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Emulex Announces Preliminary Fiscal 2014 Fourth Quarter and Annual Results

Emulex Corporation (NYSE:ELX), a leader in network connectivity, monitoring and management, today announced preliminary earnings results for the fourth quarter and fiscal year ending June 29, 2014.

Fourth Quarter Financial Highlights

  • Total revenue of $99.8 million was at the high end of the prior guidance range, aided by sequential growth in Fibre Channel host products.
  • Non-GAAP diluted earnings of $0.07 and a GAAP loss of $0.19 per share as compared to guidance of $0.00 - $0.05 and a loss of $0.16 - $0.21, respectively.
  • Non-GAAP gross margins of 66%, unchanged sequentially and up 100 basis points year-over-year, with GAAP gross margins of 58%, unchanged over both periods.
  • Cash, cash equivalents and investments at the end of the quarter of $158.4 million.
  • Diluted share count of 77.8 million shares in the fourth quarter, down from 93.5 million at the end of the first quarter of fiscal 2014.

“I’m very pleased with the operational execution by the Emulex team during the fourth quarter. We achieved the high end of our revenue guidance, and with the completion of the closure of the Bolton engineering facility, we have accomplished the reduction in our operating expenses that we announced back in November. This, combined with strong gross margins helped us exceed the high end of our earnings per share guidance,” commented Jeff Benck, president and CEO, Emulex. “We experienced good recovery in our Fibre Channel business in the quarter with sequential revenue growth. Based on reported results to date, we expect to demonstrate more than two points of Fibre Channel market share gain in the quarter.

“As we look forward, we believe that we should benefit from two major server upgrade cycles this year, IBM Power 8 and the Intel Grantley refresh. With this new Intel design cycle nearing completion, Emulex has significantly broadened its design win footprint in Ethernet from a concentration among two OEMs to now include offerings from all of the top eight server OEMs as well as the leading open compute ODMs,” Benck concluded.

Business Outlook

Although actual results may vary depending on a variety of factors, including those listed in the Safe Harbor Statement below and our filings with the SEC, Emulex is forecasting total net revenues in the range of $93 - $99 million. The Company expects first quarter non-GAAP earnings of $0.07 - $0.11 and a GAAP loss of $0.07 - $0.11 per share. GAAP estimates for the first quarter reflect approximately $0.18 per diluted share in expected charges arising primarily from amortization of intangibles, stock-based compensation, royalties, mitigation expenses and license fees associated with the Broadcom patent litigation, the accretion of debt discount on outstanding convertible senior notes, and the tax effects and the impact of our U.S. GAAP tax valuation allowance associated with these items. Reconciliation between GAAP and non-GAAP results is included in the accompanying financial data.

Fourth Quarter Business Highlights

  • Deepened Lenovo relationship with new 10Gb Ethernet and 16Gb Fibre Channel solutions for Lenovo ThinkServer rack and tower servers and was awarded the Lenovo Outstanding Quality supplier award for the second time in three years.
  • Announced next generation 10GbE converged adapters as EMC E-Lab qualified for use with solutions including EMC VNX and the new VMAX3 storage arrays.
  • Unveiled next generation 10Gb and 40Gb Ethernet solutions featuring advanced packet processing, enabling the telecommunications market to lower costs and scale flexibility by accelerating the deployment of Network Functions Virtualization (NFV) for the mobile, cloud-enabled world.
  • Commenced a strategic partnership with Compuware to deliver integrated best-of-breed application-aware network performance management (AA-NPM) and network monitoring solutions using Compuware’s Data Center Real-User Monitoring (DC RUM) and EndaceProbe™ Intelligent Network Recorders (INRs).
EMULEX CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited, in thousands, except per share data)
 
  Three Months Ended   Twelve Months Ended
June 29,   June 30, June 29,   June 30,
  2014       2013       2014       2013  
Net revenues $ 99,775 $ 120,369 $ 447,333 $ 478,567
 
