Mellanox: Fiscal 1Q11 Financial Results

Mellanox Technologies, Ltd. announced record revenue for its first quarter 2011, ended March 31, 2011.

First Quarter Highlights

• Revenues were $55.1 million
• GAAP gross margins were 65.2 percent; non-GAAP 68.8 percent
• GAAP operating loss was ($1.7) million; non-GAAP operating income was $9.1 million
• GAAP net loss: ($1.6) million; non-GAAP net income $9.2 million
• GAAP net loss per diluted share: ($0.05); non-GAAP net income per diluted share $0.24
• $13.6 million in cash provided by operating activities
• $93.3 million in total cash and investments at March 31, 2011
• Closed acquisition of Voltaire, Ltd. on February 7, 2011 for $214.0 million. First quarter results include Voltaire results for the period from February 7th to March 31st

Financial Results
In accordance with U.S. generally accepted accounting principles (GAAP), the company reported revenue of $55.1 million, up 35.3 percent from $40.7 million in the fourth quarter of 2010, and up 52.0 percent from $36.2 million in the first quarter of 2010.

GAAP gross margins in the first quarter of 2011 were 65.2 percent, compared with 71.8 percent in the fourth quarter of 2010 and 75.1 percent in the first quarter of 2010.

Non-GAAP gross margins in the first quarter of 2011 were 68.8 percent, compared with 72.0 percent in the fourth quarter of 2010 and 75.3 percent in the first quarter of 2010.

GAAP net loss in the first quarter of 2011 was ($1.6) million or ($0.05) per diluted share, compared with net loss of ($0.5) million or ($0.02) per diluted share in the fourth quarter of 2010 and $5.2 million or $0.15 per diluted share in the first quarter of 2010.

Non-GAAP net income in the first quarter was $9.2 million, or $0.24 per diluted share, compared with $7.7 million or $0.21 per diluted share in the fourth quarter of 2010, and $10.4 million, or $0.29 per diluted share in the first quarter of 2010.

The first quarter 2011 non-GAAP net income results exclude $4.3 million of share-based compensation expenses compared to $3.7 million in the fourth quarter of 2010. It also excludes amortization of acquired intangible assets of $2.1 million and other acquisition related charges of $4.4 million, both associated with the acquisition of Voltaire, Ltd. on February 7, 2011.

Total cash and investments were $93.3 million at March 31, 2011. The company generated $13.6 million in cash from operating activities during the quarter.

"We are pleased with the post-merger integration of Voltaire and Mellanox which contributed to our record revenues for the first quarter," said Eyal Waldman, chairman, president and CEO of Mellanox Technologies. "Our industry-leading end-to-end connectivity products continue to show growth and adoption by leading, worldwide server and storage OEMs as well as end-users. We are also poised to deliver our next generation FDR 56Gb/s InfiniBand and 40GbE products which will add to our market and performance leadership position."