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Emulex Corporation
ELX today announced preliminary results for its third quarter of fiscal 2013, which ended on March 31, 2013.
(Logo: http://photos.prnewswire.com/prnh/20120403/NE81278LOGO )
Third Quarter Financial Highlights
Total net revenues of $116.8 million
Network Connectivity Products (NCP) net revenues of $85.2 million, representing approximately 73% of total net revenues
Network Visibility Products (NVP), consisting of products from the recent acquisition of Endace, net revenues of $4.9 million for the partial period since the acquisition, representing 4% of total net revenues
Storage Connectivity Products (SCP) net revenues of $20.8 million, representing 18% of total net revenues
Advanced Technology and other Products (ATP) net revenues of $5.9 million, representing 5% of total net revenues
Non-GAAP gross margins of 65% and GAAP gross margins of 58%
Non-GAAP diluted earnings per share of $0.20 included a benefit of $0.06 from the retroactive reinstatement of the Federal Research and Development tax credit
GAAP loss per share of $0.08
Cash, cash equivalents and investments at the end of the quarter of $91.6 million
Third Quarter Business Highlights
Completed acquisition of Endace Limited, expanding the Emulex portfolio of products to include industry leading network packet capture and network visibility software and appliances
Gained four points in Fibre Channel revenue market share over our nearest competitor during CY12, according to Dell'Oro Group's Q4 2012 Fibre Channel Adapter Vendor Report
Announced the availability of Emulex 16Gb Fibre Channel (16GFC) Host Bus Adapters (HBAs) for the Fujitsu PRIMERGY server product line
Emulex LPe16000B 16GFC HBAs named DataCentre Networking Product of the Year from DataCentre Solutions, as a finalist for the Network Products Guide Best Products of the Year, and Network Connectivity Brand of the Year by WatchStor Magazine in China
Announced broad partner adoption of Emulex LightPulse® 16GFC HBAs, for joint virtualization, flash storage, and data archiving and backup solutions with DataCore Software, GreenBytes, Pure Storage, Quantum, and X-IO
Received the Product Line Strategy Award for leadership in the network recorder and traffic visibility market for the Endace range of network recording and visibility tools from Frost & Sullivan
Enhanced the Emulex Connect™ Partner Program, including a new loyalty program, improved reseller training tools, and streamlined deal registration and web enablement
Emulex named to CRN 2013 Partner Program Guide and awarded a 5-Star Partner rating for excellence in its overall channel program for the third year in a row
Appointed Gene Frantz and Greg Clark to the Emulex Board of Directors, adding expertise to the Board across the spectrum of technology and telecom sectors
CEO Jim McCluney commented, "I'm pleased to report we completed the acquisition of Endace, which will form the core of our Network Visibility Product line. It's still early days, but our Connect, Monitor and Manage strategy is really resonating well with the end user community and I'm very excited about the incremental opportunities the acquisition brings to Emulex for the fourth quarter and beyond into fiscal 2014," continued McCluney.
"The team did an outstanding job of balancing the demands for closing the transaction and beginning integration of the two companies, and at the same time, once again achieving our revenue and earnings guidance for the quarter. After completing the acquisition, we exited the quarter with more than $90 million in available cash and investments," McCluney concluded.
Business Outlook
Although actual results may vary depending on a variety of factors, many of which are outside the Company's control, including uncertainty related to the macro IT spending environment, the timing of new server launches by our customers, and the results and related costs of ongoing patent litigation, Emulex is providing guidance for its fourth fiscal quarter ending June 30, 2013. For the fourth quarter of fiscal 2013, Emulex is forecasting total net revenues in the range of $118 - $122 million. The Company expects non-GAAP earnings per diluted share of $0.11 - $0.13 in the fourth quarter. GAAP estimates for the fourth quarter reflect approximately $0.25 per diluted share in expected charges arising primarily from amortization of intangibles, stock-based compensation, costs associated with the acquisition of Endace and the royalties, mitigation expenses and license fees associated with the Broadcom patent litigation, as well as the associated tax impact and U.S. valuation allowance.