Cost of sales:
Cost of goods sold 34,330 42,917 153,994 173,004
Amortization of core and developed technology intangible assets 6,277 6,025 24,916 21,800
Expenses related to the Broadcom patents   1,593       1,587       7,426       4,963  
Cost of sales   42,200       50,529       186,336      

199,767

 
Gross profit   57,575       69,840       260,997       278,800  
 
Operating expenses:
Engineering and development 36,359 46,202 155,909 168,446
Selling and marketing 20,467 20,550 77,757 66,235
General and administrative 8,666 9,872 41,115 38,893
Amortization of other intangible assets   1,584       1,559       6,375       5,935  
Total operating expenses   67,076       78,183       281,156       279,509  
 
Operating loss   (9,501 )     (8,343 )     (20,159 )     (709 )
 
Non-operating loss:
Interest income 1 11 26 34
Interest expense (2,354 ) (13 ) (5,860 ) (24 )
Other income (expense), net   (75 )     (40 )     (193 )     (4,884 )
Total non-operating loss   (2,428 )     (42 )     (6,027 )     (4,874 )
 
Loss before income taxes (11,929 ) (8,385 ) (26,186 ) (5,583 )
 
Income tax provision (benefit)   2,736       (3,775 )     3,346       (369 )
 
Net loss $ (14,665 )   $ (4,610 )   $ (29,532 )   $ (5,214 )
 
Net loss per share:
Basic $ (0.19 )   $ (0.05 )   $ (0.35 )   $ (0.06 )
Diluted $ (0.19 )   $ (0.05 )   $ (0.35 )   $ (0.06 )
 
Number of shares used in net loss per share computations:
Basic   76,459       91,084       83,917       90,271  
Diluted   76,459       91,084       83,917       90,271  
 
EMULEX CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(unaudited, in thousands)
 
  June 29,   June 30,
2014   2013

Assets

 
Current assets:
Cash and cash equivalents $ 158,439 $ 105,637
Accounts receivable, net 76,974 82,363
Inventories 25,831 23,897
Prepaid income taxes 2,839 10,166
Prepaid expenses and other current assets 17,190 14,113
Deferred income taxes   223     3,137
Total current assets 281,496 239,313
 
Property and equipment, net 59,908 62,415
Goodwill and intangible assets, net 356,526 387,817
Other assets   19,993     21,164
$ 717,923   $ 710,709

 

Liabilities and Stockholders’ Equity

 
Current liabilities:
Accounts payable $ 25,762 $ 27,725
Accrued and other current liabilities   42,183     43,861
Total current liabilities 67,945 71,586
 
Convertible senior notes 146,478
Other liabilities 6,842 4,924
Deferred income taxes 15,550 17,048
Accrued taxes   26,462     29,526
Total liabilities   263,277     123,084
 
Total stockholders’ equity   454,646     587,625
$ 717,923   $ 710,709
 
EMULEX CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statement of Cash Flows
(unaudited, in thousands)
 
  Twelve Months Ended
June 29,   June 30,
  2014       2013  
 
Cash flows from operations:
Net (loss) income $ (29,532 ) $ (5,214 )
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Depreciation and amortization 50,327 45,935
Stock based compensation 15,257 21,802
Deferred income taxes 1,428 1,886
Other reconciling items 2,490 (209 )
Changes in assets and liabilities   7,813       (53,603 )
Net cash provided by (used in) operating activities   47,783       10,597  
 
Cash flows from investing activities:
Investment in property and equipment, net (15,983 ) (15,696 )
Acquisitions, net of cash acquired (107,709 )
Maturities of (proceeds from) investments, net         28,939  
Net cash provided by (used in) investing activities   (15,983 )     (94,466 )
 
Cash flows from financing activities:
Issuance of convertible senior notes 175,000
Repurchase of common stock (150,000 )
Non-controlling interest (11,828 )
Other   (4,459 )     628  
Net cash provided by (used in) financing activities   20,541       (11,200 )
 
Effect of exchange rates on cash and cash equivalents   461       (342 )
 
