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 28, 2011

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

	Item 2.02 Results of Operations and Financial Condition
	Item 9.01 Financial Statements and Exhibits
SIGNATURES
EXHIBIT INDEX
EX-99.1

Item 2.02 Results of Operations and Financial Condition

     On July 28, 2011, the Company reported the financial results for its fiscal first quarter ended July 3, 2011. A copy of the press release issued by the Company 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 Company 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 Company 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 Company 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 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 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. Although the non-GAAP financial measures presented by the Company may be different from the non-GAAP financial measures used by other companies, the Company believes that these non-GAAP financial measures may also assist investors in making comparisons of the Company’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 Company’s profitability.

     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 Company 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 Company and purchases of common stock under the Company’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 Company, such as the market price and associated volatility of the Company’s common stock. Accordingly, management believes these expenses are not reflective of the Company’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 Company records purchased intangible assets 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 Company. 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 Company’s core business and does not consider these special charges when assessing the core operating results of the Company.

     Gains recognized on previously impaired investment securities. The Company recognized gains on investment securities that were previously impaired. The Company 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 Company’s core business and does not consider the gains recognized on previously impaired investment securities when assessing the core operating results of the Company.

     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 Company’s tax expense. Management believes changes in valuation allowances related to the Company’s deferred tax assets associated with non-core assets (i.e., investment securities) and acquisition-related deferred tax assets are unrelated to the Company’s core business. Accordingly, management does not consider valuation allowances related to such deferred tax assets when assessing the core operating results of the Company.

     Each of the foregoing items has been excluded from the non-GAAP financial measures presented by the Company. Management believes that such exclusion is appropriate since these items are not reflective of the Company’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 28, 2011, reporting the financial results of QLogic Corporation for its fiscal first quarter ended July 3, 2011.

* 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 28, 2011	/s/ Jean Hu
	Jean Hu
	Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit
Number	Description of Document
99.1	Press Release, dated July 28, 2011, reporting the financial results of QLogic Corporation for its fiscal first quarter ended July 3, 2011.

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Media Contact:
Sonal Dave
QLogic Corporation
949.533.1655
sonal.dave@qlogic.com

Investor Contact:
Jean Hu
QLogic Corporation
949.389.7579
jean.hu@qlogic.com

QLOGIC REPORTS FIRST QUARTER
RESULTS FOR FISCAL YEAR 2012

ALISO VIEJO, Calif., July 28, 2011—QLogic Corp. (Nasdaq:QLGC), a leading supplier of high performance network infrastructure solutions, today announced its first quarter financial results for the period ended July 3, 2011.

First Quarter Highlights

• Net revenue: $151.6 million

• GAAP net income: $32.4 million or $0.31 per diluted share

• Non-GAAP net income: $40.3 million or $0.38 per diluted share

• Operating margin: 21.5% GAAP, 28.7% non-GAAP

• Cash generated from operations: $40.3 million

Financial Results

Net revenue for the first quarter of fiscal 2012 was $151.6 million and increased 6% from $142.6 million in the same quarter last year. Revenue from Host Products was $109.8 million during the first quarter of fiscal 2012 and increased 7% from $102.5 million in the same quarter last year. Revenue from Network Products was $21.9 million during the first quarter of fiscal 2012 compared to $25.6 million in the same quarter last year. Revenue from Silicon Products was $16.8 million during the first quarter of fiscal 2012 and increased 42% from $11.9 million in the same quarter last year.

Net income on a GAAP basis for the first quarter of fiscal 2012 increased to $32.4 million, or $0.31 per diluted share, from $25.4 million, or $0.22 per diluted share, for the first quarter of fiscal 2011. Net income on a non-GAAP basis for the first quarter of fiscal 2012 increased to $40.3 million, or $0.38 per diluted share, from $34.7 million, or $0.30 per diluted share, for the first quarter of fiscal 2011.