About Emulex
Emulex, the leader in network connectivity, monitoring and management, provides hardware and software solutions for global networks that support enterprise, cloud, government and telecommunications. Emulex's products enable unrivaled end-to-end application visibility, optimization and acceleration. The Company's I/O connectivity offerings, including its line of ultra high-performance Ethernet and Fibre Channel-based connectivity products, have been designed into server and storage solutions from leading OEMs, including Cisco, Dell, EMC, Fujitsu, Hitachi, HP, Huawei, IBM, NetApp and Oracle, and can be found in the data centers of nearly all of the Fortune 1000. Emulex's monitoring and management solutions, including its portfolio of network visibility and recording products, provide organizations with complete network performance management at speeds up to 100Gb Ethernet. Emulex is headquartered in Costa Mesa, Calif., and has offices and research facilities in North America, Asia and Europe. For more information about Emulex
please visit http://www.Emulex.com.
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 third 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.
Site closure related expenses. We have recognized expenses related to closure and consolidation of certain facilities. We believe that exclusion of these expenses 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 expenses of this type are infrequent in nature.
Patent litigation damages, license fees and royalties. We have incurred expenses in the form of damages, sunset period royalties and settlement costs as a result of a judgment in a patent litigation proceeding with Broadcom and the related partial settlement and worldwide license agreement executed on July 3, 2012 (the Release Agreement). We believe that exclusion of charges related to the Broadcom patent damages, sunset period royalties and Release Agreement are useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis and relative to our competitors, as this amount relates to a judgment in litigation and does not reflect a continuing cost of operating our core business. In this regard, we note that expenses of this type are generally unrelated to our core business and/or infrequent in nature but will continue in future periods until affected products are phased out.
Mitigation expenses related to the Broadcom patents. We have recognized mitigation expenses related to the Broadcom patents. We believe that exclusion of these redesign, requalification and appeal expenses 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 expenses of this type are infrequent in nature.
Expenses related to the acquisition of Endace Limited
EDA. We have incurred various expenses during the acquisition process including but not limited to legal fees, accounting fees, the mark-up on acquired inventory, severance costs and unrealized translation loss. We believe that exclusion of these charges are useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis and relative to our competitors, as these expenditures do not reflect a continuing cost of operating our current core business. In this regard, we note that expenses of this type are infrequent in nature.
Valuation allowance for U.S. federal and state deferred tax assets. The Company has concluded that it is more likely than not that we will be unable to fully utilize the majority of our U.S. federal and state deferred tax assets As a result, the Company has previously recorded a valuation allowance against those assets to the extent that they cannot be realized through net operating loss carrybacks to prior tax years. We believe that eliminating the impact of a discrete adjustment of this nature and its continuing impact on our effective tax rate is useful to management and investors in evaluating the performance of the Company's ongoing operations on a period-to-period basis and relative to the Company's competitors. In this regard, we note that adjustments of this type are generally infrequent in nature.