Net increase (decrease) in cash & cash equivalents 52,802 (95,411 )
Opening cash balance   105,637       201,048  
Ending cash balance $ 158,439     $ 105,637  
 
EMULEX CORPORATION AND SUBSIDIARIES
Supplemental Information
 

Reconciliation of GAAP Net Loss to Non-GAAP Net Income:

  Three Months Ended   Twelve Months Ended
($000s) June 29,   June 30, June 29,   June 30,
  2014       2013       2014       2013  
GAAP net loss as presented above $ (14,665 )   $ (4,610 )   $ (29,532 )   $ (5,214 )
GAAP loss per share as presented above $ (0.19 )   $ (0.05 )   $ (0.35 )   $ (0.06 )
Shares used in GAAP loss per share computations   76,459       91,084       83,917       90,271  
 
Items excluded from GAAP net loss to calculate non-GAAP net income:
Amortization of intangibles:
Cost of sales 6,277 6,025 24,916 21,800
Amortization of intangibles (operating expense)   1,584       1,559       6,375       5,935  
Total amortization of intangibles 7,861 7,584 31,291 27,735
Stock-based compensation:
Cost of sales 198 269 667 1,013
Engineering and development 1,271 2,284 5,550 9,802
Selling and marketing 891 1,017 3,929 3,593
General and administrative   671       1,964       5,111       7,393  
Total stock-based compensation 3,031 5,534 15,257 21,801
Site closure and other restructuring costs:
Cost of sales (6 ) 45 296 45
Engineering and development 263 1,728 5,688 1,728
Selling and marketing 1,348 591 2,473 591
General and administrative   581       340       1,981       340  
Total site closure and other restructuring costs 2,186 2,704 10,438 2,704
Expenses related to the Broadcom patents:
Cost of sales 1,593 1,587 7,426 4,963
Engineering and development (271 ) 3,809 2,132 6,948
Selling and marketing 1,154 1,979
General and administrative   22       307       5,347       1,658  
Total expenses related to the Broadcom patents 2,498 5,703 16,884 13,569
Expenses related to the acquisition of Endace:
Cost of sales 349 858
Engineering and development 116 275
Selling and marketing 69 21 85
General and administrative (39 ) 328 282 3,176
Non-operating income                     4,692  
Total expenses related to the acquisition of Endace (39 ) 862 303 9,086
Expenses related to class action lawsuit:
General and administrative   18             18        
Total expenses related to class action lawsuit 18 18
IRS NOPA:
General and administrative   762             934        
Total IRS NOPA 762 934
Accretion of debt discount on convertible senior notes 1,587 3,914
Tax impact of above items and U.S. GAAP tax valuation allowance   2,563       (3,779 )     (875 )     (2,752 )
Impact on GAAP net loss 20,467 18,608 78,164 72,143
 
Non-GAAP net income $ 5,802     $ 13,998     $ 48,632     $ 66,929  
Non-GAAP diluted earnings per share $ 0.07     $ 0.15     $ 0.57     $ 0.73  
Diluted shares used in non-GAAP earnings per share computations   77,784       92,842       85,583       92,171  
 

Reconciliation of GAAP Gross Margin to Non-GAAP Gross Margin:

 
  Three Months Ended   Twelve Months Ended
($000s) June 29,   June 30, June 29,   June 30,
  2014       2013       2014       2013  
Revenue $ 99,775     $ 120,369  

 

$ 447,333     $ 478,567  
 
GAAP gross margin   57,575       69,840       260,997       278,800  
GAAP gross margin %   57.7 %     58.0 %     58.3 %     58.3 %
 
Items excluded from GAAP gross margin to calculate non-GAAP gross margin:
Amortization of intangibles 6,277 6,025 24,916 21,800
Stock-based compensation 198 269 667 1,013
Site closure and other restructuring costs (6 ) 45 296 45
Expenses related to the Broadcom patents 1,593 1,587 7,426 4,963
Expenses related to the acquisition of Endace         349             858  
Impact on gross margin 8,062 8,275 33,305 28,679
 
