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8-K - FORM 8-K - EMULEX CORP /DE/ | c11239e8vk.htm |
Exhibit 99.01
Investor Contact:
|
Press Contact: | |
Frank Yoshino
|
Katherine Lane | |
Vice President, Finance
|
Director, Corporate Communications | |
+1 714 885-3697
|
+1 714 885-3828 | |
frank.yoshino@emulex.com
|
katherine.lane@emulex.com |
EMULEX ANNOUNCES SECOND QUARTER FISCAL 2011 RESULTS
Net Revenues Grow 11 Percent Sequentially, Totaling $114 Million
COSTA MESA, Calif., January 20, 2011 Emulex Corporation (NYSE:ELX) today announced results
for its second fiscal quarter ended December 26, 2010.
Second Quarter Financial Highlights
| Total net revenues of $114.0 million, an increase of 11% sequentially and 5%
year-over-year |
| 10Gb/s Ethernet (10GbE)-based net revenues grew more than 35% sequentially, and
accounted for over 10% of total net revenues for the quarter |
| Host Server Products (HSP) net revenues were $92.2 million, or 81% of net
revenues, an increase of 17% sequentially and 13% year-over-year |
| 8Gb/s products exceeded 50% of HSP Fibre Channel net revenues for the quarter |
| Embedded Storage Products (ESP) net revenues were $21.8 million, or 19% of net
revenues, a decrease of 9% sequentially and 17% year over year |
| GAAP gross margins of 56% and non-GAAP gross margins of 64% |
| GAAP operating loss of $8.2 million, or 7% of total net revenues, and non-GAAP
operating income of $12.5 million, or 11% of total net revenues |
| GAAP net loss of $39.8 million and non-GAAP net income of $13.4 million |
| GAAP loss per share of $0.46 and non-GAAP diluted earnings per share of $0.15 |
| Cash, cash equivalents and investments at the end of the quarter were $178.6
million |
FY11 Q2 Earnings Results
January 20, 2011
Page 2 of 13
January 20, 2011
Page 2 of 13
Business Highlights
| Captured over ten percent of the total 10GbE adapter and Local Area Network on
Motherboard (LOM) revenue market share, according to the DellOro Groups Q3 2010
Network Controller and Adapter report. Emulex now ranks second in overall 10GbE
adapter and LOM ports, and third in total revenue for the September quarter. |
| Began OEM sampling of the Pilot 3 integrated Baseboard Management Controllers
(iBMC), an integrated lights-out management controller with a unique high
performance triple core architecture that provides embedded platform management,
high performance Keyboard Video and Mouse (KVM) console operation and high speed
remote storage support |
| Announced broad support of OneConnect 10Gb/s Ethernet, iSCSI and Fibre Channel
over Ethernet (FCoE) Universal Converged Network Adapters (UCNAs) and LightPulse®
Fibre Channel HBAs on the new Red Hat Enterprise Linux 6 platform |
| Introduced OneCommand Guardian and OneCommand Key Manager, a comprehensive
host-based encryption solution designed to provide a scalable cost-effective
security for data in-flight and at-rest on servers using Emulexs OneSecure
Adapters or LightPulse® Fibre Channel Hosts Bus Adapters (HBAs) |
| Announced support of the T10 Protection Information (T10-PI) standard to prevent
silent data corruption and ensures the integrity and regulatory compliance of user
data on Emulex LightPulse 8Gb/s Fibre Channel HBAs with its BlockGuard feature |
Financial Results
Total net revenues increased 11% sequentially and 5% from the comparable quarter of last year,
reaching $114.0 million in the second quarter. Second quarter GAAP net loss was $39.8 million, or
$0.46 per share, compared to a GAAP net loss of $8.1 million, or $0.10 per share, in the prior quarter, and GAAP net income of $8.9 million, or $0.11 per diluted share, reported
in Q2 of fiscal 2010. Non-GAAP net income for the second quarter was $13.4 million, or $0.15 per
diluted share. Non-GAAP net income increased 35% sequentially from the $9.9 million reported in
the first quarter, but declined 7% from $14.3 million in the comparable quarter of the last fiscal
year. Reconciliations between GAAP and non-GAAP results are included in the accompanying financial
data.
