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Filed by QLogic Corporation
pursuant to Rule 425 under the
Securities Act of 1933 and deemed
filed pursuant to Rule 14a-12 of the
Securities Exchange Act of 1934
Subject Company: Ancor Communications,
Incorporated
Commission File No.: 001-12982
[QLOGIC CORP. LOGO]
THE CONNECTION IS CRITICAL
Corporate Presentation
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SAFE HARBOR PREFACE
During the course of this presentation, we may make forward looking statements
regarding the future events or the future performance of the Company. Actual
events or results could differ materially. We refer you to the documents the
Company files from time to time with the Securities and Exchange Commission,
including the Company's most recent Form S-3, Form 10-K, and Form 10-Q. These
documents identify important risk factors that could cause actual events or
results to differ materially from those contained in any forward-looking
statements.
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MAKING THE CONNECTION
[GRAPHIC]
Graphic shows how disk drives, RAID subsystems, tape
libraries, and tape drives connect to workstations and high
end PCs.
- HBAs for system & storage market
- Silicon for system and storage manufacturers
- Silicon for peripheral manufacturers
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[GRAPHIC]
TRANSFORMING FOR GROWTH
1999 Prepared For The Future. Broadening technology base and positioning
for Infiniband with integration of Adaptive RAID.
1998 Three Businesses One Company. Expanded focus anticipating market
demand for Subsystem and System/Baseboard Management.
1994 Phased Transition. Expanded Product Offerings in anticipation of
Storage Market Expansion.
1992 Market Dominance. Storage Controllers for HDD Manufacturers.
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QLOGIC AND ANCOR
TRANSACTION STRUCTURE
- - Definitive Agreement signed May 7, 2000
- - Pooling-of-interests
- - Exchange ratio is 0.5275 QLogic share for each Ancor share
- - Ancor pro forma ownership approximately 18%
- - Transaction expected to close in Q3 CY2000
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PROFILE COMPANIES
QLOGIC ANCOR
------ -----
Headquarters: Aliso Viejo, CA Minneapolis, MN
Employees: 390 165
Revenues: $60.1M(1) $7.2M(1)
Key Technologies: SCSI, Fibre Channel Fibre Channel, InfiniBand
InfiniBand
Key Customers: Fujitsu, Sun, Hitachi, Dell Sun, MTI, Hitachi,
Intel, Net App., IBM EMC, INRANGE
Technology Partners: Intel Intel, INRANGE
Channel Partners: Bell Micro Bell Micro
(1) Qtr. Ended 03/00
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FIBRE CHANNEL SAN COMPONENTS
[GRAPHIC]
The Graphic shows the following information:
Fibre channel SAN Components
1999 Share by 2003 Share by SAN
73% SAN Component Component Factory
Market Factory Revenue Revenue equals
CAGR equals $506 million $4,544 million
HBA 49% 38%
Switches, directors 10% 30%
Switches, fabric 19% 22%
Switches, loop 3% 4%
Hubs, managed 10% 3%
Hubs, entry 3% 0.4%
Storage Routers 6% 3%
Source: IDC's 4-00 2000 Worldwide Fibre Channel Hub and Switch Forecast and
Analysis 1997-2003 and IDC's 3-00 Fibre Channel Host Bus Adapter Forecast and
Analysis 1997-2003
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HUB AND SWITCH MARKET
IDC'S HUB AND SWITCH PORT FORECAST 1999-2003
(75% CAGR)
Ports
Year Shipped
(000)
1999 500
2000 1,100
2001 1,900
2002 3,200
2003 5,200
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HUB AND SWITCH MARKET
IDC'S HUB AND SWITCH FACTORY REVENUE FORECAST 1999-2003
(85% CAGR)
Factory
Year Revenue
($M)
1999 200
2000 600
2001 1,100
2002 1,800
2003 2,650
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FIBRE CHANNEL SAN MARKET
QLogic Total Addressable FC Market
1999 2000 2001 2002 2003
---- ---- ---- ---- ----
Peripheral Controller 65 154 265 354 428
Chips 58 161 338 610 1,236
Switches/Directors 167 451 937 1,710 2,630
PCI Raid Controller - 33 45 81 103
Enclosure Controller 5 10 13 17 19
HBAs 267 587 1,024 1,533 2,110
Source (Dataquest, IDC and QLogic)
- - Enables cost effective solutions
- Storage consolidation
- Remote mirroring/backup
- LANless/Serverless backup
- - Technology benefits
- Flexible, scalable capacity
- Built-in reliability features
- Superior performance
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MARKET LEADERSHIP
QLOGIC
- - #1 Fibre Channel HBA
- - SAN End-Node Components
- Silicon
- HBAs
- - First Single Chip Fibre Channel Solution
- - Broadest Range of Fibre Channel I/O Solutions
- Server, W/S, RAID
- Disk, Tape
- Management Controllers
ANCOR
