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FDR InfiniBand Represents 54 Percent of Revenues
Second Quarter 2012 Highlights
Financial Results
In accordance with U.S. generally accepted accounting principles (GAAP),
the company reported record revenue of
GAAP gross margins in the second quarter of 2012 were 68.8 percent, compared with 67.4 percent in the first quarter of 2012, and 64.9 percent in the second quarter of 2011.
Non-GAAP gross margins in the second quarter of 2012 were 70.5 percent, compared with 70.0 percent in the first quarter of 2012, and 68.9 percent in the second quarter of 2011.
GAAP net income in the second quarter of 2012 was a record
Non-GAAP net income in the second quarter of 2012 was a record
Total cash and investments were
"Mellanox surpassed the
Recent Mellanox Press Release Highlights
Conference Calls
The
About
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, 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,
the continued launch and volume ramp of Intel Romley and
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-Q filed with the
|
Condensed Consolidated Statements of Operations (in thousands, except per share data, unaudited) |
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| Three Months Ended | Six Months Ended | |||||||||||||||
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| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Total revenues | $ | 133,472 | $ | 63,345 | $ | 222,210 | $ | 118,402 | ||||||||
| Cost of revenues | 41,700 | 22,249 | 70,588 | 41,665 | ||||||||||||
| Gross profit | 91,772 | 41,096 | 151,622 | 76,737 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 37,658 | 23,689 | 66,616 | 43,999 | ||||||||||||
| Sales and marketing | 15,810 | 9,989 | 28,615 | 18,544 | ||||||||||||
| General and administrative | 6,336 | 4,659 | 11,193 | 13,104 | ||||||||||||
| Total operating expenses | 59,804 | 38,337 | 106,424 | 75,647 | ||||||||||||
| Income from operations | 31,968 | 2,759 | 45,198 | 1,090 | ||||||||||||
| Other income, net | 221 | 88 | 405 | 136 | ||||||||||||
| Income before taxes | 32,189 | 2,847 | 45,603 | 1,226 | ||||||||||||
| Provision for taxes on income | (100 | ) | (719 | ) | (1,068 | ) | (722 | ) | ||||||||
| Net income | $ | 32,089 | $ | 2,128 | $ | 44,535 | $ | 504 | ||||||||
| Net income per share — basic | $ | 0.79 | $ | 0.06 | $ | 1.11 | $ | 0.01 | ||||||||
| Net income per share — diluted | $ | 0.74 | $ | 0.06 | $ | 1.04 | $ | 0.01 | ||||||||
|
Shares used in computing income per share: |
||||||||||||||||
|
Basic |
40,860 | 35,147 | 40,165 | 34,820 | ||||||||||||
| Diluted | 43,468 | 37,279 | 42,676 | 37,079 | ||||||||||||
|
Reconciliation of Non-GAAP Adjustments (in thousands, except per share data and percentages, unaudited) |
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| Three Months Ended | Six Months Ended | |||||||||||||||
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| 2012 | 2011 | 2012 | 2011 | |||||||||||||
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Reconciliation of GAAP net income to non-GAAP: |
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| GAAP net income | $ | 32,089 | $ | 2,128 | $ | 44,535 | $ | 504 | ||||||||
| Adjustments: | ||||||||||||||||
| Share-based compensation expense: | ||||||||||||||||
| Cost of revenues | 441 | 225 | 770 | 369 | ||||||||||||
| Research and development | 4,519 | 3,004 | 8,700 | 5,357 | ||||||||||||
| Sales and marketing | 2,061 | 1,298 | 3,703 | 2,317 | ||||||||||||
| General and administrative | 1,424 | 904 | 2,514 | 1,666 | ||||||||||||
