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 22, 2010

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
(Address of principal executive offices) 92656
(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))

Item 2.02 Results of Operations and Financial Condition

     On July 22, 2010, the Registrant reported the financial results for its fiscal first quarter ended June 27, 2010. 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 99.1 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 Exhibit 99.1 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 press release included in Exhibit 99.1, 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 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 may also 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 and non-GAAP net income per diluted share in its evaluation of the Registrant’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 Registrant 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 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, purchases of common stock under the Registrant’s Employee Stock Purchase Plan and a stock-based performance plan entered into by the Registrant in connection with an acquisition. 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 acquisition-related 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 acquisition-related intangible assets and the related amortization can vary significantly based on the size and frequency of acquisitions.

     Special charges. Special charges consist of costs related to severance benefits for involuntarily-terminated employees. Management believes these charges are unrelated to the Registrant’s core business and does not consider these special charges when assessing the core operating results of the Registrant.

     Gains recognized on previously impaired investment securities. The Registrant recognized gains on investment securities that were previously impaired. The Registrant had previously recognized impairment charges on certain of its investment securities due to declines in the fair value of these investments below their cost basis that management had deemed to be other-than-temporary. Management believes that these gains are unrelated to the Registrant’s core business and does not consider the gains recognized on previously impaired investment securities when assessing the core operating results of the Registrant.

     Income tax effect. Income tax expense is adjusted by the amount of tax benefit or expense (including any valuation allowance related to deferred tax assets) that would result from the use of the non-GAAP results instead of the GAAP results when calculating the Registrant’s tax expense. Management believes changes in valuation allowances related to the Registrant’s deferred tax assets associated with non-core assets (i.e., investment securities) are unrelated to the Registrant’s core business. Accordingly, management does not consider valuation allowances related to such deferred tax assets when assessing the core operating results of the Registrant.

     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 22, 2010, reporting the financial results of QLogic Corporation for its fiscal first quarter ended June 27, 2010.

* 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 22, 2010	/s/ Simon Biddiscombe
	Simon Biddiscombe
	Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit
Number	Description of Document
99.1	Press Release, dated July 22, 2010, reporting the financial results of QLogic Corporation for its fiscal first quarter ended June 27, 2010.

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Media Contact:
Steve Zivanic
QLogic Corporation
408.667.8039
steve.zivanic@qlogic.com

Investor Contact:
Simon Biddiscombe
QLogic Corporation
949.389.7533
simon.biddiscombe@qlogic.com

QLOGIC REPORTS FIRST QUARTER
RESULTS FOR FISCAL YEAR 2011

ALISO VIEJO, Calif., July 22, 2010—QLogic Corp. (Nasdaq:QLGC), a leading supplier of high performance network infrastructure solutions, today announced its first quarter financial results for the period ended June 27, 2010.

First Quarter Highlights

• Net revenue: $142.6 million

• GAAP net income: $25.4 million or $0.22 per diluted share

• Non-GAAP net income: $34.7 million or $0.30 per diluted share

• Cash generated from operations: $30.6 million

• Cash and investment securities: $348.6 million as of June 27, 2010

Financial Results

Net revenue for the first quarter of fiscal 2011 was $142.6 million and increased 16% from $122.8 million in the same quarter last year. Revenue from Host Products was $102.5 million during the first quarter of fiscal 2011 and increased 16% from $88.3 million in the same quarter last year. Revenue from Network Products was $25.6 million during the first quarter of fiscal 2011 and increased 3% from $25.0 million in the same quarter last year. Revenue from Silicon Products was $11.9 million during the first quarter of fiscal 2011 and increased 60% from $7.4 million in the same quarter last year.

Net income on a GAAP basis for the first quarter of fiscal 2011 increased 70% to $25.4 million, or $0.22 per diluted share, from $15.0 million, or $0.13 per diluted share, for the first quarter of fiscal 2010. Net income on a non-GAAP basis for the first quarter of fiscal 2011 increased 45% to $34.7 million, or $0.30 per diluted share, from $23.9 million, or $0.20 per diluted share, for the first quarter of fiscal 2010.