- - - - - - - - -
"Safe Harbor'' Statement under the Private Securities Litigation Reform Act of 1995: With the exception of historical information, the statements set forth above, 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. These factors include the possibility that we may not realize the anticipated benefits from the acquisition of Endace on a timely basis or at all, and may be unable to integrate the technology, operations and personnel of Endace into our existing operations in a timely and efficient manner. In addition, intellectual property claims, with or without merit, that could result in costly litigation, cause product shipment delays, require us to indemnify customers, or require us to enter into royalty or licensing agreements, which may or may not be available. Furthermore, we have in the past obtained, and may be required in the future to obtain, licenses of technology owned by other parties. We cannot be certain that the necessary licenses will be available or that they can be obtained on commercially reasonable terms. If we were to fail to obtain such royalty or licensing agreements in a timely manner and on reasonable terms, our business, results of operations and financial condition could be materially adversely affected. Ongoing lawsuits, such as the action brought by Broadcom Corporation (Broadcom), present inherent risks, any of which could have a material adverse effect on our business, financial condition, or results of operations. Such potential risks include continuing expenses of litigation, risk of loss of patent rights, risk of monetary damages, risk of injunction against the sale of products incorporating the technology in question, counterclaims, attorneys' fees, incremental costs associated with product or component redesigns, potential liabilities to customers under contractual indemnification provisions, and diversion of management's attention from other business matters. With respect to the continuing Broadcom litigation, such potential risks also include the adequacy of any sunset period to make design changes, the ability to implement any design changes, the availability of customer resources to complete any re-qualification or re-testing that may be needed, the ability to maintain favorable working relationships with Emulex suppliers of serializer/deserializer (SerDes) modules, and the ability to obtain a settlement which does not put us at a competitive disadvantage. In addition, the fact that the economy generally, and the technology and storage market 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 short term. Continued weakness in domestic and worldwide macro-economic conditions, related disruptions in world credit and equity markets, and the resulting economic uncertainty for our customers, as well as the storage and converged networking market as a whole, has and could continue to adversely affect our revenues and results of operations. As a result of these uncertainties, we are unable to predict our future results with any accuracy. Other factors affecting these forward-looking statements include but are not limited to the following: faster than anticipated declines in the storage networking market, slower than expected growth of the converged 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, decrease in or delays of orders by any such customers, or the failure of such customers to make timely payments; the emergence of new or stronger competitors as a result of consolidation movements in the market; the timing and market acceptance of our products or our OEM customers' new or enhanced products; costs associated with entry into new areas of the network, server and storage technology markets; the variability in the level of our backlog and the variable and seasonal procurement patterns of our customers; 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 judgments; the effect of any actual or potential unsolicited offers to acquire us; proxy contests or the activities of activist investors; impairment charges, including but not limited to goodwill and intangible assets; changes in tax rates or legislation; the effects of acquisitions; the effects of terrorist activities, natural disasters, and any resulting disruption in our supply chain or customer purchasing patterns or any other resulting economic or political instability; the highly competitive nature of the markets for our products as well as pricing pressures that may result from such competitive conditions; the effects of changes in our business model to separately charge for software; the effect of rapid migration of customers towards newer, lower cost product platforms; transitions from board or box level to application specific integrated circuit (ASIC) solutions for selected applications; a shift in unit product mix from higher-end to lower-end or mezzanine card products; a faster than anticipated 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; our ability to attract and retain key technical personnel; our ability to benefit from our research and development activities; our dependence on international sales and internationally produced products; changes in accounting standards; and any resulting regulatory changes on our business. 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 our recent filings on Forms 10-K and 10-Q, under the caption "Risk Factors."
