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

Exhibit 99.1

FOR IMMEDIATE RELEASE

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 FOURTH QUARTER
AND FISCAL YEAR 2007 RESULTS
Record Annual Revenues Achieved

Aliso Viejo, Calif., May 3, 2007 — QLogic Corporation (Nasdaq:QLGC), the leader in Fibre Channel host bus adapters (HBAs), stackable switches and blade server switches, today announced its financial results for the fourth quarter and fiscal year ended April 1, 2007.

Fourth Quarter Highlights

• Net revenue increased 13% from the comparable quarter last year to $147.1 million.

• Income from continuing operations: $18.4 million GAAP, $35.2 million non-GAAP.

• Income from continuing operations per diluted share: $0.12 GAAP, $0.22 non-GAAP.

• Cash generated from operations was $70.4 million.

• $543.9 million in cash and short-term marketable securities as of April 1.

• Repurchased $77.5 million of outstanding common stock.

Fiscal Year Highlights

• Net revenue increased 19% from last year to a record $586.7 million.

• Income from continuing operations: $105.4 million GAAP, $152.1 million non-GAAP.

• Income from continuing operations per diluted share: $0.66 GAAP, $0.95 non-GAAP.

• Cash generated from operations was $191.1 million.

Financial Results

Net revenue for the fourth quarter of fiscal 2007 was $147.1 million and increased 13% from $130.5 million in the comparable quarter last year. Revenue from SAN Infrastructure Products, which is

comprised primarily of HBAs, switches and silicon, was $143.3 million during the fourth quarter of fiscal 2007, an increase of 18% from the comparable quarter last year.

“We are pleased with our strong financial performance and annual revenue growth during fiscal year 2007. The year was highlighted by record revenue of $586.7 million, which grew 19% from the prior year, and cash generated from operations of $191.1 million,” said H. K. Desai, QLogic’s chief executive officer. “We continue to believe the strength in our core business will be enhanced with the expected contribution from our new, emerging technology products.”

Income from continuing operations on a GAAP basis for the fourth quarter of fiscal 2007 was $18.4 million, or $0.12 per diluted share, and included stock-based compensation expense, acquisition-related charges, impairment charges related to debt and equity securities, and the related income tax effects, totaling $16.8 million. The stock-based compensation expense was primarily the result of the adoption of Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment (“SFAS 123R”) in the first quarter of fiscal 2007. Income from continuing operations on a GAAP basis for the fourth quarter of fiscal 2006, which did not include any amounts for SFAS 123R but did include acquisition-related charges, a gain on the sale of shares acquired in the sale of discontinued operations and the related income tax effects, totaling $3.1 million, was $31.4 million or $0.19 per diluted share. Non-GAAP income from continuing operations for the fourth quarter of fiscal 2007 of $35.2 million, or $0.22 per diluted share, increased from $34.5 million, or $0.21 per diluted share, for the comparable quarter last year.

Net revenue for fiscal 2007 was $586.7 million and increased 19% from $494.1 million in fiscal 2006. Income from continuing operations on a GAAP basis for fiscal 2007 was $105.4 million, or $0.66 per diluted share, and included SFAS 123R stock-based compensation expense, acquisition-related charges, impairment charges related to debt and equity securities, and the related income tax effects, totaling $46.7 million. Income from continuing operations on a GAAP basis for fiscal 2006, which did not include any amounts for SFAS 123R, was $121.8 million or $0.70 per diluted share. Non-GAAP income from continuing operations for fiscal 2007 was $152.1 million, or $0.95 per diluted share, and increased 22% from fiscal 2006.

QLogic uses certain non-GAAP financial measures to supplement financial statements based on GAAP. A summary of these non-GAAP financial measures and a complete reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial 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 fourth 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 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) 457-2728, pass code: 9932604.

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 May 17, 2007 at (719) 457-0820 or (888) 203-1112, pass code: 9932604.

About QLogic

QLogic is a leading supplier of high-performance storage networking solutions, producing the controller chips, host bus adapters (HBAs) and fabric switches that are the backbone of storage networks for most Global 2000 corporations. The company delivers a broad and diverse portfolio of products that includes Fibre Channel 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 InfiniBand switches and InfiniBand host channel adapters for the emerging High Performance Computing Cluster (HPCC) market. 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.

