Mellanox: Fiscal 4Q09 Financial Results

Mellanox Technologies, Ltd. announced record revenue in its fourth quarter and fiscal year 2009, ended Dec. 31, 2009.

Fourth Quarter and Fiscal Year Highlights

• Fourth quarter revenues were $35.5 million, and $116.0 million in 2009
• Fourth quarter gross margins were 75.6 percent, and 75.3 percent in 2009
• Fourth quarter operating income was $6.7 million or 18.9 percent of revenues
• Fiscal year operating income was $18.7 million or 16.2 percent of revenues
• Fourth quarter net income: $4.3 million GAAP, $9.9 million non-GAAP or 27.9 percent of revenues
• Fiscal year net income: $12.9 million GAAP, $28.7 million non-GAAP or 24.7 percent of revenues
• Fourth quarter net income per diluted share: $0.12 GAAP, $0.28 non-GAAP
• Fiscal year net income per diluted share: $0.39 GAAP, $0.81 non-GAAP
• $7.3 million in cash provided by operating activities during the fourth quarter
• $32.8 million in cash provided by operating activities during the year
• $213.2 million in total cash and investments at Dec. 31, 2009

Financial Results
In accordance with U.S. generally accepted accounting principles (GAAP), the company reported revenue of $35.5 million, up 8.7 percent from $32.7 million in the third quarter of 2009, and up 40.9 percent from $25.2 million in the fourth quarter of 2008. For the year ended Dec. 31, 2009, revenue was $116.0 million, an increase of 7.7 percent from revenue of $107.7 million reported in 2008.

Gross margins in the fourth quarter of 2009 were 75.6 percent, compared with 75.2 percent in the third quarter of 2009 and compared with 77.5 percent in the fourth quarter of 2008. Gross margins in 2009 were 75.3 percent, compared with 78.3 percent in 2008.

GAAP net income in the fourth quarter of 2009 was $4.3 million or $0.12 per diluted share, compared with $4.8 million or $0.14 per diluted share in the third quarter of 2009 and $8.0 million or $0.24 per diluted share in the fourth quarter of 2008. GAAP net income in 2009 was $12.9 million or $0.39 per diluted share, compared with $22.4 million or $0.68 per diluted share in 2008.

On a non-GAAP basis, the company recorded fourth quarter net income of $9.9 million, or $0.28 per diluted share, compared with $8.9 million or $0.25 per diluted share in the third quarter of 2009, or 12 percent quarter-over-quarter growth, and $4.4 million, or $0.13 per diluted share in the fourth quarter of 2008, or 115 percent growth. The fourth quarter 2009 non-GAAP net income results exclude $3.8 million of share-based compensation expenses and tax expense of $1.9 million from changes in certain deferred tax assets.

On a non-GAAP basis, the company recorded annual net income of $28.7 million, or $0.81 per diluted share in 2009, compared with $32.2 million or $0.92 per diluted share in 2008. These 2009 non-GAAP net income results exclude $10.7 million of share-based compensation expenses and tax expenses of $5.0 million from changes in certain deferred tax assets.

Total cash and investments increased to $213.2 million at Dec. 31, 2009. The company generated $7.3 million in cash from operating activities during the quarter and $32.8 million in 2009.

“We are very proud to demonstrate quarterly year-over-year revenue growth of 40.9 percent and non-GAAP EPS growth of 115 percent,” said Eyal Waldman, chairman, president and CEO of Mellanox Technologies. “This year we saw worldwide Tier-1 server OEM integration of our 40Gb/s InfiniBand adapter products, and achieved design-win momentum and Tier-1 server OEM adoption of our 10 Gigabit Ethernet adapters and InfiniBand switch system products.”

Recent Mellanox Press Release Highlights

• Jan. 25 – Mellanox ConnectX-2 10 Gigabit Ethernet Technology Now Available Through HP
• Nov. 19 – Mellanox Honored by HPCwire with Two Editors’ Choice Awards for Best Product and Best Government & Industry Collaboration
• Nov. 17 – InfiniBand Momentum on the TOP500 Continues with 28 Percent Annual Growth, All with Mellanox Performance-Leading Interconnect Solutions
• Nov. 16 – Mellanox ConnectX-2 40Gb/s InfiniBand Adapters with Application Communication Offloading Technology Available Through HP
• Nov. 16 – Mellanox Introduces CORE-Direct, Industry’s Most Advanced Application Offloading Technology for High-Performance Computing Systems
• Nov. 16 – Mellanox Announces World’s Fastest Switch Systems
• Nov. 10 – Mellanox Delivers End-to-End Connectivity for Asia’s First Petascale Cluster
• Nov. 10 – ASUS Selects Mellanox 40Gb/s InfiniBand Adapter Devices for Landed-on-Motherboard (LOM) Solutions
• Nov. 10 – Micro-Star International Half Size Server Motherboards Feature Mellanox’s Industry-Leading 40Gb/s InfiniBand Adapter Devices for Landed-on-Motherboard (LOM) Solutions
• Oct. 26 – Mellanox Advances IBM Networking Solutions with 10 Gigabit Ethernet Adapter Cards