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52 Percent Year-over-Year Revenue Growth
First Quarter Highlights
Financial Results
In accordance with U.S. generally accepted accounting principles (GAAP),
the company reported revenue of
GAAP gross margins in the first quarter of 2011 were 65.2 percent, compared with 71.8 percent in the fourth quarter of 2010 and 75.1 percent in the first quarter of 2010.
Non-GAAP gross margins in the first quarter of 2011 were 68.8 percent, compared with 72.0 percent in the fourth quarter of 2010 and 75.3 percent in the first quarter of 2010.
GAAP net loss in the first quarter of 2011 was
Non-GAAP net income in the first quarter was
The first quarter 2011 non-GAAP net income results exclude
Total cash and investments were
"We are pleased with the post-merger integration of Voltaire and
Recent Mellanox Press Release Highlights
Conference Calls
The
About
Founded in 1999,
GAAP to Non-GAAP Reconciliation
To supplement our consolidated financial statements presented in
accordance with generally accepted accounting principles (GAAP),
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
All statements included or incorporated by reference in this release, other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry and business, management's beliefs and certain assumptions made by us, all of which are subject to change.
Forward-looking statements can often be identified by words such as "projects," "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," similar expressions and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.
The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include the continued expansion of our product line, customer base and the total available market of our products, the continued growth in demand for our products, the continued, increased demand for industry standards-based technology, the impact of our acquisition of Voltaire discussed herein on the Company's actual financial results, negative customer reaction to the acquisition, our ability to react to trends and challenges in our business and the markets in which we operate, our ability to anticipate market needs or develop new or enhanced products to meet those needs, the adoption rate of our products, our ability to establish and maintain successful relationships with our OEM partners, our ability to effectively compete in our industry, fluctuations in demand, sales cycles and prices for our products and services, our success converting design wins to revenue-generating product shipments, our ability to successfully integrate Voltaire's operations with our operation following the closing of the transaction, and our ability to protect our intellectual property rights.
In addition, current uncertainty in the global economic environment
poses a risk to the overall economy as businesses may defer purchases in
response to tighter credit conditions, changing overall demand for our
products, and negative financial news. Consequently, our results could
differ materially from our prior results due to these general economic
and market conditions, political events and other risks and
uncertainties described more fully in our documents filed with or
furnished to the
More information about the risks, uncertainties and assumptions that may
impact our business is set forth in our Form 10-K filed with the
| Mellanox Technologies, Ltd. | ||||||||
| Condensed Consolidated Statements of Operations | ||||||||
| (in thousands, except per share data, unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2011 | 2010 | |||||||
| Total revenues | $ | 55,057 | $ | 36,210 | ||||
| Cost of revenues | 19,165 | 9,023 | ||||||
| Gross profit | 35,892 | 27,187 | ||||||
| Operating expenses: | ||||||||
| Research and development | 20,394 | 12,277 | ||||||
| Sales and marketing | 8,722 | 5,013 | ||||||
| General and administrative | 8,445 | 2,636 | ||||||
| Total operating expenses | 37,561 | 19,926 | ||||||
| Income (loss) from operations | (1,669 | ) | 7,261 | |||||
| Other income, net | 48 | 113 | ||||||
| Income (loss) before taxes | (1,621 | ) | 7,374 | |||||
| Provision for taxes on income | (3 | ) | (2,136 | ) | ||||
| Net income (loss) | $ | (1,624 | ) | $ | 5,238 | |||