“We are very pleased with our strong financial performance during the first quarter, which was highlighted by a 16% increase in net revenue and a significant increase in profitability from the first quarter of last year,” said H. K. Desai, chief executive officer, QLogic. “We continue to realize tangible results from our strategic initiatives. During the first quarter, we achieved a significant milestone with revenue totaling $10 million from products serving host applications for the fast-growing converged network market.”

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 2011 first quarter conference call is scheduled for today at 2:00 p.m. Pacific Time (5:00 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) 325-2490, pass code: 8866403.

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.

Follow QLogic @ twitter.com/qlogic

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) 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: declines in information technology spending levels; potential fluctuations in operating results; gross margins that may vary over time; the stock price of the company may be volatile; the company’s dependence on the networking markets served; 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 small 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 third-party subcontractors and contract manufacturers; declines in the market value of the company’s investment securities; the complexity of the company’s products; sales fluctuations arising from customer transitions to new products; changes in the company’s tax provisions or adverse outcomes resulting from examination of its income tax returns; 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; the use of “open source” software in the company’s products; changes in regulations or standards regarding energy use of the company’s products; 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
	June 27,		June 28,
	2010		2009
Net revenues	$	142,609	$	122,775
Cost of revenues		49,701		44,469
Gross profit		92,908		78,306
Operating expenses:
Engineering and development		34,709		34,078
Sales and marketing		20,430		19,465
General and administrative		8,468		8,314
Special charges		931		—
Total operating expenses		64,538		61,857
Operating income		28,370		16,449
Interest and other income, net		1,676		2,924
Income before income taxes		30,046		19,373
Income taxes		4,597		4,410
Net income	$	25,449	$	14,963
Net income per share:
Basic	$	0.23	$	0.13
Diluted	$	0.22	$	0.13
Number of shares used in per share calculations:
Basic		111,425		118,860
Diluted		113,730		119,474

QLOGIC CORPORATION

RECONCILIATION OF GAAP NET INCOME TO
NON-GAAP NET INCOME

(unaudited — in thousands, except per share amounts)

	Three Months Ended
	June 27,			June 28,
	2010			2009
GAAP net income	$	25,449		$	14,963
Items excluded from GAAP net income:
Stock-based compensation		10,323			9,619
Amortization of acquisition-related intangible assets		1,156			2,210
Special charges		931			—
Gains recognized on previously impaired investment securities		(312	)		(605	)
Income tax effect		(2,865	)		(2,292	)
Total non-GAAP adjustments		9,233			8,932
Non-GAAP net income	$	34,682		$	23,895
Net income per diluted share:
GAAP net income	$	0.22		$	0.13
Adjustments		0.08			0.07
Non-GAAP net income	$	0.30		$	0.20

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 per diluted 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
	June 27,			June 28,
(unaudited - in thousands)	2010			2009
Non-GAAP Adjustments:
Cost of revenues:
Stock-based compensation	$	734		$	734
Amortization of acquisition-related intangible assets		1,156			1,402
Total cost of revenue adjustments		1,890			2,136
Operating expenses:
Engineering and development:
Stock-based compensation		5,007			5,026
Sales and marketing:
Stock-based compensation		2,113			1,644
Amortization of acquisition-related intangible assets		—			808
General and administrative:
Stock-based compensation		2,469			2,215
Special charges		931			—
Total operating expense adjustments		10,520			9,693
Interest and other income:
Gains recognized on previously impaired investment securities		(312	)		(605	)
Total non-GAAP adjustments before income taxes		12,098			11,224
Income tax effect		(2,865	)		(2,292	)
Total non-GAAP adjustments	$	9,233		$	8,932

QLOGIC CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited — in thousands)

