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QLogic Reports Third Quarter Results for Fiscal Year 2004; Revenues and Net Income Reach Record Levels
ALISO VIEJO, Calif.--(BUSINESS WIRE)--01/14/2004--QLogic Corporation (Nasdaq:QLGC), the company that powers storage area networks (SANs), today announced its third quarter financial results for the period ended December 28, 2003.
Net revenues on a GAAP basis for the third quarter of fiscal 2004 were a record $137.1 million, up 4% sequentially from the $132.3 million reported in the second quarter of fiscal 2004. Fibre Channel revenues for the third quarter were up 6% sequentially to a record $107.2 million and represented 78% of the Company's total revenue. Net income on a GAAP basis for the third quarter of fiscal 2004 was a record $35.0 million, or $0.36 per share on a diluted basis. This was an increase of 2% sequentially from the $34.2 million, or $0.35 per share on a diluted basis, reported in the second quarter of fiscal 2004.
During the third quarter of fiscal 2004, net revenues increased 20% from the $114.2 million reported in the comparable quarter last year on a GAAP basis. Fibre Channel revenues for the third quarter were up 33% from the comparable quarter last year. Third quarter net income on a GAAP basis increased 27% from the $27.5 million, or $0.29 per share on a diluted basis, reported in the third quarter of last year.
Net revenues for the first nine months of fiscal 2004 were $395.6 million, up 24% from the $320.2 million reported in the comparable period last year on a GAAP basis. Net income on a GAAP basis for the first nine months of fiscal 2004 was $100.8 million, or $1.05 per share on a diluted basis. This was an increase of 37% from the $73.6 million, or $0.77 per share on a diluted basis, reported in the comparable period last year.
Pro forma net income for the third quarter of fiscal 2004 was a record $37.9 million, or $0.39 per share on a diluted basis, up 5% sequentially from the $36.1 million, or $0.37 per share on a diluted basis, for the second quarter of fiscal 2004. Pro forma net income for the third quarter increased 30% from the $29.1 million, or $0.31 per share on a diluted basis, for the third quarter of last year.
During the first nine months of fiscal 2004, the Company's pro forma net income was $107.7 million, or $1.12 per share on a diluted basis. This was an increase of 31% from the $82.5 million, or $0.86 per share on a diluted basis, reported in the comparable period last year.
The pro forma non-GAAP results are a supplement to financial statements based on GAAP and these results include adjustments for merger related stock compensation charges, legal settlements, Fibre Channel sales discounts for stock warrants and an impairment of an investment in a technology company. QLogic uses pro forma information to evaluate its on-going operating performance and believes this presentation provides investors with additional insight into its underlying operating results and business trends. A reconciliation between the GAAP and pro forma non-GAAP results is included in the accompanying financial data.
"We are very pleased with the Company's performance during the third quarter and the achievement once again of both record revenues and net income. The continued growth in our revenues during the third quarter was the result of a significant increase in sales of our Fibre Channel products, led by double-digit sequential revenue growth in our Fibre Channel host bus adapters as well as strong sequential growth in our switch business," said H.K. Desai, the Company's chairman, chief executive officer and president. "We continue to believe that this performance in our core Fibre Channel business is growing faster than the market rate, which indicates a favorable gain in market share."
The Company's balance sheet was again highlighted by an increase in cash and short-term investments, ending the quarter with $739.1 million. During the first nine months of fiscal 2004, cash and short-term investments increased by $95.9 million, net of the $19.5 million the Company used to purchase its common stock pursuant to the previously authorized stock repurchase program.
QLogic's fiscal 2004 third quarter conference call is scheduled today at 2:30 p.m. Pacific Time (5:30 p.m. Eastern Time). H.K. Desai, chairman of the board, chief executive officer and president, and Frank Calderoni, 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 or via CCBN. Phone access to participate in the conference call is available at (913) 981-5571, passcode: 636635.
The quarterly financial information that the Company intends to discuss during the conference call is included in this press release and will be available on the Company's website at www.qlogic.com for 12 months following the conference call. To listen to a webcast replay of the conference call, please visit the Investor Relations section of the Company's website at www.qlogic.com. The webcast replay will be available for 12 months following the conference call. An audio replay of the conference call will also be available through January 30, 2004 by calling (719) 457-0820, passcode: 636635.
