Mellanox Technologies, Ltd. Announces Record Quarterly Results
Mellanox® Technologies, Ltd. (NASDAQ: MLNX) (TASE: MLNX), a leading supplier of end-to-end interconnect solutions for servers and storage systems, today announced record financial results in its third quarter 2012, ended September 30, 2012.
Third Quarter 2012 Highlights
In accordance with U.S. generally accepted accounting principles (GAAP), the company reported record revenue of $156.5 million for the third quarter of 2012, up 17.2 percent from $133.5 million in the second quarter of 2012, and up 129.6 percent from $68.2 million in the third quarter of 2011.
GAAP gross margins in the third quarter of 2012 were 69.1 percent, compared with 68.8 percent in the second quarter of 2012, and 64.5 percent in the third quarter of 2011.
Non-GAAP gross margins in the third quarter of 2012 were 70.5 percent, unchanged from the second quarter of 2012, and compared to 68.2 percent in the third quarter of 2011.
GAAP net income in the third quarter of 2012 was a record $48.4 million, or $1.09 per diluted share, compared with net income of $32.1 million, or $0.74 per diluted share in the second quarter of 2012, and $4.8 million, or $0.13 per diluted share in the third quarter of 2011.
Non-GAAP net income in the third quarter of 2012 was a record $60.1 million, or $1.37 per diluted share, compared with $42.9 million, or $0.99 per diluted share in the second quarter of 2012, and $13.0 million, or $0.34 per diluted share in the third quarter of 2011. The third quarter 2012 non-GAAP net income excludes $9.4 million of share-based compensation expenses compared to $8.4 million in the second quarter of 2012, and compared to $5.6 million in the third quarter of 2011. The third quarter 2012 non-GAAP net income also excludes amortization of acquired intangible assets of $2.3 million associated with the acquisition of Voltaire, Ltd. on February 7, 2011 consistent with such amortization expenses in the second quarter of 2012, and compared to $2.6 million in the third quarter of 2011.
Total cash and investments were $405.4 million at September 30, 2012. The company generated a record $74.4 million in cash from operating activities during the quarter.
“Our third quarter results demonstrate the company’s continued ability to increase its penetration into existing markets, as well as to expand into new markets for our InfiniBand solutions,” said Eyal Waldman, chairman, president and CEO of Mellanox Technologies. “We also continue to see increased traction for our 10 and 40 Gigabit Ethernet products. We expect additional partners and customers to benefit from the higher return-on-investment that our fast interconnect solutions provide to them.”
Recent Mellanox Press Release Highlights
Mellanox will broadcast its third quarter 2012 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, October 18, 2012 at 9 a.m. Israel Time to discuss the company’s third quarter 2012 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 website 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.
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 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, Big Data and financial services. More information is available at www.mellanox.com.
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 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 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 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.
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 Sandy Bridge-based server and storage platforms, 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 and we have limited visibility into actual end-user demand 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 Securities and Exchange Commission.
More information about the risks, uncertainties and assumptions that may impact our business is set forth in our form 10-Q filed with the SEC on August 3, 2012, and our form 10-K filed with the SEC on February 28, 2012. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements.
Mellanox, BridgeX, ConnectX, CORE-Direct, InfiniBridge, InfiniHost, InfiniScale, PhyX, SwitchX, Virtual Protocol Interconnect and Voltaire are registered trademarks of Mellanox Technologies, Ltd. Connect-IB, FabricIT, MLNX-OS, ScalableHPC, Unbreakable-Link, UFM and Unified Fabric Manager are trademarks of Mellanox Technologies, Ltd. All other trademarks are property of their respective owners.
* 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 January 1, 2012, the Company uses weighted shares outstanding method to calculate the non-GAAP share count. For comparison purposes, the non-GAAP share count for the 2011 periods presented was calculated using this new method.
Ashley Paula, +1-415-547-7024
USA Investor Contact
Gwyn Lauber, +1-408-916-0012
Israel Investor Contact
Gelbart Kahana Investor Relations
Nava Ladin, +972-3-6074717
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