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 26, 2007

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 26, 2007, the Registrant reported the financial results for its fiscal first quarter ended July 1, 2007. A copy of the press release issued by the Registrant concerning the foregoing results is furnished herewith as Exhibit 99.1 and is incorporated herein 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, or otherwise subject to the liabilities under that section.

Discussion of Non-GAAP Financial Measures

     In addition to the results presented on a generally accepted accounting principles (GAAP) basis in the accompanying press release, the Registrant has also included certain non-GAAP financial measures. These non-GAAP financial measures include non-GAAP net income and non-GAAP net income per diluted share.

     The Registrant believes that these supplemental non-GAAP financial measures, when presented in conjunction with the corresponding GAAP financial measures, provide useful information to investors and management regarding financial and business trends relating to its financial condition and results of operations. However, non-GAAP financial measures have certain limitations in that they do not reflect all of the costs associated with the operations of the Registrant’s business as determined in accordance with GAAP. Therefore, investors should consider non-GAAP financial measures in addition to, and not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP.

     The Registrant has presented non-GAAP net income and non-GAAP net income per diluted share, on a basis consistent with its historical presentation, to assist investors in understanding the Registrant’s core net income and core net income per diluted share on an on-going basis. These non-GAAP financial measures assist investors in making comparisons of the Registrant’s core net profitability with historical periods. Although the non-GAAP financial measures presented by the Registrant may be different from the non-GAAP financial measures used by other companies, the Registrant believes that these non-GAAP financial measures may also assist investors in making comparisons of the Registrant’s core net profitability with the corresponding results for its competitors. Management also believes that non-GAAP net income and non-GAAP net income per diluted share are important measures in the evaluation of the Registrant’s profitability.

     Management uses non-GAAP net income in its evaluation of the Registrant’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 Registrant prepares and maintains its budgets and forecasts for future periods on a basis consistent with this non-GAAP financial measure. Management believes that providing these non-GAAP financial measures allows investors to view the Registrant’s financial results in the way that management views the financial results.

     The Registrant excludes the following items from its non-GAAP financial measures:

     Stock-based compensation. Stock-based compensation consists of expenses associated with stock options and restricted stock units granted by the Registrant and purchases of common stock under the Registrant’s Employee Stock Purchase Plan. Stock-based compensation is a non-cash expense that varies in amount from period to period as a result of factors that are difficult to predict and are generally outside the control of the Registrant, such as the market price and associated volatility of the Registrant’s common stock. Accordingly, management believes these expenses are not reflective of the Registrant’s core operating expenses and excludes them when assessing its core operating results and from its internal budgets and forecasts.

     Amortization of purchased intangible assets. In connection with acquisitions, the Registrant records purchased intangible assets (consisting primarily of purchased technology and customer relationships) which are amortized over their estimated useful lives. The amortization is a non-cash expense which is not considered by management when assessing the core operating results of the Registrant. The purchased intangible assets and the related amortization can vary significantly based on the size and frequency of acquisitions.

     Acquisition-related stock-based compensation. Acquisition-related stock-based compensation is a non-cash expense related to stock-based performance plans entered into by the Registrant in connection with certain acquisitions. These expenses can vary based on the nature of the related plan associated with an acquisition, as well as the timing of achievement of the underlying performance milestones. Management does not consider acquisition-related stock-based compensation when assessing the core operating results of the Registrant. In addition, acquisition-related stock-based compensation can vary significantly based on the size and frequency of acquisitions, as well as the extent that such performance plans are used.

     Special charges. Special charges relate to the costs associated with exit or disposal activities, including severance benefits for involuntarily terminated employees, contract cancellation costs, asset impairments and other related charges. Management believes these charges are infrequent in nature and are unrelated to the Registrant’s core business. Accordingly, management does not consider these special charges when assessing the core operating results of the Registrant.

     Purchased in-process research and development. In connection with acquisitions, the Registrant records in-process research and development expenses when technological feasibility for acquired technology has not been established and no future alternative use for such technology exists. Management believes that in-process research and development expenses relate to the value created by the acquired company prior to the acquisition and thus

are transaction costs rather than ongoing costs of operating the Registrant’s core business. These costs are not considered by management when assessing the core operating results of the Registrant. In addition, purchased in-process research and development can vary significantly based on the nature, size and frequency of acquisitions.