Non-GAAP gross margin $ 65,637     $ 78,115     $ 294,302     $ 307,479  
Non-GAAP gross margin %   65.8 %     64.9 %     65.8 %     64.2 %

 

Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses:

 
Three Months Ended Twelve Months Ended
June 29, June 30, June 29, June 30,
($000s)   2014       2013       2014       2013  
 
GAAP operating expenses, as presented above $ 67,076     $ 78,183     $ 281,156     $ 279,509  
 
Items excluded from GAAP operating expenses to calculate non-GAAP operating expenses:
Amortization of other intangibles (1,584 ) (1,559 ) (6,375 ) (5,935 )
Stock-based compensation (2,833 ) (5,265 ) (14,590 ) (20,788 )
Site closure and other restructuring costs (2,192 ) (2,659 ) (10,142 ) (2,659 )
Expenses related to the Broadcom patents (905 ) (4,116 ) (9,458 ) (8,606 )
Expenses related to the acquisition of Endace 39 (513 ) (303 ) (3,536 )
Expenses related to class action lawsuit (18 ) (18 )
IRS NOPA   (762 )           (934 )      
Impact on operating expenses   (8,255 )     (14,112 )     (41,820 )     (41,524 )
Non-GAAP operating expenses $ 58,821     $ 64,071     $ 239,336     $ 237,985  
 

Reconciliation of GAAP Operating Loss to Non-GAAP Operating Income:

 
  Three Months Ended   Twelve Months Ended
($000s) June 29,   June 30, June 29,   June 30,
  2014       2013       2014       2013  
 
GAAP operating loss as presented above $ (9,501 )   $ (8,343 )   $ (20,159 )   $ (709 )
 
Items excluded from GAAP operating loss to calculate non-GAAP operating income:
Amortization of intangibles 7,861 7,584 31,291 27,735
Stock-based compensation 3,031 5,534 15,257 21,801
Site closure and other restructuring costs 2,186 2,704 10,438 2,704
Expenses related to the Broadcom patents 2,498 5,703 16,884 13,569
Expenses related to the acquisition of Endace (39 ) 862 303 4,394
Expenses related to class action lawsuit 18 18
IRS NOPA   762             934        
Impact on operating loss   16,317       22,387       75,125       70,203  
Non-GAAP operating income $ 6,816     $ 14,044     $ 54,966     $ 69,494  
 
 
 
Guidance for
Three Months Ending
September 28, 2014
 
 
Non-GAAP diluted earnings per share guidance $0.07 - $0.11
 

Items excluded, net of tax, from non-GAAP diluted earnings per share to calculate GAAP loss per share guidance:

Amortization of intangibles (0.10)
Stock-based compensation (0.04)
Expenses related to the Broadcom patents (0.03)
Accretion of debt discount on convertible senior notes (0.02)
Tax impact of above items and U.S. GAAP tax valuation allowance 0.01
 
GAAP loss per share guidance ($0.07 - $0.11)
 

Historical Net Revenue by Product Lines:

 
  Q4 FY     Q4 FY    
2014 % Total 2013 % Total
($000s) Revenues   Revenues Revenues   Revenues % Change
 
Network Connectivity Products $ 75,850 76 % $ 82,943 69 % (9 )%
Storage Connectivity and Other Products   16,850   17 %   29,115   24 % (42 )%
Emulex Connectivity Division   92,700   93 %     112,058   93 %   (17 )%
Network Visibility Products   7,075   7 %     8,311   7 %   (15 )%
Total net revenues $ 99,775   100 % $ 120,369   100 % (17 )%
 
 

Historical Net Revenues by Channel:

 
Q4 FY Q4 FY
2014 % Total 2013 % Total
($000s) Revenues   Revenues Revenues   Revenues % Change
 
Revenues from OEM customers $ 82,995 83 % $ 101,342 84 % (18 )%
Revenues from distribution 13,646 14 % 14,107 12 % (3 )%
Other   3,134   3 %   4,920   4 % (36 )%
Total net revenues $ 99,775   100 % $ 120,369   100 % (17 )%
 

