QLogic Exceeds Revenue and EPS Guidance for Q2 FY2015

More detailed information on these and additional factors that could affect the company's operating and financial results are described in the company's Forms 10-K, 10-Q and other reports filed, or to be filed, with the Securities and Exchange Commission. The company urges all interested parties to read these reports to gain a better understanding of the business and other risks that the company faces. The forward-looking statements contained in this press release are made only as of the date hereof, and the company does not intend to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

QLogic and the QLogic logo are registered trademarks of QLogic Corporation. Other trademarks and registered trademarks are the property of the companies with which they are associated.


QLOGIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited — in thousands, except per share amounts)

	Three Months Ended				Six Months Ended
	September 28,		September 29,		September 28,		September 29,
	2014		2013		2014		2013

Net revenues	$	127,503	$	112,622	$	246,952	$	225,738
Cost of revenues		52,093		36,313		100,847		72,932
Gross profit		75,410		76,309		146,105		152,806

Operating expenses:
Engineering and development		35,480		34,790		73,301		75,177
Sales and marketing		15,453		16,431		31,487		35,844
General and administrative		8,697		7,553		17,597		15,292
Special charges		2,259		4,349		4,803		16,382
Total operating expenses		61,889		63,123		127,188		142,695

Operating income		13,521		13,186		18,917		10,111

Interest and other income, net		296		25		438		798

Income before income taxes		13,817		13,211		19,355		10,909

Income taxes		2,807		2,234		2,345		2,982

Net income	$	11,010	$	10,977	$	17,010	$	7,927

Net income per share:
Basic	$	0.13	$	0.13	$	0.19	$	0.09
Diluted	$	0.12	$	0.13	$	0.19	$	0.09

Number of shares used in per share calculations:
Basic		87,914		87,430		87,654		88,288
Diluted		88,102		87,669		88,177		88,720


QLOGIC CORPORATION
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME
(unaudited — in thousands, except per share amounts)

	Three Months Ended						Six Months Ended
	September 28,			September 29,			September 28,			September 29,
	2014			2013			2014			2013

GAAP net income	$	11,010		$	10,977		$	17,010		$	7,927
Items excluded from GAAP net income:
Stock-based compensation		4,735			4,818			10,275			12,989
Amortization of acquisition-related intangible assets		4,119			244			8,567			487
Amortization of license fee		695			—			1,394			—
Acquisition-related charges		263			—			1,034			—
Special charges		2,259			4,349			4,803			16,382
Income tax effects		(1,066	)		(346	)		(2,582	)		(1,327	)
Total non-GAAP adjustments		11,005			9,065			23,491			28,531
Non-GAAP net income	$	22,015		$	20,042		$	40,501		$	36,458

Net income per diluted share:
GAAP net income	$	0.12		$	0.13		$	0.19		$	0.09
Adjustments		0.13			0.10			0.27			0.32
Non-GAAP net income	$	0.25		$	0.23		$	0.46		$	0.41

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