EX-99.1 2 a52351exv99w1.htm EX-99.1 exv99w1
FOR IMMEDIATE RELEASE   Exhibit 99.1
Media Contact:
Steve Zivanic
QLogic Corporation
Phone: (408) 667-8039
steve.zivanic@qlogic.com
Investor Contact:
Simon Biddiscombe
QLogic Corporation
Phone: (949) 389-7533
simon.biddiscombe@qlogic.com
QLOGIC REPORTS FOURTH QUARTER
AND FISCAL YEAR 2009 RESULTS
Record Annual Revenues Achieved
ALISO VIEJO, Calif., April 30, 2009—QLogic Corp. (NASDAQ:QLGC), a leading supplier of high performance network infrastructure solutions, today announced its financial results for the fourth quarter and fiscal year ended March 29, 2009.
Fourth Quarter Highlights
  •   Net revenue: $130.5 million.
 
  •   Net income: $19.2 million GAAP, $24.5 million non-GAAP.
 
  •   Net income per diluted share: $0.16 GAAP, $0.20 non-GAAP.
 
  •   Cash generated from operations: $58.0 million.
 
  •   Cash and investment securities: $378.3 million as of March 29, 2009.
Fiscal Year Highlights
  •   Net revenue: a record $633.9 million.
 
  •   Net income: $108.8 million GAAP, $154.2 million non-GAAP.
 
  •   Net income per diluted share: $0.85 GAAP, $1.20 non-GAAP.
 
  •   Cash generated from operations: $221.3 million.
 
  •   Stock buyback: $205.5 million.
Financial Results
Net revenue for the fourth quarter of fiscal 2009 was $130.5 million compared to $159.7 million in the same quarter last year. Revenue from Host Products, which are comprised primarily of Fibre Channel and iSCSI host bus adapters and InfiniBand host channel adapters, was $88.4 million during the fourth quarter of fiscal 2009 compared to $110.3 million in the same quarter last year. Revenue from Network Products, which are comprised primarily of Fibre Channel and InfiniBand switches, was $25.1 million during the fourth quarter of fiscal 2009 compared to $27.5 million in the same quarter last year. Revenue

 

 

from Silicon Products, which are comprised primarily of protocol chips, was $13.7 million during the fourth quarter of fiscal 2009 compared to $13.9 million in the same quarter last year.
Net income on a GAAP basis for the fourth quarter of fiscal 2009 was $19.2 million, or $0.16 per diluted share, compared to $22.8 million or $0.17 per diluted share for the fourth quarter of fiscal 2008. Net income on a non-GAAP basis for the fourth quarter of fiscal 2009 was $24.5 million, or $0.20 per diluted share, compared to $37.7 million or $0.28 per diluted share for the fourth quarter of fiscal 2008.
Net revenue for fiscal 2009 was a record $633.9 million and increased 6% from $597.9 million in fiscal 2008. Net income on a GAAP basis for fiscal 2009 was $108.8 million, or $0.85 per diluted share, and increased from $96.2 million or $0.67 per diluted share for fiscal 2008. Non-GAAP net income for fiscal 2009 was $154.2 million, or $1.20 per diluted share, and increased from $141.3 million or $0.99 per diluted share for fiscal 2008.
“Despite a very tough macroeconomic environment in the second half of the year, QLogic was able to deliver record revenues for fiscal year 2009,” said H.K. Desai, chief executive officer, QLogic. “As we enter a challenging fiscal 2010, we believe that we have set the appropriate goals and strategies to drive long-term growth in revenues and profitability.”
QLogic uses certain non-GAAP financial measures to supplement financial statements based on GAAP. A summary of these non-GAAP financial measures and a 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 2009 fourth 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 Simon Biddiscombe, senior vice president and chief financial officer, will host the conference call. The call is being webcast live via the Internet at http://ir.qlogic.com and www.earnings.com. Phone access to participate in the conference call is available at (719) 325-4797, pass code: 5416549.
The financial information that the company intends to discuss during the conference call will be available on the company’s website at http://ir.qlogic.com for twelve months following the conference call. A replay of the conference call will be available via webcast at http://ir.qlogic.com for twelve months.