Historical Net Revenues by Territory:

 
Q4 FY Q4 FY
2014 % Total 2013 % Total
($000s) Revenues   Revenues Revenues   Revenues % Change
 
Asia-Pacific $ 61,469 61 % $ 68,297 57 % (10 )%
United States 22,707 23 % 33,881 28 % (33 )%
Europe, Middle East and Africa 14,752 15 % 16,537 14 % (11 )%
Rest of world   847   1 %   1,654   1 % (49 )%
Total net revenues $ 99,775   100 % $ 120,369   100 % (17 )%

Note Regarding Non-GAAP Financial Information

To supplement the condensed consolidated financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), we have included the following non-GAAP financial measures in this press release or in the webcast to discuss our financial results for the fourth fiscal quarter which may be accessed via our website at www.emulex.com: (i) non-GAAP gross margin, (ii) non-GAAP operating expenses, (iii) non-GAAP operating income, (iv) non-GAAP net income, and (v) non-GAAP diluted earnings per share. These non-GAAP financial measures exclude certain expenses and reflect an additional way of viewing aspects of our operations that, when viewed with the GAAP results and the reconciliations to corresponding GAAP financial measures, provide a more complete understanding of our results of operations and the factors and trends affecting our business. However, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. We use our non-GAAP financial measures internally to better understand and evaluate our business, prepare annual budgets, and in measuring performance for some forms of compensation.

Our non-GAAP financial measures reflect adjustments based on the following items, as well as the related income tax effects:

Amortization of intangibles. Amortization of intangibles generally represents costs incurred by an acquired company or other third party to build value prior to our acquisition of the intangible assets. As such, it is effectively part of the transaction costs of the acquisition rather than ongoing costs of operating our core business. As a result, we believe that exclusion of these costs in presenting non-GAAP financial measures provides management and investors a more effective means of evaluating its historical performance and projected costs and the potential for realizing cost efficiencies within our core business. Amortization of intangibles will recur in future periods.

Stock-based compensation. Although stock-based compensation represents an important part of incentive compensation offered to our key employees, we believe that exclusion of the impact of stock-based compensation assists management and investors in evaluating the period over period performance of our business operations and in comparing our performance with those of our competitors. Stock-based compensation expense will recur in future periods.

Site closure and other restructuring costs. We have recognized expenses related to an organizational restructure including closure and consolidation of certain facilities, as well as severance and related costs. We believe that exclusion of these expenses is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis and relative to our competitors. In this regard, we note that expenses of this type may be incurred in future periods but are generally infrequent in nature.

Patent litigation damages, license fees and royalties related to the Broadcom patents. We have incurred expenses in the form of damages, sunset period royalties and settlement costs as a result of a judgment in a patent litigation proceeding with Broadcom and the related partial settlement and worldwide license agreement executed on July 3, 2012 (the Release Agreement). We believe that exclusion of these cost of sales expenses related to the Broadcom patents is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis and relative to our competitors. In this regard, we note that expenses of this type are generally unrelated to our core business and/or infrequent in nature but will continue in future periods.

Dismissal Agreement and mitigation expenses related to the Broadcom patents. Effective March 30, 2014, we have entered into a Dismissal and Standstill Agreement (Dismissal Agreement) agreeing to pay Broadcom, a non-refundable, non-cancelable dismissal and standstill fee of $5 million. We have recognized mitigation expenses related to the Broadcom patents. We believe that exclusion of these operating expenses related to the Broadcom patents is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis and relative to our competitors. In this regard, we note that expenses of this type are generally unrelated to our core business and/or infrequent in nature but will continue in future periods.

Expenses related to the acquisition of Endace Limited. We have incurred various expenses in connection with our acquisition of Endace Limited including but not limited to legal fees, accounting fees, the mark-up on acquired inventory, severance costs and realized translation loss. We believe that exclusion of these charges is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis and relative to our competitors, as these expenditures do not reflect a continuing cost of operating our current core business. In this regard, we note that expenses of this type relate to the acquisition of an operating business and, as such, are infrequent in nature but may occur in future periods in the event we make a material acquisition.