| Net income (loss) per share — basic | $ | (0.05 | ) | $ | 0.16 | |||
| Net income (loss) per share — diluted | $ | (0.05 | ) | $ | 0.15 | |||
| Shares used in computing income per share: | ||||||||
| Basic | 34,490 | 32,960 | ||||||
| Diluted | 34,490 | 34,759 | ||||||
| Mellanox Technologies, Ltd. | ||||||||
| Reconciliation of Non-GAAP Adjustments | ||||||||
| (in thousands, except per share data and percentages, unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2011 | 2010 | |||||||
|
Reconciliation of GAAP net income (loss) to non-GAAP: |
||||||||
| GAAP net income (loss) | $ | (1,624 | ) | $ | 5,238 | |||
| Adjustments: | ||||||||
| Share-based compensation expense: | ||||||||
| Cost of revenues | 144 | 90 | ||||||
| Research and development | 2,353 | 1,893 | ||||||
| Sales and marketing | 1,019 | 643 | ||||||
| General and administrative | 762 | 762 | ||||||
| Total share-based compensation expense: | 4,278 | 3,388 | ||||||
| Acquisition related charges: | ||||||||
| Amortization of acquired intangibles: | ||||||||
| Cost of revenue | 1,851 | — | ||||||
| Sales and marketing | 254 | — | ||||||
| Total amortization of acquired intangibles | 2,105 | — | ||||||
| Other acquisition related charges | ||||||||
| General and administrative | 4,394 | — | ||||||
| Deferred taxes in Israel | — | 1,767 | ||||||
| Non-GAAP net income | $ | 9,153 | $ | 10,393 | ||||
|
Reconciliation of GAAP gross profit to non-GAAP: |
||||||||
| Revenues | $ | 55,057 | $ | 36,210 | ||||
| GAAP gross profit | 35,892 | 27,187 | ||||||
| GAAP gross margin | 65.2 | % | 75.1 | % | ||||
| Share-based compensation expense | 144 | 90 | ||||||
| Acquisition related charges | 1,851 | — | ||||||
| Non-GAAP gross profit | $ | 37,887 | $ | 27,277 | ||||
| Non-GAAP gross margin | 68.8 | % | 75.3 | % | ||||
|
Reconciliation of GAAP operating expenses to non-GAAP: |
||||||||
| GAAP operating expenses | $ | 37,561 | $ | 19,926 | ||||
| Share-based compensation expense | (4,134 | ) | (3,298 | ) | ||||
| Acquisition related charges | (4,648 | ) | — | |||||
| Non-GAAP operating expenses | $ | 28,779 | $ | 16,628 | ||||
|
Reconciliation of GAAP income (loss) from operations to non-GAAP: |
||||||||
| GAAP income (loss) from operations | $ | (1,669 | ) | $ | 7,261 | |||
| Share-based compensation expense | 4,278 | 3,388 | ||||||
| Acquisition related charges | 6,499 | — | ||||||
| Non-GAAP income from operations | $ | 9,108 | $ | 10,649 | ||||
| Mellanox Technologies, Ltd. | ||||||||
| Reconciliation of Non-GAAP Adjustments | ||||||||
| (in thousands, except per share data and percentages, unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2011 | 2010 | |||||||
| Shares used in computing GAAP basic earnings per share | 34,490 | 32,960 | ||||||
| Adjustments: | ||||||||
| Impact from weighted outstanding shares* | 274 | 321 | ||||||
| Shares used in computing non-GAAP basic earnings per share | 34,764 | 33,281 | ||||||
| Shares used in computing GAAP diluted earnings per share | 34,490 | 34,759 | ||||||
| Adjustments: | ||||||||
| Impact from weighted outstanding shares* | 274 | 321 | ||||||
| Effect of dilutive securities under GAAP** | — | (1,799 | ) | |||||
| Total options vested and exercisable | 3,304 | 2,319 | ||||||
| Shares used in computing non-GAAP diluted earnings per share | 38,068 | 35,600 | ||||||
| GAAP diluted net income (loss) per share | $ | (0.05 | ) | $ | 0.15 | |||
| Adjustments: | ||||||||
| Share-based compensation expense | 0.12 | 0.10 | ||||||
| Amortization of acquired intangibles | 0.06 | 0.00 | ||||||
| Other acquisition related charges | 0.13 | 0.00 | ||||||
| Deferred taxes in Israel | 0.00 | 0.05 | ||||||
| Effect of dilutive securities under GAAP** | 0.00 | 0.01 | ||||||
| Total options vested and exercisable | (0.02 | ) | (0.02 | ) | ||||
| Non-GAAP diluted income per share | $ | 0.24 | $ | 0.29 | ||||
* Under GAAP, shares used in computing income per share are adjusted for the amount of time they are outstanding during the period. The number of shares used in computing income per share has been adjusted to a non-GAAP measure as if those ordinary shares were outstanding during the entire period to provide a comparable share number in future quarters.
