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68.0 Percent Quarterly Year-over-Year Revenue Growth
93.2
Percent Annual Year-over-Year Revenue Growth
Annual
Increased Silicon Unit Shipments 95 Percent Annual
Year-over-Year
Fourth Quarter and 2012 Fiscal Year Highlights
Financial Results
In accordance with U.S. generally accepted accounting principles (GAAP),
the company reported revenue of
GAAP gross margins in the fourth quarter of 2012 were 68.1 percent, compared with 69.1 percent in the third quarter of 2012 and 64.0 percent in the fourth quarter of 2011. GAAP gross margins in 2012 were 68.5 percent, compared with 64.5 percent in 2011.
Non-GAAP gross margins in the fourth quarter of 2012 were 70.0 percent, compared with 70.5 percent in the third quarter of 2012 and 67.0 percent in the fourth quarter of 2011. Non-GAAP gross margins in 2012 were 70.3 percent, compared with 68.1 percent in 2011.
GAAP net income in the fourth quarter of 2012 was
Non-GAAP net income in the fourth quarter of 2012 was
GAAP net income in 2012 was a record
Non-GAAP net income in 2012 was a record
Total cash and investments increased
"We are proud of our results for 2012, which was an outstanding year.
Recent Mellanox Press Release Highlights
Conference Calls
Both of 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 large customer sales
opportunities, and our ability to protect our intellectual property
rights. Furthermore, the majority of our quarterly revenues are derived
from customer orders received and fulfilled in the same quarterly
period. We have limited visibility into actual end-user demand as such
demand impacts us and our OEM customer inventory balances in any given
quarter. Consequently, this introduces risk and uncertainty into our
revenue and production forecasts and business planning and could
negatively impact our financial results. 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
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|||||||||||||||||||||
| Condensed Consolidated Statements of Operations | |||||||||||||||||||||
| (in thousands, except per share data, unaudited) | |||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
|
|
December 31, | ||||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
| Total revenues | $ | 122,118 | $ | 72,689 | $ | 500,799 | $ | 259,251 | |||||||||||||
| Cost of revenues | 38,973 | 26,186 | 157,936 | 92,015 | |||||||||||||||||
| Gross profit | 83,145 | 46,503 | 342,863 | 167,236 | |||||||||||||||||
| Operating expenses: | |||||||||||||||||||||
| Research and development | 36,101 | 25,142 | 138,946 | 92,508 | |||||||||||||||||
| Sales and marketing | 16,002 | 11,338 | 61,068 | 40,366 | |||||||||||||||||
| General and administrative | 7,136 | 4,140 | 24,541 | 21,769 | |||||||||||||||||
| Total operating expenses | 59,239 | 40,620 | 224,555 | 154,643 | |||||||||||||||||
| Income from operations | 23,906 | 5,883 | 118,308 | 12,593 | |||||||||||||||||
| Other income, net | 269 | 207 | 1,259 | 759 | |||||||||||||||||
| Income before taxes | 24,175 | 6,090 | 119,567 | 13,352 | |||||||||||||||||
| Provision for taxes on income | (5,733 | ) | (1,427 | ) | (8,187 | ) | (3,375 | ) | |||||||||||||
| Net income | $ | 18,442 | $ | 4,663 | $ | 111,380 | $ | 9,977 | |||||||||||||
| Net income per share — basic | $ | 0.43 | $ | 0.12 | $ | 2.70 | $ | 0.28 | |||||||||||||
| Net income per share — diluted | $ | 0.41 | $ | 0.11 | $ | 2.54 | $ | 0.26 | |||||||||||||
|
Shares used in computing income per share: |
|||||||||||||||||||||
| Basic | 42,451 | 39,542 | 41,308 | 36,263 | |||||||||||||||||
| Diluted | 44,614 | 41,800 | 43,901 | 38,562 | |||||||||||||||||
|
|
|||||||||||||||||||||
| Reconciliation of Non-GAAP Adjustments | |||||||||||||||||||||
| (in thousands, percentages, unaudited) | |||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
|
|
December 31, | ||||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
|
Reconciliation of GAAP net income to non-GAAP net income: |
|||||||||||||||||||||
| GAAP net income | $ | 18,442 | $ | 4,663 | $ | 111,380 | $ | 9,977 | |||||||||||||