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					Year Ended
	April 1,			April 2,		April 1,		April 2,
	2007			2006		2007		2006
Net revenues	$	147,096		$	130,450	$	586,697	$	494,077
Cost of revenues		52,208			38,358		191,982		144,246
Gross profit		94,888			92,092		394,715		349,831
Operating expenses:
Engineering and development		35,773			25,180		135,315		89,753
Sales and marketing		22,636			17,466		86,731		64,416
General and administrative		7,770			4,851		31,044		17,295
Purchased in-process research and development		1,800			10,510		3,710		10,510
Total operating expenses		67,979			58,007		256,800		181,974
Operating income		26,909			34,085		137,915		167,857
Interest and other income (expense), net		(1,460	)		15,246		16,872		32,627
Income from continuing operations before income taxes		25,449			49,331		154,787		200,484
Income taxes		7,008			17,957		49,369		78,653
Income from continuing operations		18,441			31,374		105,418		121,831
Income from discontinued operations, net of income taxes		—			1,175		—		161,757
Net income	$	18,441		$	32,549	$	105,418	$	283,588
Income from continuing operations per share:
Basic	$	0.12		$	0.19	$	0.66	$	0.71
Diluted	$	0.12		$	0.19	$	0.66	$	0.70
Income from discontinued operations per share:
Basic	$	—		$	0.01	$	—	$	0.95
Diluted	$	—		$	0.01	$	—	$	0.93
Net income per share:
Basic	$	0.12		$	0.20	$	0.66	$	1.66
Diluted	$	0.12		$	0.20	$	0.66	$	1.63
Number of shares used in per share calculations:
Basic		157,775			161,722		159,081		171,250
Diluted		159,235			164,378		160,680		173,467

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						Year Ended
	April 1,			April 2,			April 1,			April 2,
	2007			2006			2007			2006
GAAP income from continuing operations	$	18,441		$	31,374		$	105,418		$	121,831
Items excluded from GAAP income from continuing operations:
Stock-based compensation		7,733			—			30,279			—
Amortization of purchased intangible assets		5,089			201			12,940			201
Acquisition-related stock-based compensation		1,283			318			9,092	��		530
Insurance recovery		—			—			—			(700	)
Purchased in-process research and development		1,800			10,510			3,710			10,510
Impairment of marketable securities		8,094			—			8,094			—
Gain on sale of shares acquired in the sale of discontinued operations		—			(8,463	)		—			(8,463	)
Income tax effect		(7,208	)		578			(17,413	)		772
Total non-GAAP adjustments		16,791			3,144			46,702			2,850
Non-GAAP income from continuing operations	$	35,232		$	34,518		$	152,120		$	124,681
Income from continuing operations per diluted share:
GAAP income from continuing operations	$	0.12		$	0.19		$	0.66		$	0.70
Adjustments		0.10			0.02			0.29			0.02
Non-GAAP income from continuing operations	$	0.22		$	0.21		$	0.95		$	0.72

Non-GAAP Financial Measures

The non-GAAP financial measures contained herein are a supplement to the corresponding financial measures 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 and that 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 income from continuing operations per diluted share, on a basis consistent with its historical presentation, to assist investors in understanding the company’s core income from continuing operations and core income from continuing operations per diluted 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 income from continuing operations per diluted 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 measure. Management believes that providing these non-GAAP financial measures allows investors to view the company’s financial results in the way that management views the financial results.

The non-GAAP financial measures 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 financial 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 financial measures used by other companies.

For additional information on the items excluded from the non-GAAP financial measures and why the company believes that these non-GAAP financial measures provide useful supplemental information to investors, the company refers you to the Form 8-K regarding this release filed today with the Securities and Exchange Commission.

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

	Three Months Ended						Year Ended
	April 1,			April 2,			April 1,			April 2,
(unaudited — in thousands)	2007			2006			2007			2006
Non-GAAP Adjustments:
Cost of revenues:
Stock-based compensation	$	466		$	—		$	1,897		$	—
Amortization of purchased intangible assets		3,617			201			11,093			201
Acquisition-related stock-based compensation		13			—			52			—
Total cost of revenue adjustments		4,096			201			13,042			201
Operating expenses:
Engineering and development:
Stock-based compensation		2,924			—			11,190			—
Amortization of purchased intangible assets		67			—			267			—
Acquisition-related stock-based compensation		1,616			256			7,601			426
Sales and marketing:
Stock-based compensation		2,272			—			8,155			—
Amortization of purchased intangible assets		1,405			—			1,580			—
Acquisition-related stock-based compensation		(327	)		62			1,387			104
General and administrative:
Stock-based compensation		2,071			—			9,037			—
Acquisition-related stock-based compensation		(19	)		—			52			—
Insurance recovery		—			—			—			(700	)
Purchased in-process research and development		1,800			10,510			3,710			10,510
Total operating expense adjustments		11,809			10,828			42,979			10,340
Interest and other income (expense):
Impairment of marketable securities		8,094			—			8,094			—
Gain on sale of shares acquired in the sale of discontinued operations		—			(8,463	)		—			(8,463	)
Total interest and other income (expense) adjustments		8,094			(8,463	)		8,094			(8,463	)
Total non-GAAP adjustments before income taxes		23,999			2,566			64,115			2,078
Income tax effect		(7,208	)		578			(17,413	)		772
Total non-GAAP adjustments	$	16,791		$	3,144		$	46,702		$	2,850