FY11 Q2 Earnings Results
January 20, 2011
Page 3 of 13
January 20, 2011
Page 3 of 13
CEO Jim McCluney commented, Our December quarter results were a strong finish for calendar
2010, which represents 20% revenue growth over 2009. Revenues were at the high end of our guidance
and our gross margins improved sequentially as we began to realize the benefits from the recently
completed ServerEngines acquisition. Host Server Products sequential revenue growth of 17% was
driven by share gains in our core Fibre Channel products and the continuing ramp of our 10GbE UCNAs
and ULOMs, which are now over 10% of our revenues, McCluney continued.
With the next round of 10GbE server design activities well underway at our customers, we are
well positioned to expand on the momentum that has been building over the past year, concluded
McCluney.
Business Outlook
Although actual results may vary depending on a variety of factors, many of which are outside
the Companys control, including the timing of new server launches by our customers, Emulex is
providing guidance for its third fiscal quarter ending March 27, 2011. For the third quarter of
fiscal 2011, Emulex is forecasting total net revenues in the range of $108$112 million. The
Company expects non-GAAP earnings per diluted share could amount to $0.08$0.11 in the third
quarter. On a GAAP basis, Emulex expects a loss per share of $0.03$0.06 in the third quarter.
GAAP estimates for the third quarter reflect approximately $0.14 per diluted share in expected
charges arising primarily from amortization of intangibles and stock-based compensation.
About Emulex
Emulex is the leader in converged networking solutions for the data center. Our Connectivity
Continuum architecture provides intelligent networking services that transition todays
infrastructure into tomorrows unified network ecosystem. Emulex provides a single framework that intelligently connects every server, network and storage device within the data center.
Through strategic collaboration and integrated partner solutions, Emulex provides its customers
with industry leading business value, operational flexibility and strategic advantage. Emulex is
listed on the New York Stock Exchange (NYSE:ELX) and has corporate headquarters in Costa Mesa,
California. News releases and other information about Emulex Corporation are available at
http://www.emulex.com.
FY11 Q2 Earnings Results
January 20, 2011
Page 4 of 13
January 20, 2011
Page 4 of 13
Note Regarding Non-GAAP Financial Information
To supplement the condensed consolidated financial statements presented in accordance with U.S.
generally accepted accounting principles (GAAP), we have included the following non-GAAP financial
measures in this press release or in the webcast to discuss our financial results for the second
fiscal quarter which may be accessed via our website at www.emulex.com: (i) non-GAAP gross margin,
(ii) non-GAAP operating expenses, (iii) non-GAAP operating income, (iv) non-GAAP net income, and
(v) non-GAAP diluted earnings per share. These non-GAAP financial measures exclude certain
expenses and reflect an additional way of viewing aspects of our operations that, when viewed with
the GAAP results and the reconciliations to corresponding GAAP financial measures, provide a more
complete understanding of our results of operations and the factors and trends affecting our
business. However, these non-GAAP measures should be considered as a supplement to, and not as a
substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. We
use our non-GAAP financial measures internally to better understand and evaluate our business,
prepare annual budgets, and in measuring performance for some forms of compensation.
Our non-GAAP financial measures reflect adjustments based on the following items, as well as the
related income tax effects:
Stock-based compensation. Although stock-based compensation represents an important
part of incentive compensation offered to our key employees, we believe that exclusion of the
impact of stock-based compensation assists management and investors in evaluating the period over
period performance of our business operations and in comparing our performance with those of our
competitors. Stock-based compensation expense will recur in future periods.
Amortization of intangibles. Amortization of intangibles generally represents costs
incurred by an acquired company or other third party to build value prior to our acquisition of the
intangible assets. As such, it is effectively part of the transaction costs of the acquisition
rather than ongoing costs of operating our core business. As a result, we believe that exclusion
of these costs in presenting non-GAAP financial measures provides management and investors a more
effective means of evaluating its historical performance and projected costs and the potential for
realizing cost efficiencies within our core business. Amortization of intangibles will recur in
future periods.