| Adjustments: | |||||||||||||||||||||
| Share-based compensation expense: | |||||||||||||||||||||
| Cost of revenues | 445 | 259 | 1,621 | 980 | |||||||||||||||||
| Research and development | 5,773 | 3,491 | 19,356 | 11,906 | |||||||||||||||||
| Sales and marketing | 1,876 | 1,322 | 8,055 | 4,894 | |||||||||||||||||
| General and administrative | 1,869 | 987 | 5,987 | 3,632 | |||||||||||||||||
| Total share-based compensation expense | 9,963 | 6,059 | 35,019 | 21,412 | |||||||||||||||||
| Amortization of acquired intangibles: | |||||||||||||||||||||
| Cost of revenue | 1,849 | 1,923 | 7,520 | 8,246 | |||||||||||||||||
| Sales and marketing | 440 | 438 | 1,757 | 1,569 | |||||||||||||||||
| Total amortization of acquired intangibles | 2,289 | 2,361 | 9,277 | 9,815 | |||||||||||||||||
| Other acquisition related charges | — | — | — | 4,394 | |||||||||||||||||
| Non-GAAP net income | $ | 30,694 | $ | 13,083 | $ | 155,676 | $ | 45,598 | |||||||||||||
|
Reconciliation of GAAP gross profit to non-GAAP: |
|||||||||||||||||||||
| Revenues | $ | 122,118 | $ | 72,689 | $ | 500,799 | $ | 259,251 | |||||||||||||
| GAAP gross profit | 83,145 | 46,503 | 342,863 | 167,236 | |||||||||||||||||
| GAAP gross margin | 68.1 | % | 64.0 | % | 68.5 | % | 64.5 | % | |||||||||||||
| Share-based compensation expense | 445 | 259 | 1,621 | 980 | |||||||||||||||||
| Acquisition related charges | 1,849 | 1,923 | 7,520 | 8,246 | |||||||||||||||||
| Non-GAAP gross profit | $ | 85,439 | $ | 48,685 | $ | 352,004 | $ | 176,462 | |||||||||||||
| Non-GAAP gross margin | 70.0 | % | 67.0 | % | 70.3 | % | 68.1 | % | |||||||||||||
|
Reconciliation of GAAP operating expenses to non-GAAP: |
|||||||||||||||||||||
| GAAP operating expenses | $ | 59,239 | $ | 40,620 | $ | 224,555 | $ | 154,643 | |||||||||||||
| Share-based compensation expense | (9,518 | ) | (5,800 | ) | (33,398 | ) | (20,432 | ) | |||||||||||||
| Acquisition related charges | (440 | ) | (438 | ) | (1,757 | ) | (5,963 | ) | |||||||||||||
| Non-GAAP operating expenses | $ | 49,281 | $ | 34,382 | $ | 189,400 | $ | 128,248 | |||||||||||||
|
Reconciliation of GAAP income from operations to non-GAAP: |
|||||||||||||||||||||
| GAAP income from operations | $ | 23,906 | $ | 5,883 | $ | 118,308 | $ | 12,593 | |||||||||||||
| Share-based compensation expense | 9,963 | 6,059 | 35,019 | 21,412 | |||||||||||||||||
| Acquisition related charges | 2,289 | 2,361 | 9,277 | 14,209 | |||||||||||||||||
| Non-GAAP income from operations | $ | 36,158 | $ | 14,303 | $ | 162,604 | $ | 48,214 | |||||||||||||
|
|
|||||||||||||||||||||
| Reconciliation of Non-GAAP Adjustments | |||||||||||||||||||||
| (in thousands, except per share data, unaudited) | |||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
|
|
December 31, | ||||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
| Shares used in computing GAAP diluted earnings per share | 44,614 | 41,800 | 43,901 | 38,562 | |||||||||||||||||
| Adjustments: | |||||||||||||||||||||
| Effect of dilutive securities under GAAP* | (2,163 | ) | (2,258 | ) | (2,593 | ) | (2,299 | ) | |||||||||||||
| Total options vested and exercisable | 1,888 | 3,037 | 1,888 | 3,037 | |||||||||||||||||
| Shares used in computing non-GAAP diluted earnings per share** | 44,339 | 42,579 | 43,196 | 39,300 | |||||||||||||||||
| GAAP diluted net income per share | $ | 0.41 | $ | 0.11 | $ | 2.54 | $ | 0.26 | |||||||||||||
| Adjustments: | |||||||||||||||||||||
| Share-based compensation expense | 0.22 | 0.14 | 0.79 | 0.56 | |||||||||||||||||
| Amortization of acquired intangibles | 0.05 | 0.06 | 0.21 | 0.25 | |||||||||||||||||
| Other acquisition related charges | 0.00 | 0.00 | 0.00 | 0.11 | |||||||||||||||||
| Effect of dilutive securities under GAAP* | 0.04 | 0.02 | 0.22 | 0.07 | |||||||||||||||||
| Total options vested and exercisable | (0.03 | ) | (0.02 | ) | (0.16 | ) | (0.09 | ) | |||||||||||||
| Non-GAAP diluted income per share** | $ | 0.69 | $ | 0.31 | $ | 3.60 | $ | 1.16 | |||||||||||||
* 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.