     Income tax effects of excluded items. Income tax expense is adjusted by the amount of the tax expense or benefit that would result from use of the non-GAAP results instead of the GAAP results when calculating the Registrant’s tax expense.

     Each of the foregoing items has been excluded from the non-GAAP financial measures presented by the Registrant. Management believes that such exclusion is appropriate since these items are not reflective of the Registrant’s core operating activities and thus excludes them from their internal budgets and forecasts, as well as their assessment of core operating performance.

Item 9.01 Financial Statements and Exhibits

     (d) Exhibits

99.1 Press Release*, dated July 26, 2007, reporting the financial results of QLogic Corporation for its fiscal first quarter ended July 1, 2007.

* 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 26, 2007	/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 26, 2007, reporting the financial results of QLogic Corporation for its fiscal first quarter ended July 1, 2007.

EX-99.1

FOR IMMEDIATE RELEASE Exhibit 99.1

Editor’s Contact:
Frank Berry
QLogic Corporation
Phone: (949) 389-6499
frank.berry@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 2008

ALISO VIEJO, Calif., July 26, 2007 – QLogic Corp. (NASDAQ:QLGC), a leader in networking for storage and high performance computing, today announced its first quarter financial results for the period ended July 1, 2007.

First Quarter Highlights

• Net revenue increased 2% from the comparable quarter last year to $139.8 million.

• Net income: $19.0 million GAAP, $30.2 million non-GAAP.

• Net income per diluted share: $0.12 GAAP, $0.20 non-GAAP.

• Cash generated from operations was $35.5 million.

• $478.6 million in cash and short-term marketable securities as of July 1.

• Repurchased $107.0 million of outstanding common stock.

Financial Results

Net revenue for the first quarter of fiscal 2008 was $139.8 million and increased 2% from $136.7 million in the comparable quarter last year. Revenue from Host Products, which are comprised primarily of Fibre Channel and iSCSI Host Bus Adapters (HBAs) and InfiniBand Host Channel Adapters (HCAs), was $104.2 million during the first quarter of fiscal 2008 and increased 15% from $90.5 million in the comparable quarter last year. Revenue from Network Products, which are comprised primarily of Fibre Channel and InfiniBand switches, was $24.5 million during the first quarter of fiscal 2008 and increased 33% from $18.3 million in the comparable quarter last year. Revenue from Silicon Products, which are comprised primarily of protocol chips and management controllers, was $9.6 million during the first quarter of fiscal 2008 and decreased 62% from $25.4 million for the comparable quarter last year.

“The first quarter revenue from our core business, which is comprised of Host and Network Products, grew 18% from the comparable quarter last year,” said H. K. Desai, QLogic’s chief executive officer. “The revenue from our non-core Silicon Products declined during the first quarter as expected.”

Net income on a GAAP basis for the first quarter of fiscal 2008 was $19.0 million, or $0.12 per diluted share, and included stock-based compensation expense, acquisition-related charges, special charges, and the related income tax effects. Net income on a GAAP basis for the first quarter of fiscal 2007 was $21.1 million, or $0.13 per diluted share, and included stock-based compensation expense, acquisition-related charges, and the related income tax effects. Net income on a non-GAAP basis for the first quarter of fiscal 2008 was $30.2 million, or $0.20 per diluted share.

QLogic uses certain non-GAAP financial measures to supplement financial statements based on GAAP. A summary of these non-GAAP financial measures and a complete reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial 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.

QLogic’s fiscal 2008 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, Jeff Benck, president and chief operating officer, 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 Thomson Financial. Phone access to participate in the conference call is available at (719) 457-2650, pass code: 6648418.

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 9, 2007 at (719) 457-0820 or (888) 203-1112, pass code: 6648418.

