Emulex Announces Q4 Results

Total net revenues of $112.8 million - a decrease of 11% year- over-year

Host Server Products net revenues of $84.4 million - 75% of total net revenues

Embedded Storage Products net revenues of $28.3 million - 25% of total net revenues

GAAP gross margin of 63% and non-GAAP gross margin of 68%

GAAP operating income of $8.8 million, or 8% of total net revenues, and non-GAAP operating income of $24.7 million, or 22% of net revenues

GAAP Net Loss Per Share of $0.61 and non-GAAP diluted Earnings Per Share of $0.22

Cash, cash equivalents and investments of $350.3 million

Inventory turnover of 8.5 times

Days Sales Outstanding of 45 days

2008 Full Year Highlights

Total net revenues of $488.3 million - an increase of 4% year- over-year

Host Server Products net revenues of $352.7 million - 72% of total net revenues

Embedded Storage Products net revenues of $134.9 million - 28% of total net revenues

GAAP gross margin of 62% and non-GAAP gross margin of 67%

GAAP operating income of $66.3 million, or 14% of total net revenues, and non-GAAP operating income of $131.9 million, or 27% of net revenues

GAAP Net Loss Per Share of $0.09 and non-GAAP diluted EPS of $1.13Financial Results

Fourth quarter net revenues were $112.8 million, a decrease of 11% from the comparable quarter last year and a 12% decrease sequentially from the third quarter. Fourth quarter GAAP net loss was $50.4 million, or$0.61 per share compared to GAAP net income of $0.15 per diluted share reported in the year ago period and $0.19 per diluted share in the third quarter. Non-GAAP net income for the fourth quarter, which excludes amortization of intangibles, stock-based compensation, severance and associated charges, and tax charges associated with the Company's globalization initiatives, was $18.2 million, or $0.22 per diluted share. Non-GAAP net income per diluted share decreased 35% from the $0.34 per diluted share reported last year, and decreased 29% sequentially from $0.31 per diluted share reported in the third quarter. Reconciliations between GAAP and non-GAAP results are included in the accompanying financial data.

Full year fiscal 2008 net revenues were $488.3 million, a 4% increase over 2007 and representing the 10th consecutive year of revenue growth.

Full year GAAP net loss was $7.1 million or $0.09 per share compared to GAAP net income of $29.4 million or $0.34 per diluted share in 2007.

Non-GAAP net income was $95.0 million or $1.13 per diluted share compared to $100.8 million or $1.14 per diluted share in 2007.In early August, the Board of Directors approved approximately $40 million of share repurchases in the first quarter of fiscal 2009, which is the remaining amount available under the existing 2006 Share Repurchase Plan. In addition, the Board has authorized a new plan of $100 million of share repurchases.

Jim McCluney, president and CEO commented, "While the fourth quarter revenue results were disappointing, key metrics including our gross margins, cash generation and spending management demonstrate our commitment to performance. We were also able to deliver our 10th consecutive year of top line revenue growth in 2008 driven by strong year-over-year growth of our server OEMs."

"As we enter 2009, we are accelerating our strategy of leveraging our strong financial model to take advantage of our opportunities to grow through diversification. In addition to adding depth to our product portfolio, we are focusing our internal investments in sales and marketing to closely align ourselves with our customers and partners in faster growing global markets for our existing solutions," concluded McCluney.

Emulex Corp.