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): February 29, 2012
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) |
Registrants 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 (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.01 Completion of Acquisition or Disposition of Assets
On February 29, 2012, QLogic Corporation (the Company) completed the previously announced sale of the product lines and certain assets associated with the Companys InfiniBand business (the Business) pursuant to the Asset Purchase Agreement, dated as of January 20, 2012 (the Purchase Agreement), with Intel Corporation. Pursuant to the terms of the Purchase Agreement, the Company received $125 million in cash, which remains subject to a post-closing downward adjustment based on inventory at closing. The Business, including the gain on the sale, will be presented as discontinued operations for financial reporting purposes for current and prior periods beginning with the Companys Annual Report on Form 10-K for the year ending April 1, 2012.
Item 9.01 Financial Statements and Exhibits
(b) | Pro Forma Financial Information |
Attached as Exhibit 99.1 and incorporated herein by reference are (1) an unaudited pro forma condensed consolidated balance sheet as of January 1, 2012, (2) unaudited pro forma condensed consolidated statements of income for the nine months ended January 1, 2012 and December 26, 2010 and (3) unaudited pro forma condensed consolidated statements of income for the fiscal years ended April 3, 2011, March 28, 2010 and March 29, 2009. These pro forma financial statements are derived from the historical financial statements of the Company and give effect to the sale of the Business and the receipt of the net proceeds related thereto as described in Exhibit 99.1.
(d) | Exhibits. |
99.1 | Unaudited Pro Forma Condensed Consolidated Financial Information of QLogic Corporation. |
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 | ||||||
March 6, 2012 |
/s/ Jean Hu | |||||
Jean Hu | ||||||
Senior Vice President and | ||||||
Chief Financial Officer |
EXHIBIT INDEX
Exhibit |
Description of Document | |
99.1 | Unaudited Pro Forma Condensed Consolidated Financial Information of QLogic Corporation. |
Exhibit 99.1
QLogic Corporation
Unaudited Pro Forma Condensed Consolidated Financial Information
On January 23, 2012, QLogic Corporation (the Company) announced that it had entered into an Asset Purchase Agreement, dated as of January 20, 2012 (the Purchase Agreement), with Intel Corporation (Purchaser). Pursuant to the terms of the Purchase Agreement, Purchaser agreed to acquire the product lines and certain assets associated with the Companys InfiniBand business (the Business) and to assume certain liabilities related thereto. Purchaser agreed to pay a purchase price of $125 million in cash at closing for the Business, subject to downward adjustment based on inventory at closing.
On February 29, 2012 (the Closing Date), the Company completed the sale of the Business and received cash proceeds of $125 million. This consideration is subject to a final downward adjustment based on inventory as of the Closing Date. In connection with the sale, the parties also entered into several ancillary and related agreements, including a transition services agreement for up to one year designed to ensure a smooth transition of the Business to Purchaser, and an intellectual property license agreement, which will permit Purchaser to use certain intellectual property owned by the Company.
The following Unaudited Pro Forma Condensed Consolidated Financial Information of the Company has been presented after giving effect to the sale of the Business. The historical financial information of the Company set forth below has been derived from the historical audited and unaudited consolidated financial statements included in its annual report on Form 10-K for the year ended April 3, 2011 and its quarterly report on Form 10-Q for the quarter ended January 1, 2012. The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of January 1, 2012 includes pro forma adjustments giving effect to the sale of the Business as if it had occurred on that date. The Unaudited Pro Forma Condensed Consolidated Statements of Income for the years ended April 3, 2011, March 28, 2010 and March 29, 2009, and for the nine months ended January 1, 2012 and December 26, 2010, include pro forma adjustments giving effect to the sale of the Business as if it had occurred as of March 31, 2008.
The Unaudited Pro Forma Condensed Consolidated Financial Information is provided for informational purposes only and does not purport to present the consolidated financial position or results of operations of the Company had the sale of the Business occurred on the dates specified, nor is it necessarily indicative of the consolidated financial position or results of operations of the Company that may be expected in the future. The Unaudited Pro Forma Condensed Consolidated Financial Information should be read in conjunction with the Companys Managements Discussion and Analysis of Financial Condition and Results of Operations and the Companys consolidated financial statements and notes thereto included in its annual report on Form 10-K for the year ended April 3, 2011 and its quarterly report on Form 10-Q for the quarter ended January 1, 2012.