 

 

About QLogic
QLogic (NASDAQ: QLGC) is a global leader and technology innovator in high performance networking, including adapters, switches and ASICs. Leading OEMs and channel partners worldwide rely on QLogic products for their data, storage and server networking solutions. QLogic is a NASDAQ Global Select company and is included in the S&P 500. For more information, visit www.qlogic.com.
Disclaimer — Forward Looking Statements
This press release contains statements relating to future results of the company (including certain beliefs and projections regarding business trends, growth in revenue and profitability) 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; revenues may be affected by changes in IT spending levels; gross margins that may vary over time; the stock price of the company may be volatile; the company’s dependence on the storage area network market; potential adverse effects of server virtualization technology on the company’s business; potential adverse effects of increased market acceptance of blade servers; 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; the company’s dependence on sole source and limited source suppliers; the company’s dependence on relationships with certain silicon chip suppliers; declines in the market value of the company’s marketable securities; 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 the company’s products; changes in the company’s tax provisions or adverse outcomes resulting from examination of its 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     Year Ended  
    March 29,     March 30,     March 29,     March 30,  
    2009     2008     2009     2008  
 
                                
Net revenues
   $ 130,547     $ 159,723     $ 633,862     $ 597,866  
Cost of revenues
     44,533       53,846       210,075       205,959  
 
                        
Gross profit
     86,014       105,877       423,787       391,907  
 
                        
 
                                
Operating expenses:
                                
Engineering and development
     32,687       33,752       133,252       134,668  
Sales and marketing
     19,064       22,062       86,959       84,166  
General and administrative
     7,747       8,799       32,639       34,049  
Special charges
     2,656       1,556       4,063       5,328  
 
                        
Total operating expenses
     62,154       66,169       256,913       258,211  
 
                        
 
                                
Operating income
     23,860       39,708       166,874       133,696  
 
                                
Interest and other income (expense), net
     99       (2,861 )     2,134       14,024  
 
                        
 
                                
Income before income taxes
     23,959       36,847       169,008       147,720  
 
                                
Income taxes
     4,762       14,082       60,219       51,510  
 
                        
 
                                
Net income
   $ 19,197     $ 22,765     $ 108,789     $ 96,210  
 
                        
 
                                
Net income per share:
                                
Basic
   $ 0.16     $ 0.17     $ 0.85     $ 0.68  
Diluted
   $ 0.16     $ 0.17     $ 0.85     $ 0.67  
 
                                
Number of shares used in per share calculations:
                                
Basic
     120,957       133,873       127,776       142,167  
Diluted
     121,486       134,762       128,570       142,901  

 

 

QLOGIC CORPORATION
RECONCILIATION OF GAAP NET INCOME TO
NON-GAAP NET INCOME
(unaudited — in thousands, except per share amounts)
                                 
    Three Months Ended     Year Ended  
    March 29,     March 30,     March 29,     March 30,  
    2009     2008     2009     2008  
 
                                
GAAP net income
   $ 19,197     $ 22,765     $ 108,789     $ 96,210  
Items excluded from GAAP net income:
                                
Stock-based compensation
     6,502       7,515       28,646       31,764  
Amortization of purchased intangible assets
     2,713       3,618       15,032       16,725  
Impairment of intangible assets
     —       2,338       —       2,338  
Acquisition-related stock-based compensation
     (614 )     641       173       1,209  
Special charges
     2,656       1,556       4,063       5,328  
Impairment of investment securities
     4,405       6,867       16,407       6,867  
Net losses (gains) on trading securities
     149       —       (3,456 )     —  
Gain on sale of shares of a publicly-traded company
     (2,075 )     —       (2,075 )     —  
Income taxes
     (8,421 )     (7,589 )     (13,391 )     (19,093 )
 
                        
Total non-GAAP adjustments
     5,315       14,946       45,399       45,138  
 
                        
Non-GAAP net income
   $ 24,512     $ 37,711     $ 154,188     $ 141,348  
 
                        
 
                                
Net income per diluted share:
                                