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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.
EMULEX CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited, in thousands, except per share data)
Three Months Ended
Nine Months Ended
March 31,
April 1,
March 31,
April 1,
2013
2012
2013
2012
Net revenues
$116,786
$125,746
$358,198
$372,814
Cost of sales:
Cost of goods sold
41,642
45,351
130,265
137,314
Amortization of core and developed
technology intangible assets
5,478
5,159
15,775
18,882
Patent litigation settlement and
royalties
1,426
477
3,376
865
Cost of sales
48,546
50,987
149,416
157,061
Gross profit
68,240
74,759
208,782
215,753
Operating expenses:
Engineering and development
43,661
40,361
122,244
121,307
Selling and marketing
17,179
15,897
45,685
45,774
General and administrative
9,526
8,820
29,021
29,808
Amortization of other intangible
assets
1,488
1,603
4,376
4,967
Total operating expenses
71,854
66,681
201,326
201,856
Operating (loss) income
(3,614)
8,078
7,456
13,897
Non-operating (loss) income:
Interest income
15
19
23
74
Interest expense
(7)
(10)
(11)
(14)
Other income (expense), net
(4,481)
(277)
(4,844)
265
Total non-operating (loss) income
(4,473)
(268)
(4,832)
325
(Loss) income before income taxes
(8,087)
7,810
2,624
14,222
Income tax (benefit) provision
(1,117)
(869)
3,354
(2,292)
Net (loss) income
$(6,970)
$8,679
$(730)
$16,514
Net (loss) income per share:
Basic
$(0.08)
$0.10
$(0.01)
$0.19
Diluted
$(0.08)
$0.10
$(0.01)
$0.19
Number of shares used in per share
computations:
Basic
90,590
86,495
90,000
86,421
Diluted
90,590
88,518
90,000
88,369
EMULEX CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(unaudited, in thousands)
March 31,
July 1,
2013
2012
Assets
Current assets:
Cash and cash equivalents
$ 91,071
$201,048
Investments
500
28,879
Accounts receivable, net
85,598
84,106
Inventories
30,304
20,319
Prepaid income taxes
3,361
10,784
Prepaid expenses and other current assets
14,534
7,380
Deferred income taxes
5,108
10,722
Total current assets
230,476
363,238
Property and equipment, net
62,971
60,118
Goodwill and Intangible assets, net
392,886
282,292
Other assets
23,771
7,311
$710,104
$712,959
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
$ 31,651
$ 26,889
Accrued and other current liabilities
39,916
75,700
Total current liabilities
71,567
102,589
Other liabilities
3,981
3,878
Deferred income taxes
18,131
3,876
Accrued taxes
30,471
27,513
Total liabilities
124,150
137,856
Total stockholders' equity
585,954
575,103
$710,104
$712,959
EMULEX CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statement of Cash Flows
(unaudited, in thousands)
Nine Months Ended
March 31,
April 1,
2013
2012
Cash flows from operations:
Net (loss) income
$ (730)
$ 16,514
Adjustments to reconcile net (loss) income to net
cash (used in) provided by operating activities:
Depreciation and amortization
33,324
37,479
Stock based compensation
16,267
18,436
Deferred income taxes
(958)
(5,976)
Other reconciling items
196
(163)
Changes in assets and liabilities
(55,495)
(17,416)
Net cash (used in) provided by operating
activities
(7,396)
48,874
Cash flows from investing activities:
Investment in property and equipment, net
(10,322)
(10,676)
Acquisitions, net of cash acquired
(107,709)
-
Maturities of/(proceeds from) investments, net
28,441
(6,625)
Net cash used in investing activities
(89,590)
(17,301)
Cash flows from financing activities:
Repurchase of common stock
-
(20,058)
Noncontrolling interest
(11,876)
-
Other
(1,275)
537
Net cash used in financing activities
(13,151)
(19,521)
Effect of exchange rates on cash and cash equivalents
160
(274)
Net (decrease) increase in cash & cash equivalents
(109,977)
11,778
Opening cash balance
201,048
131,160
Ending cash balance
$ 91,071
$142,938
EMULEX CORPORATION AND SUBSIDIARIES
Supplemental Information
Historical Net Revenue by Product Lines:
Network Connectivity Products (NCP) primarily consist of Fibre Channel LightPluse® and Ethernet OneConnect® standup HBAs, mezzanine cards, I/O ASICs, ULOMs, and UCNAs to provide server Input/Output (I/O) and target storage array connectivity to enable servers to reliably and efficiently connect to Local Area Networks, Storage Area Networks and Network Attached Storage by offloading data communication processing tasks from the servers as information is delivered and sent to the network.
Network Visibility Products (NVP) consists entirely of the recently acquired Endace® family of network visibility and intelligent network recording products, which consists of EndaceProbe™ Intelligent Network Recorder appliances, the EndaceVision™ browser-based network traffic search engine, EndaceAccess™ network visibility headend systems and Data Acquisition and Generation (DAG) network capture cards, providing organizations with complete network performance management at speeds up to 100Gb Ethernet.
Storage Connectivity Products (SCP) include our InSpeed®, FibreSpy®, switch-on-a-chip (SOC), bridge and router products. SCP are deployed inside storage arrays, tape libraries, and other storage appliances to connect storage controllers to storage capacity, delivering improved performance, reliability, and connectivity.
Advanced Technology and Other Products (ATP) primarily consists of our Integrated Baseboard Management Controllers (iBMC), our One Command® Vision products, as well as some legacy and other products and services.
