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): January 18, 2006

QLOGIC CORPORATION

(Exact name of registrant as specified in its charter)

Delaware (State of incorporation)	0-23298 (Commission File Number)	33-0537669 (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))

TABLE OF CONTENTS

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

Item 2.02 Results of Operations and Financial Condition

     On January 18, 2006, the Registrant reported the financial results for its fiscal third quarter ended January 1, 2006. A copy of the press release issued by the Registrant concerning the foregoing results is furnished herewith as Exhibit 99.1 and is incorporated by reference.

     The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filings of the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference in such filing. The information in this report, including the exhibit hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

Item 9.01 Financial Statements and Exhibits

     (c) Exhibits

99.1 Press Release*, dated January 18, 2006, reporting the financial results of QLogic Corporation for its fiscal third quarter ended January 1, 2006.

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

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	QLOGIC CORPORATION
January 18, 2006	/s/ Anthony J. Massetti
	Anthony J. Massetti
	Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit
Number	Description of Document
99.1	Press Release, dated January 18, 2006, reporting the financial results of QLogic Corporation for its fiscal third quarter ended January 1, 2006.

EX-99.1

EXHIBIT 99.1

FOR IMMEDIATE RELEASE

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 THIRD QUARTER
RESULTS FOR FISCAL YEAR 2006
Record Revenue from Continuing Operations

Aliso Viejo, Calif., January 18, 2006 — QLogic Corporation (Nasdaq:QLGC), the leader in Fibre Channel host bus adapters (HBAs), stackable switches and blade server switches today announced its third quarter financial results for the period ended January 1, 2006.

Net revenue from continuing operations for the third quarter of fiscal 2006 was a record $129.2 million and increased 11% from $116.0 million in the comparable quarter last year. During the third quarter of fiscal 2006, revenue from SAN Infrastructure Products, which are comprised of HBAs, switches and silicon, was $120.4 million, an increase of 14% from the comparable quarter last year and 9% sequentially.

Income from continuing operations on a GAAP basis for the third quarter of fiscal 2006 was $31.7 million, or $0.39 per share on a diluted basis, a decline of 1% from the third quarter of last year and an increase of 4% sequentially.

Net revenue from continuing operations for the first nine months of fiscal 2006 was $363.6 million, up 15% from the same period of fiscal 2005. Income from continuing operations on a GAAP basis for the first nine months of fiscal 2006 was $90.5 million, or $1.03 per share on a diluted basis, an increase of 13% from the same period last year.

Net income on a GAAP basis, including the gain on sale of the hard disk drive controller and tape drive controller business and the related results from discontinued operations, for the third quarter of fiscal

1

2006 was $166.2 million, or $2.04 per share on a diluted basis. Net income on a GAAP basis for the first nine months of fiscal 2006 was $251.0 million, or $2.84 per share on a diluted basis.

The Company generated $105.0 million in cash from continuing operations during the first nine months of fiscal 2006. The Company’s balance sheet at the end of the third quarter of fiscal 2006 was highlighted by $719 million of cash and short-term investments.

“We are pleased with the continued momentum of our business and the achievement of record revenues from continuing operations,” said H. K. Desai, the Company’s chief executive officer and president. “During the third quarter, our HBA revenue grew 16% and switch revenue grew 35% from the third quarter of last year.”

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

Non-GAAP income from continuing operations for the third quarter of fiscal 2006 was $31.4 million, or $0.38 per share on a diluted basis, an increase of 3% sequentially. During the first nine months of fiscal 2006, the Company’s non-GAAP income from continuing operations was $90.2 million, or $1.02 per share on a diluted basis, and increased 5% from the same period last year.

QLogic’s fiscal 2006 third quarter conference call is scheduled for today at 2:30 p.m. Pacific Time (5:30 p.m. Eastern Time). H.K. Desai, chief executive officer and president, and Tony Massetti, senior vice president and chief financial officer, will host the conference call. The call is being webcast live via the Internet at www.qlogic.com. Phone access to participate in the conference call is available at (719) 457-2654, pass code: 2886486.

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 February 1, 2006 at (719) 457-0820; pass code: 2886486.

2

About QLogic

QLogic is the leading supplier of Fibre Channel host bus adapters (HBAs), blade server embedded Fibre Channel switches and Fibre Channel stackable switches for storage area networks. The Company is also a leading supplier of iSCSI HBAs. QLogic products are delivered to small, medium and large enterprises around the world, powering solutions from leading companies like Cisco, Dell, EMC, HP, IBM, NEC, Network Appliance and Sun Microsystems. QLogic is a member of the S&P 500 Index. For more information visit www.qlogic.com.

Note: All QLogic-issued press releases appear on the Company’s website (www.qlogic.com). Any announcement that does not appear on the QLogic website has not been issued by QLogic.

