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TMCNet:  Emulex Reports Second Quarter Results

[February 06, 2013]

Emulex Reports Second Quarter Results

Feb 06, 2013 (Close-Up Media via COMTEX) -- Emulex Corp. announced results for its second quarter of fiscal 2013 which ended on December 30.

In a release on Jan. 31, the Company noted that second quarter financial highlights include: -Total net revenues of $122.1 million, an increase of 2 percent sequentially and a decrease of 5 percent year-over-year -Network Connectivity Products (NCP) net revenues of $96.1 million, a decrease of 1 percent both sequentially and year-over-year, representing approximately 79 percent of total net revenues -Storage Connectivity Products (SCP) net revenues of $22.7 million, an increase of 21 percent sequentially and a decrease of 18 percent year-over-year, representing 18 percent of total net revenues -Advanced Technology and other Products (ATP) net revenues of $3.3 million, a decrease of 11 percent sequentially and 25 percent year-over-year, representing 3 percent of total net revenues -Non-GAAP gross margins of 63.7 percent and GAAP gross margins of 58.6 percent -Non-GAAP diluted earnings per share of $0.19 and GAAP diluted earnings per share of $0.06 -Cash, cash equivalents and investments at the end of the quarter of $211.2 million Second Quarter Business Highlights -Announced intent to acquire Endace Limited, a network performance management company that provides network monitoring appliances, network analytics software and ultra-high speed network access switching with 100 percent accuracy -Gained more than seven points of overall Fibre Channel revenue market share over nearest competitor and accelerated leadership in emerging 16Gb Fibre Channel (16GFC) segment with more than 75 percent market share according to Dell'Oro Group's Q3 2012 Fibre Channel Adapter Vendor report and Crehan Research's Q3 2012 Server-class Adapter and LOM market share reports -Announced new LightPulse 16Gb Fibre Channel (16GFC) blade adapters for Dell PowerEdge blade servers to support the new end-to-end 16GFC blade solution from Dell, extending Emulex 16GFC connectivity for Dell customers across blade, storage and servers -Delivered an integrated HP NC553i 10Gb FlexFabric adapter for new HP Integrity BL860c i4, BL870c i4 and BL890c i4 Server Blades, providing I/O flexibility, efficiency and simplicity for LAN and SAN connectivity -Announced OneCore Storage software development kit (SDK), a new comprehensive solution for independent hardware and software vendors (IHVs and ISVs) and system integrators developing storage, flash/solid state disk (SSD), application and networking appliance solutions requiring low latency and high performance I/O connectivity -First I/O vendor to support the new VMware vSphere 5.1 Web Client with Emulex OneCommand Manager plug-in for VMware vCenter Server, integrating real-time lifecycle management of adapters provided by Emulex into the VMware vCenter Server console, centralizing and simplifying virtualization management -Won Systems Management Product of the Year award for Emulex OneCommand Vision 3.0 at the Storage, Virtualization and Cloud Computing (SVC) Awards -Named to CRN's 2013 Data Center 100 list, recognizing technology vendors for powering, supporting and protecting today's data center services in an environmentally and economically friendly manner, while boosting efficiency and productivity -Partnered with Gnodal to deliver a joint high frequency trading (HFT) solution using Emulex OneConnect 10Gb Ethernet (10GbE) Network Xceleration OCe12000-D adapters, with FastStack DBL software, and a Gnodal GS4008 10GbE switch, eliminating network congestion and providing industry-leading low latency -Announced a joint live data management solution for analyzing big data with uCIRRUS using Emulex OneConnect 10GbE Network Xceleration OCe12000-D adapters, with FastStack Sniffer10G software, and uCIRRUS's XPRESSmp Financial Results In the second quarter, total net revenues of $122.1 million represented an increase of 2 percent over the first quarter results. On a GAAP basis, Emulex recorded net income of $5.6 million, or $0.06 per diluted share, compared to first quarter GAAP income of $0.7 million, or $0.01 per share. Non-GAAP net income for the second quarter was $17.2 million, or $0.19 per diluted share, essentially flat with the $0.19 of diluted earnings per share reported in the first quarter. Cash, cash equivalents and investments at the end of the quarter totaled $211.2 million compared to $186.4 million at the end of the first quarter. Reconciliations between GAAP and non-GAAP results are included in the accompanying financial data.


CEO Jim McCluney commented, "I'm pleased with the solid execution we were able to deliver for the second quarter, once again meeting both our top line revenue and our earnings goals. In addition to achieving our quarterly revenue and earnings objectives, we also strengthened our balance sheet, exiting the quarter with over $211 million in available cash and investments," continued McCluney.

"Looking forward, we are well positioned in 16Gb Fibre Channel to continue the share gain momentum we have delivered over the past three quarters, and with expected completion of our Endace acquisition this quarter, we will further increase our relevance as a thought leader in connectivity and management of high performance, converged Ethernet networks," 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, the timing of completion of the proposed acquisition of Endace Limited and the results and related costs of ongoing patent litigation, Emulex is providing guidance for its third fiscal quarter ending March 31, 2013. For the third quarter of fiscal 2013, Emulex is forecasting total net revenues in the range of $110-$114 million. The Company expects non-GAAP earnings per diluted share of $0.12 - $0.14 in the third quarter. Incremental to this guidance, we expect approximately $0.06 per diluted share related to the retroactive portion of the federal R&D tax credit. GAAP estimates for the third quarter reflect approximately $0.30 per diluted share in expected charges arising primarily from amortization of intangibles, stock-based compensation, costs associated with the proposed 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.

Emulex is a provider of converged networking solutions.

More information: www.Emulex.com ((Comments on this story may be sent to newsdesk@closeupmedia.com))

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