SUNNYVALE, Calif. & YOKNEAM, Israel, April 25 — Mellanox Technologies, Ltd., a leading supplier of end-to-end connectivity solutions for servers and storage systems, today announced financial results for its first quarter 2014, ended March 31, 2014.

First Quarter 2014 Highlights

• Revenues were $98.7 million.
• GAAP gross margins were 65.7 percent.
• Non-GAAP gross margins were 68.6 percent.
• GAAP operating loss was $10.9 million.
• Non-GAAP operating income was $4.9 million.
• GAAP net loss was $11.4 million.
• Non-GAAP net income was $4.5 million.
• GAAP net loss per diluted share was $0.26.
• Non-GAAP net income per diluted share was $0.10.
• $10.5 million in cash was provided by operating activities.
• Cash and investments totaled $340.1 million at March 31, 2014.

Financial Results

In accordance with U.S. generally accepted accounting principles (GAAP), the company reported revenue of $98.7 million for the first quarter of 2014, down 6.5 percent from $105.5 million in the fourth quarter of 2013, and up 18.8 percent from $83.1 million in the first quarter of 2013.

GAAP gross margins in the first quarter of 2014 were 65.7 percent, compared with 64.9 percent in the fourth quarter of 2013 and 65.2 percent in the first quarter of 2013.

Non-GAAP gross margins in the first quarter of 2014 were 68.6 percent, compared with 68.5 percent in the fourth quarter of 2013 and 68.1 percent in the first quarter of 2013.

GAAP net loss in the first quarter of 2014 was $11.4 million, or $0.26 per diluted share, compared with GAAP net loss of $7.3 million, or $0.17per diluted share in the fourth quarter of 2013 and GAAP net loss of $8.5 million or $0.20 per diluted share in the first quarter of 2013.

Non-GAAP net income in the first quarter of 2014 was $4.5 million, or $0.10 per diluted share, compared with $9.7 million, or $0.21 per diluted share in the fourth quarter of 2013, and $4.3 million, or $0.10 per diluted share in the first quarter of 2013. The first quarter 2014 non-GAAP net income excludes $11.6 million of share-based compensation expense compared to $11.7 million in the fourth quarter of 2013, and $10.4 million in the first quarter of 2013. The first quarter 2014 non-GAAP net income also excludes amortization expenses of acquired intangible assets of $3.5 million, and $0.7 million of charges associated with the acquisition of Kotura, Inc. and IPtronics A/S, compared to amortization expenses of acquired intangible assets of $4.4 million and acquisition related charges of $0.9 million in the fourth quarter of 2013, and compared to $2.4 million of amortization expense of acquired intangibles assets in the first quarter of 2013.

Total cash and investments at March 31, 2014 were $340.1 million compared to $330.2 million at December 31, 2013. The company generated $10.5 million in cash from operating activities in the first quarter of 2014.

“Our first quarter results are a significant achievement given the pause in the HPC market ahead of its refresh cycle and the lower than expected revenues from one of our largest customers,” said Eyal Waldman, president and CEO of Mellanox Technologies. “We continue to see growth in data, the number of devices generating and consuming data, and the number of applications and users utilizing data. This growth drives the need for faster and better interconnects, fulfilled today by our 56 Gb/s and, in the future, by our 100 Gb/s solutions for which we already see demand. We believe that we will grow year-over-year in 2014 with our growth accelerating in the second half of the year.”

Recent Mellanox Press Release Highlights

• April 16, 2014 – Mellanox Collaborates with Dell to Optimize Computational Performance for Applications
• April 15, 2014 – Mellanox Delivers InfiniBand and Ethernet CloudX Interconnect Cloud Solution at National Computational Infrastructure
• April 3, 2014 -Mellanox’s InfiniBand, 10Gb/s and 40Gb/s Ethernet Solutions are Cloudera 5 Certified
• March 10, 2014 – Mellanox Announces LinkX the Most Comprehensive Product Family of Cables and Transceivers for Data Center Infrastructures
• March 10, 2014 – Mellanox Showcases 100 Gigabit QSFP Solutions
• March 3, 2014 – Mellanox and the University of Cambridge Collaborate to Develop Computing Platform for the Square Kilometer Array (SKA) Project
• February 18, 2014 – Mellanox Introduces CloudX Platform to Enable Companies to Build the Most Efficient Public, Private and Hybrid Clouds
• February 10, 2014 – Mellanox 10 and 40 Gigabit Ethernet NICs Support Microsoft Open Compute Project (OCP) Cloud Server Specification
• February 4, 2014 – Mellanox Releases Ethernet Switch Application Programing Interface (API) to the Community as Part of The Open Ethernet Initiative
• February 3, 2014 – Mellanox Announces Launch of Mellanox Capital

About Mellanox

Mellanox Technologies is a leading supplier of end-to-end InfiniBand and Ethernet interconnect solutions and services for servers and storage.Mellanox interconnect solutions increase data center efficiency by providing the highest throughput and lowest latency, delivering data faster to applications and unlocking system performance capability. Mellanox offers a choice of fast interconnect products: adapters, switches, software, cables and silicon that accelerate application runtime and maximize business results for a wide range of markets including high performance computing, enterprise data centers, Web 2.0, cloud, storage and financial services. More information is available at www.mellanox.com.

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Source: Mellanox Technologies