Emulex Announces Fiscal 2015 Second Quarter Results 

Emulex Corporation, a leader in network connectivity, monitoring and management, today announced earnings results for the second quarter of fiscal 2015 ending December 28, 2014.

Second Quarter Financial Highlights

• Total revenue of $111 million, above the high end of the initial guidance range, aided by strong sequential and year-on-year growth in Gen 5 (16Gb) Fibre Channel products.
• Non-GAAP diluted earnings of $0.24, up 14% year-on-year, and GAAP earnings of $0.06 as compared to a prior year loss of $0.05, both above their respective initial guidance range.
• Non-GAAP operating margin of 18%, up 130 basis points year-on-year and 560 basis points sequentially, with GAAP operating income of $8 million as compared to an operating loss of $2 million in the prior year and operating income of $1 million in the prior quarter.
• Cash, cash equivalents and investments at the end of the quarter of $185 million.

"The second quarter demonstrated continued progress with initiatives put in place at Emulex over the last 18 months, including the delivery of the broadest set of new Ethernet and Fibre Channel products in the Company's history, increased focus on execution, and a greater emphasis on fiscal discipline," commented Jeff Benck, president and CEO, Emulex. "Coupled with healthy demand for our Fibre Channel portfolio and share gains aided by accelerating adoption of our latest Gen 5 Fibre Channel products, we again exceeded the high end of our initial revenue and earnings guidance."

"We look forward to building on this foundation with the broad slate of OEM wins for our latest 10Gb Ethernet products, designed for the new generation of x86 servers, that will ramp in the market over the next year," Benck concluded.

Business Outlook

Although actual results may vary depending on a variety of factors, including those listed in the Safe Harbor Statement below and our filings with the SEC, Emulex is forecasting total net revenues in the range of $97 - $103 million for the third quarter. The Company expects third quarter non-GAAP earnings of $0.11 - $0.15 and a GAAP loss of $0.06 - $0.10 per share.  GAAP estimates for the third quarter reflect approximately $0.21 per diluted share in expected charges arising primarily from amortization of intangibles, stock-based compensation, royalties, mitigation expenses and license fees associated with the Broadcom patent litigation, the accretion of debt discount on outstanding convertible senior notes, and the tax effects and the impact of our U.S. GAAP tax valuation allowance associated with these items.  Reconciliation between GAAP and non-GAAP results is included in the accompanying financial data.

Second Quarter Business Highlights

• Announced Emulex LightPulse Gen 5 Fibre Channel target mode support for new DataCore SANsymphony-V10 software-defined storage platform
• Announced new Emulex Virtual Fabric Adapter 5 (VFA5) technology for new Lenovo Flex System server family, based on the latest Intel Xeon processor E5-2600/1600 v3 product families
• Network Visibility Products (NVP) Division unveiled NetPod application-aware network performance management (AA-NPM) solution based on a combination of Dynatrace Application Performance Management (APM) technology and Emulex Network Performance Management (NPM) capture technology
• Introduced Emulex ExpressConfig for OpenStack to accelerate deployment time, lower operational costs and increase Service Level Agreement attainment