| Total share-based compensation expense | 8,445 | 5,431 | 15,687 | 9,709 | ||||||||||||
| Amortization of acquired intangibles: | ||||||||||||||||
| Cost of revenues | 1,879 | 2,316 | 3,792 | 4,168 | ||||||||||||
| Sales and marketing | 439 | 438 | 878 | 692 | ||||||||||||
| Total amortization of acquired intangibles | 2,318 | 2,754 | 4,670 | 4,860 | ||||||||||||
| Other acquisition related charges | — | — | — | 4,394 | ||||||||||||
| Non-GAAP net income | $ | 42,852 | $ | 10,313 | $ | 64,892 | $ | 19,467 | ||||||||
|
Reconciliation of GAAP gross profit to non-GAAP: |
||||||||||||||||
| Revenues | $ | 133,472 | $ | 63,345 | $ | 222,210 | $ | 118,402 | ||||||||
| GAAP gross profit | 91,772 | 41,096 | 151,622 | 76,737 | ||||||||||||
| GAAP gross margin | 68.8 | % | 64.9 | % | 68.2 | % | 64.8 | % | ||||||||
| Share-based compensation expense | 441 | 225 | 770 | 369 | ||||||||||||
| Acquisition related charges | 1,879 | 2,316 | 3,792 | 4,168 | ||||||||||||
| Non-GAAP gross profit | $ | 94,092 | $ | 43,637 | $ | 156,184 | $ | 81,274 | ||||||||
| Non-GAAP gross margin | 70.5 | % | 68.9 | % | 70.3 | % | 68.6 | % | ||||||||
|
Reconciliation of GAAP operating expenses to non-GAAP: |
||||||||||||||||
| GAAP operating expenses | $ | 59,804 | $ | 38,337 | $ | 106,424 | $ | 75,647 | ||||||||
| Share-based compensation expense | (8,004 | ) | (5,206 | ) | (14,917 | ) | (9,340 | ) | ||||||||
| Acquisition related charges | (439 | ) | (438 | ) | (878 | ) | (5,086 | ) | ||||||||
| Non-GAAP operating expenses | $ | 51,361 | $ | 32,693 | $ | 90,629 | $ | 61,221 | ||||||||
|
Reconciliation of GAAP income from operations to non-GAAP: |
||||||||||||||||
| GAAP income from operations | $ | 31,968 | $ | 2,759 | $ | 45,198 | $ | 1,090 | ||||||||
| Share-based compensation expense | 8,445 | 5,431 | 15,687 | 9,709 | ||||||||||||
| Acquisition related charges | 2,318 | 2,754 | 4,670 | 9,254 | ||||||||||||
| Non-GAAP income from operations | $ | 42,731 | $ | 10,944 | $ | 65,555 | $ | 20,053 | ||||||||
|
Reconciliation of Non-GAAP Adjustments (in thousands, except per share data, unaudited) |
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| Three Months Ended | Six Months Ended | |||||||||||||||
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| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Shares used in computing GAAP diluted earnings per share | 43,468 | 37,279 | 42,676 | 37,079 | ||||||||||||
| Adjustments: | ||||||||||||||||
| Effect of dilutive securities under GAAP** | (2,608 | ) | (2,132 | ) | (2,511 | ) | (2,259 | ) | ||||||||
| Total options vested and exercisable | 2,491 | 3,018 | 2,491 | 3,018 | ||||||||||||
| Shares used in computing non-GAAP diluted earnings per share | 43,351 | 38,165 | 42,656 | 37,838 | ||||||||||||
| GAAP diluted net income per share | $ | 0.74 | $ | 0.06 | $ | 1.04 | $ | 0.01 | ||||||||
| Adjustments: | ||||||||||||||||
| Share-based compensation expense | 0.19 | 0.14 | 0.37 | 0.26 | ||||||||||||
| Amortization of acquired intangibles | 0.05 | 0.07 | 0.11 | 0.13 | ||||||||||||
| Other acquisition related charges | 0.00 | 0.00 | 0.00 | 0.12 | ||||||||||||
| Effect of dilutive securities under GAAP** | 0.06 | 0.02 | 0.09 | 0.03 | ||||||||||||
| Total options vested and exercisable | (0.05 | ) | (0.02 | ) | (0.09 | ) | (0.04 | ) | ||||||||
| Non-GAAP diluted income per share | $ | 0.99 | $ | 0.27 | $ | 1.52 | $ | 0.51 | ||||||||
** This adjustment adds back the GAAP effect of additional ordinary shares that would have been outstanding if the dilutive potential ordinary shares from stock options had been issued under the Treasury method.
