tax results of operations and trends between fiscal periods and believes that this measure is an important component of its internal performance measurement process. In addition, the Company prepares and maintains its budgets and forecasts for future periods on a basis consistent with this non-GAAP financial measurement.

The non-GAAP financial measurements presented herein have certain limitations in that they do not reflect all of the costs associated with the operations of the Company’s business as determined in accordance with GAAP. Therefore, investors should consider non-GAAP measures in addition to, and not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. The non-GAAP information presented by the Company may be different from the non-GAAP measures used by other companies.

A summary of the non-GAAP adjustments presented in the table above by the financial statement line impacted is as follows:

	Three Months Ended
	July 2,			April 2,			July 3,
(unaudited — in thousands)	2006			2006			2005
Non-GAAP Adjustments:
Cost of revenues:
Stock-based compensation	$	512		$	—		$	—
Amortization of purchased intangible assets		2,986			201			—
Acquisition-related non-cash compensation charges		13			—			—
Total cost of revenue adjustments		3,511			201			—
Operating expenses:
Engineering and development:
Stock-based compensation		2,824			—			—
Amortization of purchased intangible assets		67			—			—
Acquisition-related non-cash compensation charges		2,209			256			—
Sales and marketing:
Stock-based compensation		2,691			—			—
Amortization of purchased intangible assets		58			—			—
Acquisition-related non-cash compensation charges		632			62			—
General and administrative:
Stock-based compensation		2,637			—			—
Acquisition-related non-cash compensation charges		25			—			—
Purchased in-process research and development		1,910			10,510			—
Total operating expense adjustments		13,053			10,828			—
Interest and other income:
Gain on sale of shares acquired in the sale of discontinued operations		—			(8,463	)		—
Total non-GAAP adjustments before income taxes		16,564			2,566			—
Income tax effect		(3,987	)		578			—
Total non-GAAP adjustments	$	12,577		$	3,144		$	—

QLOGIC CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited — in thousands)

	July 2, 2006			April 2, 2006
ASSETS
Current assets:
Cash and cash equivalents	$	30,259		$	125,192
Short-term investments		528,180			540,448
Accounts receivable, net		71,088			67,571
Inventories		41,289			39,440
Other current assets		48,406			46,441
Total current assets		719,222			819,092
Property and equipment, net		87,957			82,630
Goodwill		87,573			24,725
Purchased intangible assets, net		42,459			7,954
Other assets		16,335			3,306
	$	953,546		$	937,707
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	27,531		$	32,160
Accrued compensation		14,164			22,990
Income taxes payable		28,172			12,920
Deferred revenue		5,632			3,662
Other current liabilities		14,076			6,621
Total current liabilities		89,575			78,353
Deferred tax liabilities		5,383			—
Total liabilities		94,958			78,353
Stockholders’ equity:
Common stock		195			195
Additional paid-in capital		548,199			537,648
Retained earnings		904,386			883,310
Accumulated other comprehensive loss		(4,931	)		(1,799	)
Treasury stock		(589,261	)		(560,000	)
Total stockholders’ equity		858,588			859,354
	$	953,546		$	937,707

QLOGIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited — in thousands)

	Three Months Ended
	July 2,			July 3,
	2006			2005
Cash flows from operating activities:
Net income	$	21,076		$	41,777
Income from discontinued operations, net of income taxes		—			(13,491	)
Income from continuing operations		21,076			28,286
Adjustments to reconcile income from continuing operations to net cash provided by continuing operating activities:
Depreciation and amortization		9,027			4,275
Purchased in-process research and development		1,910			—
Deferred income taxes		(4,134	)		3,119
Tax benefit from issuance of stock under stock plans		—			804
Stock-based compensation		8,664			175
Acquisition-related non-cash compensation charges		2,879			—
Provision for losses on accounts receivable		326			(75	)
Loss on disposal of property and equipment		117			32
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable		(3,576	)		(4,670	)
Inventories		(1,849	)		(2,194	)
Other assets		719			1,350
Accounts payable		(4,629	)		(1,126	)
Accrued compensation		(9,238	)		(8,947	)
Income taxes payable		15,252			13,396
Deferred revenue		1,970			430
Other liabilities		1,467			1,831
Net cash provided by continuing operating activities		39,981			36,686
Cash flows from investing activities:
Purchases of marketable securities		(73,966	)		(252,087	)
Sales and maturities of marketable securities		81,194			134,849
Additions to property and equipment		(9,676	)		(5,338	)
Acquisition of business, net of cash acquired		(92,092	)		—
Restricted cash placed in escrow		(15,000	)		—
Net cash used in continuing investing activities		(109,540	)		(122,576	)
Cash flows from financing activities:
Proceeds from issuance of stock under stock plans		1,691			4,891
Tax benefit from issuance of stock under stock plans		196			—
Purchase of treasury stock		(27,261	)		(54,999	)
Net cash used in continuing financing activities		(25,374	)		(50,108	)
Net cash used in continuing operations		(94,933	)		(135,998	)
Cash flows from discontinued operations:
Net cash provided by operating activities		—			18,096
Net cash used in investing activities		—			(62	)
Cash provided by discontinued operations		—			18,034
Net decrease in cash and cash equivalents		(94,933	)		(117,964	)
Cash and cash equivalents at beginning of period		125,192			165,644
Cash and cash equivalents at end of period	$	30,259		$	47,680

QLOGIC CORPORATION

SUPPLEMENTAL FINANCIAL INFORMATION

(unaudited — in thousands)

Net Revenues

A summary of the Company’s revenue components is as follows:

	Three Months Ended
	July 2,		April 2,		July 3,
	2006		2006		2005
SAN Infrastructure Products	$	127,399	$	121,845	$	107,323
Management Controllers		6,889		7,130		6,908
Other		2,404		1,475		1,199
	$	136,692	$	130,450	$	115,430

Geographic Revenues

Revenues by geographic area are presented based upon the country of destination. Net revenues by geographic area are as follows:

	Three Months Ended
	July 2,		April 2,		July 3,
	2006		2006		2005
United States	$	78,373	$	72,875	$	65,202
Asia-Pacific and Japan		29,244		29,459		24,339
Europe, Middle East and Africa		26,767		27,326		25,496
Rest of world		2,308		790		393
	$	136,692	$	130,450	$	115,430