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Actionable news in MLNX: Mellanox Technologies, Ltd.,

Mellanox: Mcgrath/Power Public Relations And Communications

The following excerpt is from the company's SEC filing.

+1-408-727-0351

allysonscott@mcgrathpower.com

Investor Contact

Jeffrey Schreiner

+1-408-916-0012

jschreiner@mellanox.com

Israel PR Contact

Sharon Levin

Gelbart Kahana Investor Relations

+972-3-6070567

sharonl@gk-biz.com

Mellanox Achieves Record Quarterly Revenue in the First Quarter 2016

Quarterly revenue growth of

percent, year-over-year to

$196.8 million

, sets new record

Quarterly Ethernet revenues grew 98 percent year-over-year, including EZchip

Closed acquisition of EZchip Semiconductor Ltd.

SUNNYVALE, Calif. and YOKNEAM, ISRAEL — April 20, 2016 —

Mellanox® Technologies, Ltd. (NASDAQ: MLNX) today announced financial results for its first quarter ended March 31, 2016.

“We are pleased to report the fourth consecutive quarter of record revenue. Our profitability grew 37.2 percent year-over-year. During the quarter we closed the acquisition of EZchip Semiconductor Ltd. We see great promise in the combination of EZchip’s intelligent processors, and Mellanox’s leading interconnect technology. We believe the combined company can deliver compelling value to current and future customers,” said Eyal Waldman, president and CEO of Mellanox Technologies. “We recorded strong growth in our Ethernet business, supported by adoption of our 40 Gigabit Ethernet adapters. We are seeing strong interest in the Spectrum product line and expect revenues to accelerate in the coming quarters. Tests demonstrate superior performance, costs, resiliency, and power of Spectrum compared to alternative products. We are pleased to see our InfiniBand business grow year-over-year. We see additional hyperscale entities deployed InfiniBand in their data centers.”

-Highlights

Revenues of

increased

percent, compared to $176.9 million in the fourth quarter of 2015.

GAAP gross margins of

percent in the first quarter compared to 70.7 percent in the fourth quarter of 2015.

Non-GAAP gross margins of

percent in the first quarter compared to 72.2 percent in the fourth quarter of 2015.

GAAP operating loss was

$3.9 million

, compared to operating income of $19.9 million in the fourth quarter of 2015.

Non-GAAP operating income was $

41.3 million

percent of revenue, compared to $36.6 million, or 20.7 percent of revenue in the fourth quarter of 2015.

GAAP net loss was $

7.2 million

, compared to net income of $43.2 million in the fourth quarter of 2015.

Non-GAAP net income was $

39.3 million

, compared to $37.5 million in the fourth quarter of 2015.

GAAP net loss per diluted share was

in the first quarter compared to net income per diluted share of $0.90 in the fourth quarter of 2015.

Non-GAAP net income per diluted share was

in the first quarter compared to $0.77 in the fourth quarter of 2015.

million in cash was provided by operating activities, compared to $34.7 million in the fourth quarter of 2015.

Cash and investments totaled

$261.8

million at March 31, 2016, compared to $510.5 million at December 31, 2015.

Second Quarter 2016 Guidance

We currently project:

Quarterly revenues of $210 million to $215 million

Non-GAAP gross margins of 71 percent to 72 percent

An increase in non-GAAP operating expenses of 8 percent to 10 percent

Share-based compensation expense of $13.4 million to $13.9 million

Non-GAAP diluted share count of 48.8 million to 49.3 million shares

Recent Mellanox Press Release Highlights

Mellanox Announces New Line of InfiniBand Router Systems, Expanding Data Center Scalability and Enabling Infrastructure Flexibility

Mar 22, 2016

Mellanox Announces First 200Gb/s Silicon Photonics Devices, Doubling The Performance in the QSFP Form Factor

Mellanox and InnoLight Announce the Availability and Interoperability of 100Gb/s PSM4 Transceivers at 1310 and 1550nm Wavelengths

Mar 8, 2016

Mellanox Showcases End to End 100Gb/s Ethernet Solutions for Content Distribution Networks

Mar 7, 2016

Mellanox Adds Cumulus Linux Support for Ethernet Switches

Mellanox Introduces World's First 25/50 Gb/s OCP Ethernet Adapters for Single and Multi-Host Technology

Mellanox Introduces Open Composable Networks to Enable New Interconnect Speeds and Higher Efficiency for OCP Platforms

Mar 2, 2016

Mellanox Joins RISC-V Foundation as a Platinum Founding Sponsor

Mar 1, 2016

Mellanox Delivers Next Generation Network Processor to Key Telco Customers

Feb 24, 2016

Mellanox Partners with Nutanix to Deliver Effortless Enterprise Infrastructure

Conference Call

Mellanox will hold its first quarter 2016 financial results conference call today at 2 p.m. Pacific Time to discuss the company’s financial results. To listen to the call, dial +1-877-876-9177, or for investors outside the U.S., +1-785-424-1666, approximately 10 minutes prior to the start time.

The Mellanox financial results conference call will be available via live webcast on the investor relations section of the Mellanox website at http://ir.mellanox.com. Access the webcast 15 minutes prior to the start of the call to download and install any necessary audio software. A replay of the webcast will also be available on the Mellanox website.

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.

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 (loss) income which are adjusted from results based on GAAP to exclude share-based compensation expense, amortization expense of acquired intangible assets, acquisition related expense, settlement costs, changes in certain deferred tax assets and gains (impairment losses) on equity investments. 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 expense, amortization expense of acquired intangible assets, acquisition related expense, settlement costs, changes in deferred tax assets, and gains (impairment losses) on equity investments 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, amortization of acquired intangible assets and changes related to recognition of deferred taxes 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 “Investor Relations” section on our website.