($000s)
Q3 FY
2013
Revenues
Q2 FY
2013
Revenues
Q1 FY
2013
Revenues
Q4 FY
2012
Revenues
Q3 FY
2012
Revenues
% Change
Q3 vs Q3
Network Connectivity Products
$ 85,166
$ 96,132
$ 96,733
$ 87,979
$ 91,127
(6)%
Network Visibility Products
4,873
-
-
-
-
na
Storage Connectivity Products
20,833
22,670
18,769
32,797
27,855
(25)%
Advanced Technology and
Other Products
5,914
3,343
3,765
8,179
6,764
(13)%
Total net revenues
$116,786
$122,145
$119,267
$128,955
$125,746
(7)%
na – not applicable
% Total
Revenues
% Total
Revenues
% Total
Revenues
% Total
Revenues
% Total
Revenues
Network Connectivity Products
73%
79%
81%
68%
73%
Network Visibility Products
4%
-
-
-
-
Storage Connectivity Products
18%
18%
16%
26%
22%
Advanced Technology and
Other Products
5%
3%
3%
6%
5%
Total net revenues
100%
100%
100%
100%
100%
Historical Net Revenues by Channel and Territory:
($000s)
Q3 FY
2013
Revenues
% Total
Revenues
Q3 FY
2012
Revenues
% Total
Revenues
% Change
Revenues from OEM customers
$100,975
86%
$115,327
92%
(12)%
Revenues from distribution
13,985
12%
10,282
8%
36%
Other
1,826
2%
137
nm
nm
Total net revenues
$116,786
100%
$125,746
100%
(7)%
Asia-Pacific
$65,285
56%
$ 67,461
54%
(3)%
United States
29,713
26%
40,100
32%
(26)%
Europe, Middle East and Africa
19,088
16%
17,919
14%
7%
Rest of world
2,700
2%
266
nm
nm
Total net revenues
$116,786
100%
$125,746
100%
(7)%
nm – not meaningful
Summary of Stock-Based Compensation:
Three Months Ended
Nine Months Ended
March 31,
April 1,
March 31,
April 1,
($000s)
2013
2012
2013
2012
Cost of sales
$ 248
$ 223
$ 744
$ 990
Engineering and development
2,606
2,547
7,518
7,831
Selling and marketing
890
938
2,576
2,874
General and administrative
1,594
2,149
5,429
6,741
Total stock-based compensation
$5,338
$5,857
$16,267
$18,436
Reconciliation of GAAP Gross Margin to Non-GAAP Gross Margin:
Three Months Ended
Nine Months Ended
March 31,
April 1,
March 31,
April 1,
2013
2012
2013
2012
GAAP gross margin
58.4%
59.5%
58.3%
57.9%
Items excluded from GAAP gross
margin to calculate non-GAAP gross
margin:
Stock-based compensation
0.2%
0.1%
0.2%
0.3%
Amortization of intangibles
4.7%
4.1%
4.4%
5.1%
Site closure related expenses
-
-
-
0.0%
Patent litigation damages, license fees and royalties
1.2%
0.4%
0.9%
0.2%
Expenses related to the acquisition of Endace
0.6%
-
0.2%
-
Non-GAAP gross margin
65.1%
64.1%
64.0%
63.5%
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses:
Three Months Ended
Nine Months Ended
March 31,
April 1,
March 31,
April 1,
($000s)
2013
2012
2013
2012
GAAP operating expenses, as presented above
$71,854
$66,681
$201,326
$201,856
Items excluded from GAAP operating
expenses to calculate non-GAAP
operating expenses:
Stock-based compensation
(5,090)
(5,634)
(15,523)
(17,446)
Amortization of other intangibles
(1,488)
(1,603)
(4,376)
(4,967)
Site closure related expenses
-
-
-
(1,039)
Mitigation expenses related to the Broadcom patents
(3,026)
(231)
(4,490)
(231)
Expenses related to the acquisition of Endace
(963)
-
(3,023)
-
Impact on operating expenses
(10,567)
(7,468)
(27,412)
(23,683)
Non-GAAP operating expenses
$61,287
$59,213
$173,914
$178,173
Reconciliation of GAAP Operating (Loss) Income to Non-GAAP Operating Income:
Three Months Ended
Nine Months Ended
March 31,
April 1,
March 31,
April 1,
($000s)
2013
2012
2013
2012
GAAP operating (loss) income as