“We are very pleased with the performance of our business in the first quarter. Our revenue of $151.6 million in the first quarter was up 6% over the prior year and was at the high end of our guidance range, driven by strength in both Host and Silicon Products,” said Simon Biddiscombe, president and chief executive officer, QLogic. “We continue to see tangible benefits from our focus and investments in expansion markets. Our results in the first quarter were highlighted by strong growth in revenue from converged and 10Gb Ethernet products, which grew more than 20% sequentially for the second consecutive quarter.”

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 2012 first quarter conference call is scheduled for today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). Simon Biddiscombe, president and chief executive officer, and Jean Hu, 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) 457-2632, pass code: 8634537.

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. 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 and market trends, including which markets will expand) 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: unfavorable economic conditions; 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; 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; the company’s ability to compete effectively with other companies; the complexity of the company’s products; declining average unit sales prices of comparable products; 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; the ability to attract and retain key personnel; sales fluctuations arising from customer transitions to new products; seasonal fluctuations and uneven sales patterns in orders from customers; a reduction in sales efforts by current distributors; changes in the company’s tax provisions or adverse outcomes resulting from examination of its income tax returns; international economic, regulatory, political and other risks; facilities of the company and its suppliers and customers are located in areas subject to natural disasters; the ability to protect proprietary rights; the ability to satisfactorily resolve any infringement claims; uncertain benefits from strategic business combinations; declines in the market value of the company’s investment securities; environmental compliance costs; changes in regulations or standards regarding energy use of the company’s products; difficulties in transitioning to smaller geometry process technologies; the use of “open source” software in the company’s products; and computer viruses and other tampering with the company’s computer systems.

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 3,		June 27,
	2011		2010
Net revenues	$	151,622	$	142,609
Cost of revenues		50,859		49,701
Gross profit		100,763		92,908
Operating expenses:
Engineering and development		37,692		34,709
Sales and marketing		21,263		20,430
General and administrative		9,163		8,468
Special charges		—		931
Total operating expenses		68,118		64,538
Operating income		32,645		28,370
Interest and other income, net		1,048		1,676
Income before income taxes		33,693		30,046
Income taxes		1,267		4,597
Net income	$	32,426	$	25,449
Net income per share:
Basic	$	0.31	$	0.23
Diluted	$	0.31	$	0.22
Number of shares used in per share calculations:
Basic		104,679		111,425
Diluted		105,789		113,730

QLOGIC CORPORATION

RECONCILIATION OF GAAP NET INCOME TO
NON-GAAP NET INCOME

(unaudited — in thousands, except per share amounts)

	Three Months Ended
	July 3,			June 27,
	2011			2010
GAAP net income	$	32,426		$	25,449
Items excluded from GAAP net income:
Stock-based compensation		9,667			10,323
Amortization of acquisition-related intangible assets		1,156			1,156
Special charges		—			931
Gains recognized on previously impaired investment securities		—			(312	)
Income tax effect		(2,911	)		(2,865	)
Total non-GAAP adjustments		7,912			9,233
Non-GAAP net income	$	40,338		$	34,682
Net income per diluted share:
GAAP net income	$	0.31		$	0.22
Adjustments		0.07			0.08
Non-GAAP net income	$	0.38		$	0.30

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
	July 3,			June 27,
(unaudited - in thousands)	2011			2010
Non-GAAP Adjustments:
Cost of revenues:
Stock-based compensation	$	808		$	734
Amortization of acquisition-related intangible assets		1,156			1,156
Total cost of revenue adjustments		1,964			1,890
Operating expenses:
Engineering and development:
Stock-based compensation		4,631			5,007
Sales and marketing:
Stock-based compensation		1,857			2,113
General and administrative:
Stock-based compensation		2,371			2,469
Special charges		—			931
Total operating expense adjustments		8,859			10,520
Interest and other income:
Gains recognized on previously impaired investment securities		—			(312	)
Total non-GAAP adjustments before income taxes		10,823			12,098
Income tax effect		(2,911	)		(2,865	)
Total non-GAAP adjustments	$	7,912		$	9,233

