QLogic (QLGC) 8-K Results of Operations and Financial Condition

FOR IMMEDIATE RELEASE Exhibit 99.1

Editor’s Contact:
Frank Berry
QLogic Corporation
Phone: (949) 389-6499
frank.berry@qlogic.com

Investor’s Contact:
Tony Massetti
QLogic Corporation
Phone: (949) 389-7533
tony.massetti@qlogic.com

QLOGIC REPORTS THIRD QUARTER
RESULTS FOR FISCAL YEAR 2007
Record Revenues and Earnings Achieved

Aliso Viejo, Calif., January 23, 2007 — QLogic Corporation (Nasdaq:QLGC), the leader in Fibre Channel host bus adapters (HBAs), stackable switches and blade server switches, today announced its third quarter financial results for the period ended December 31, 2006.

Third Quarter Highlights

• Record revenue achieved for the 7^th consecutive quarter.

• Net revenue increased 22% from the comparable quarter last year to $157.6 million.

• Income from continuing operations: $35.5 million GAAP, $44.9 million non-GAAP.

• Income from continuing operations per diluted share: $0.22 GAAP, $0.28 non-GAAP.

• $555.3 million in cash and marketable securities as of December 31.

• Cash generated from operations was $42.2 million.

Financial Results

Net revenue for the third quarter of fiscal 2007 was a record $157.6 million and increased 22% from $129.2 million in the comparable quarter last year. Revenue from SAN Infrastructure Products, which is comprised primarily of HBAs, switches and silicon, was $152.5 million during the third quarter of fiscal 2007, an increase of 27% from the comparable quarter last year.

“We are very pleased with our financial performance during the third quarter, which was driven by another strong quarter of HBA revenue growth,” said H. K. Desai, the Company’s chief executive officer and president. “Our HBA revenue grew 33% from the comparable quarter last year and 14% sequentially.”

Income from continuing operations on a GAAP basis for the third quarter of fiscal 2007 was $35.5 million, or $0.22 per share on a diluted basis, and increased 12% from the comparable quarter last year. Non-GAAP income from continuing operations for the third quarter of fiscal 2007 was $44.9 million, or $0.28 per share on a diluted basis, and increased 43% from the comparable quarter last year.

The Company uses certain non-GAAP measures to supplement financial statements based on GAAP. A summary of these non-GAAP financial measures and a complete reconciliation of each non-GAAP measure to the most directly comparable GAAP measure, as well as a description of the reasons that management believes that these non-GAAP financial measures provide useful information to investors and the additional purposes for which management uses these non-GAAP financial measures is presented in the accompanying financial schedules.

QLogic’s fiscal 2007 third quarter conference call is scheduled for today at 2:30 p.m. Pacific Time (5:30 p.m. Eastern Time). H.K. Desai, chief executive officer and president, and Tony Massetti, senior vice president and chief financial officer, will host the conference call. The call is being webcast live via the Internet at www.qlogic.com and via CCBN. Phone access to participate in the conference call is available at (719) 457-2626, pass code: 9939749 .

The financial information that the Company intends to discuss during the conference call will be available on the Company’s website at www.qlogic.com for 12 months following the conference call. A replay of the conference call will be available via webcast for 12 months on the Company’s website at www.qlogic.com. An audio replay of the conference call will also be available through February 6, 2007 at (719) 457-0820 or (888) 203-1112, pass code: 9939749 .

About QLogic

QLogic is a leading supplier of high performance storage networking solutions including Fibre Channel host bus adapters (HBAs), blade server embedded Fibre Channel switches, Fibre Channel stackable switches, iSCSI HBAs, iSCSI routers and storage services platforms for enabling advanced storage management applications. The Company is also a leading supplier of server networking products including InfiniBand host channel adapters that accelerate cluster performance. QLogic products are delivered to small-to-medium businesses and large enterprises around the world via its channel partner community. QLogic products are also powering solutions from leading companies like Cisco, Dell, EMC, Hitachi Data Systems, HP, IBM, NEC, Network Appliance and Sun Microsystems. QLogic is a member of the S&P 500 Index. For more information, go tohttp://www.qlogic.com.

Note: All QLogic-issued press releases appear on the Company’s website (www.qlogic.com). Any announcement that does not appear on the QLogic website has not been issued by QLogic.