QLOGIC CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited — in thousands)

	April 1, 2007			April 2, 2006
ASSETS
Current assets:
Cash and cash equivalents	$	76,804		$	125,192
Short-term marketable securities		467,118			540,448
Accounts receivable, net		73,538			67,571
Inventories		38,935			39,440
Other current assets		40,758			46,441
Total current assets		697,153			819,092
Property and equipment, net		90,913			82,630
Goodwill		102,910			24,725
Purchased intangible assets, net		55,093			7,954
Other assets		25,290			3,306
	$	971,359		$	937,707
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	29,280		$	32,160
Accrued compensation		34,483			23,520
Income taxes payable		15,729			12,920
Deferred revenue		7,368			3,662
Other current liabilities		7,674			6,091
Total current liabilities		94,534			78,353
Deferred tax liabilities		2,294			—
Total liabilities		96,828			78,353
Stockholders’ equity:
Common stock		198			195
Additional paid-in capital		608,515			537,648
Retained earnings		988,728			883,310
Accumulated other comprehensive income (loss)		169			(1,799	)
Treasury stock		(723,079	)		(560,000	)
Total stockholders’ equity		874,531			859,354
	$	971,359		$	937,707

QLOGIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited — in thousands)

	Year Ended
	April 1,			April 2,
	2007			2006
Cash flows from operating activities:
Net income	$	105,418		$	283,588
Income from discontinued operations, net of income taxes		—			(161,757	)
Income from continuing operations		105,418			121,831
Adjustments to reconcile income from continuing operations to net cash provided by continuing operating activities:
Depreciation and amortization		27,554			17,697
Stock-based compensation		30,279			175
Acquisition-related:
Amortization of purchased intangible assets		12,940			201
Stock-based compensation		9,092			530
Purchased in-process research and development		3,710			10,510
Deferred income taxes		(4,154	)		(4,480	)
Provision for losses on accounts receivable		30			(54	)
Loss on disposal of property and equipment		214			168
Impairment of marketable securities		8,094			—
Tax benefit from issuance of stock under stock plans		—			5,055
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		(2,275	)		(12,825	)
Inventories		2,771			(16,230	)
Other assets		(1,906	)		(5,840	)
Accounts payable		(7,401	)		11,877
Accrued compensation		2,264			3,263
Income taxes payable		2,809			(1,205	)
Deferred revenue		3,706			2,166
Other liabilities		(2,076	)		(291	)
Net cash provided by continuing operating activities		191,069			132,548
Cash flows from investing activities:
Purchases of marketable securities		(298,220	)		(946,087	)
Sales and maturities of marketable securities		366,677			1,101,680
Additions to property and equipment		(31,708	)		(28,295	)
Acquisition of businesses, net of cash acquired		(142,521	)		(35,210	)
Restricted cash placed in escrow		(24,000	)		(12,000	)
Restricted cash received from escrow		12,508			—
Net cash provided by (used in) continuing investing activities		(117,264	)		80,088
Cash flows from financing activities:
Proceeds from issuance of stock under stock plans		33,703			27,757
Tax benefit from issuance of stock under stock plans		5,816			—
Payoff of line of credit assumed in acquisition		(1,632	)		—
Purchase of treasury stock		(160,080	)		(414,999	)
Net cash used in continuing financing activities		(122,193	)		(387,242	)
Net cash used in continuing operations		(48,388	)		(174,606	)
Cash flows from discontinued operations:
Net cash used in operating activities		—			(47,182	)
Net cash provided by investing activities, including proceeds from sale		—			181,336
Net cash provided by discontinued operations		—			134,154
Net decrease in cash and cash equivalents		(48,388	)		(40,452	)
Cash and cash equivalents at beginning of period		125,192			165,644
Cash and cash equivalents at end of period	$	76,804		$	125,192

QLOGIC CORPORATION

SUPPLEMENTAL FINANCIAL INFORMATION

(unaudited — in thousands)

Net Revenues

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

	Three Months Ended				Year Ended
	April 1,		April 2,		April 1,		April 2,
	2007		2006		2007		2006
SAN Infrastructure Products	$	143,254	$	121,845	$	558,399	$	460,050
Management Controllers		1,222		7,130		16,098		27,136
Other		2,620		1,475		12,200		6,891
	$	147,096	$	130,450	$	586,697	$	494,077

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				Year Ended
	April 1,		April 2,		April 1,		April 2,
	2007		2006		2007		2006
United States	$	78,076	$	72,875	$	314,300	$	271,937
Europe, Middle East and Africa		35,230		27,325		131,954		111,000
Asia-Pacific and Japan		24,333		29,459		111,130		108,166
Rest of world		9,457		791		29,313		2,974
	$	147,096	$	130,450	$	586,697	$	494,077