GAAP net income
   $ 0.16     $ 0.17     $ 0.85     $ 0.67  
Adjustments
     0.04       0.11       0.35       0.32  
 
                        
Non-GAAP net income
   $ 0.20     $ 0.28     $ 1.20     $ 0.99  
 
                        
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 and non-GAAP net income per diluted share in its evaluation of the company’s core after-tax results of operations and trends between fiscal periods and believes that these measures are important components 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 these non-GAAP financial measures. 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:
                                 
    Three Months Ended     Year Ended  
    March 29,     March 30,     March 29,     March 30,  
(unaudited — in thousands)   2009     2008     2009     2008  
Non-GAAP Adjustments:
                                
Cost of revenues:
                                
Stock-based compensation
   $ 481     $ 499     $ 2,058     $ 2,128  
Amortization of purchased intangible assets
     1,873       2,779       11,673       12,867  
Impairment of intangible assets
     —       2,338       —       2,338  
Acquisition-related stock-based compensation
     —       —       —       (24 )
 
                        
Total cost of revenue adjustments
     2,354       5,616       13,731       17,309  
 
                        
 
                                
Operating expenses:
                                
Engineering and development:
                                
Stock-based compensation
     3,391       3,400       14,991       14,531  
Amortization of purchased intangible assets
     31       31       125       314  
Acquisition-related stock-based compensation
     (619 )     644       151       1,198  
Sales and marketing:
                                
Stock-based compensation
     1,242       1,502       5,545       6,255  
Amortization of purchased intangible assets
     809       808       3,234       3,544  
Acquisition-related stock-based compensation
     5       (3 )     22       35  
General and administrative:
                                
Stock-based compensation
     1,388       2,114       6,052       8,850  
Special charges
     2,656       1,556       4,063       5,328  
 
                        
Total operating expense adjustments
     8,903       10,052       34,183       40,055  
 
                        
 
                                
Interest and other income:
                                
Impairment of investment securities
     4,405       6,867       16,407       6,867  
Net losses (gains) on trading securities
     149       —       (3,456 )     —  
Gain on sale of shares of a publicly-traded company
     (2,075 )     —       (2,075 )     —  
 
                        
 
                                
Total interest and other income adjustments
     2,479       6,867       10,876       6,867  
 
                        
 
                                
Total non-GAAP adjustments before income taxes
     13,736       22,535       58,790       64,231  
Income taxes
     (8,421 )     (7,589 )     (13,391 )     (19,093 )
 
                        
Total non-GAAP adjustments
   $ 5,315     $ 14,946     $ 45,399     $ 45,138  
 
                        

 

 

QLOGIC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited — in thousands)
                 
    March 29, 2009     March 30, 2008  
ASSETS
                
 
                
Current assets:
                
Cash and cash equivalents
   $ 203,722     $ 160,009  
Short-term investment securities
     139,561       160,497  
Accounts receivable, net
     68,519       81,642  
Inventories
     40,293       27,520  
Deferred tax assets
     19,002       32,227  
Other current assets
     10,854       8,925  
 
            
Total current assets
     481,951       470,820  
 
                
Long-term investment securities
     34,986       55,903  
Property and equipment, net
     92,547       93,726  
Goodwill
     118,859       127,409  
Purchased intangible assets, net
     19,117       34,652  
Deferred tax assets
     28,785       25,870  
Other assets
     4,045       2,586  
 
            
 
                
 
   $ 780,290     $ 810,966  
 
            
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
 
                
Current liabilities:
                
Accounts payable
   $ 36,874     $ 35,643  
Accrued compensation
     28,702       31,120  
Accrued taxes
     13,499       5,262  
Deferred revenue
     7,470       8,693  
Other current liabilities
     6,728       5,952  
 
            
Total current liabilities
     93,273       86,670  
 
                
Accrued taxes
     47,116       48,163  
Deferred revenue
     8,559       5,087  
Other liabilities
     4,797       5,130  
 
            
Total liabilities
     153,745       145,050  
 
            
 
                
Stockholders’ equity:
                
