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QLogic Corp. Reports Operating Results (10-Q)

August 02, 2010 | About:
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10qk

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QLogic Corp. (QLGC) filed Quarterly Report for the period ended 2010-06-27.

Qlogic Corp. has a market cap of $1.82 billion; its shares were traded at around $16.29 with a P/E ratio of 19.4 and P/S ratio of 3.3. Qlogic Corp. had an annual average earning growth of 6.9% over the past 10 years.QLGC is in the portfolios of Westport Asset Management, John Hussman of Hussman Economtrics Advisors, Inc., Chuck Royce of Royce& Associates, Jeremy Grantham of GMO LLC, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

Our net revenues are derived primarily from the sale of Host Products, Network Products and Silicon Products. Net revenues increased 16% to $142.6 million for the three months ended June 27, 2010 from $122.8 million for the three months ended June 28, 2009. This increase was primarily the result of a $14.2 million, or 16%, increase in revenue from Host Products and a $4.5 million, or

Engineering and Development. Engineering and development expenses consist primarily of compensation and related employee benefit costs, service and material costs, occupancy and equipment costs and related computer support costs. During the three months ended June 27, 2010, engineering and development expenses increased to $34.7 million from $34.1 million for the three months ended June 28, 2009. The increase was primarily due to a $1.6 million increase in cash compensation and related employee benefit costs due to an increase in headcount, partially offset by a $0.6 million decrease in outside service costs related to new product development.

Sales and Marketing. Sales and marketing expenses consist primarily of compensation and related employee benefit costs, sales commissions, promotional activities and travel for sales and marketing personnel. Sales and marketing expenses increased to $20.4 million for the three months ended June 27, 2010 from $19.5 million for the three months ended June 28, 2009. The increase in sales and marketing expenses was due primarily to a $0.9 million increase in cash compensation and related employee benefit costs, primarily due to higher headcount and increased commissions, and a $0.5 million increase in stock-based compensation. These increases were partially offset by a $0.8 million decrease in amortization of purchased intangible assets due to an intangible asset becoming fully amortized during fiscal 2010.

million and net non-cash charges of $25.4 million, partially offset by a net increase in the non-cash components of working capital of $20.2 million. The increase in the non-cash components of working capital was primarily due to a $6.2 million decrease in accrued taxes, a $5.5 million decrease in accrued compensation and a $5.0 million increase in inventories. The decreases in accrued taxes and accrued compensation were primarily due to the timing of payment obligations. The increase in inventories was due to advanced purchases of silicon chips to maintain flexibility due to long lead times for these products.

Cash provided by investing activities was $15.4 million for the three months ended June 27, 2010 and consisted primarily of $11.1 million of net proceeds from sales and maturities of available-for-sale securities and $9.3 million of proceeds from redemptions of auction rate securities (ARS) at par value, partially offset by $5.3 million of purchases of property and equipment. During the three months ended June 28, 2009, cash used in investing activities of $64.3 million consisted of $49.5 million of net purchases of available-for-sale securities, $13.7 million for the acquisition of NetXen, Inc. (net of cash acquired), and $6.9 million of purchases of property and equipment, partially offset by $5.8 million of proceeds from redemptions of ARS at par value.

Cash used in financing activities of $53.4 million for the three months ended June 27, 2010 consisted of our purchase of $53.1 million of common stock under our stock repurchase program and $5.9 million for minimum tax withholdings paid on behalf of employees for restricted stock units that vested during the period, partially offset by $5.6 million of proceeds from the issuance of common stock and excess tax benefits from stock-based awards. During the three months ended June 28, 2009, cash used in financing activities of $22.8 million consisted of our purchase of $21.0 million of common stock under our stock repurchase program, $2.4 million for minimum tax withholdings paid on behalf of employees for restricted stock units that vested during the period and the repayment of a $0.9 million line of credit assumed in the NetXen, Inc. acquisition, partially offset by $1.5 million of proceeds from the issuance of common stock and excess tax benefits from stock-based awards.

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