Disclaimer — Forward Looking Statements

This press release contains statements relating to future results of the Company (including certain beliefs and projections regarding business trends) that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected or implied in the forward-looking statements. The Company advises readers that these potential risks and uncertainties include, but are not limited to: potential fluctuations in operating results; gross margins that may vary over time; revenues may be affected by changes in IT spending levels; the stock price of the Company may be volatile; the Company’s dependence on the storage area network market; the ability to maintain and gain market or industry acceptance of the Company’s products; the Company’s dependence on a limited number of customers; seasonal fluctuations and uneven sales patterns in orders from customers; the Company’s ability to compete effectively with other companies; declining average unit sales prices of comparable products; a reduction in sales efforts by current distributors; reliance on third party licenses; dependence on sole source and limited source suppliers; the Company’s dependence on relationships with certain silicon chip suppliers; the complexity of the Company’s products; sales fluctuations arising from customer transitions to new products; the uncertainty associated with SOX 404 compliance; environmental compliance costs; terrorist activities and resulting military actions; international, economic, regulatory, political and other risks; uncertain benefits from strategic business combinations; the ability to maintain or expand upon strategic alliances; the strain on resources caused by growth and expansion; the ability to attract and retain key personnel; the decreased effectiveness of equity compensation; difficulties in transitioning to smaller geometry process technologies; the ability to protect proprietary rights; the ability to satisfactorily resolve any infringement claims; changes in tax laws or adverse tax audit results; computer viruses and other tampering with the Company’s computer systems; charter documents and stockholder rights plan that may discourage a business combination; and facilities of the Company and its suppliers and customers are located in areas subject to natural disasters.

More detailed information on these and additional factors which could affect the Company’s operating and financial results are described in the Company’s Forms 10-K, 10-Q and other reports filed, or to be filed, with the Securities and Exchange Commission. The Company urges all interested parties to read these reports to gain a better understanding of the many business and other risks that the Company faces. The forward-looking statements contained in this press release are made only as of the date hereof, and the Company undertakes no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

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

3

QLOGIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited — in thousands, except per share amounts)

	Three Months Ended						Nine Months Ended
	January 1,		October 2,		December 26,		January 1,		December 26,
	2006		2005		2004		2006		2004
Net revenues	$	129,185	$	119,012	$	116,041	$	363,627	$	316,992
Cost of revenues		36,900		34,995		32,962		105,888		90,387
Gross profit		92,285		84,017		83,079		257,739		226,605
Operating expenses:
Engineering and development		22,797		21,417		21,059		64,573		62,025
Sales and marketing		16,100		15,617		13,890		46,950		39,980
General and administrative		4,362		4,190		4,319		12,444		12,743
Total operating expenses		43,259		41,224		39,268		123,967		114,748
Operating income		49,026		42,793		43,811		133,772		111,857
Interest and other income		5,151		6,111		4,468		17,381		12,334
Income from continuing operations before income taxes		54,177		48,904		48,279		151,153		124,191
Income taxes		22,496		18,414		16,237		60,696		43,894
Income from continuing operations		31,681		30,490		32,042		90,457		80,297
Discontinued operations:
Income from operations, net of income taxes		4,570		12,534		11,314		30,595		31,144
Gain from sale, net of income taxes		129,987		—		—		129,987		—
Income from discontinued operations		134,557		12,534		11,314		160,582		31,144
Net income	$	166,238	$	43,024	$	43,356	$	251,039	$	111,441
Income from continuing operations per share:
Basic	$	0.39	$	0.34	$	0.35	$	1.04	$	0.87
Diluted	$	0.39	$	0.34	$	0.34	$	1.03	$	0.86
Income from discontinued operations per share:
Basic	$	1.67	$	0.14	$	0.12	$	1.84	$	0.33
Diluted	$	1.65	$	0.14	$	0.12	$	1.81	$	0.33
Net income per share:
Basic	$	2.06	$	0.48	$	0.47	$	2.88	$	1.20
Diluted	$	2.04	$	0.48	$	0.46	$	2.84	$	1.19
Number of shares used in per share computations:
Basic		80,659		89,447		92,157		87,213		92,663
Diluted		81,547		90,526		93,484		88,248		93,604

4

QLOGIC CORPORATION

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

(unaudited — in thousands, except per share amounts)

	Three Months Ended							Nine Months Ended
	January 1,			October 2,		December 26,		January 1,			December 26,
	2006			2005		2004		2006			2004
GAAP income from continuing operations	$	31,681		$	30,490	$	32,042	$	90,457		$	80,297
Items excluded from GAAP income from continuing operations:
Acquisition related non-cash compensation charges included in:
Engineering and development expenses		170			—		1,779		170			5,381
Sales and marketing expenses		42			—		—		42			—
Insurance recovery included in general and administrative expenses		(700	)		—		—		(700	)		—
Income tax effect		194			—		—		194			—
Non-GAAP income from continuing operations	$	31,387		$	30,490	$	33,821	$	90,163		$	85,678
Diluted income from continuing operations per share:
GAAP income from continuing operations	$	0.39		$	0.34	$	0.34	$	1.03		$	0.86
Adjustments		(0.01	)		—		0.02		(0.01	)		0.06
Non-GAAP income from continuing operations	$	0.38		$	0.34	$	0.36	$	1.02		$	0.92

Non-GAAP Financial Measurements

     The non-GAAP financial measurements contained herein are a supplement to the corresponding financial measurements prepared in accordance with generally accepted accounting principles (GAAP). The non-GAAP financial information presented for fiscal 2006 excludes acquisition related non-cash compensation charges related to the acquisition of Troika Networks in November 2005 and an insurance recovery received. The non-GAAP financial information presented for fiscal 2005 excludes acquisition related non-cash compensation charges, which relate to the Company’s acquisition of Little Mountain Group, Inc. Management believes these items are not indicative of the Company’s on-going core operating performance.