Severance and associated costs. We have incurred severance and certain related costs
in connection with the change in employment status of certain employees, including terminations
resulting from elimination of certain positions. We believe that the exclusion of such severance and related costs from the relevant non-GAAP financial measures enables management and investors to
more effectively evaluate historical performance and projected costs. While severance and
associated costs are generally infrequent in nature, we may incur severance or associated costs in
response to changing economic conditions or in connection with acquisitions.
FY11 Q2 Earnings Results
January 20, 2011
Page 5 of 13
January 20, 2011
Page 5 of 13
Broadcoms unsolicited takeover proposal and related litigation costs. We believe that
exclusion of charges related to Broadcoms unsolicited takeover proposal and related litigation
costs is useful to management and investors in evaluating the performance of our ongoing operations
on a period-to-period basis and relative to our competitors. While such costs will continue until
our outstanding litigation with Broadcom has been resolved, such costs are generally unrelated to
our core business and/or infrequent in nature.
Fair value adjustments on assets. We have recognized fair value adjustments in
connection with certain assets. We believe that exclusion of these adjustments is useful to
management and investors in evaluating the performance of our ongoing operations on a
period-to-period basis and relative to our competitors. In this regard, we note that adjustments
of this type are infrequent in nature.
Tax impact associated with the option exchange. During the first quarter of fiscal
2010 we completed a shareholder approved exchange of options for restricted stock which resulted in
a tax benefit. We believe the exclusion of the tax benefit related to this option exchange is
useful to management and investors in evaluating the performance of our ongoing operations on a
period-to-period basis and relative to our competitors. In this regard, we note that charges of
this type are infrequent in nature.
Charges related to PCT of ServerEngines Intangibles. During the second
quarter of fiscal 2011 one of our US entities entered into a platform contribution transaction
(PCT) with one of our international subsidiaries to license the recently acquired ServerEngines
technology. We believe the exclusion of the tax impact related to this PCT is useful to management
and investors in evaluating the performance of our ongoing operations on a period-to-period basis
and relative to our competitors. In this regard, we note that charges of this type are infrequent
in nature.
Timing difference due to using an actual interim effective tax rate versus an annualized
effective tax rate. Although for fiscal year 2010, we used an actual interim effective tax
rate instead of an annualized effective tax rate in calculating GAAP net income, we believe that
eliminating the tax impact associated with this timing difference is useful to management and
investors in evaluating the performance of our ongoing operations on a period-to-period basis and
relative to our competitors. In this regard, we note that a similar adjustment may recur in future
periods when the use of an annualized effective tax rate would be distortive.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: With the
exception of historical information, the statements set forth above, including, without limitation,
those contained in the discussion of Business Outlook above, and the reconciliation of
forward-looking diluted earnings per share below, contain forward-looking statements that involve
risk and uncertainties. We expressly disclaim any obligation or undertaking to release publicly
any updates or changes to these forward-looking statements that may be made to reflect any future
events or circumstances. We wish to caution readers that a number of important factors could cause