QLogic Corporation
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of January 1, 2012
(in thousands)
As Reported | Pro Forma Adjustments |
Pro Forma | ||||||||||
ASSETS | ||||||||||||
Current assets: |
||||||||||||
Cash and cash equivalents |
$ | 74,198 | $ | 125,000 | (a) | $ | 199,198 | |||||
Marketable securities |
321,627 | | 321,627 | |||||||||
Accounts receivable, net |
82,221 | (4,510 | )(b) | 77,711 | ||||||||
Inventories |
26,967 | (6,354 | )(a) | 20,301 | ||||||||
(312 | )(b) | |||||||||||
Deferred tax assets |
19,954 | (542 | )(c) | 19,412 | ||||||||
Other current assets |
13,390 | (485 | )(a) | 12,905 | ||||||||
Current assets related to discontinued operations |
| 4,822 | (b) | 4,822 | ||||||||
|
|
|
|
|
|
|||||||
Total current assets |
538,357 | 117,619 | 655,976 | |||||||||
Property and equipment, net |
78,715 | (3,560 | )(a) | 75,155 | ||||||||
Goodwill |
119,748 | (10,084 | )(a) | 109,664 | ||||||||
Purchased intangible assets, net |
10,179 | (5,646 | )(a) | 4,533 | ||||||||
Deferred tax assets |
27,284 | (2,527 | )(c) | 24,757 | ||||||||
Other assets |
2,082 | (319 | )(a) | 1,763 | ||||||||
|
|
|
|
|
|
|||||||
$ | 776,365 | $ | 95,483 | $ | 871,848 | |||||||
|
|
|
|
|
|
|||||||
LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||||||
Current liabilities: |
||||||||||||
Accounts payable |
$ | 35,099 | $ | (2,544 | )(b) | $ | 32,555 | |||||
Accrued compensation |
28,240 | (2,243 | )(b) | 25,997 | ||||||||
Accrued taxes |
3,029 | 41,495 | (a) | 41,452 | ||||||||
(3 | )(b) | |||||||||||
(3,069 | )(c) | |||||||||||
Deferred revenue |
10,348 | (4,069 | )(a) | 6,279 | ||||||||
Other current liabilities |
6,356 | (103 | )(a) | 5,929 | ||||||||
(324 | )(b) | |||||||||||
Current liabilities related to discontinued operations |
| 5,114 | (b) | 5,114 | ||||||||
|
|
|
|
|
|
|||||||
Total current liabilities |
83,072 | 34,254 | 117,326 | |||||||||
Accrued taxes |
62,409 | | 62,409 | |||||||||
Deferred revenue |
3,840 | (2,312 | )(a) | 1,528 | ||||||||
Other liabilities |
5,922 | | 5,922 | |||||||||
|
|
|
|
|
|
|||||||
Total liabilities |
155,243 | 31,942 | 187,185 | |||||||||
Total stockholders equity |
621,122 | 63,541 | (a) | 684,663 | ||||||||
|
|
|
|
|
|
|||||||
$ | 776,365 | $ | 95,483 | $ | 871,848 | |||||||
|
|
|
|
|
|
See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Information.
2
QLogic Corporation
Unaudited Pro Forma Condensed Consolidated Statement of Income
Nine Months Ended January 1, 2012
(in thousands, except per share amounts)
As Reported | Pro Forma Adjustments(d) |
Pro Forma | ||||||||||
Net revenues |
$ | 454,463 | $ | (30,928 | ) | $ | 423,535 | |||||
Cost of revenues |
154,010 | (20,031 | ) | 133,979 | ||||||||
|
|
|
|
|
|
|||||||
Gross profit |
300,453 | (10,897 | ) | 289,556 | ||||||||
|
|
|
|
|
|
|||||||
Operating expenses: |
||||||||||||
Engineering and development |
112,446 | (8,300 | ) | 104,146 | ||||||||
Sales and marketing |
63,219 | (5,131 | ) | 58,088 | ||||||||
General and administrative |
26,820 | | 26,820 | |||||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
202,485 | (13,431 | ) | 189,054 | ||||||||
|
|
|
|
|
|
|||||||
Operating income |
97,968 | 2,534 | 100,502 | |||||||||
Interest and other income, net |
2,926 | | 2,926 | |||||||||
|
|
|
|
|
|
|||||||
Income before income taxes |
100,894 | 2,534 | 103,428 | |||||||||
Income taxes |
9,789 | 3,715 | 13,504 | |||||||||
|
|
|
|
|
|
|||||||
Net income |
$ | 91,105 | $ | (1,181 | ) | $ | 89,924 | |||||
|
|
|
|
|
|
|||||||
Net income per share: |
||||||||||||
Basic |
$ | 0.89 | $ | 0.88 | ||||||||
|
|
|
|
|||||||||
Diluted |
$ | 0.88 | $ | 0.87 | ||||||||
|
|
|
|
|||||||||
Number of shares used in per share calculations: |
||||||||||||
Basic |
102,696 | 102,696 | ||||||||||
|
|
|
|
|||||||||
Diluted |
103,340 | 103,340 | ||||||||||
|
|
|
|
See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Information.
