Emulex: Fiscal 1Q14 Financial Results

Emulex Corporation announced earnings results for the first quarter of fiscal 2014, which ended on September 29, 2013.

First Quarter Financial Highlights

• Total net revenues of $114.8 million
• Network Connectivity Products (NCP) net revenues of $78.0 million, representing approximately 68% of total net revenues
• Network Visibility Products (NVP), net revenues of $10.1 million, representing 9% of total net revenues
• Storage Connectivity and Other Products (SCOP), net revenues of $26.8 million, representing 23% of total net revenues
• Non-GAAP gross margins of 66% and GAAP gross margins of 59%
• Non-GAAP diluted earnings per share of $0.13
• GAAP loss per share of $0.04
• Cash, cash equivalents and investments at the end of the quarter of $104.9 million

First Quarter Business Highlights

NVP Highlights

• Introduced the EndaceFlow 3040 NetFlow Generator Appliance (NGA), delivering custom filtering, advanced load balancing and ease-of-integration with industry leading NetFlow collectors, including SevOne and Lancope
• Launched Endace Fusion Ecosystem program, enabling integration with key application performance management (APM) and network performance management (NPM) solutions
• Announced Endace Fusion Connector for Splunk which optimizes data analysis workflows between EndaceProbe Intelligent Network Recorders (INRs) and Splunk monitoring and security tools
• Won Network Security Solution of the Year award for EndaceProbe INRs at 2013 Computing Security Awards

NCP Highlights

• Introduced new LightPulse Gen 5 FC HBAs and converged fabric adapters that deliver superior latency, maximum I/O performance and unmatched reliability, critical for virtualized, private cloud and flash cache environments
• Announced the Emulex Engine (XE) 201 I/O controller has been selected by EMC to deliver target-side Gen 5 FC connectivity and data integrity protection for VMAX enterprise storage arrays
• Announced range of FC and Ethernet-based solutions for new HP ProLiant Gen8 Servers, delivering broadest I/O connectivity for HP Converged Infrastructure
• Announced Fusion-io qualification of LightPulse Gen 5 FC HBAs for use with ION Data Accelerator solutions
• Introduced Gen 5 FC Flash Services technology for virtualized environments and database applications, providing QoS and in-band message passing features to optimize I/O performance in fabric-based flash arrays and server-based cache environments
• Announced FC and Ethernet I/O connectivity support for vSphere 5.5 and forthcoming Emulex Virtual Network eXceleration (VNeX) virtual network offload technology in support of Virtual Extensible LAN (VXLAN)
• Announced FC and Ethernet I/O connectivity support for Windows Server 2012 R2 with forthcoming VNeX offload technology support for Hyper-V Network Virtualization
• Announced support for Brocade ClearLink diagnostics to advance Gen 5 FC capabilities for enterprise and cloud data centers leveraging FC SANs
• Gen 5 FC HBAs and CFAs optimized for new Intel Xeon processor E5-2600 v2 (codenamed Ivy Bridge)-based servers with PCIe 3.0 support, with leading performance and improved efficiency
• Joined IB Trade Association to help define the standard and promote the benefits of RDMA and RDMA over Converged Ethernet technology

Company Highlights
Won Outstanding Technology company of the Year award at 20th annual High-Tech Innovation Awards by OC Technology Alliance

President and CEO Jeff Benck commented: “Exceeding the high end of our guidance was a terrific start to the new fiscal year. We are already beginning to see the results of our commitment to improve operational efficiencies and increase the profitability of our connectivity business.” Benck continued, “In addition, we’re building the momentum of our visibility business, by delivering strong sequential revenue growth and we are creating an expanded pipeline of opportunities.”

Business Outlook
For the second quarter of fiscal 2014, Emulex is forecasting total net revenues in the range of $118 – $124 million. The company expects non-GAAP earnings per diluted share of $0.15 – $0.17 in the second quarter. GAAP estimates for the second quarter reflect approximately $0.16 per diluted share in expected charges arising primarily from amortization of intangibles, stock-based compensation, and the royalties, mitigation expenses and license fees associated with the Broadcom patent litigation, as well as the associated tax effects and the impact of our U.S. GAAP tax valuation allowance.

To read the earnings call transcript