QLogic Exceeds Revenue and EPS Guidance for Q3 FY2015

ALISO VIEJO, Calif. — (BUSINESS WIRE) — January 29, 2015QLogic Corp. (Nasdaq: QLGC), a leading supplier of high performance network infrastructure solutions, today announced its third quarter financial results for the period ended December 28, 2014.

Third Quarter Highlights

  • Net revenue: $140.2 million, up 10% sequentially
  • GAAP net income: $22.4 million or $0.25 per diluted share
  • Non-GAAP net income: $31.6 million, or $0.36 per diluted share
  • GAAP operating income: $23.7 million, up 75% sequentially
  • Non-GAAP operating income: $33.9 million, up 33% sequentially
  • Operating margin: 16.9% GAAP, 24.2% non-GAAP
  • Cash and marketable securities: $287.9 million as of December 28, 2014
  • Cash generated from operations: $25.6 million

Net revenue for the third quarter of fiscal 2015 was $140.2 million and increased 17% from $119.4 million in the same quarter last year. Revenue from Advanced Connectivity Platforms was $124.7 million during the third quarter of fiscal 2015 and increased 27% from $98.5 million in the same quarter last year.

Net income on a GAAP basis for the third quarter of fiscal 2015 increased to $22.4 million or $0.25 per diluted share from $20.6 million or $0.24 per diluted share for the third quarter of fiscal 2014. Net income on a non-GAAP basis for the third quarter of fiscal 2015 increased 24% to $31.6 million, or $0.36 per diluted share, from $25.6 million, or $0.29 per diluted share, for the third quarter of fiscal 2014. The GAAP and non-GAAP net income per diluted share amounts for the third quarter of fiscal 2015 include the benefits associated with the retroactive reinstatement of the federal research tax credit, which contributed $0.04 to net income per diluted share.

“I am very pleased with our strong financial performance and execution during the third quarter. For the second consecutive quarter, we delivered both revenue and non-GAAP earnings per diluted share above the high end of our guidance range,” said Prasad Rampalli, president and chief executive officer, QLogic. “Our strong revenue performance, combined with our intense focus on operating expense management resulted in a significant expansion of our operating profit during the third quarter. Based on our compelling product portfolio, our focus on consistent execution and the current momentum with the enterprise upgrade cycle, we believe we are well positioned to continue delivering solid revenue and earnings per share performance.”

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 third quarter fiscal 2015 conference call is scheduled for today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). Prasad Rampalli, 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 will include certain prepared materials. Phone access to participate in the conference call is available at (800) 475-6881, pass code: 9835550.

The financial information and the prepared materials 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 webcast will be available 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 our product portfolio is compelling and we are well positioned to continue delivering solid revenue and earnings per share performance) 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; unfavorable economic conditions; 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; uncertain benefits from strategic business combinations, acquisitions and divestitures; 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; 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; a reduction in sales efforts by current distributors; 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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