About QLogic

QLogic is a leading supplier of high-performance storage networking solutions, which include controller chips, host adapters and fabric switches that are the backbone of storage networks for most Global 2000 corporations. The company delivers a broad and diverse portfolio of products that includes Fibre Channel 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 InfiniBand switches and InfiniBand host channel adapters for the emerging High Performance Computing (HPC) market. 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, Network Appliance and Sun Microsystems. QLogic is a member of the S&P 500 Index.

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; environmental compliance costs; international economic, regulatory, political and other risks; uncertain benefits from strategic business combinations; the ability to attract and retain key personnel; 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 technology; 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; 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 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 does not intend 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 1,		July 2,
	2007		2006
Net revenues	$	139,777	$	136,692
Cost of revenues		50,863		43,320
Gross profit		88,914		93,372
Operating expenses:
Engineering and development		34,684		32,920
Sales and marketing		21,173		22,401
General and administrative		8,186		8,442
Special charges		2,136		—
Purchased in-process research and development		—		1,910
Total operating expenses		66,179		65,673
Operating income		22,735		27,699
Interest and other income, net		6,266		6,842
Income before income taxes		29,001		34,541
Income taxes		10,006		13,465
Net income	$	18,995	$	21,076
Net income per share:
Basic	$	0.12	$	0.13
Diluted	$	0.12	$	0.13
Number of shares used in per share calculations:
Basic		153,178		161,548
Diluted		154,219		162,897

QLOGIC CORPORATION

RECONCILIATION OF GAAP NET INCOME TO
NON-GAAP NET INCOME

(unaudited — in thousands, except per share amounts)

	Three Months Ended
	July 1,			July 2,
	2007			2006
GAAP net income	$	18,995		$	21,076
Items excluded from GAAP net income:
Stock-based compensation		8,370			8,664
Amortization of purchased intangible assets		4,433			3,111
Acquisition-related stock-based compensation		703			2,879
Special charges		2,136			—
Purchased in-process research and development		—			1,910
Income tax effect		(4,456	)		(3,987	)
Total non-GAAP adjustments		11,186			12,577
Non-GAAP net income	$	30,181		$	33,653
Net income per diluted share:
GAAP net income	$	0.12		$	0.13
Adjustments		0.08			0.08
Non-GAAP net income	$	0.20		$	0.21

Non-GAAP Financial Measures

The non-GAAP financial measures contained herein are a supplement to the corresponding financial measures prepared in accordance with generally accepted accounting principles (GAAP). The non-GAAP financial measures presented exclude the items summarized in the above table. Management believes that adjustments for these items assist investors in making comparisons of period to period operating results and that these items are not indicative of the company’s on-going core operating performance.

The company has presented non-GAAP net income and non-GAAP net income per diluted share, on a basis consistent with its historical presentation, to assist investors in understanding the company’s core net income and core net income per diluted share on an on-going basis. These non-GAAP financial measures may also assist investors in making 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 non-GAAP net income and non-GAAP net income per diluted share are important measures in the evaluation of the company’s profitability. These non-GAAP financial measures exclude the adjustments described in the above table, 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 net income 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 measure. Management believes that providing these non-GAAP financial measures allows investors to view the company’s financial results in the way that management views the financial results.

The non-GAAP financial measures 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 financial 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 financial measures presented by the company may be different from the non-GAAP financial measures used by other companies.

For additional information on the items excluded from the non-GAAP financial measures and why the company believes that these non-GAAP financial measures provide useful supplemental information to investors, the company refers you to the Form 8-K regarding this release filed today with the Securities and Exchange Commission.

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

(unaudited – in thousands)	Three Months Ended
	July 1,			July 2,
	2007			2006
Non-GAAP Adjustments:
Cost of revenues:
Stock-based compensation	$	574		$	512
Amortization of purchased intangible assets		3,218			2,986
Acquisition-related stock-based compensation		(24	)		13
Total cost of revenue adjustments		3,768			3,511
Operating expenses:
Engineering and development:
Stock-based compensation		3,772			2,824
Amortization of purchased intangible assets		173			67
Acquisition-related stock-based compensation		715			2,209
Sales and marketing:
Stock-based compensation		1,625			2,691
Amortization of purchased intangible assets		1,042			58
Acquisition-related stock-based compensation		12			632
General and administrative:
Stock-based compensation		2,399			2,637
Acquisition-related stock-based compensation		—			25
Special charges		2,136			—
Purchased in-process research and development		—			1,910
Total operating expense adjustments		11,874			13,053
Total non-GAAP adjustments before income taxes		15,642			16,564
Income tax effect		(4,456	)		(3,987	)
Total non-GAAP adjustments	$	11,186		$	12,577