Disclaimer — Forward Looking Statements

This press release contains statements relating to future results of the Company (including certain beliefs and projections regarding business trends) that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected or implied in the forward-looking statements. The Company advises readers that these potential risks and uncertainties include, but are not limited to: potential fluctuations in operating results; gross margins that may vary over time; revenues may be affected by changes in IT spending levels; the stock price of the Company may be volatile; the Company’s dependence on the storage area network market; the ability to maintain and gain market or industry acceptance of the Company’s products; the Company’s dependence on a limited number of customers; seasonal fluctuations and uneven sales patterns in orders from customers; the Company’s ability to compete effectively with other companies; declining average unit sales prices of comparable products; a reduction in sales efforts by current distributors; dependence on sole source and limited source suppliers; the Company’s dependence on relationships with certain silicon chip suppliers; the complexity of the Company’s products; sales fluctuations arising from customer transitions to new products; the uncertainty associated with SOX 404 compliance; environmental compliance costs; terrorist activities and resulting military actions; international economic, regulatory, political and other risks; uncertain benefits from strategic business combinations; the ability to attract and retain key personnel; recognition of compensation expense related to employee stock options and the Company’s employee stock purchase plan; the decreased effectiveness of equity compensation; difficulties in implementing smaller geometry process technologies; the ability to protect proprietary rights; the ability to satisfactorily resolve any infringement claims; reliance on third party licenses; the use of “open source” software in our products; changes in our tax provisions or adverse outcomes resulting from examination of our income tax returns; computer viruses and other tampering with the Company’s computer systems; and facilities of the Company and its suppliers and customers are located in areas subject to natural disasters.

More detailed information on these and additional factors which could affect the Company’s operating and financial results are described in the Company’s Forms 10-K, 10-Q and other reports filed, or to be filed, with the Securities and Exchange Commission. The Company urges all interested parties to read these reports to gain a better understanding of the many business and other risks that the Company faces. The forward-looking statements contained in this press release are made only as of the date hereof, and the Company does not intend to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

QLogic and the QLogic logo are registered trademarks of QLogic Corporation. Other trademarks and registered trademarks are the property of the companies with which they are associated.

QLOGIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited — in thousands, except per share amounts)

	Three Months Ended						Nine Months Ended
	December 31,		October 1,		January 1,		December 31,		January 1,
	2006		2006		2006		2006		2006
Net revenues	$	157,611	$	145,298	$	129,185	$	439,601	$	363,627
Cost of revenues		50,698		45,756		36,900		139,774		105,888
Gross profit		106,913		99,542		92,285		299,827		257,739
Operating expenses:
Engineering and development		34,003		32,619		22,797		99,542		64,573
Sales and marketing		21,586		20,108		16,100		64,095		46,950
General and administrative		7,238		7,594		4,362		23,274		12,444
Purchased in-process research and development		—		—		—		1,910		—
Total operating expenses		62,827		60,321		43,259		188,821		123,967
Operating income		44,086		39,221		49,026		111,006		133,772
Interest and other income		5,646		5,844		5,151		18,332		17,381
Income from continuing operations before income taxes		49,732		45,065		54,177		129,338		151,153
Income taxes		14,278		14,618		22,496		42,361		60,696
Income from continuing operations		35,454		30,447		31,681		86,977		90,457
Discontinued operations:
Income from operations, net of income taxes		—		—		4,570		—		30,595
Gain on sale, net of income taxes		—		—		129,987		—		129,987
Income from discontinued operations		—		—		134,557		—		160,582
Net income	$	35,454	$	30,447	$	166,238	$	86,977	$	251,039
Income from continuing operations per share:
Basic	$	0.22	$	0.19	$	0.20	$	0.55	$	0.52
Diluted	$	0.22	$	0.19	$	0.19	$	0.54	$	0.51
Income from discontinued operations per share:
Basic	$	—	$	—	$	0.83	$	—	$	0.92
Diluted	$	—	$	—	$	0.83	$	—	$	0.91
Net income per share:
Basic	$	0.22	$	0.19	$	1.03	$	0.55	$	1.44
Diluted	$	0.22	$	0.19	$	1.02	$	0.54	$	1.42
Number of shares used in per share calculations:
Basic		158,532		158,468		161,317		159,516		174,426
Diluted		160,760		159,827		163,093		161,161		176,497

QLOGIC CORPORATION

RECONCILIATION OF GAAP INCOME FROM CONTINUING OPERATIONS TO
NON-GAAP INCOME FROM CONTINUING OPERATIONS

(unaudited — in thousands, except per share amounts)