Powered by QLogic
Since 1993, over 50 million QLogic products have shipped inside servers, workstations, RAID subsystems, tape libraries, disk and tape drives. These products were delivered to small, medium and large enterprises around the world. Powering solutions from leading companies like Cisco, Dell, EMC, Fujitsu, Hitachi, HP, IBM, Network Appliance, Quantum, StorageTek and Sun Microsystems, the broad line of QLogic controller chips, host bus adapters, network switches and management software move data from storage devices through the network fabric to servers. A member of the S&P 500 and NASDAQ 100, QLogic was recently named to Fortune's 100 Fastest Growing Companies list for the fourth consecutive year and to Forbes' Best 200 Small Companies for the fifth consecutive year. In addition, QLogic was named to Business Week's list of 100 Hot Growth Companies for 2003. 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 within 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 wishes to advise readers that these potential risks and uncertainties include, but are not limited to: the volatility of the Company's stock price; fluctuations in operating results; the dependence on the storage area network market; the ability to maintain and gain market or industry acceptance of the Company's products; the dependence on a limited number of customers and fluctuations or cancellations in orders from customers; the ability to compete effectively with other companies; a reduction in sales efforts by current distributors; the dependence on relationships with certain silicon chip suppliers and other subcontractors; the complexity of the Company's products; terrorist activities and resulting military actions; international, economic, regulatory, political and other risks; changes in semiconductor foundry capacity; the ability to maintain or expand upon strategic alliances; the strain on resources caused by rapid growth and expansion; the ability to attract and retain key personnel; and the ability to protect proprietary rights or to satisfactorily resolve any infringement claims.
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.
Trademarks and registered trademarks are the property of the companies with which they are associated.
QLOGIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME -- GAAP
(unaudited -- in thousands, except per share amounts)
Three Months Ended Nine Months Ended
Dec. 28, Sep. 28, Dec. 29, Dec. 28, Dec. 29,
2003 2003 2002 2003 2002
Gross revenues $137,064 $132,267 $114,167 $395,566 $323,472
Stock-based sales
discounts -- -- -- -- 3,228
Net revenues 137,064 132,267 114,167 395,566 320,244
Cost of revenues 42,881 42,366 40,908 127,249 118,215
Gross profit 94,183 89,901 73,259 268,317 202,029
Operating expenses:
Engineering and
development 21,514 21,482 21,540 65,731 59,352
Selling and
marketing 13,846 12,436 10,955 38,011 33,008
General and
administrative 5,944 4,408 3,530 14,443 10,375
Total operating
expenses 41,304 38,326 36,025 118,185 102,735
Operating income 52,879 51,575 37,234 150,132 99,294
Interest and other
income 3,495 3,556 5,417 12,463 12,196
Income before
income taxes 56,374 55,131 42,651 162,595 111,490
Income taxes 21,422 20,950 15,138 61,786 37,906
Net income $34,952 $34,181 $27,513 $100,809 $73,584
Net income per share:
Basic $0.37 $0.36 $0.29 $1.07 $0.79
Diluted $0.36 $0.35 $0.29 $1.05 $0.77
Number of shares
used in per share
computations:
Basic 94,458 94,282 93,553 94,252 93,369
Diluted 96,823 96,360 95,231 96,395 95,337
QLOGIC CORPORATION
PRO FORMA NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited -- in thousands, except per share amounts)
Three Months Ended Nine Months Ended
Dec. 28, Sep. 28, Dec. 29, Dec. 28, Dec. 29,
2003 2003 2002 2003 2002
Net revenues $137,064 $132,267 $114,167 $395,566 $323,472
Cost of revenues 42,881 42,366 40,908 127,249 118,215
Gross profit 94,183 89,901 73,259 268,317 205,257
Operating expenses:
Engineering and
development 19,644 19,590 19,973 59,857 54,650
Selling and marketing 13,846 12,436 10,955 38,011 33,008
General and
administrative 4,194 4,408 3,530 12,693 10,375
Total operating
expenses 37,684 36,434 34,458 110,561 98,033
Operating income 56,499 53,467 38,801 157,756 107,224
Interest and other income 3,495 3,556 5,417 12,463 15,196
Income before income
taxes 59,994 57,023 44,218 170,219 122,420
Income taxes 22,106 20,950 15,138 62,470 39,964
Net income $37,888 $36,073 $29,080 $107,749 $82,456
Net income per share:
Basic $0.40 $0.38 $0.31 $1.14 $0.88
Diluted $0.39 $0.37 $0.31 $1.12 $0.86
Number of shares used in
per share computations:
Basic 94,458 94,282 93,553 94,252 93,369
Diluted 96,823 96,360 95,231 96,395 95,337
The above pro forma non-GAAP financial information is based on the
Company's unaudited condensed consolidated financial statements and
excludes certain adjustments for merger related stock compensation
charges, legal settlements, Fibre Channel sales discounts for stock
warrants and an impairment of an investment in a technology company.