QLOGIC CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited — in thousands)

	July 3, 2011			April 3, 2011
ASSETS
Current assets:
Cash and cash equivalents	$	89,802		$	147,780
Marketable securities		309,926			236,296
Accounts receivable, net		79,110			70,134
Inventories		26,015			26,931
Deferred tax assets		17,315			17,754
Other current assets		21,270			20,753
Total current assets		543,438			519,648
Property and equipment, net		81,506			77,134
Goodwill		119,748			119,748
Purchased intangible assets, net		12,148			12,694
Deferred tax assets		22,420			25,333
Other assets		2,419			2,650
	$	781,679		$	757,207
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	38,353		$	34,816
Accrued compensation		21,184			25,858
Accrued taxes		5,924			6,012
Deferred revenue		10,172			10,431
Other current liabilities		7,916			5,221
Total current liabilities		83,549			82,338
Accrued taxes		60,038			62,565
Deferred revenue		4,832			5,169
Other liabilities		6,280			5,971
Total liabilities		154,699			156,043
Stockholders’ equity:
Common stock		209			208
Additional paid-in capital		856,911			844,546
Retained earnings		1,420,191			1,387,765
Accumulated other comprehensive income		1,081			614
Treasury stock		(1,651,412	)		(1,631,969	)
Total stockholders’ equity		626,980			601,164
	$	781,679		$	757,207

QLOGIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited — in thousands)

	Three Months Ended
	July 3,			June 27,
	2011			2010
Cash flows from operating activities:
Net income	$	32,426		$	25,449
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		6,975			8,066
Stock-based compensation		9,667			10,323
Amortization of acquisition-related intangible assets		1,156			1,156
Deferred income taxes		3,124			6,584
Net gains on investment securities		(390	)		(711	)
Other non-cash items		1,211			(5	)
Changes in operating assets and liabilities:
Accounts receivable		(9,101	)		(1,247	)
Inventories		916			(5,003	)
Other assets		(1,854	)		76
Accounts payable		539			(687	)
Accrued compensation		(4,674	)		(5,546	)
Accrued taxes		(1,340	)		(6,155	)
Deferred revenue		(596	)		(144	)
Other liabilities		2,254			(1,511	)
Net cash provided by operating activities		40,313			30,645
Cash flows from investing activities:
Purchases of available-for-sale securities		(133,619	)		(34,604	)
Proceeds from sales and maturities of available-for-sale securities		60,171			45,657
Proceeds from disposition of trading securities		—			9,350
Distributions from other investment securities		—			293
Purchases of property and equipment		(8,982	)		(5,297	)
Net cash provided by (used in) investing activities		(82,430	)		15,399
Cash flows from financing activities:
Proceeds from issuance of common stock under stock-based awards		7,553			4,555
Excess tax benefits from stock-based awards		538			1,029
Minimum tax withholding paid on behalf of employees for restricted stock units		(5,259	)		(5,861	)
Purchases of treasury stock		(18,693	)		(53,122	)
Net cash used in financing activities		(15,861	)		(53,399	)
Net decrease in cash and cash equivalents		(57,978	)		(7,355	)
Cash and cash equivalents at beginning of period		147,780			190,308
Cash and cash equivalents at end of period	$	89,802		$	182,953

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 3,		June 27,
	2011		2010
Host Products	$	109,777	$	102,472
Network Products		21,878		25,638
Silicon Products		16,829		11,868
Service and other		3,138		2,631
	$	151,622	$	142,609

Geographic Revenues

Revenues by geographic area are presented based upon the ship-to location of the customer, which is not necessarily indicative of the location of the ultimate end-user of the company’s products. Net revenues by geographic area are as follows:

	Three Months Ended
	July 3,		June 27,
	2011		2010
United States	$	69,671	$	63,947
Asia-Pacific and Japan		45,462		39,034
Europe, Middle East and Africa		28,756		32,108
Rest of world		7,733		7,520
	$	151,622	$	142,609