QLOGIC CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited — in thousands)

	July 1, 2007			April 1, 2007
ASSETS
Current assets:
Cash and cash equivalents	$	135,427		$	76,804
Short-term marketable securities		343,211			467,118
Accounts receivable, net		77,290			73,538
Inventories		37,980			38,935
Deferred tax assets		32,552			27,866
Other current assets		12,530			12,892
Total current assets		638,990			697,153
Property and equipment, net		91,940			90,913
Goodwill		102,843			102,910
Purchased intangible assets, net		50,463			55,093
Deferred tax assets		16,414			49
Other assets		25,245			25,241
	$	925,895		$	971,359
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	30,756		$	29,280
Accrued compensation		20,024			34,483
Accrued taxes		7,093			15,729
Deferred revenue		8,087			7,368
Other current liabilities		15,907			7,674
Total current liabilities		81,867			94,534
Accrued taxes		40,920			—
Deferred tax liabilities		—			2,294
Total liabilities		122,787			96,828
Stockholders’ equity:
Common stock		199			198
Additional paid-in capital		624,678			608,515
Retained earnings		1,007,723			988,728
Accumulated other comprehensive income		615			169
Treasury stock		(830,107	)		(723,079	)
Total stockholders’ equity		803,108			874,531
	$	925,895		$	971,359

QLOGIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited — in thousands)

	Three Months Ended
	July 1,			July 2,
	2007			2006
Cash flows from operating activities:
Net income	$	18,995		$	21,076
Adjustments to reconcile net income to net cash provided by by operating activities:
Depreciation and amortization		7,317			5,916
Stock-based compensation		8,370			8,664
Acquisition-related:
Amortization of purchased intangible assets		4,433			3,111
Stock-based compensation		703			2,879
Purchased in-process research and development		—			1,910
Deferred income taxes		(6,584	)		(4,134	)
Provision for losses on accounts receivable		70			326
Loss on disposal of property and equipment		473			117
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		(3,822	)		(3,576	)
Inventories		955			(1,849	)
Other assets		360			719
Accounts payable		1,495			(4,629	)
Accrued compensation		(12,530	)		(6,343	)
Accrued taxes		15,238			15,252
Deferred revenue		719			1,970
Other liabilities		(665	)		(1,428	)
Net cash provided by operating activities		35,527			39,981
Cash flows from investing activities:
Purchases of marketable securities		(25,463	)		(73,966	)
Sales and maturities of marketable securities		150,099			81,194
Additions to property and equipment		(8,639	)		(9,676	)
Acquisition of businesses, net of cash acquired		67			(92,092	)
Restricted cash placed in escrow		—			(15,000	)
Net cash provided by (used in) investing activities		116,064			(109,540	)
Cash flows from financing activities:
Proceeds from issuance of stock under stock plans		4,738			1,691
Tax benefit from issuance of stock under stock plans		424			196
Purchase of treasury stock		(98,130	)		(27,261	)
Net cash used in financing activities		(92,968	)		(25,374	)
Net increase (decrease) in cash and cash equivalents		58,623			(94,933	)
Cash and cash equivalents at beginning of period		76,804			125,192
Cash and cash equivalents at end of period	$	135,427		$	30,259

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 1,		July 2,
	2007		2006
Host Products	$	104,208	$	90,525
Network Products		24,452		18,326
Silicon Products		9,614		25,437
Other		1,503		2,404
	$	139,777	$	136,692

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 1,		July 2,
	2007		2006
United States	$	77,747	$	78,373
Europe, Middle East and Africa		30,623		26,767
Asia-Pacific and Japan		23,043		29,244
Rest of world		8,364		2,308
	$	139,777	$	136,692