actual results to differ materially from those in the forward-looking statements. The fact that the economy generally, and the technology and storage segments
specifically, have been in a state of uncertainty makes it difficult to determine if past
experience is a good guide to the future and makes it impossible to determine if markets will grow or shrink in the
FY11 Q2 Earnings Results
January 20, 2011
Page 6 of 13
January 20, 2011
Page 6 of 13
short term. Disruptions in world credit and equity markets and the resulting
economic uncertainty for our customers and the storage networking market as a whole has resulted in
a downturn in information technology spending that has and could continue to adversely affect our
revenues and results of operations. Furthermore, the effect of any actual or potential unsolicited
offers to acquire us may have an adverse effect on our operations. As a result of this
uncertainty, we are unable to predict with any accuracy what future results might be. Other
factors affecting these forward-looking statements include, but are not limited to, the following:
slower than expected growth of the storage networking market or the failure of our Original
Equipment Manufacturer (OEM) customers to successfully incorporate our products into their systems;
our dependence on a limited number of customers and the effects of the loss of, or decrease or
delays in orders by any such customers, or the failure of such customers to make payments; the
emergence of new or stronger competitors as a result of consolidation movements in the market; the
timing and market acceptance of our or our OEM customers new or enhanced products; unexpected
costs associated with entry into new markets; the variability in the level of our backlog and the
variable and seasonal procurement patterns of our customers; impairment charges, including but not
limited to goodwill, intangible assets and equity investments recorded under the cost method;
changes in tax rates or legislation; the effects of terrorist activities, natural disasters and
resulting political or economic instability; the highly competitive nature of the markets for tour
products as well as pricing pressures that may result from such competitive conditions; any
inability to successfully implement changes in our revenue model to separately charge for software;
the effect of rapid migration of customers towards newer, lower cost product platforms; possible
transitions from board or box level to application specific computer chip solutions for selected
applications; a shift in unit product mix from higher-end to lower-end or mezzanine card products;
a decrease in the average unit selling prices or an increase in the manufactured cost of our
products; delays in product development; our reliance on third-party suppliers and subcontractors
for components and assembly; any inadequacy of our intellectual property protection and the costs
of actual or potential third-party claims of infringement and any related indemnity obligations or
adverse judgements; our ability to attract and retain key technical personnel; our ability to
benefit from research and development activities; our dependence on international sales and
internationally produced products; the effect of acquisitions; including the recent acquisition of
ServerEngines; changes in accounting standards; and the potential effects of global warming and any
resulting regulatory changes on our business. We have and will incur charges associated with the
acquisition of ServerEngines. As the valuation and purchase price allocation has not been
finalized, we are unable to predict the impact of various post-acquisition charges, including
amortization of intangibles and stock-based compensation. These and other factors could cause
actual results to differ materially from those in the forward-looking statements and are discussed
in our filings with the Securities and Exchange Commission, including its recent filings on Forms
10-K and 10-Q, under the caption Risk Factors.
