qlogic.com
QLogic Reports Fourth Quarter and Fiscal Year 2003 Results
Revenues and Net Income Reach Record Levels
Aliso Viejo, Calif., April 29, 2003 - QLogic Corporation (Nasdaq:QLGC), the company that powers storage area networks (SANs), announced today its financial results for the fourth quarter and fiscal year ended March 30, 2003.
Revenues for the fourth quarter were a record $120.6 million, up 6% sequentially from $114.2 million in the December 2002 quarter. Fourth quarter pro forma net income increased 9% from the previous quarter to a record $31.1 million, or $0.33 per share on a diluted basis, compared to $28.5 million, or $0.30 per share on a diluted basis.
Revenues for the fourth quarter of $120.6 million increased 31% from the $92.3 million reported in the comparable quarter last year on a pro forma basis. Fourth quarter pro forma net income of $31.1 million, or $0.33 per share on a diluted basis, increased 47% from $21.1 million, or $0.22 per share on a diluted basis, in the comparable quarter last year.
Revenues on a pro forma basis for the full fiscal year 2003 were a record $444.0 million, up 27% from the $349.7 million reported last year. Pro forma net income for the full fiscal year 2003 was a record $111.9 million, or $1.17 per diluted share, up 40% from the prior year.
The pro forma results are a supplement to financial statements based on generally accepted accounting principles (GAAP). These non-GAAP pro forma results include adjustments primarily for non-cash items associated with sales discounts for stock warrants and merger related stock compensation charges. QLogic uses pro forma information to evaluate its on-going operating performance. QLogic believes this presentation provides investors with additional insight into its underlying operating results and business trends. A reconciliation between the pro forma and GAAP results is included in the accompanying financial data.
Net revenues on a GAAP basis for the fourth quarter of fiscal year 2003 were a record $120.6 million, and were up 33% from the net revenues of $90.8 million reported in the comparable quarter last year. The Company's fourth quarter net income on a GAAP basis was up 60% to a record $29.9 million, or $0.31 per diluted share, from the $18.7 million, or $0.20 per diluted share, reported in the prior year. In addition, the Company's fourth quarter GAAP net income of $29.9 million, or $0.31 per diluted share, increased 9% from the $27.5 million, or $0.29 per diluted share, reported in the December 2002 quarter.
The Company's net revenues on a GAAP basis for the full fiscal year 2003 were a record $440.8 million, up 28% from the $344.2 million reported last year. Net income on a GAAP basis increased 46% during fiscal year 2003 to a record $103.5 million, or $1.09 per diluted share, from $70.7 million, or $0.74 per diluted share, in the prior year.
"QLogic has again established new records for quarterly revenue and net income. Our total revenues increased 6% sequentially and our net income grew 9% sequentially. The Fibre Channel market combined with our ability to increase market share remain the largest growth drivers for QLogic," said H.K. Desai, the Company's chairman, chief executive officer and president. "Fibre Channel revenues for the fourth quarter increased 7% sequentially and 44% on a year over year basis to $86.0 million, which represented 71% of the Company's total revenue. We are very pleased with our revenue and market share gains, as well as our profitability performance during the current quarter and fiscal year 2003."
The Company's balance sheet was again highlighted by an increase in cash and short-term investments, ending the quarter with $643.2 million, an increase of $27.6 million during the quarter.
QLogic's fourth quarter 2003 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/company/investor_relations.asp or via CCBN. Phone access to participate in the conference call is available at (913) 981-4900, pass code: 294872.
The quarterly and annual 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/company/investor_relations.asp 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/company/investor_relations.asp. 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 May 16, 2003 by calling (888) 203-1112 or (719) 457-0820, pass code: 294872.
Powered by QLogic
QLogic products are included in servers, workstations, RAID subsystems, tape libraries, disk and tape drives, and 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, Sony, StorageTek and Sun, 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 Forbes' Best 200 Small Companies for the fourth consecutive year and was named to Fortune's 100 Fastest Growing Companies list for the third consecutive year. For more information visit www.qlogic.com. Note: All QLogic-issued press releases appear on the company's web site (www.qlogic.com). Any announcement that does not appear on the QLogic web site has not been issued by QLogic.
Disclaimer - Forward Looking Statements
With the exception of historical information, the statements set forth above include 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. QLogic wishes to advise readers that these potential risks and uncertainties relate to, but are not limited to, in no particular order: the introduction of new and changing technologies in our industry and customer acceptance of those technologies; a change in semiconductor foundry capacity or conditions; fluctuations in the growth of I/O markets; fluctuations or cancellations in orders from OEM customers; QLogic's ability to compete effectively with other companies; cancellation of OEM products associated with design wins; and fluctuations in our operating results and our stock price.
More detailed information on these and additional factors which could affect QLogic's operating and financial results are described in QLogic's Forms 10-Q, 10-K and other reports, filed or to be filed with the Securities and Exchange Commission. QLogic urges all interested parties to read these reports to gain a better understanding of the many business and other risks that QLogic faces. Additionally, QLogic undertakes no obligation to publicly release the results of any revisions to these forward-looking statements, which may be made to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events.
Trademarks and registered trademarks are the property of the companies with which they are associated.
QLOGIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - PRO FORMA
(Unaudited)
(in thousands, except per share data)
Three Months Ended
Years Ended
Mar. 30, 2003
Dec. 29, 2002
Mar. 31, 2002
Mar. 30, 2003
Mar. 31, 2002
Net revenues
$ 120,565
$ 114,167
$ 92,255
$ 444,037
$ 349,690
Cost of revenues
41,155
40,908
34,631
159,370
133,005
Gross profit
79,410
73,259
57,624
284,667
216,685
Operating expenses:
Engineering and development
19,830
19,973
16,835
74,480
63,941
Selling and marketing
11,304
10,955
10,176
44,312
38,323
General and administrative
3,636
3,530
3,819
14,011
14,489
Total operating expenses
34,770
34,458
30,830
132,803
116,753
Operating income
44,640
38,801
26,794
151,864
99,932
Interest and other income, net
5,160
5,417
4,616
20,356
19,036
Income before income taxes
49,800
44,218
31,410
172,220
118,968
Income taxes
18,675
15,765
10,267
60,298
39,287
Net income
$ 31,125
$ 28,453
$ 21,143
$ 111,922
$ 79,681
Net income per share:
Basic
$ 0.33
$ 0.30
$ 0.23
$ 1.20
$ 0.86
Diluted
$ 0.33
$ 0.30
$ 0.22
$ 1.17
$ 0.84
Number of shares used in per share computations:
Basic
93,771
93,553
92,939
93,469
92,645
Diluted
95,444
95,231
95,454
95,354
95,126
The above pro forma financial information is based on the Company’s unaudited condensed consolidated financial statements and excludes certain adjustments primarily for non-cash items associated with sales discounts for stock warrants, merger related stock compensation charges, an impairment of an investment in a technology company, and in fiscal year 2002, other acquisition related charges. The Company uses this pro forma information to evaluate its on-going operating performance. QLogic 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, generally accepted accounting principles (GAAP) and may be different from non-GAAP pro forma presentations used by other companies.
A reconciliation of the pro forma net income with the Company’s net income determined under generally accepted accounting principles is presented in the following table.
QLOGIC CORPORATION
Reconciliation of Pro Forma Net Income to GAAP Net Income
(Unaudited)
(in thousands)
Three Months Ended
Years Ended
Mar. 30, 2003
Dec. 29, 2002
Mar. 31, 2002
Mar. 30, 2003
Mar. 31, 2002
Pro forma net income
$ 31,125
$ 28,453
$ 21,143
$ 111,922
$ 79,681
Items excluded from pro forma net income:
Sales discounts for stock warrants
-
-
(1,433)
(3,228)
(5,501)
Acquired in process R&D charges
-
-
(322)
-
(1,124)
Merger related stock compensation charges
(2,071)
(1,567)
(1,385)
6,773)
(4,619)
Technology company investment impairment
-
-
-
(3,000)
-
Amortization of goodwill and other intangibles
-
-
(572)
-
(2,184)
Impact on income before taxes
(2,071)
(1,567)
(3,712)
(13,001)
(13,428)
Income tax effect
835
627
1,225
4,552
4,473
Impact on net income
(1,236)
(940)
(2,487)
(8,449)
(8,955)
GAAP net income
$ 29,889
$ 27,513
$ 18,656
$ 103,473
$ 70,726
QLOGIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME – GAAP
(Unaudited)
(in thousands, except per share data)
Three Months Ended
Years Ended
Mar. 30, 2003
Dec. 29, 2002
Mar. 31, 2002
Mar. 30, 2003
Mar. 31, 2002
Gross revenues
$ 120,565
$ 114,167
$ 92,255
$ 444,037
$ 349,690
Stock-based sales discounts
-
-
1,433
3,228
5,501
Net revenues
120,565
114,167
90,822
440,809
344,189
Cost of revenues
41,155
40,908
34,631
159,370
133,005
Gross profit
79,410
73,259
56,191
281,439
211,184
Operating expenses:
Engineering and development
21,901
21,540
18,542
81,253
69,684
Selling and marketing
11,304
10,955
10,176
44,312
38,323
General and administrative
3,636
3,530
4,391
14,011
16,673
Total operating expenses
36,841
36,025
33,109
139,576
124,680
Operating income
42,569
37,234
23,082
141,863
86,504
Interest and other income, net
5,160
5,417
4,616
17,356
19,036
Income before income taxes
47,729
42,651
27,698
159,219
105,540
Income taxes
17,840
15,138
9,042
55,746
34,814
Net income
$ 29,889
$ 27,513
$ 18,656
$ 103,473
$ 70,726
Net income per share:
Basic
$ 0.32
$ 0.29
$ 0.20
$ 1.11
$ 0.76
Diluted
$ 0.31
$ 0.29
$ 0.20
$ 1.09
$ 0.74
Number of shares used in per share computations:
Basic
93,771
93,553
92,939
93,469
92,645
Diluted
95,444
95,231
95,454
95,354
95,126
QLOGIC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
Mar. 30, 2003
Mar. 31, 2002
ASSETS
Current assets:
Cash and cash equivalents
$137,810
$76,124
Short-term investments
505,387
416,422
Accounts receivable, net
49,694
38,360
Inventories
19,365
24,758
Deferred income taxes
31,914
27,635
Prepaid expenses and other current assets
4,010
3,345
Total current assets
748,180
586,644
Property and equipment, net
59,813
60,293
Other assets
9,426
23,078
$ 817,419
$ 670,015
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$ 15,301
$ 15,025
Accrued expenses
51,383
36,007
Total current liabilities
66,684
51,032
Total stockholders’ equity
750,735
618,983
$ 817,419
$ 670,015 |