presented above
$ (3,614)
$ 8,078
$ 7,456
$13,897
Items excluded from GAAP operating
(loss) income to calculate non-GAAP
operating income:
Stock-based compensation
5,338
5,857
16,267
18,436
Amortization of intangibles
6,966
6,762
20,151
23,849
Site closure related expenses
-
-
-
1,142
Patent litigation damages, license fees
and royalties
1,426
477
3,376
865
Mitigation expenses related to the
Broadcom patents
3,026
231
4,490
231
Expenses related to the acquisition of Endace
1,650
-
3,710
-
Impact on operating income
18,406
13,327
47,994
44,523
Non-GAAP operating income
$14,792
$21,405
$55,450
$58,420
Reconciliation of GAAP Net (Loss) Income to Non-GAAP Net Income:
Three Months Ended
Nine Months Ended
March 31,
April 1,
March 31,
April 1,
($000s)
2013
2012
2013
2012
GAAP net (loss) income as presented
above
$ (6,970)
$ 8,679
$ (730)
$16,514
Items excluded from GAAP net (loss)
income to calculate non-GAAP net income:
Stock-based compensation
5,338
5,857
16,267
18,436
Amortization of intangibles
6,966
6,762
20,151
23,849
Site closure related expenses
-
-
-
1,142
Patent litigation damages, license fees
and royalties
1,426
477
3,376
865
Mitigation expenses related to the
Broadcom patents
3,026
231
4,490
231
Expenses related to the acquisition of Endace
6,342
-
8,402
-
Income tax effect of above items
(4,799)
(3,521)
(10,236)
(8,081)
Valuation allowance for U.S. federal
and/or state deferred tax assets
6,856
-
11,211
-
Impact on net income
25,155
9,806
53,661
36,442
Non-GAAP net income
$18,185
$18,485
$52,931
$52,956
Reconciliation of GAAP Diluted (Loss) Earnings Per Share to Non-GAAP Diluted Earnings Per Share:
Three Months Ended
Nine Months Ended
March 31,
April 1,
March 31,
April 1,
(shares in 000s)
2013
2012
2013
2012
GAAP diluted (loss) earnings per share
as presented above
$(0.08)
$0.10
$(0.01)
$0.19
Items excluded from GAAP (loss) earnings
per share to calculate diluted non-GAAP
earnings per share, net of tax effect:
Stock-based compensation
0.06
0.07
0.18
0.21
Amortization of intangibles
0.08
0.08
0.22
0.27
Site closure related expenses
-
-
-
0.01
Patent litigation damages, license fees and royalties
0.02
0.00
0.04
0.01
Mitigation expenses related to the
Broadcom patents
0.03
0.00
0.05
0.00
Expenses related to the acquisition of Endace
0.07
-
0.09
-
Tax impact of above items and U.S
GAAP valuation allowance
0.02
(0.04)
0.01
(0.09)
Impact on GAAP (loss) earnings per share
0.28
0.11
0.59
0.41
Non-GAAP diluted earnings per share
$0.20
$0.21
$0.58
$0.60
Diluted shares used in non-GAAP per share computations
92,240
88,518
91,894
88,369
Forward-Looking Diluted Earnings per Share Reconciliation:
Guidance for
Three Months Ending
June 30, 2013
Non-GAAP diluted earnings per share guidance
$0.11 - $0.13
Items excluded, net of tax, from non-GAAP diluted earnings per share to
calculate GAAP diluted earnings per share guidance:
Stock-based compensation
(0.06)
Amortization of intangibles
(0.09)
Patent litigation damages, license fees, royalties and mitigation expenses
(0.10)
Expense related to the acquisition of Endace
(0.01)
Tax impact of above items and U.S. GAAP valuation allowance
0.01
GAAP loss per share guidance
($0.12) – ($0.14)
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
SOURCE Emulex Corporation
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