Mellanox: Fiscal 2Q09 Financial Results

(in US$ millions)	2Q08	2Q09	6 mo. 08	6 mo. 09
Revenues	28.2	25.3	53.4	47.8
*Growth*		-10%		*-10%*
Net income (loss)	4.6	1.7	9.2	3.0

Mellanox Technologies, Ltd. announced financial results for its second quarter 2009, ended June 30, 2009.

Second Quarter Highlights

Revenues were $25.3 million
Gross margins were 74.1 percent
Operating income was $2.6 million or 10.3 percent of revenues
Net income: $4.7 million non-GAAP, $1.7 million GAAP
Net income per diluted share: $0.13 non-GAAP, $0.05 GAAP
$7.2 million in cash provided by operating activities
$193.7 million in total cash and investments at June 30, 2009

Financial Results
In accordance with U.S. generally accepted accounting principles (GAAP), the company reported revenue of $25.3 million, compared with $22.6 million in the first quarter of 2009, and compared with $28.2 million in the second quarter of 2008.

Gross margins in the second quarter were 74.1 percent, compared with 76.3 percent in the first quarter of 2009 and 79.8 percent in the second quarter of 2008. GAAP net income in the second quarter of 2009 was $1.7 million or $0.05 per diluted share, compared with $2.1 million or $0.06 per diluted share in the first quarter of 2009 and $4.6 million or $0.14 per diluted share in the second quarter of 2008.

On a non-GAAP basis, the company recorded second quarter net income of $4.7 million, or $0.13 per diluted share, compared with $5.2 million or $0.15 per diluted share in the first quarter of 2009 and $9.6 million or $0.28 per diluted share in the second quarter of 2008. The second quarter 2009 non-GAAP net income results exclude $2.2 million of share-based compensation expenses and tax expense of $0.7 million from changes in certain deferred tax assets.

Total cash and investments increased to $193.7 million at June 30, 2009. The company generated $7.2 million in cash from operating activities during the quarter.

“Our second quarter results were highlighted by increased OEM and end-user adoption of our industry-leading end-to-end 40Gb/s InfiniBand connectivity solutions, which grew to 56 percent of revenue, up from 34 percent of revenue in the first quarter,” said Eyal Waldman, chairman, president and CEO of Mellanox Technologies. “This quarter we gained 10GigE design wins at two tier-1 server OEMs and introduced innovative products that further our industry leadership position, and expand our total addressable market.”