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, including the guidance for the three months ended June 30, 2016, statements related to trends in the market for our solutions and services, opportunities for our company in 2016 and beyond, and future product capabilities. 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, our ability to protect our intellectual property rights, our ability to successfully acquire businesses and technologies and to successfully integrate and operate these acquired businesses, our success in realizing the anticipated benefits of mergers and acquisitions, and our ability to obtain debt at competitive rates or in sufficient amounts in order to fund our contractual commitments. 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 Securities and Exchange Commission.

More information about the risks, uncertainties and assumptions that may impact our business is set forth in our annual report on Form 10-K filed with the SEC on February 26, 2016. All forward-looking statements in this press release, including the guidance for the three months ended June 30, 2016, are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements.

Mellanox is a registered trademark of Mellanox Technologies, Ltd. All other trademarks are property of their respective owners.

Mellanox Technologies, Ltd.

Condensed Consolidated Statements of Operations

(in thousands, except per share data, unaudited)

Three Months Ended

Total revenues

196,810

146,675

Cost of revenues

70,481

41,087

Gross profit

126,329

105,588

Operating expenses:

Research and development

71,034

58,118

Sales and marketing

31,228

22,558

General and administrative

27,938

Total operating expenses

130,200

90,377

(Loss) income from operations

(3,871

15,211

Interest expense

Other income (loss)

(2,469

Other loss, net

(Loss) income before taxes

(4,808

12,742

Provision for taxes on income

Net (loss) income

(7,168

10,496

Net (loss) income per share — basic

Net (loss) income per share — diluted

Shares used in computing net (loss) income per share:

47,358

45,691

Diluted

47,034

Reconciliation of Non-GAAP Adjustments

(in thousands, percentages, unaudited)

Reconciliation of GAAP net income (loss) to non-GAAP:

GAAP (loss) net income

Adjustments:

Share-based compensation expense:

Total share-based compensation expense

18,266

11,718

Amortization of acquired intangibles:

10,429

Total amortization of acquired intangibles

11,647

Settlement costs:

Total settlement costs

Acquisition related charges:

Total acquisition related charges

10,180

Impairment loss on equity investment in a private company

Deferred taxes on NOL in Israel

39,296

28,644

Reconciliation of GAAP gross profit to non-GAAP:

Non-GAAP gross profit

140,533

107,609

Reconciliation of GAAP operating expenses to non-GAAP:

(17,791

(11,171

(1,218

(5,106

(6,880

Non-GAAP operating expenses

99,205

77,439

Reconciliation of GAAP (loss) income from operations to non-GAAP:

Non-GAAP income from operations

41,328

30,170

Shares used in computing GAAP diluted earnings per share

Effect of dilutive securities under GAAP*

(1,343

Total options vested and exercisable

Shares used in computing non-GAAP diluted earnings per share

48,808

47,488

GAAP diluted net (loss) income per share

Deferred taxes in NOL in Israel

Non-GAAP diluted net income per share

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.

Condensed Consolidated Balance Sheets

(in thousands, unaudited)

ASSETS

Current assets:

Cash and cash equivalents

117,912

263,199

Short-term investments

143,926

247,314

Accounts receivable, net

105,114

84,273

Inventories

72,271

62,473

Other current assets

22,907

19,979

Total current assets

462,130

677,238

Property and equipment, net

103,157

100,018

Severance assets

15,787

Intangible assets, net

308,721

32,154

Goodwill

476,037

200,743

Deferred taxes and other long-term assets

32,627

33,715

Total assets

1,398,459

1,053,382

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable

47,632

44,600

Accrued liabilities

106,684

74,296

Deferred revenue

18,948

17,743

Capital lease liabilities, current

Current portion of term debt

25,905

Total current liabilities

199,386

137,130

Accrued severance

19,630

12,464

12,197

12,439

Term debt

248,926

Other long-term liabilities

26,498

24,668

Total liabilities

506,637

186,701

Shareholders’ equity:

Ordinary shares

Additional paid-in capital

713,039

684,824

Accumulated other comprehensive income (loss)

(1,669

Retained earnings

176,158

183,326

Total shareholders’ equity

891,822

866,681

Total liabilities and shareholders’ equity

Condensed Consolidated Statement of Cash Flows

Three months ended March 31,

Cash flows from operating activities:

Adjustments to reconcile net (loss) income to net cash provided by operating activities, net of effects from acquired company:

Depreciation and amortization

20,614

Deferred income taxes

Loss (gain) on investments

Impairment of equity investment in a private company

Changes in assets and liabilities:

(4,677

Inventory

(8,689

Prepaid expenses and other assets

(2,122

Accrued liabilities and other payables

10,177

Net cash provided by operating activities

48,595

45,795

Cash flows from investing activities:

Purchase of severance-related insurance policies

Purchase of short term investments

(64,908

(87,793

Proceeds from sale of short term investments

199,932

37,326

Proceeds from maturities of short term investments

77,715

17,798

Purchase of property and equipment

(8,283

(9,521

Purchase of equity investment in a private company

Acquisition, net of cash acquired $87.5 million

(681,189

Net cash used in investing activities

(477,066

(42,376

Cash flows from financing activities:

Proceeds from term debt

280,000

Term debt issuance costs

(5,521

Principal payments on capital lease obligations

Proceeds from exercise of share awards

Net cash provided by financing activities

283,184

Net (decrease) increase in cash and cash equivalents

(145,287

10,330

Cash and cash equivalents at beginning of period

51,326

Cash and cash equivalents at end of period

61,656

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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Other recent filings from the company include the following:

Other definitive proxy statements - April 8, 2016
Mellanox Technologies director just cashed-in 3,571 options - March 31, 2016
Mellanox Technologies's Chief Financial Officer just disposed of 2,750 shares - March 24, 2016