	June 27, 2010			March 28, 2010
ASSETS
Current assets:
Cash and cash equivalents	$	182,953		$	190,308
Short-term investment securities		165,628			185,365
Accounts receivable, net		74,551			73,301
Inventories		24,406			19,403
Deferred tax assets		11,168			10,976
Other current assets		11,636			9,845
Total current assets		470,342			489,198
Property and equipment, net		79,948			83,496
Goodwill		119,748			119,748
Purchased intangible assets, net		16,755			17,394
Deferred tax assets		30,027			36,917
Other assets		3,643			3,984
	$	720,463		$	750,737
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	35,818		$	36,766
Accrued compensation		16,608			22,727
Accrued taxes		2,921			2,633
Deferred revenue		9,763			9,240
Other current liabilities		9,267			11,069
Total current liabilities		74,377			82,435
Accrued taxes		65,660			70,577
Deferred revenue		6,734			7,401
Other liabilities		6,660			6,985
Total liabilities		153,431			167,398
Stockholders’ equity:
Common stock		206			205
Additional paid-in capital		789,455			778,853
Retained earnings		1,274,124			1,248,675
Accumulated other comprehensive income		1,353			1,206
Treasury stock		(1,498,106	)		(1,445,600	)
Total stockholders’ equity		567,032			583,339
	$	720,463		$	750,737

QLOGIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited — in thousands)

	Three Months Ended
	June 27,			June 28,
	2010			2009
Cash flows from operating activities:
Net income	$	25,449		$	14,963
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		8,066			8,012
Stock-based compensation		10,323			9,619
Amortization of acquisition-related intangible assets		1,156			2,210
Deferred income taxes		6,584			3,260
Net gains on investment securities		(711	)		(1,199	)
Other non-cash items		(5	)		25
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable		(1,247	)		312
Inventories		(5,003	)		11,386
Other assets		76			(9	)
Accounts payable		(687	)		(9,140	)
Accrued compensation		(5,546	)		(12,748	)
Accrued taxes		(6,155	)		(10,030	)
Deferred revenue		(144	)		570
Other liabilities		(1,511	)		(283	)
Net cash provided by operating activities		30,645			16,948
Cash flows from investing activities:
Purchases of available-for-sale securities		(34,604	)		(113,534	)
Proceeds from sales and maturities of available-for-sale securities		45,657			64,056
Proceeds from disposition of trading securities		9,350			5,800
Distributions from other investment securities		293			—
Purchases of property and equipment		(5,297	)		(6,958	)
Acquisition of business, net of cash acquired		—			(13,664	)
Net cash provided by (used in) investing activities		15,399			(64,300	)
Cash flows from financing activities:
Proceeds from issuance of common stock under stock-based awards		4,555			1,700
Excess tax benefits from stock-based awards		1,029			(244	)
Minimum tax withholding paid on behalf of employees for restricted stock units		(5,861	)		(2,395	)
Purchases of treasury stock		(53,122	)		(20,959	)
Payoff of line of credit assumed in acquisition		—			(934	)
Net cash used in financing activities		(53,399	)		(22,832	)
Net decrease in cash and cash equivalents		(7,355	)		(70,184	)
Cash and cash equivalents at beginning of period		190,308			203,722
Cash and cash equivalents at end of period	$	182,953		$	133,538

QLOGIC CORPORATION

SUPPLEMENTAL FINANCIAL INFORMATION

(unaudited — in thousands)

Net Revenues

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

	Three Months Ended
	June 27,		June 28,
	2010		2009
Host Products	$	102,472	$	88,329
Network Products		25,638		24,976
Silicon Products		11,868		7,401
Royalty and Service		2,631		2,069
	$	142,609	$	122,775

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
	June 27,		June 28,
	2010		2009
United States	$	63,947	$	60,830
Asia-Pacific and Japan		39,034		26,257
Europe, Middle East and Africa		32,108		28,412
Rest of world		7,520		7,276
	$	142,609	$	122,775