** This adjustment adds back the GAAP effect of additional ordinary shares that would have been outstanding if the dilutive potential common shares from stock options had been issued under the Treasury method.
| Mellanox Technologies, Ltd. | ||||||
| Condensed Consolidated Balance Sheets | ||||||
| (in thousands, unaudited) | ||||||
| March 31, | December 31, | |||||
| 2011 | 2010 | |||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 54,496 | $ | 107,994 | ||
| Short-term investments | 33,701 | 141,959 | ||||
| Restricted cash | 5,148 | 3,353 | ||||
| Accounts receivable, net | 35,452 | 19,893 | ||||
| Inventories | 15,289 | 11,717 | ||||
| Deferred taxes | 810 | 616 | ||||
| Prepaid expenses and other | 7,805 | 3,871 | ||||
| Total current assets | 152,701 | 289,403 | ||||
| Property and equipment, net | 22,057 | 15,490 | ||||
| Severance assets | 9,274 | 5,792 | ||||
| Intangible assets, net | 34,487 | 290 | ||||
| Goodwill | 132,885 | — | ||||
| Deferred taxes | 954 | 1,422 | ||||
| Other long-term assets | 4,669 | 3,358 | ||||
| Total assets | $ | 357,027 | $ | 315,755 | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 15,893 | $ | 6,526 | ||
| Other accrued liabilities | 24,378 | 15,885 | ||||
| Deferred revenue | 4,088 | 1,051 | ||||
| Capital lease obligations, current | 316 | 316 | ||||
| Total current liabilities | 44,675 | 23,778 | ||||
| Accrued severance | 12,110 | 7,355 | ||||
| Deferred revenue | 2,028 | 563 | ||||
| Capital lease obligations | 79 | 158 | ||||
| Other long-term obligations | 3,219 | 2,211 | ||||
| Total liabilities | 62,111 | 34,065 | ||||
| Shareholders' equity | ||||||
| Ordinary shares | 142 | 141 | ||||
| Additional paid-in capital | 279,963 | 265,481 | ||||
| Accumulated other comprehensive income | 1,321 | 954 | ||||
| Retained earnings | 13,490 | 15,114 | ||||
| Total shareholders' equity | 294,916 | 281,690 | ||||
| Total liabilities and shareholders' equity | $ | 357,027 | $ | 315,755 | ||
| Mellanox Technologies, Ltd. | ||||||||
| Condensed Consolidated Statement of Cash Flows | ||||||||
| (in thousands, unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2011 | 2010 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | (1,624 | ) | $ | 5,238 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 3,918 | 1,089 | ||||||
| Deferred income taxes | 450 | 1,767 | ||||||
| Share-based compensation expense | 4,278 | 3,388 | ||||||
| Gain on sale of investments | (77 | ) | (153 | ) | ||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable, net | (3,136 | ) | (1,704 | ) | ||||
| Inventories | 1,027 | (3,228 | ) | |||||
| Prepaid expenses and other assets | (1,586 | ) | 1,092 | |||||
| Accounts payable | 6,826 | 897 | ||||||
| Accrued liabilities and other payables | 3,545 | (292 | ) | |||||
| Net cash provided by operating activities | 13,621 | 8,094 | ||||||
| Cash flows from investing activities: | ||||||||
| Acquisition of Voltaire, Ltd., net of cash acquired of $3,961 | (203,704 | ) | — | |||||
| Purchase of severance-related insurance policies | (201 | ) | (185 | ) | ||||
| Purchases of short-term investments | (22 | ) | (74,250 | ) | ||||
| Proceeds from sale of short-term investments | 135,196 | 56,567 | ||||||
| Proceeds from maturities of short-term investments | — | 18,687 | ||||||
| Purchase of property and equipment | (2,211 | ) | (3,674 | ) | ||||
| Net cash used in investing activities | (70,942 | ) | (2,855 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Principal payments on capital lease obligations | (79 | ) | (251 | ) | ||||
| Proceeds from issuance of common stock to employees | 3,902 | 3,046 | ||||||
| Excess tax benefit from share-based compensation | — | 271 | ||||||
| Net cash provided by financing activities | 3,823 | 3,066 | ||||||
| Net increase (decrease) in cash and cash equivalents | (53,498 | ) | 8,305 | |||||
| Cash and cash equivalents at beginning of period | 107,994 | 43,640 | ||||||
| Cash and cash equivalents at end of period | $ | 54,496 | $ | 51,945 | ||||
Press/Media Contact:
media@mellanox.com
or
U.S.
Investor Contact:
janine@mellanox.com
or
Gelbart Kahana Investor Relations
Nava
Ladin, +972-3-6074717
nava@gk-biz.com
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