Common stock
     202       200  
Additional paid-in capital
     712,064       657,893  
Retained earnings
     1,193,727       1,084,938  
Accumulated other comprehensive income (loss)
     634       (2,530 )
Treasury stock
     (1,280,082 )     (1,074,585 )
 
            
Total stockholders’ equity
     626,545       665,916  
 
            
 
                
 
   $ 780,290     $ 810,966  
 
            

 

 

QLOGIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited — in thousands)
                 
    Year Ended  
    March 29,     March 30,  
    2009     2008  
 
                
Cash flows from operating activities:
                
Net income
   $ 108,789     $ 96,210  
Adjustments to reconcile net income to net cash provided by operating activities:
                
Depreciation and amortization
     32,525       30,857  
Stock-based compensation
     28,646       31,764  
Acquisition-related:
                
Amortization of purchased intangible assets
     15,032       16,725  
Stock-based compensation
     173       1,209  
Deferred income taxes
     16,660       (14,549 )
Impairment of investment securities
     16,407       6,867  
Net gains on trading securities
     (3,456 )     —  
Gain on sale of shares of a publicly-traded company
     (2,075 )     —  
Provision for losses on accounts receivable
     278       399  
Loss on disposal of property and equipment
     402       1,328  
Impairment of intangible assets
     —       2,338  
Changes in operating assets and liabilities:
                
Accounts receivable
     12,845       (8,503 )
Inventories
     (12,773 )     11,415  
Other assets
     (2,126 )     3,593  
Accounts payable
     707       7,282  
Accrued compensation
     (884 )     (1,940 )
Accrued taxes
     7,190       20,635  
Deferred revenue
     2,249       6,412  
Other liabilities
     688       (453 )
 
            
Net cash provided by operating activities
     221,277       211,589  
 
            
 
                
Cash flows from investing activities:
                
Purchases of available-for-sale securities
     (122,437 )     (185,707 )
Proceeds from sales and maturities of available-for-sale securities
     161,320       425,033  
Proceeds from disposition of trading securities
     4,550       —  
Reclassification of cash equivalents to investment securities
     (57,209 )     —  
Distributions from other investment securities
     48,855       —  
Purchases of property and equipment
     (30,721 )     (30,001 )
Acquisition of business
     —       67  
 
            
Net cash provided by investing activities
     4,358       209,392  
 
            
 
                
Cash flows from financing activities:
                
Proceeds from issuance of stock under stock plans
     23,541       14,696  
Tax benefit from issuance of stock under stock plans
     279       288  
Purchases of treasury stock
     (205,742 )     (352,760 )
 
            
Net cash used in financing activities
     (181,922 )     (337,776 )
 
            
 
                
Net increase in cash and cash equivalents
     43,713       83,205  
 
                
Cash and cash equivalents at beginning of year
     160,009       76,804  
 
            
 
                
Cash and cash equivalents at end of year
   $ 203,722     $ 160,009  
 
            

 

 

QLOGIC CORPORATION
SUPPLEMENTAL FINANCIAL INFORMATION
(unaudited — in thousands)
Net Revenues
A summary of the company’s revenue components is as follows:
                                 
    Three Months Ended     Year Ended  
    March 29,     March 30,     March 29,     March 30,  
    2009     2008     2009     2008  
 
                                
Host Products
   $ 88,364     $ 110,323     $ 440,862     $ 437,882  
Network Products
     25,074       27,519       117,551       101,758  
Silicon Products
     13,719       13,940       61,426       44,323  
Royalty and Service
     3,390       7,941       14,023       13,903  
 
                        
 
   $ 130,547     $ 159,723     $ 633,862     $ 597,866  
 
                        
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     Year Ended  
    March 29,     March 30,     March 29,     March 30,  
    2009     2008     2009     2008  
 
                                
United States
   $ 63,644     $ 80,211     $ 303,729     $ 305,146  
Europe, Middle East and Africa
     31,056       39,206       154,463       144,631  
Asia-Pacific and Japan
     28,440       32,063       139,850       113,063  
Rest of world
     7,407       8,243       35,820       35,026  
 
                        
 
   $ 130,547     $ 159,723     $ 633,862     $ 597,866