Prior to the first quarter of fiscal 2004, the Company's pro forma
income tax expense was based on the respective effective tax rate
utilized for GAAP purposes applied to the pro forma pre-tax income.
However in fiscal 2004, the pro forma tax effect is being calculated
on a specific item basis. The pro forma income tax expense for all
periods prior to fiscal 2004 reflects the income tax expense on a
specific item basis consistent with fiscal 2004. The Company uses the
pro forma information to evaluate its on-going operating performance
and believes this presentation provides investors with additional
insight into its underlying operating results and business trends.
This presentation is not in accordance with, or an alternative for,
GAAP and may be different from pro forma non-GAAP presentations used
by other companies.
A reconciliation of the Company's net income and the related net
income per share amounts computed in accordance with generally
accepted accounting principles to the corresponding amounts included
above is presented in the following table.
QLOGIC CORPORATION
Reconciliation of GAAP Net Income to Pro Forma Non-GAAP Net Income
(unaudited -- in thousands, except per share amounts)
Three Months Ended Nine Months Ended
Dec. 28, Sep. 28, Dec. 29, Dec. 28, Dec. 29,
2003 2003 2002 2003 2002
GAAP net income $34,952 $34,181 $27,513 $100,809 $73,584
Items excluded from GAAP
net income:
Merger related stock
compensation charges 1,870 1,892 1,567 5,874 4,702
Legal settlements 1,750 -- -- 1,750 --
Sales discounts for
stock warrants -- -- -- -- 3,228
Technology company
investment impairment -- -- -- -- 3,000
Income tax effect (684) -- -- (684) (2,058)
Pro forma net income $37,888 $36,073 $29,080 $107,749 $82,456
Basic net income per share:
GAAP net income $0.37 $0.36 $0.29 $1.07 $0.79
Adjustments 0.03 0.02 0.02 0.07 0.09
Pro forma net income $0.40 $0.38 $0.31 $1.14 $0.88
Diluted net income per share:
GAAP net income $0.36 $0.35 $0.29 $1.05 $0.77
Adjustments 0.03 0.02 0.02 0.07 0.09
Pro forma net income $0.39 $0.37 $0.31 $1.12 $0.86
QLOGIC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited -- in thousands)
Dec. 28, Mar. 30,
2003 2003
ASSETS
Current assets:
Cash and cash equivalents $159,832 $137,810
Short-term investments 579,268 505,387
Accounts receivable, net 75,946 49,694
Inventories 17,859 19,365
Deferred income taxes 28,558 31,914
Prepaid expenses and other current assets 2,490 4,010
Total current assets 863,953 748,180
Property and equipment, net 63,723 59,813
Other assets 5,372 9,426
$933,048 $817,419
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $15,155 $15,301
Accrued expenses 57,515 51,383
Total current liabilities 72,670 66,684
Total stockholders' equity 860,378 750,735
$933,048 $817,419
QLOGIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited -- in thousands)
Nine Months Ended
Dec. 28, Dec. 29,
2003 2002
Cash flows from operating activities:
Net income $100,809 $73,584
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 10,886 11,260
Tax benefit from issuance of
stock under stock plans 9,620 5,088
Deferred income taxes 7,398 4,253
Stock-based sales discounts -- 3,228
Other non-cash charges 1,742 5,265
Changes in operating assets and
liabilities (17,369) 20,072
Net cash provided by
operating activities 113,086 122,750
Cash flows from investing activities:
Net purchases of marketable
securities (75,423) (63,910)
Additions to property and equipment (15,434) (11,536)
Acquisition of business -- (1,695)
Net cash used in investing
activities (90,857) (77,141)
Cash flows from financing activities:
Proceeds from issuance of stock
under stock plans 19,338 8,578
Purchase of treasury stock (19,545) --
Net cash provided by
(used in) financing activities (207) 8,578
Net increase in cash and cash
equivalents 22,022 54,187
Cash and cash equivalents at beginning
of period 137,810 76,124
Cash and cash equivalents at end of
period $159,832 $130,311
CONTACT:QLogic Corporation, Aliso Viejo Steve Sturgeon (Editorial) 949-389-6268 steve.sturgeon@qlogic.com or Michael Roe (Investors) 949-389-6440 michael.roe@qlogic.com
SOURCE: QLogic Corporation
01/14/2004 16:37 EASTERN |