	Three Months Ended									Nine Months Ended
	December 31,			October 1,			January 1,			December 31,			January 1,
	2006			2006			2006			2006			2006
GAAP income from continuing operations	$	35,454		$	30,447		$	31,681		$	86,977		$	90,457
Items excluded from GAAP income from continuing operations:
Stock-based compensation		7,511			6,371			—			22,546			—
Amortization of purchased intangible assets		2,370			2,370			—			7,851			—
Acquisition-related stock-based compensation		2,337			2,593			212			7,809			212
Purchased in-process research and development		—			—			—			1,910			—
Insurance recovery		—			—			(700	)		—			(700	)
Income tax effect		(2,777	)		(3,441	)		194			(10,205	)		194
Total non-GAAP adjustments		9,441			7,893			(294	)		29,911			(294	)
Non-GAAP income from continuing operations	$	44,895		$	38,340		$	31,387		$	116,888		$	90,163
Diluted income from continuing operations per share:
GAAP income from continuing operations	$	0.22		$	0.19		$	0.19		$	0.54		$	0.51
Adjustments		0.06			0.05			—			0.19			—
Non-GAAP income from continuing operations	$	0.28		$	0.24		$	0.19		$	0.73		$	0.51

Non-GAAP Financial Measurements

The non-GAAP financial measurements contained herein are a supplement to the corresponding financial measurements prepared in accordance with generally accepted accounting principles (GAAP). The non-GAAP financial information presented excludes the items summarized in the above table. Management believes that adjustments for these items enhance the comparison of period to period operating results or these items are not indicative of the Company’s on-going core operating performance.

The Company has presented non-GAAP income from continuing operations and non-GAAP diluted income from continuing operations per share, on a basis consistent with its historical presentation, to assist investors in understanding the Company’s core income from continuing operations and core diluted income from continuing operations per share on an on-going basis. The non-GAAP presentation also enhances comparisons of the Company’s core net profitability with historical periods and comparisons of the Company’s core net profitability with the corresponding results for competitors. Management believes that non-GAAP income from continuing operations and non-GAAP diluted income from continuing operations per share are important measures in the evaluation of the Company’s profitability. These non-GAAP financial measures exclude the adjustments described in the above table, and thus provide an overall measure of the Company’s on-going net profitability and related profitability on a diluted per share basis.

Management uses non-GAAP income from continuing operations in its evaluation of the Company’s core after-tax results of operations and trends between fiscal periods and believes that this measure is an important component of its internal performance measurement process. In addition, the Company prepares and maintains its budgets and forecasts for future periods on a basis consistent with this non-GAAP financial measurement.

The non-GAAP financial measurements presented herein have certain limitations in that they do not reflect all of the costs associated with the operations of the Company’s business as determined in accordance with GAAP. Therefore, investors should consider non-GAAP measures in addition to, and not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. The non-GAAP information presented by the Company may be different from the non-GAAP measures used by other companies.

A summary of the non-GAAP adjustments presented in the table above by the financial statement line impacted is as follows:

(unaudited - in thousands)	Three Months Ended									Nine Months Ended
	December 31,			October 1,			January 1,			December 31,			January 1,
	2006			2006			2006			2006			2006
Non-GAAP Adjustments:
Cost of revenues:
Stock-based compensation	$	495		$	424		$	—		$	1,431		$	—
Amortization of purchased intangible assets		2,245			2,245			—			7,476			—
Acquisition-related stock-based compensation		13			13			—			39			—
Total cost of revenue adjustments		2,753			2,682			—			8,946			—
Operating expenses:
Engineering and development:
Stock-based compensation		3,023			2,419			—			8,266			—
Amortization of purchased intangible assets		67			66			—			200			—
Acquisition-related stock-based compensation		1,811			1,965			170			5,985			170
Sales and marketing:
Stock-based compensation		1,767			1,425			—			5,883			—
Amortization of purchased intangible assets		58			59			—			175			—
Acquisition-related stock-based compensation		491			591			42			1,714			42
General and administrative:
Stock-based compensation		2,226			2,103			—			6,966			—
Acquisition-related stock-based compensation		22			24			—			71			—
Insurance recovery		—			—			(700	)		—			(700	)
Purchased in-process research and development		—			—			—			1,910			—
Total operating expense adjustments		9,465			8,652			(488	)		31,170			(488	)
Total non-GAAP adjustments before income taxes		12,218			11,334			(488	)		40,116			(488	)
Income tax effect		(2,777	)		(3,441	)		194			(10,205	)		194
Total non-GAAP adjustments	$	9,441		$	7,893		$	(294	)	$	29,911		$	(294	)

QLOGIC CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited — in thousands)