** Effective
|
|
||||||||||
| Condensed Consolidated Balance Sheets | ||||||||||
| (in thousands, unaudited) | ||||||||||
|
|
December 31, | |||||||||
| 2012 | 2011 | |||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 117,054 | $ | 181,258 | ||||||
| Short-term investments | 302,593 | 52,373 | ||||||||
| Restricted cash | 3,229 | 4,452 | ||||||||
| Accounts receivable, net | 58,516 | 48,215 | ||||||||
| Inventories | 43,318 | 24,955 | ||||||||
| Deferred taxes and other current assets | 15,616 | 7,373 | ||||||||
| Total current assets | 540,326 | 318,626 | ||||||||
| Property and equipment, net | 62,375 | 36,806 | ||||||||
| Severance assets | 8,907 | 7,767 | ||||||||
| Intangible assets, net | 16,134 | 25,657 | ||||||||
| Goodwill | 132,885 | 132,885 | ||||||||
| Deferred taxes and other long-term assets | 10,419 | 8,289 | ||||||||
| Total assets | $ | 771,046 | $ | 530,030 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 37,431 | $ | 30,132 | ||||||
| Accrued liabilities | 57,879 | 31,091 | ||||||||
| Deferred revenue | 12,018 | 5,571 | ||||||||
| Capital lease obligations | 1,253 | 299 | ||||||||
| Total current liabilities | 108,581 | 67,093 | ||||||||
| Accrued severance | 11,821 | 10,433 | ||||||||
| Deferred revenue | 8,366 | 3,664 | ||||||||
| Capital lease obligations | 2,835 | 279 | ||||||||
| Other long-term liabilities | 11,635 | 6,214 | ||||||||
| Total liabilities | 143,238 | 87,683 | ||||||||
| Shareholders' equity: | ||||||||||
| Ordinary shares | 178 | 165 | ||||||||
| Additional paid-in capital | 488,365 | 418,255 | ||||||||
| Accumulated other comprehensive income (loss) | 2,794 | (1,164 | ) | |||||||
| Retained earnings | 136,471 | 25,091 | ||||||||
| Total shareholders' equity | 627,808 | 442,347 | ||||||||
| Total liabilities and shareholders' equity | $ | 771,046 | $ | 530,030 | ||||||
|
|
|||||||||||
| Condensed Consolidated Statement of Cash Flows | |||||||||||
| (in thousands, unaudited) | |||||||||||
| Twelve Months Ended December 31, | |||||||||||
| 2012 | 2011 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 111,380 | $ | 9,977 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 23,868 | 19,745 | |||||||||
| Deferred income taxes | (3,454 | ) | (228 | ) | |||||||
| Share-based compensation | 35,019 | 21,412 | |||||||||
| Gain on investments | (896 | ) | (15 | ) | |||||||
| Excess tax benefit from share-based compensation | (5,141 | ) | (2,411 | ) | |||||||
| Changes in assets and liabilities: | |||||||||||
| Accounts receivable, net | (10,301 | ) | (15,899 | ) | |||||||
| Inventories | (19,436 | ) | (8,639 | ) | |||||||
| Prepaid expenses and other assets | (3,239 | ) | (513 | ) | |||||||
| Accounts payable | 3,430 | 19,102 | |||||||||
| Accrued liabilities and other payables | 51,259 | 18,645 | |||||||||
| Net cash provided by operating activities | 182,489 | 61,176 | |||||||||
| Cash flows from investing activities: | |||||||||||
|
Acquisition of |
— | (203,704 | ) | ||||||||
| Purchase of severance-related insurance policies | (783 | ) | (832 | ) | |||||||
| Purchases of short-term investments | (328,998 | ) | (45,600 | ) | |||||||
| Proceeds from sale of short-term investments | 14,860 | 149,889 | |||||||||
| Proceeds from maturities of short-term investments | 64,683 | 12,128 | |||||||||
| Decrease (increase) in restricted cash deposits | 1,327 | (1,700 | ) | ||||||||
| Purchase of property and equipment | (30,544 | ) | (22,717 | ) | |||||||
| Purchase of equity investment in a private company | (1,424 | ) | — | ||||||||
| Net cash used in investing activities | (280,879 | ) | (112,536 | ) | |||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from public offering, net | — | 104,201 | |||||||||
| Principal payments on capital lease obligations | (918 | ) | (459 | ) | |||||||
| Proceeds from issuance of ordinary shares to employees | 29,963 | 18,471 | |||||||||
| Excess tax benefit from share-based compensation | 5,141 | 2,411 | |||||||||
| Net cash provided by financing activities | 34,186 | 124,624 | |||||||||
| Net (decrease) increase in cash and cash equivalents | (64,204 | ) | 73,264 | ||||||||
| Cash and cash equivalents at beginning of period | 181,258 | 107,994 | |||||||||
| Cash and cash equivalents at end of period | $ | 117,054 | $ | 181,258 | |||||||
Press/Media Contact:
apaula@waggeneredstrom.com
or
gwyn@mellanox.com
or
Gelbart Kahana Investor Relations
nava@gk-biz.com
Source:
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