QLogic Reports Second Quarter Results for Fiscal Year 2014

ALISO VIEJO, Calif. — (BUSINESS WIRE) — October 24, 2013QLogic Corp. (Nasdaq: QLGC), a leading supplier of high performance network infrastructure solutions, today announced its second quarter financial results for the period ended September 29, 2013.

Second Quarter Highlights

  • Net revenue: $112.6 million
  • GAAP income from continuing operations: $11.0 million or $0.13 per diluted share
  • Non-GAAP income from continuing operations: $20.0 million or $0.23 per diluted share
  • Operating margin: 11.7% GAAP, 20.1% non-GAAP
  • Cash and marketable securities: $433.0 million as of September 29, 2013
  • Cash generated from operations: $24.1 million

Financial Results

Net revenue for the second quarter of fiscal 2014 was $112.6 million compared to $117.9 million in the same quarter last year. Revenue from Advanced Connectivity Platforms was $94.0 million during the second quarter of fiscal 2014 compared to $97.4 million in the same quarter last year. Revenue from Legacy Connectivity Products was $18.6 million during the second quarter of fiscal 2014 compared to $20.5 million in the same quarter last year.

Income from continuing operations on a GAAP basis for the second quarter of fiscal 2014 was $11.0 million, or $0.13 per diluted share, compared to $11.8 million, or $0.13 per diluted share, for the second quarter of fiscal 2013. Income from continuing operations on a GAAP basis for the second quarter of fiscal 2014 includes $4.3 million of special charges recorded in connection with the restructuring plan that commenced in June 2013. Income from continuing operations on a non-GAAP basis for the second quarter of fiscal 2014 increased to $20.0 million, or $0.23 per diluted share, from $16.8 million, or $0.18 per diluted share, for the second quarter of fiscal 2013.

“Last quarter we announced a restructuring plan aimed at improving our focus, execution and financial performance. I am very pleased with our progress and sharper focus on the server and storage connectivity markets. In addition, our execution has improved and we are delivering more consistently on new programs and products, as demonstrated by achieving general availability for more than a dozen new OEM programs since early September,” said Jean Hu, interim chief executive officer, senior vice president and chief financial officer, QLogic. “I am also very pleased with our financial performance during the second quarter. We are ahead of plan on our expense reduction activities and are already seeing the benefits in our financial results and operating margin.”

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 second quarter fiscal 2014 conference call is scheduled for today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). Jean Hu, interim chief executive officer, 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 (800) 768-6544, pass code: 8336286.

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

QLogic – the Ultimate in Performance

QLogic (Nasdaq: QLGC) is a global leader and technology innovator in high performance server and storage networking connectivity products. Leading OEMs and channel partners worldwide rely on QLogic for their server and storage 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, as well as our belief that we have a sharper focus on the server and storage connectivity markets, our execution has improved and we are delivering more consistently on new programs and products, and that we are ahead of plan on our expense reduction initiatives) 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: uncertainties whether our restructuring plan will achieve its stated goals; uncertainty whether our enhanced product focus will achieve its stated goals; 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 ability to attract and retain key personnel; 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; 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, currency, 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, acquisitions and divestitures; declines in the market value of the company's marketable securities; changes in and compliance with regulations; difficulties in transitioning to smaller geometry process technologies; the use of "open source" software in the company's products; system security risks, data protection breaches and cyber-attacks; and the company’s ability to borrow under its credit agreement is subject to certain covenants.

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