	December 31, 2006			April 2, 2006
ASSETS
Current assets:
Cash and cash equivalents	$	91,643		$	125,192
Short-term marketable securities		325,413			540,448
Accounts receivable, net		85,545			67,571
Inventories		44,464			39,440
Other current assets		36,648			46,441
Total current assets		583,713			819,092
Long-term marketable securities		138,272			—
Property and equipment, net		89,923			82,630
Goodwill		137,557			24,725
Purchased intangible assets, net		37,389			7,954
Other assets		31,218			3,306
	$	1,018,072		$	937,707
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	33,305		$	32,160
Accrued compensation		29,493			23,520
Income taxes payable		18,606			12,920
Deferred revenue		6,645			3,662
Other current liabilities		7,829			6,091
Total current liabilities		95,878			78,353
Deferred tax liabilities		2,709			—
Total liabilities		98,587			78,353
Stockholders’ equity:
Common stock		198			195
Additional paid-in capital		598,614			537,648
Retained earnings		970,287			883,310
Accumulated other comprehensive loss		(3,998	)		(1,799	)
Treasury stock		(645,616	)		(560,000	)
Total stockholders’ equity		919,485			859,354
	$	1,018,072		$	937,707

QLOGIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited — in thousands)

	Nine Months Ended
	December 31,			January 1,
	2006			2006
Cash flows from operating activities:
Net income	$	86,977		$	251,039
Income from discontinued operations, net of income taxes		—			(30,595	)
Gain from sale of discontinued operations, net of income taxes		—			(129,987	)
Income from continuing operations		86,977			90,457
Adjustments to reconcile income from continuing operations to net cash provided by continuing operating activities:
Depreciation and amortization		26,904			12,851
Stock-based compensation		22,546			175
Acquisition-related stock-based compensation		7,809			212
Purchased in-process research and development		1,910			—
Deferred income taxes		(14,643	)		(7,117	)
Provision for losses on accounts receivable		(55	)		57
Loss on disposal of property and equipment		163			130
Tax benefit from issuance of stock under stock plans		—			2,134
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		(14,197	)		(15,894	)
Inventories		(2,915	)		(6,578	)
Other assets		1,109			3,014
Accounts payable		(2,777	)		3,056
Accrued compensation		(1,443	)		(2,276	)
Income taxes payable		5,686			22,223
Deferred revenue		2,983			1,557
Other liabilities		629			958
Net cash provided by continuing operating activities		120,686			104,959
Cash flows from investing activities:
Purchases of marketable securities		(240,441	)		(639,830	)
Sales and maturities of marketable securities		313,644			689,038
Additions to property and equipment		(23,666	)		(18,139	)
Acquisition of businesses, net of cash acquired		(142,383	)		(35,241	)
Restricted cash received from escrow		12,508			—
Restricted cash placed in escrow		(24,000	)		(12,000	)
Net cash used in continuing investing activities		(104,338	)		(16,172	)
Cash flows from financing activities:
Proceeds from issuance of stock under stock plans		31,063			12,394
Tax benefit from issuance of stock under stock plans		6,288			—
Payoff of line of credit assumed in acquisition		(1,632	)		—
Purchase of treasury stock		(85,616	)		(414,999	)
Net cash used in continuing financing activities		(49,897	)		(402,605	)
Net cash used in continuing operations		(33,549	)		(313,818	)
Cash flows from discontinued operations:
Net cash provided by operating activities		—			32,719
Net cash provided by investing activities, including proceeds from sale		—			181,336
Net cash provided by discontinued operations		—			214,055
Net decrease in cash and cash equivalents		(33,549	)		(99,763	)
Cash and cash equivalents at beginning of period		125,192			165,644
Cash and cash equivalents at end of period	$	91,643		$	65,881

QLOGIC CORPORATION

SUPPLEMENTAL FINANCIAL INFORMATION

(unaudited — in thousands)

Net Revenues

A summary of the Company’s revenue components is as follows:

	Three Months Ended						Nine Months Ended
	December 31,		October 1,		January 1,		December 31,		January 1,
	2006		2006		2006		2006		2006
SAN Infrastructure Products	$	152,463	$	135,283	$	120,402	$	415,145	$	338,205
Management Controllers		2,557		5,430		6,050		14,876		20,006
Other		2,591		4,585		2,733		9,580		5,416
	$	157,611	$	145,298	$	129,185	$	439,601	$	363,627

Geographic Revenues

Revenues by geographic area are presented based upon the country of destination. Net revenues by geographic area are as follows:

	Three Months Ended						Nine Months Ended
	December 31,		October 1,		January 1,		December 31,		January 1,
	2006		2006		2006		2006		2006
United States	$	78,779	$	79,072	$	68,394	$	236,224	$	199,062
Europe, Middle East and Africa		38,677		31,280		31,551		96,724		83,675
Asia-Pacific and Japan		29,769		27,784		27,700		86,797		78,707
Rest of world		10,386		7,162		1,540		19,856		2,183
	$	157,611	$	145,298	$	129,185	$	439,601	$	363,627