3
QLogic Corporation
Unaudited Pro Forma Condensed Consolidated Statement of Income
Nine Months Ended December 26, 2010
(in thousands, except per share amounts)
As Reported | Pro Forma Adjustments(d) |
Pro Forma | ||||||||||
Net revenues |
$ | 444,909 | $ | (32,603 | ) | $ | 412,306 | |||||
Cost of revenues |
153,112 | (22,210 | ) | 130,902 | ||||||||
|
|
|
|
|
|
|||||||
Gross profit |
291,797 | (10,393 | ) | 281,404 | ||||||||
|
|
|
|
|
|
|||||||
Operating expenses: |
||||||||||||
Engineering and development |
100,649 | (9,444 | ) | 91,205 | ||||||||
Sales and marketing |
60,953 | (5,291 | ) | 55,662 | ||||||||
General and administrative |
25,560 | | 25,560 | |||||||||
Special charges |
931 | (558 | ) | 373 | ||||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
188,093 | (15,293 | ) | 172,800 | ||||||||
|
|
|
|
|
|
|||||||
Operating income |
103,704 | 4,900 | 108,604 | |||||||||
Interest and other income, net |
4,258 | | 4,258 | |||||||||
|
|
|
|
|
|
|||||||
Income before income taxes |
107,962 | 4,900 | 112,862 | |||||||||
Income taxes |
2,188 | 6,118 | 8,306 | |||||||||
|
|
|
|
|
|
|||||||
Net income |
$ | 105,774 | $ | (1,218 | ) | $ | 104,556 | |||||
|
|
|
|
|
|
|||||||
Net income per share: |
||||||||||||
Basic |
$ | 0.97 | $ | 0.96 | ||||||||
|
|
|
|
|||||||||
Diluted |
$ | 0.96 | $ | 0.95 | ||||||||
|
|
|
|
|||||||||
Number of shares used in per share calculations: |
||||||||||||
Basic |
108,492 | 108,492 | ||||||||||
|
|
|
|
|||||||||
Diluted |
110,032 | 110,032 | ||||||||||
|
|
|
|
See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Information.
4
QLogic Corporation
Unaudited Pro Forma Condensed Consolidated Statement of Income
Year Ended April 3, 2011
(in thousands, except per share amounts)
As Reported | Pro Forma Adjustments(d) |
Pro Forma | ||||||||||
Net revenues |
$ | 597,199 | $ | (38,824 | ) | $ | 558,375 | |||||
Cost of revenues |
203,944 | (26,985 | ) | 176,959 | ||||||||
|
|
|
|
|
|
|||||||
Gross profit |
393,255 | (11,839 | ) | 381,416 | ||||||||
|
|
|
|
|
|
|||||||
Operating expenses: |
||||||||||||
Engineering and development |
137,654 | (12,435 | ) | 125,219 | ||||||||
Sales and marketing |
80,926 | (6,961 | ) | 73,965 | ||||||||
General and administrative |
34,148 | | 34,148 | |||||||||
Special charges |
931 | (558 | ) | 373 | ||||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
253,659 | (19,954 | ) | 233,705 | ||||||||
|
|
|
|
|
|
|||||||
Operating income |
139,596 | 8,115 | 147,711 | |||||||||
Interest and other income, net |
5,187 | | 5,187 | |||||||||
|
|
|
|
|
|
|||||||
Income before income taxes |
144,783 | 8,115 | 152,898 | |||||||||
Income taxes |
5,693 | 5,859 | 11,552 | |||||||||
|
|
|
|
|
|
|||||||
Net income |
$ | 139,090 | $ | 2,256 | $ | 141,346 | ||||||
|
|
|
|
|
|
|||||||
Net income per share: |
||||||||||||
Basic |
$ | 1.29 | $ | 1.31 | ||||||||
|
|
|
|
|||||||||
Diluted |
$ | 1.27 | $ | 1.29 | ||||||||
|
|
|
|
|||||||||
Number of shares used in per share calculations: |
||||||||||||
Basic |
107,647 | 107,647 | ||||||||||
|
|
|
|
|||||||||
Diluted |
109,192 | 109,192 | ||||||||||
|
|
|
|
See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Information.
