Announces Approval of a $100 million Stock Repurchase Program

ALISO VIEJO, Calif. — (BUSINESS WIRE) — October 16, 2014 — QLogic Corp. (Nasdaq: QLGC), a leading supplier of high performance network infrastructure solutions, today announced its second quarter financial results for the period ended September 28, 2014.

Second Quarter Highlights

• Net revenue: $127.5 million, up 7% sequentially
• GAAP net income: $11.0 million or $0.12 per diluted share
• Non-GAAP net income: $22.0 million, or $0.25 per diluted share, up 19% sequentially
• Operating margin: 10.6% GAAP, 20.1% non-GAAP
• Cash and marketable securities: $276.8 million as of September 28, 2014
• Cash generated from operations: $28.4 million

Net revenue for the second quarter of fiscal 2015 was $127.5 million and increased 13% from $112.6 million in the same quarter last year. Revenue from Advanced Connectivity Platforms was $114.9 million during the second quarter of fiscal 2015 and increased 22% from $94.0 million in the same quarter last year.

The growth of our net revenue in the second quarter was driven by a sequential increase in revenue from Fibre Channel adapters of more than 5% and a sequential increase in revenue from Ethernet products of approximately $5 million.

Net income on a GAAP basis was $11.0 million or $0.12 per diluted share for the second quarter of fiscal 2015 compared to $11.0 million or $0.13 per diluted share for the second quarter of fiscal 2014. Net income on a non-GAAP basis for the second quarter of fiscal 2015 increased 10% to $22.0 million, or $0.25 per diluted share, from $20.0 million, or $0.23 per diluted share, for the second quarter of fiscal 2014.

QLogic also announced today that its board of directors has authorized a program to repurchase up to $100 million of the company’s outstanding common stock over a period of up to 18 months.

“I am very pleased with our financial performance in the second quarter. We delivered both revenue and non-GAAP earnings per diluted share that exceeded the high end of our guidance range. Based on our current execution, compelling product portfolio, and design win and qualification activity, we are well positioned to continue solid revenue and earnings per share performance during the second half of fiscal 2015,” said Prasad Rampalli, president and chief executive officer, QLogic. “The stock repurchase program that we announced today underscores the Board’s ongoing commitment to enhancing shareholder value, as well as our confidence in our long-term business growth prospects and financial outlook.”

QLogic uses certain non-GAAP financial measures to supplement financial statements based on GAAP. A summary of these non-GAAP financial measures and a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure, as well as a description of the reasons that management believes that these non-GAAP financial measures provide useful information to investors and the additional purposes for which management uses these non-GAAP financial measures, is presented in the accompanying financial schedules.

QLogic’s second quarter fiscal 2015 conference call is scheduled for today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). Prasad Rampalli, president and chief executive officer, and Jean Hu, senior vice president and chief financial officer, will host the conference call. The call is being webcast live via the Internet at http://ir.qlogic.com and will include certain prepared materials. Phone access to participate in the conference call is available at (888) 539-3612, pass code: 5088706.

The financial information and the prepared materials that the company intends to discuss during the conference call will be available on the company’s website at http://ir.qlogic.com for twelve months following the conference call. A replay of the webcast will be available at http://ir.qlogic.com for twelve months.

Follow QLogic @ twitter.com/qlogic

QLogic – the Ultimate in Performance

QLogic (Nasdaq: QLGC) is a global leader and technology innovator in high performance server and storage networking connectivity products. Leading OEMs and channel partners worldwide rely on QLogic for their server and storage networking solutions. For more information, visit www.qlogic.com.

Disclaimer – Forward-Looking Statements

This press release contains statements relating to future results of the company (including certain beliefs and projections regarding business and market trends, as well as our confidence in our long-term business growth prospects and financial outlook and belief that we are well positioned to continue solid revenue and earnings per share performance during the second half of fiscal 2015) that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected or implied in the forward-looking statements. The company advises readers that these potential risks and uncertainties include, but are not limited to: potential fluctuations in operating results; gross margins that may vary over time; unfavorable economic conditions; the stock price of the company may be volatile; the company's dependence on the networking markets served; the ability to maintain and gain market or industry acceptance of the company's products; the company's dependence on a small number of customers; the company's ability to compete effectively with other companies; uncertain benefits from strategic business combinations, acquisitions and divestitures; the ability to attract and retain key personnel; the complexity of the company's products; declining average unit sales prices of comparable products; the company's dependence on sole source and limited source suppliers; the company's dependence on relationships with certain third-party subcontractors and contract manufacturers; sales fluctuations arising from customer transitions to new products; seasonal fluctuations and uneven sales patterns in orders from customers; changes in the company's tax provisions or adverse outcomes resulting from examination of its income tax returns; international economic, currency, regulatory, political and other risks; facilities of the company and its suppliers and customers are located in areas subject to natural disasters; the ability to protect proprietary rights; the ability to satisfactorily resolve any infringement claims; a reduction in sales efforts by current distributors; declines in the market value of the company's marketable securities; changes in and compliance with regulations; difficulties in transitioning to smaller geometry process technologies; the use of "open source" software in the company's products; system security risks, data protection breaches and cyber-attacks; and the company’s ability to borrow under its credit agreement is subject to certain covenants.