Expenses related to class action lawsuit. We have incurred expenses related to a class action lawsuit. We believe that exclusion of these expenses is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis and relative to our competitors. In this regard, we note that expenses of this type are infrequent in nature.

IRS NOPA Expenses. We have incurred various legal and accounting expenses related to the receipt and our response to the Notice of Proposed Adjustment (NOPA) received from the Internal Revenue Service in March of 2014. We disagree with the IRS’ proposed adjustments and the basis for its positions, and will administratively appeal to the IRS Appeals Office. We believe that exclusion of these expenses is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis and relative to our competitors. In this regard, we note that expenses of this type are infrequent in nature but will continue in future periods until these audits are resolved.

Accretion of debt discount on convertible senior notes. We have accreted debt discount in connection with the convertible senior notes. We believe that exclusion of this expense is useful to management and investors in evaluating the performance of our ongoing operations on a period-to-period basis and relative to our competitors. In this regard, we note that expenses of this type are generally unrelated to our core business but will continue in future periods until maturity of the convertible senior notes.

Valuation allowance for U.S. federal and state deferred tax assets. The Company has concluded that it is more likely than not that we will be unable to fully utilize the majority of our U.S. federal and state deferred tax assets. As a result, the Company has previously recorded a valuation allowance against those assets to the extent that they cannot be realized through net operating loss carrybacks to prior tax years. We believe that eliminating the impact of a discrete adjustment of this nature and its continuing impact on our effective tax rate is useful to management and investors in evaluating the performance of the Company’s ongoing operations on a period-to-period basis and relative to the Company’s competitors. In this regard, we note that adjustments of this type are generally infrequent in nature.

