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January 25, 2012
SUNNYVALE, Calif. and YOKNEAM, Israel, Jan. 25 – Mellanox Technologies, Ltd. (NASDAQ: MLNX; TASE: MLNX), a leading supplier of end-to-end connectivity solutions for servers and storage systems, today announced record financial results in its fourth quarter and fiscal year 2011, ended Dec. 31, 2011.
Fourth Quarter and 2011 Fiscal Year Highlights
In accordance with U.S. generally accepted accounting principles (GAAP), the company reported record revenue of $72.7 million for the fourth quarter, up 6.6 percent from $68.2 million in the third quarter of 2011, and up 78.6 percent from $40.7 million in the fourth quarter of 2010. For the year ended Dec. 31, 2011, revenue was a record $259.3 million, an increase of 67.6 percent from revenue of $154.6 million reported in 2010. The 2010 comparable financials do not include any of Voltaire’s 2010 results.
GAAP gross margins in the fourth quarter of 2011 were 64.0 percent, compared with 64.5 percent in the third quarter of 2011 and 71.8 percent in the fourth quarter of 2010. GAAP gross margins in 2011 were 64.5 percent, compared with 73.8 percent in 2010.
Non-GAAP gross margins in the fourth quarter of 2011 were 67.0 percent, compared with 68.2 percent in the third quarter of 2011 and 72.0 percent in the fourth quarter of 2010. Non-GAAP gross margins in 2011 were 68.1 percent, compared with 74.0 percent in 2010.
GAAP net income in the fourth quarter of 2011 was $4.7 million or $0.11 per diluted share, compared with net income of $4.8 million or $0.13 per diluted share in the third quarter of 2011 and a net loss of ($0.5) million or ($0.02) per diluted share in the fourth quarter of 2010.
Non-GAAP net income in the fourth quarter of 2011 was a record $13.1 million, or $0.31 per diluted share, compared with $13.0 million or $0.31 per diluted share in the third quarter of 2011, and $7.7 million, or $0.21 per diluted share in the fourth quarter of 2010. The fourth quarter 2011 non-GAAP net income excludes $6.1 million of share-based compensation expenses compared to $5.6 million in the third quarter of 2011, and compared to $3.7 million in the fourth quarter of 2010. It also excludes amortization of acquired intangible assets of $2.4 million associated with the acquisition of Voltaire, Ltd. on February 7, 2011 compared to $2.6 million of such amortization expenses in the third quarter of 2011. The fourth quarter 2010 non-GAAP net income also excludes $3.6 million of tax expenses related to utilization of deferred tax assets in Israel and acquisition related expenses of $0.9 million for Voltaire, Ltd.
GAAP net income in 2011 was $10.0 million or $0.26 per diluted share, compared with $13.5 million or $0.38 per diluted share in 2010.
Non-GAAP net income in 2011 was a record $45.6 million, or $1.07 per diluted share, compared with $36.7 million or $0.99 per diluted share in 2010. 2011 non-GAAP net income excludes $21.4 million of share-based compensation expenses, amortization of acquired intangible assets of $9.8 million associated with the acquisition of Voltaire, Ltd. on February 7, 2011 and acquisition related expenses of $4.4 million. Had the company used the weighted shares outstanding method to calculate non-GAAP share count throughout 2011, its non-GAAP net income per diluted share would have been $1.16. The company intends to adopt this calculation method in 2012.
Total cash and investments were $238.1 million at Dec. 31, 2011 compared to $253.3 million in 2010. The company generated a record $22.2 million in cash from operating activities in the fourth quarter, and a record $63.1 million for the year. In 2011, the company paid $203.7 million in cash for Voltaire and raised net $104.2 million in its additional public offering in September.
“2011 was a record year for Mellanox. Our strategy to offer leading-edge connectivity products to markets with increasing bandwidth and lower latency needs resulted in strong revenue and non-GAAP earnings growth. Our first acquisition, Voltaire, has been successfully completed,” said Eyal Waldman, chairman, president and CEO of Mellanox Technologies. “In 2011, we significantly penetrated new markets in addition to our traditional High Performance Computing (HPC) market, specifically, the Web 2.0, database, storage and cloud markets. The upcoming launch of Intel Romley and Sandy Bridge platforms will drive the industry toward 10Gb/s and faster interconnect speeds, such as 40 and 56Gb/s. We lead the industry with the fastest end-to-end interconnect solutions that provide a higher return-on-investment. We expect to demonstrate continued growth in 2012 and 2013 as we further execute on our plan and serve the needs of additional markets and customers.”
Recent Mellanox Press Release Highlights
Mellanox will broadcast its fourth quarter and fiscal year 2011 financial results conference call today at 2 p.m. Pacific Time (5 p.m. Eastern). To listen to the call, dial 877-831-3840 approximately ten minutes prior to the start time.
Mellanox will also conduct a conference call on Thursday, Jan. 26 at 9 a.m. Israel Time to discuss the company’s fourth quarter and fiscal year 2011 financial results in Hebrew. To listen to the call, dial +972-3-9180609 approximately 10 minutes prior to the start of the call.
The Mellanox financial results conference call will be available via a live webcast on the investor relations section of the Mellanox website at http://ir.mellanox.com. Access the web site 15 minutes prior to the start of the call to download and install any necessary audio software. An archived webcast replay will also be available on the Mellanox website.
GAAP to Non-GAAP Reconciliation
To supplement our consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), Mellanox uses non-GAAP measures of net income which are adjusted from results based on GAAP to exclude share-based compensation expenses, changes in certain deferred tax assets and acquisition related expenses. The company believes the non-GAAP results provide useful information to both management and investors, as these non-GAAP results exclude expenses that are not indicative of our core operating results. Management believes it is useful to exclude share-based compensation expenses, changes in deferred tax assets and acquisition related expenses because it enhances investors' ability to understand our business from the same perspective as management, which believes that such items are not directly attributable to nor reflect the underlying performance of the company's business operations. Further, management believes certain non-cash charges such as share-based compensation and changes in certain deferred tax assets do not reflect the cash operating results of the business. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. These non-GAAP measures may be different than the non-GAAP measures used by other companies. A reconciliation of GAAP to non-GAAP condensed consolidated statements of operations is also presented in the financial statements portion of this release and is posted under the “Investors” section at our web site.
Mellanox Technologies is a leading supplier of end-to-end InfiniBand and Ethernet connectivity solutions and services for servers and storage. Mellanox products optimize data center performance and deliver industry-leading bandwidth, scalability, power conservation and cost-effectiveness while converging multiple legacy network technologies into one future-proof architecture. The company offers innovative solutions that address a wide range of markets including HPC, enterprise, mega warehouse data centers, cloud computing, Internet and Web 2.0.
Source: Mellanox Technologies
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