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

     Management uses non-GAAP income from continuing operations in its evaluation of the Company’s core after-tax results of operations and trends between fiscal periods and believes that this measure is an important component

5

of its internal performance measurement process. In addition, the Company prepares and maintains its budgets and forecasts for future periods on a basis consistent with this non-GAAP financial measurement.

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

6

QLOGIC CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited — in thousands)

	January 1, 2006			April 3, 2005
ASSETS
Current assets:
Cash and cash equivalents	$	65,881		$	165,644
Short-term investments		652,865			646,694
Accounts receivable, net		70,504			54,245
Inventories		29,788			22,661
Current assets related to discontinued operations		2,898			17,576
Other current assets		40,515			32,699
Total current assets		862,451			939,519
Property and equipment, net		77,517			71,322
Long-term assets of discontinued operations		—			6,454
Other assets		44,335			9,045
	$	984,303		$	1,026,340
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	23,311		$	19,975
Accrued compensation		17,451			19,629
Income taxes payable		120,733			17,999
Current liabilities related to discontinued operations		16			3,774
Other current liabilities		10,605			7,444
Total current liabilities		172,116			68,821
Deferred tax liabilities		—			1,336
Total liabilities		172,116			70,157
Stockholders’ equity:
Common stock		97			96
Additional paid-in capital		519,462			504,760
Retained earnings		850,761			599,722
Accumulated other comprehensive income (loss)		1,867			(3,394	)
Treasury stock		(560,000	)		(145,001	)
Total stockholders’ equity		812,187			956,183
	$	984,303		$	1,026,340

7

QLOGIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited — in thousands)

	Nine Months Ended
	January 1,			December 26,
	2006			2004
Cash flows from operating activities:
Net income	$	251,039		$	111,441
Income from discontinued operations, net of income taxes		(30,595	)		(31,144	)
Gain from sale of discontinued operations, net of income taxes		(129,987	)		—
Income from continuing operations		90,457			80,297
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
Depreciation and amortization		12,851			10,809
Deferred income taxes		(7,117	)		(5,720	)
Tax benefit from issuance of stock under stock plans		2,134			1,358
Stock-based compensation		175			472
Provision for losses on accounts receivable		57			414
Loss on disposal of property and equipment		130			245
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable		(15,894	)		(9,518	)
Inventories		(6,578	)		1,877
Other assets		3,014			486
Accounts payable		3,056			4,126
Accrued compensation		(2,276	)		1,262
Income taxes payable		22,223			7,100
Other liabilities		2,727			2,028
Net cash provided by operating activities		104,959			95,236
Cash flows from investing activities:
Purchases of marketable securities		(639,830	)		(509,271	)
Sales and maturities of marketable securities		689,038			468,846
Additions to property and equipment		(18,139	)		(12,898	)
Acquisition of business, net of cash acquired		(35,241	)		—
Restricted cash placed in escrow		(12,000	)		—
Purchase of other assets		—			(4,000	)
Net cash used in investing activities		(16,172	)		(57,323	)
Cash flows from financing activities:
Proceeds from issuance of stock under stock plans		12,394			7,622
Purchase of treasury stock		(414,999	)		(80,009	)
Net cash used in financing activities		(402,605	)		(72,387	)
Cash used in continuing operations		(313,818	)		(34,474	)
Cash flows from discontinued operations:
Net cash provided by operating activities		32,719			26,295
Net cash provided by (used in) investing activities, including proceeds from sale		181,336			(1,929	)
Cash provided by discontinued operations		214,055			24,366
Net decrease in cash and cash equivalents		(99,763	)		(10,108	)
Cash and cash equivalents at beginning of period		165,644			62,911
Cash and cash equivalents at end of period	$	65,881		$	52,803

8

QLOGIC CORPORATION

SUPPLEMENTAL FINANCIAL INFORMATION

(unaudited — in thousands)

Net Revenues

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

	Three Months Ended						Nine Months Ended
	January 1,		October 2,		December 26,		January 1,		December 26,
	2006		2005		2004		2006		2004
SAN Infrastructure Products	$	120,402	$	110,480	$	105,585	$	338,205	$	285,937
Management Controllers		6,050		7,048		9,274		20,006		29,032
Other		2,733		1,484		1,182		5,416		2,023
	$	129,185	$	119,012	$	116,041	$	363,627	$	316,992

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						Nine Months Ended
	January 1,		October 2,		December 26,		January 1,		December 26,
	2006		2005		2004		2006		2004
United States	$	68,394	$	65,466	$	60,657	$	199,062	$	166,924
International		60,791		53,546		55,384		164,565		150,068
	$	129,185	$	119,012	$	116,041	$	363,627	$	316,992

9