5
QLogic Corporation
Unaudited Pro Forma Condensed Consolidated Statement of Income
Year Ended March 28, 2010
(in thousands, except per share amounts)
As Reported | Pro Forma Adjustments(d) |
Pro Forma | ||||||||||
Net revenues |
$ | 549,070 | $ | (30,599 | ) | $ | 518,471 | |||||
Cost of revenues |
196,127 | (29,020 | ) | 167,107 | ||||||||
|
|
|
|
|
|
|||||||
Gross profit |
352,943 | (1,579 | ) | 351,364 | ||||||||
|
|
|
|
|
|
|||||||
Operating expenses: |
||||||||||||
Engineering and development |
136,831 | (20,042 | ) | 116,789 | ||||||||
Sales and marketing |
77,601 | (8,720 | ) | 68,881 | ||||||||
General and administrative |
34,242 | | 34,242 | |||||||||
Special charges |
5,163 | | 5,163 | |||||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
253,837 | (28,762 | ) | 225,075 | ||||||||
|
|
|
|
|
|
|||||||
Operating income |
99,106 | 27,183 | 126,289 | |||||||||
Interest and other income, net |
10,601 | | 10,601 | |||||||||
|
|
|
|
|
|
|||||||
Income before income taxes |
109,707 | 27,183 | 136,890 | |||||||||
Income taxes |
54,759 | 14,586 | 69,345 | |||||||||
|
|
|
|
|
|
|||||||
Net income |
$ | 54,948 | $ | 12,597 | $ | 67,545 | ||||||
|
|
|
|
|
|
|||||||
Net income per share: |
||||||||||||
Basic |
$ | 0.47 | $ | 0.58 | ||||||||
|
|
|
|
|||||||||
Diluted |
$ | 0.47 | $ | 0.58 | ||||||||
|
|
|
|
|||||||||
Number of shares used in per share calculations: |
||||||||||||
Basic |
116,037 | 116,037 | ||||||||||
|
|
|
|
|||||||||
Diluted |
117,364 | 117,364 | ||||||||||
|
|
|
|
See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Information.
6
QLogic Corporation
Unaudited Pro Forma Condensed Consolidated Statement of Income
Year Ended March 29, 2009
(in thousands, except per share amounts)
As Reported | Pro Forma Adjustments(d) |
Pro Forma | ||||||||||
Net revenues |
$ | 633,862 | $ | (33,670 | ) | $ | 600,192 | |||||
Cost of revenues |
210,075 | (29,549 | ) | 180,526 | ||||||||
|
|
|
|
|
|
|||||||
Gross profit |
423,787 | (4,121 | ) | 419,666 | ||||||||
|
|
|
|
|
|
|||||||
Operating expenses: |
||||||||||||
Engineering and development |
133,252 | (24,237 | ) | 109,015 | ||||||||
Sales and marketing |
86,959 | (10,560 | ) | 76,399 | ||||||||
General and administrative |
32,639 | | 32,639 | |||||||||
Special charges |
4,063 | (1,001 | ) | 3,062 | ||||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
256,913 | (35,798 | ) | 221,115 | ||||||||
|
|
|
|
|
|
|||||||
Operating income |
166,874 | 31,677 | 198,551 | |||||||||
Interest and other income, net |
2,134 | | 2,134 | |||||||||
|
|
|
|
|
|
|||||||
Income before income taxes |
169,008 | 31,677 | 200,685 | |||||||||
Income taxes |
60,219 | 16,015 | 76,234 | |||||||||
|
|
|
|
|
|
|||||||
Net income |
$ | 108,789 | $ | 15,662 | $ | 124,451 | ||||||
|
|
|
|
|
|
|||||||
Net income per share: |
||||||||||||
Basic |
$ | 0.85 | $ | 0.97 | ||||||||
|
|
|
|
|||||||||
Diluted |
$ | 0.85 | $ | 0.97 | ||||||||
|
|
|
|
|||||||||
Number of shares used in per share calculations: |
||||||||||||
Basic |
127,776 | 127,776 | ||||||||||
|
|
|
|
|||||||||
Diluted |
128,570 | 128,570 | ||||||||||
|
|
|
|
See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Information.
7
QLogic Corporation
Notes to Unaudited Pro Forma Condensed Consolidated Financial Information
Pro forma adjustments for the unaudited pro forma condensed consolidated financial information are as follows:
(a) Reflects cash proceeds of $125 million received, the assets and liabilities transferred or eliminated relating to the Business, and the gain on sale of the Business, net of the related income tax effect, in connection with the sale of the Business. The Company is in the process of determining the income tax impact of the sale of the Business. As this analysis is not yet complete, the pro forma adjustments include an accrual for income taxes applying the Companys statutory tax rate to the gain on sale of the Business.
(b) Reflects the reclassification of certain assets and liabilities of the Business retained by the Company as assets and liabilities related to discontinued operations.
(c) Reflects the reclassification of certain net deferred tax assets to accrued taxes as a result of the sale of the Business.
(d) Reflects the historical results of operations of the Business sold. Such historical results of operations include operating expenses determined on bases which management considers to be reasonable reflections of the utilization of services provided to, or the benefit received by, the Business. The income tax benefit related to the Business sold reflects the difference between the income tax expense as previously reported and the income tax expense based on the pro forma results of operations, excluding the Business sold.
In the fourth quarter of fiscal 2012, the Company expects to a record a material gain in discontinued operations as a result of the sale of the Business. As discussed above, the Company is in the process of determining the tax impact of the sale.
8