|
Condensed Consolidated Balance Sheets (in thousands, unaudited) |
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| 2012 | 2011 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 123,808 | $ | 181,258 | ||||
| Short-term investments | 196,422 | 52,373 | ||||||
| Restricted cash | 4,288 | 4,452 | ||||||
| Accounts receivable, net | 54,619 | 48,215 | ||||||
| Inventories | 31,376 | 24,955 | ||||||
| Deferred taxes and other current assets | 8,115 | 7,373 | ||||||
| Total current assets | 418,628 | 318,626 | ||||||
| Property and equipment, net | 41,661 | 36,806 | ||||||
| Severance assets | 7,935 | 7,767 | ||||||
| Intangible assets, net | 20,844 | 25,657 | ||||||
| Goodwill | 132,885 | 132,885 | ||||||
| Deferred taxes and other long-term assets | 10,522 | 8,289 | ||||||
| Total assets | $ | 632,475 | $ | 530,030 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 34,564 | $ | 30,132 | ||||
| Accrued liabilities | 48,040 | 31,091 | ||||||
| Deferred revenue | 7,144 | 5,571 | ||||||
| Capital lease obligations | 141 | 299 | ||||||
| Total current liabilities | 89,889 | 67,093 | ||||||
| Accrued severance | 10,754 | 10,433 | ||||||
| Deferred revenue | 5,979 | 3,664 | ||||||
| Capital lease obligations | 279 | 279 | ||||||
| Other long-term obligations | 7,143 | 6,214 | ||||||
| Total liabilities | 114,044 | 87,683 | ||||||
| Shareholders' equity: | ||||||||
| Ordinary shares | 172 | 165 | ||||||
| Additional paid-in capital | 450,024 | 418,255 | ||||||
| Accumulated other comprehensive loss | (1,391 | ) | (1,164 | ) | ||||
| Retained earnings | 69,626 | 25,091 | ||||||
| Total shareholders' equity | 518,431 | 442,347 | ||||||
| Total liabilities and shareholders' equity | $ | 632,475 | $ | 530,030 | ||||
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Condensed Consolidated Statement of Cash Flows (in thousands, unaudited) |
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Six Months Ended |
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| 2012 | 2011 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 44,535 | $ | 504 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 10,922 | 8,896 | ||||||
| Deferred income taxes | (2,113 | ) | 579 | |||||
| Share-based compensation | 15,687 | 9,709 | ||||||
| Gain on investments | (229 | ) | (116 | ) | ||||
| Excess tax benefit from share-based compensation | (1,794 | ) | (387 | ) | ||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable, net | (6,404 | ) | (13,196 | ) | ||||
| Inventories | (6,928 | ) | 842 | |||||
| Prepaid expenses and other assets | 691 | 263 | ||||||
| Accounts payable | 4,432 | 8,483 | ||||||
| Accrued liabilities and other payables | 23,950 | 10,503 | ||||||
| Net cash provided by operating activities | 82,749 | 26,080 | ||||||
| Cash flows from investing activities: | ||||||||
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Acquisition of |
— | (203,704 | ) | |||||
| Purchase of severance-related insurance policies | (391 | ) | (425 | ) | ||||
| Purchases of short-term investments | (156,197 | ) | (22 | ) | ||||
| Proceeds from sale of short-term investments | 6,414 | 135,474 | ||||||
| Proceeds from maturities of short-term investments | 5,831 | 4,425 | ||||||
| Decrease (increase) in restricted cash deposits | 94 | (2,200 | ) | |||||
| Purchase of property and equipment | (10,457 | ) | (4,487 | ) | ||||
| Purchase of equity investment in a private company | (1,424 | ) | — | |||||
| Net cash used in investing activities | (156,130 | ) | (70,939 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Principal payments on capital lease obligations | (158 | ) | (158 | ) | ||||
| Proceeds from issuance of common stock to employees | 14,295 | 9,433 | ||||||
| Excess tax benefit from share-based compensation | 1,794 | 387 | ||||||
| Net cash provided by financing activities | 15,931 | 9,662 | ||||||
| Net decrease in cash and cash equivalents | (57,450 | ) | (35,197 | ) | ||||
| Cash and cash equivalents at beginning of period | 181,258 | 107,994 | ||||||
| Cash and cash equivalents at end of period | $ | 123,808 | $ | 72,797 | ||||
Press/Media Contacts
apaula@waggeneredstrom.com
or
gwyn@mellanox.com
or
Gelbart Kahana Investor Relations
nava@gk-biz.com
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