This news release refers to various products and companies by their trade names. In most, if not
all, cases these designations are claimed as trademarks or registered trademarks by their
respective companies.
FY11 Q2 Earnings Results
January 20, 2011
Page 7 of 13
January 20, 2011
Page 7 of 13
EMULEX CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited, in thousands, except per share data)
Condensed Consolidated Statements of Operations
(unaudited, in thousands, except per share data)
Three Months Ended | Six Months Ended | |||||||||||||||
December 26, | December 27, | December 26, | December 27, | |||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net revenues |
$ | 113,998 | $ | 108,290 | $ | 217,095 | $ | 193,817 | ||||||||
Cost of sales |
50,225 | 41,506 | 95,927 | 74,927 | ||||||||||||
Gross profit |
63,773 | 66,784 | 121,168 | 118,890 | ||||||||||||
Operating expenses: |
||||||||||||||||
Engineering and development |
41,668 | 31,680 | 79,932 | 63,079 | ||||||||||||
Selling and marketing |
14,226 | 15,760 | 26,935 | 28,672 | ||||||||||||
General and administrative |
13,663 | 11,896 | 31,282 | 24,175 | ||||||||||||
Amortization of other intangible
assets |
2,457 | 1,698 | 4,473 | 3,396 | ||||||||||||
Total operating expenses |
72,014 | 61,034 | 142,622 | 119,322 | ||||||||||||
Operating income (loss) |
(8,241 | ) | 5,750 | (21,454 | ) | (432 | ) | |||||||||
Nonoperating income (loss): |
||||||||||||||||
Interest income |
21 | 93 | 42 | 212 | ||||||||||||
Interest expense |
(10 | ) | (2 | ) | (385 | ) | (4 | ) | ||||||||
Other income (expense), net |
(45 | ) | (132 | ) | (198 | ) | 98 | |||||||||
Total nonoperating income (loss) |
(34 | ) | (41 | ) | (541 | ) | 306 | |||||||||
Income (loss) before income taxes |
(8,275 | ) | 5,709 | (21,995 | ) | (126 | ) | |||||||||
Income tax provision (benefit) |
31,483 | (3,233 | ) | 25,871 | (12,906 | ) | ||||||||||
Net income (loss) |
$ | (39,758 | ) | $ | 8,942 | $ | (47,866 | ) | $ | 12,780 | ||||||
Net income (loss) per share: |
||||||||||||||||
Basic |
$ | (0.46 | ) | $ | 0.11 | $ | (0.57 | ) | $ | 0.16 | ||||||
Diluted |
$ | (0.46 | ) | $ | 0.11 | $ | (0.57 | ) | $ | 0.16 | ||||||
Number of shares used in per share computations: |
||||||||||||||||
Basic |
86,565 | 79,667 | 84,485 | 79,563 | ||||||||||||
Diluted |
86,565 | 80,734 | 84,485 | 80,505 | ||||||||||||
FY11 Q2 Earnings Results
January 20, 2011
Page 8 of 13
January 20, 2011
Page 8 of 13
EMULEX CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(unaudited, in thousands)
Condensed Consolidated Balance Sheets
(unaudited, in thousands)
December 26, | June 27, | |||||||
2010 | 2010 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 168,790 | $ | 248,813 | ||||
Investments |
9,804 | 45,990 | ||||||
Accounts and other receivables, net |
75,083 | 59,479 | ||||||
Inventories |
15,851 | 13,465 | ||||||
Prepaid income taxes |
| 17,563 | ||||||
Prepaid expenses and other current assets |
10,609 | 12,799 | ||||||
Deferred income taxes |
21,297 | 19,442 | ||||||
Total current assets |
301,434 | 417,551 | ||||||
Property and equipment, net |
66,744 | 63,482 | ||||||
Intangible assets, net |
345,850 | 138,332 | ||||||
Deferred income taxes |
2,932 | 27,658 | ||||||
Other assets |
12,820 | 42,427 | ||||||
$ | 729,780 | $ | 689,450 | |||||
Liabilities and Stockholders Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 39,501 | $ | 31,377 | ||||
Accrued liabilities |
38,900 | 29,053 | ||||||
Income taxes payable |
5,090 | | ||||||
Total current liabilities |
83,491 | 60,430 | ||||||
Other liabilities |
4,293 | 4,287 | ||||||
Accrued taxes |
36,107 | 33,551 | ||||||
Total liabilities |
123,891 | 98,268 | ||||||
Total stockholders equity |
605,889 | 591,182 | ||||||
$ | 729,780 | $ | 689,450 | |||||
FY11 Q2 Earnings Results
January 20, 2011
Page 9 of 13
January 20, 2011
Page 9 of 13
EMULEX CORPORATION AND SUBSIDIARIES
Supplemental Information
Supplemental Information
Historical Net Revenues by Channel and Territory:
Q2 FY | Q2 FY | |||||||||||||||||||
2011 | % Total | 2010 | % Total | |||||||||||||||||