- - #2 Fibre Channel Switch
- - SAN Fabric Systems
- Directors
- Switches
- - First Fibre Channel Switch
- - Broadest Range of Fibre Channel Switch Offerings
- RASM
- Port Density
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MARKET DRIVERS
- - HBA decision criteria
- Server OS driver software (NT, W2K, Netware, Linux, Solaris, HP-UX,
Monterey)
- SAN management software (QLdirect, QLconfig, QLview)
- SCSI (storage), IP (management), VI (clustering)
- Switch is passive (does not parse Fibre Channel frames)
- - QLogic dominates I/O
- Fibre Channel HBA leader in 1999 (IDC)
- Fibre Channel ASICs for: motherboard, RAID controller, adapter,
router, disk drive, tape drive, tape library and tester applications
- Fibre Channel and SCSI HBAs for servers and workstations
- - Industry Standards drive Ancor selection
- No dependency on server-based software
- MIBs interface to industry standard management software (e.g. Openview
& Tivoli)
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CUSTOMER BENEFITS
- - Increase SAN functionality with VI
- QLogic: Same fabric (HBAs, switches and cabling)
- Ancor: Faster than Brocade (lower latency)
- - Best-of-breed
- Customers make decisions, not suppliers
- Customers invite suppliers to cooperate
- - Supply Chain Management
- Long-term relationships
- Software value-add
- Portfolio vs. point products
- ASICs, HBAs, software, RAID and switches
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MANUFACTURING STRATEGY
- - LEVERAGE FABLESS ADVANTAGES
- - SUBCONTRACT BOARD PRODUCTION
- - SECURITY OF SUPPLY
- WAFER LEVEL PROCUREMENT
- PURE PLAY FOUNDRY
- - DELIVER WORLD CLASS QUALITY
- IN-HOUSE RELIABILITY AND FAILURE ANALYSIS SUPPORT
- ISO9001/TICKIT CERTIFIED
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SELECTED CUSTOMERS
[GRAPHIC]
Sun
intel
IBM
Dell
Fujitsu
Compaq
Sony
Siemens Nixdorf
Exabyte
NCR
Hitachi
NEC
Mylex
Quantum
Network Appliance
Silicon Graphics
Tandberg Data
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TOTAL SAN SOLUTION
[GRAPHIC]
Graphic shows how QLogic chips and boards are used to connect various
peripheral devices to a SAN, with an Ancor switch in the middle of the SAN.
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[QLOGIC CORP. LOGO]
FINANCIALS
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Revenue Growth
Fiscal Revenue
Year in Millions of Dollars
1998 81.4
1999 117.2
2000 203.1
Fiscal Fiscal Revenue
Quarter Year in Millions of Dollars
Q1 1998 18.2
Q2 1998 19.6
Q3 1998 20.9
Q4 1998 22.7
Q1 1999 24.1
Q2 1999 27.7
Q3 1999 30.3
Q4 1999 35.1
Q1 2000 43.2
Q2 2000 47.5
Q3 2000 52.3
Q4 2000 60.1
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FIBRE CHANNEL
REVENUE HISTORY
Fibre Channel
Revenue
Fiscal Fiscal Millions of
Quarter Year Dollars
Q3 1998 $0.4
Q4 1998 0.8
Q1 1999 2.4
Q2 1999 4.0
Q3 1999 5.5
Q4 1999 7.3
Q1 2000 9.3
Q2 2000 12.2
Q3 2000 16.6
Q4 2000 21.9
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SCSI
REVENUE HISTORY
SCSI
Fiscal Fiscal Revenue in
Quarter Year Millions of Dollars
Q1 1998 18.1
Q2 1998 19.5
Q3 1998 20.5
Q4 1998 21.9
Q1 1999 21.4
Q2 1999 23.7
Q3 1999 24.8
Q4 1999 27.2
Q1 2000 30.3
Q2 2000 32.3
Q3 2000 34.2
Q4 2000 34.9
Fiscal year ends March
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QUARTERLY DILUTED EPS
Diluted
Fiscal EPS
Year (in Dollars)
1998 0.21
1999 0.34*
2000 0.76*
Diluted
Fiscal Fiscal EPS
Quarter Year (in Dollars)
Q1 1998 0.04
Q2 1998 0.05
Q3 1998 0.05
Q4 1998 0.06
Q1 1999 0.07
Q2 1999 0.07
Q3 1999 0.10*
Q4 1999 0.11
Q1 2000 0.15
Q2 2000 0.17
Q3 2000 0.20
Q4 2000 0.24*
- -----------
*Excludes one-time charges for write off of in-process technology.
Fiscal year ends March
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OPERATING MODEL
Pro Forma
FY 98 FY 99 FY00
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Gross Margin 58.2% 63.6% 68.4%
Engineering & Development 19.2% 20.8% 16.0%
Sales & Marketing 10.7% 9.4% 8.2%
G&A 5.6% 4.9% 4.0%
Operating Profit 22.7% 28.5% 40.2%
Return on Sales 16.5% 21.9% 29.0%
Fiscal Year Ends March
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CASH GROWTH
Cash
Fiscal Fiscal in Millions
Quarter Year of Dollars
Q1 1998 23.1
Q2 1998 104.4
Q3 1998 105.7
Q4 1998 112.8
Q1 1999 114.7
Q2 1999 120.5
Q3 1999 122.0
Q4 1999 130.6
Q1 2000 145.0
Q2 2000 156.1
Q3 2000 169.4
Q4 2000 162.5
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CASH NEEDS
[GRAPHIC]
Working Capital Needs
Technology Acquisitions
Supply Arrangements
$162.5 million
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[QLOGIC CORP. LOGO]
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