Mellanox: Fiscal 3Q13 Financial Results

Mellanox Technologies, Ltd. announced financial results for its third quarter 2013, ended September 30, 2013.

Third Quarter 2013 Highlights

• Revenues were $104.1 million
• GAAP gross margins were 64.4%
• Non-GAAP gross margins were 69.0%
• GAAP operating loss was $4.8 million
• Non-GAAP operating income was $13.7 million
• GAAP net loss was $5.4 million
• Non-GAAP net income was $13.1 million
• GAAP net loss per diluted share was $0.12
• Non-GAAP net income per diluted share was $0.29
• $16.4 million in cash was provided by operating activities
• Total cash and investments was $306.4 million at September 30, 2013

Financial Results

• In accordance with U.S. GAAP, the company reported revenue of $104.1 million for the third quarter of 2013, up 6.0% from $98.2 million in the second quarter of 2013, and down 33.5% from $156.5 million in the third quarter of 2012.
• GAAP gross margins in the third quarter of 2013 were 64.4 percent, compared with 67.2% in the second quarter of 2013, and 69.1% in the third quarter of 2012.
• Non-GAAP gross margins in the third quarter of 2013 were 69.0 percent, compared with 69.4% in the second quarter of 2013, and 70.5% in the third quarter of 2012.
• GAAP net loss in the third quarter of 2013 was $5.4 million, or $0.12 per diluted share, compared with GAAP net loss of $1.7 million, or $0.04 per diluted share in the second quarter of 2013, and GAAP net income of $48.4 million, or $1.09 per diluted share in the third quarter of 2012.
• Non-GAAP net income in the third quarter of 2013 was $13.1 million, or $0.29 per diluted share, compared with $13.8 million, or $0.30 per diluted share in the second quarter of 2013, and $60.1 million, or $1.37 per diluted share in the third quarter of 2012. The third quarter 2013 non-GAAP net income excludes $11.9 million of share-based compensation expenses compared to $11.2 million in the second quarter of 2013, and compared to $9.4 million in the third quarter of 2012. The third quarter 2013 non-GAAP net income also excludes amortization of acquired intangible assets of $4.6 million and $2.0 million of acquisition related charges associated with the acquisition of Kotura, Inc. and IPtronics A/S, compared to amortization expenses of acquired intangible assets of $2.5 million and acquisition related charges associated with the acquisition of Kotura, Inc. and IPtronics A/S of $1.8 million in the second quarter of 2013, and compared to $2.3 million of amortization expenses of acquired intangibles assets in the third quarter of 2012.
• Total cash and investments were $306.4 million at September 30, 2013, compared to $411.3 million at June 30, 2013. The company paid $123.5 million in cash for its acquisitions of Kotura, Inc. and IPtronics A/S, and generated $16.4 million in cash from operating activities in the third quarter.

“We completed our acquisitions of Kotura and IPtronics in the third quarter, and the integration of these teams and their advanced silicon photonics technologies is going very well,” said Eyal Waldman, president and CEO, Mellanox. “These technologies will help Mellanox to continue to lead the fast interconnect market with our IB and Ethernet offerings, and to offer market-leading solutions for high-performance computing, Web 2.0, cloud, storage, database and financial applications. We are experiencing good momentum around our end-to-end Ethernet technologies in various market segments.”