($000s) | Revenues | Revenues | Revenues | Revenues | % Change | |||||||||||||||
Revenues from OEM customers |
$ | 100,554 | 88 | % | $ | 91,194 | 84 | % | 10 | % | ||||||||||
Revenues from distribution |
13,441 | 12 | % | 16,992 | 16 | % | (21 | %) | ||||||||||||
Other |
3 | nm | 104 | nm | nm | |||||||||||||||
Total net revenues |
$ | 113,998 | 100 | % | $ | 108,290 | 100 | % | 5 | % | ||||||||||
Asia-Pacific |
$ | 58,052 | 51 | % | $ | 40,172 | 37 | % | 45 | % | ||||||||||
United States |
31,903 | 28 | % | 33,324 | 31 | % | (4 | %) | ||||||||||||
Europe, Middle East and Africa |
21,965 | 19 | % | 32,972 | 30 | % | (33 | %) | ||||||||||||
Rest of world |
2,078 | 2 | % | 1,822 | 2 | % | 14 | % | ||||||||||||
Total net revenues |
$ | 113,998 | 100 | % | $ | 108,290 | 100 | % | 5 | % | ||||||||||
nm | not meaningful |
Summary of Stock-Based Compensation:
Three Months Ended | Six Months Ended | |||||||||||||||
December 26, | December 27, | December 26, | December 27, | |||||||||||||
($000s) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
Cost of sales |
$ | 449 | $ | 312 | $ | 895 | $ | 665 | ||||||||
Engineering and development |
3,429 | 1,235 | 9,517 | 3,712 | ||||||||||||
Selling and marketing |
1,186 | 867 | 2,251 | 1,363 | ||||||||||||
General and administrative |
3,590 | 1,213 | 11,293 | 2,824 | ||||||||||||
Total stock-based compensation |
$ | 8,654 | $ | 3,627 | $ | 23,956 | $ | 8,564 | ||||||||
Reconciliation of GAAP Gross Margin to Non-GAAP Gross Margin:
Three Months Ended | Six Months Ended | |||||||||||||||
December 26, | December 27, | December 26, | December 27, | |||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
GAAP gross margin |
55.9 | % | 61.7 | % | 55.8 | % | 61.3 | % | ||||||||
Items excluded from GAAP gross
margin to calculate non-GAAP
gross margin: |
||||||||||||||||
Stock-based compensation |
0.4 | % | 0.3 | % | 0.4 | % | 0.3 | % | ||||||||
Amortization of intangibles |
7.7 | % | 4.3 | % | 6.9 | % | 5.0 | % | ||||||||
Non-GAAP gross margin |
64.0 | % | 66.3 | % | 63.1 | % | 66.6 | % | ||||||||
FY11 Q2 Earnings Results
January 20, 2011
Page 10 of 13
January 20, 2011
Page 10 of 13
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses:
Three Months Ended | Six Months Ended | |||||||||||||||
December 26, | December 27, | December 26, | December 27, | |||||||||||||
($000s) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
GAAP operating expenses, as presented above |
$ | 72,014 | $ | 61,034 | $ | 142,622 | $ | 119,322 | ||||||||
Items excluded from GAAP operating expenses
to calculate non-GAAP
operating expenses: |
||||||||||||||||
Stock-based compensation |
(8,205 | ) | (3,315 | ) | (23,061 | ) | (7,899 | ) | ||||||||
Amortization of other intangibles |
(2,457 | ) | (1,698 | ) | (4,473 | ) | (3,396 | ) | ||||||||
Severance and associated costs |
| | | (964 | ) | |||||||||||
Net charge associated with
Broadcoms unsolicited takeover
proposal and related litigation
costs |
(855 | ) | (1,484 | ) | (2,176 | ) | (4,094 | ) | ||||||||
Impact on operating expenses |
(11,517 | ) | (6,497 | ) | (29,710 | ) | (16,353 | ) | ||||||||
Non-GAAP operating expenses |
$ | 60,497 | $ | 54,537 | $ | 112,912 | $ | 102,969 | ||||||||
Reconciliation of GAAP Operating Income (Loss) to Non-GAAP Operating Income:
Three Months Ended | Six Months Ended | |||||||||||||||
December 26, | December 27, | December 26, | December 27, | |||||||||||||
($000s) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
GAAP operating income (loss) as presented above |
$ | (8,241 | ) | $ | 5,750 | $ | (21,454 | ) | $ | (432 | ) | |||||
Items excluded from GAAP operating income
(loss) to calculate non-GAAP operating income: |
||||||||||||||||
Stock-based compensation |
8,654 | 3,627 | 23,956 | 8,564 | ||||||||||||
Amortization of intangibles |
11,239 | 6,424 | 19,448 | 12,848 | ||||||||||||
Severance and associated costs |
| | | 964 | ||||||||||||
Net charge associated with
Broadcoms unsolicited takeover
proposal and related litigation
costs |
