QLogic: Fiscal 3Q08 Financial Results

QLogic Corp. announced its financial results for the fourth quarter and fiscal year ended March 30, 2008.

Fourth Quarter Highlights

• Net revenue increased 9% from last year to a record $159.7 million.
• Net income: $22.8 million GAAP, $37.7 million non-GAAP.
• Net income per diluted share: $0.17 GAAP, $0.28 non-GAAP.
• Cash generated from operations was $49.0 million.
• $376.4 million in cash and marketable securities as of March 30, 2008.
• Repurchased $36.2 million of outstanding common stock.

Fiscal Year Highlights

• Net revenue was a record $597.9 million.
• Net income: $96.2 million GAAP, $141.3 million non-GAAP.
• Net income per diluted share: $0.67 GAAP, $0.99 non-GAAP.
• Cash generated from operations was $211.6 million.
• Repurchased $351.5 million of outstanding common stock.

Financial Results
Net revenue for the fourth quarter of fiscal 2008 was $159.7 million. Revenue from Host Products, which are comprised primarily of Fibre Channel and iSCSI Host Bus Adapters (HBAs) and InfiniBand Host Channel Adapters (HCAs), was $110.3 million during the fourth quarter of fiscal 2008 and increased 5% from $105.1 million in the comparable quarter last year. Revenue from Network Products, which are comprised primarily of Fibre Channel and InfiniBand switches, was $27.5 million during the fourth quarter of fiscal 2008 and increased 6% from $25.9 million in the comparable quarter last year. Revenue from Silicon Products, which are comprised primarily of protocol chips and management controllers, was $13.9 million during the fourth quarter of fiscal 2008 and was consistent with the comparable quarter last year. Other revenue, which is comprised primarily of royalties and service fees, was $7.9 million during the fourth quarter of fiscal 2008 and increased from $2.1 million in the comparable quarter last year.

Net income on a GAAP basis for the fourth quarter of fiscal 2008 was $22.8 million, or $0.17 per diluted share, and increased from $18.4 million, or $0.12 per diluted share for the fourth quarter of fiscal 2007. Net income on a GAAP basis includes stock-based compensation expense, acquisition-related charges, impairment charges related to intangible assets and marketable securities, special charges, and the related income tax effects. Net income on a non-GAAP basis for the fourth quarter of fiscal 2008 was $37.7 million, or $0.28 per diluted share, and increased from $35.2 million, or $0.22 per diluted share for the fourth quarter of fiscal 2007.

Net revenue for fiscal 2008 was $597.9 million compared to $586.7 million in fiscal 2007. Net income on a GAAP basis for fiscal 2008 was $96.2 million, or $0.67 per diluted share, and included stock-based compensation expense, acquisition-related charges, impairment charges related to intangible assets and marketable securities, special charges, and the related income tax effects. Net income on a GAAP basis for fiscal 2007 was $105.4 million or $0.66 per diluted share. Non-GAAP net income for fiscal 2008 was $141.3 million, or $0.99 per diluted share.

“QLogic reported record revenue for both the fourth quarter and fiscal year 2008. Our record revenue for fiscal 2008 was driven by a 7% increase in revenue from Host Products and a 15% increase in revenue from Network Products from last year,” said H. K. Desai, QLogic’s chief executive officer. “As we exit fiscal 2008 with favorable second half performance, we believe we have positive momentum heading into fiscal 2009.”

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 Corp.