855 | 1,484 | 2,176 | 4,094 | ||||||||||||
Impact on operating income
(loss) |
20,748 | 11,535 | 45,580 | 26,470 | ||||||||||||
Non-GAAP operating income |
$ | 12,507 | $ | 17,285 | $ | 24,126 | $ | 26,038 | ||||||||
FY11 Q2 Earnings Results
January 20, 2011
Page 11 of 13
January 20, 2011
Page 11 of 13
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income:
Three Months Ended | Six Months Ended | |||||||||||||||
December 26, | December 27, | December 26, | December 27, | |||||||||||||
($000s) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
GAAP net income (loss) as presented above |
$ | (39,758 | ) | $ | 8,942 | $ | (47,866 | ) | $ | 12,780 | ||||||
Items excluded from GAAP net income
(loss) to calculate
non-GAAP net income: |
||||||||||||||||
Stock-based compensation |
8,654 | 3,627 | 23,956 | 8,564 | ||||||||||||
Amortization of intangibles |
11,239 | 6,424 | 19,448 | 12,848 | ||||||||||||
Severance and associated costs |
| | | 964 | ||||||||||||
Net charge associated with
Broadcoms unsolicited takeover
proposal and related litigation costs |
855 | 1,484 | 2,176 | 4,094 | ||||||||||||
Fair value adjustments on assets |
| | 353 | | ||||||||||||
Income tax effect of above items |
(3,893 | ) | (4,426 | ) | (11,098 | ) | (9,832 | ) | ||||||||
Tax impact associated with the
option exchange |
| | | (3,982 | ) | |||||||||||
Charges related to PCT of
ServerEngines intangibles |
36,278 | | 36,278 | | ||||||||||||
Timing difference due to using an
actual interim effective tax rate
versus an annualized effective
tax rate |
| (1,727 | ) | | (4,195 | ) | ||||||||||
Impact on net income (loss) |
53,133 | 5,382 | 71,113 | 8,461 | ||||||||||||
Non-GAAP net income |
$ | 13,375 | $ | 14,324 | $ | 23,247 | $ | 21,241 | ||||||||
FY11 Q2 Earnings Results
January 20, 2011
Page 12 of 13
January 20, 2011
Page 12 of 13
Reconciliation of GAAP Diluted Earnings (Loss) Per Share to Non-GAAP Diluted Earnings Per
Share:
Three Months Ended | Six Months Ended | |||||||||||||||
December 26, | December 27, | December 26, | December 27, | |||||||||||||
(shares in 000s) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
GAAP diluted earnings (loss) per
share as presented above |
$ | (0.46 | ) | $ | 0.11 | $ | (0.57 | ) | $ | 0.16 | ||||||
Items excluded from diluted GAAP
earnings (loss) per share to
calculate diluted non-GAAP earnings
per share, net of tax effect: |
||||||||||||||||
Stock-based compensation |
0.10 | 0.03 | 0.26 | 0.07 | ||||||||||||
Amortization of intangibles |
0.09 | 0.05 | 0.13 | 0.10 | ||||||||||||
Severance and associated costs |
| | | 0.00 | ||||||||||||
Net charge associated with
Broadcoms unsolicited takeover
proposal and related litigation
costs |
0.01 | 0.01 | 0.02 | 0.03 | ||||||||||||
Fair value adjustments on assets |
| | 0.01 | | ||||||||||||
Tax impact associated with the
option exchange |
| | | (0.05 | ) | |||||||||||
Charges related to PCT of
ServerEngines intangibles |
0.41 | | 0.42 | | ||||||||||||
Timing difference due to using an
actual interim effective tax rate
versus an annualized effective
tax rate |
| (0.02 | ) | | (0.05 | ) | ||||||||||
Impact on diluted earnings per
share |
0.61 | 0.07 | 0.84 | 0.10 | ||||||||||||
Non-GAAP diluted earnings per share |
$ | 0.15 | $ | 0.18 | $ | 0.27 | $ | 0.26 | ||||||||
Diluted shares used in non-GAAP per
share computations |
88,412 | 80,734 | 86,111 | 80,505 | ||||||||||||
FY11 Q2 Earnings Results
January 20, 2011
Page 13 of 13
January 20, 2011
Page 13 of 13
Forward-Looking Diluted Earnings per Share Reconciliation:
Guidance for | ||||
Three Months Ending | ||||
March 27, 2011 | ||||
Non-GAAP diluted earnings per share guidance |
$0.08 - $0.11 | |||
Items excluded, net of tax, from non-GAAP diluted earnings per share
to calculate GAAP diluted earnings (loss) per share guidance: |
||||
Stock-based compensation |
0.07 | |||
Amortization of intangibles |
0.07 | |||
Other charges associated with Broadcoms unsolicited takeover
proposal and related litigation costs |
0.00 | |||
GAAP loss per share guidance |
($0.06) - ($0.03 | ) | ||