- - - - - - - - -

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: With the exception of historical information, the statements set forth above, contain forward-looking statements that involve risk and uncertainties. We expressly disclaim any obligation or undertaking to release publicly any updates or changes to these forward-looking statements that may be made to reflect any future events or circumstances. We wish to caution readers that a number of important factors could cause actual results to differ materially from those in the forward-looking statements. These factors include the possibility that all or a substantial portion of the cost savings targeted by us will not be realized on a timely basis or at all even though we expect to incur charges relating to the cost saving initiative and that the share repurchases implemented by us may not be completed in whole or in part or within the expected timeframe. The assumptions on which the cost savings, share repurchase and capital return goals and expectations are based necessarily involve judgments with respect to, among other things, economic, competitive and financial market conditions and the impact of the cost savings initiative on our customers, all of which are difficult or impossible to predict and many of which are beyond the Company’s control. Furthermore, our changes to the membership of our board of directors may not have the desired effect in helping us achieve and implement our business and strategic goals. These factors also include the possibility that we may not realize the anticipated benefits from the acquisition of Endace Limited on a timely basis or at all, and may be unable to integrate the technology, operations and personnel of Endace into our existing operations in a timely and efficient manner. In addition, intellectual property claims, with or without merit, could result in costly litigation, cause product shipment delays, require us to indemnify customers, or require us to enter into royalty or licensing agreements, which may or may not be available. Furthermore, we have in the past obtained, and may be required in the future to obtain, licenses of technology owned by other parties. We cannot be certain that the necessary licenses will be available or that they will be obtainable on commercially reasonable terms. If we were to fail to obtain such royalty or licensing agreements in a timely manner and on reasonable terms, our business, results of operations and financial condition could be materially adversely affected. Lawsuits present inherent risks, any of which could have a material adverse effect on our business, financial condition, or results of operations. Such potential risks include continuing expenses of litigation, loss of patent rights, monetary damages, injunctions against the sale of products incorporating the technology in question, counterclaims, attorneys’ fees, incremental costs associated with product or component redesigns, liabilities to customers under reimbursement agreements or contractual indemnification provisions, and diversion of management’s attention from other business matters. In addition, the fact that the economy generally, and the network connectivity and visibility market segments specifically, have been in a state of uncertainty makes it difficult to determine if past experience is a good guide to the future and makes it impossible to determine if markets will grow or shrink in the short term. Continued weakness in domestic and worldwide macro-economic conditions, currency exchange rate fluctuations, potential disruptions in world credit and equity markets, and the resulting economic uncertainty for our customers, as well as the overall network connectivity and visibility markets, has and could continue to adversely affect our revenues and results of operations. As a result of these uncertainties, we are unable to predict our future results with any accuracy. Other factors affecting these forward-looking statements include but are not limited to the following: faster than anticipated declines in the storage networking market, slower than expected growth of the converged networking market or the failure of our Original Equipment Manufacturer (OEM) customers to successfully incorporate our products into their systems; our dependence on a limited number of customers and the effects of the loss of, decrease in or delays of orders by any such customers, or the failure of such customers to make timely payments; the emergence of new or stronger competitors as a result of consolidation movements in the market; the timing and market acceptance of our products or our OEM customers’ new or enhanced products; costs associated with entry into new areas of the network connectivity and visibility markets; the variability in the level of our backlog and the variable and seasonal procurement patterns of our customers; any inadequacy of our intellectual property protection and the costs of actual or potential third-party claims of infringement and any related indemnity obligations or adverse judgments; the effect of any actual or potential unsolicited offers to acquire us; proxy contests or the activities of activist investors; impairment charges, including but not limited to goodwill and intangible assets; changes in tax rates or legislation; the effects of acquisitions; the effects of terrorist activities, natural disasters, and any resulting disruption in our supply chain or customer purchasing patterns or any other resulting economic or political instability; the highly competitive nature of the markets for our products as well as pricing pressures that may result from such competitive conditions; the effect of rapid migration of customers towards newer, lower cost product platforms; transitions from board or box level to application specific integrated circuit (ASIC) solutions for selected applications; a shift in unit product mix from higher-end to lower-end or mezzanine card products; a faster than anticipated decrease in the average unit selling prices or an increase in the manufactured cost of our products; delays in product development; our reliance on third-party suppliers and subcontractors for components and assembly; our ability to attract and retain key technical personnel; our ability to benefit from our research and development activities as well as government grants related thereto; our dependence on international sales and internationally produced products; changes in accounting standards; and any resulting regulatory changes on our business. These and other factors could cause actual results to differ materially from those in the forward-looking statements and are discussed in our filings with the Securities and Exchange Commission, including our recent filings on Forms 10-K and 10-Q, under the caption “Risk Factors.”

About Emulex

Emulex, a leader in network connectivity, monitoring and management, provides hardware and software solutions for global networks that support enterprise, cloud, government and telecommunications. Emulex’s products enable unrivaled end-to-end application visibility, optimization and acceleration. The Company's I/O connectivity offerings, including its line of ultra high-performance Ethernet and Fibre Channel-based connectivity products, have been designed into server and storage solutions from leading OEMs, including Cisco, Dell, EMC, Fujitsu, Hitachi, HP, Huawei, IBM, NetApp and Oracle, and can be found in the data centers of nearly all of the Fortune 1000. Emulex’s monitoring and management solutions, including its portfolio of network visibility and recording products, provide organizations with complete network performance management at speeds up to 100Gb Ethernet. Emulex is headquartered in Costa Mesa, Calif., and has offices and research facilities in North America, Asia and Europe. For more information about Emulex (NYSE:ELX) please visit http://www.Emulex.com.

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This news release refers to various products and companies by their trade names. In most, if not all, cases these designations are claimed as trademarks or registered trademarks by their respective companies.

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@ThingsExpo Stories
SYS-CON Events announced today that SOA Software, an API management leader, will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. SOA Software is a leading provider of API Management and SOA Governance products that equip business to deliver APIs and SOA together to drive their company to meet its business strategy quickly and effectively. SOA Software’s technology helps businesses to accelerate their digital channels with APIs, drive partner adoption, monetize their assets, and achieve a...
SYS-CON Events announced today that Aria Systems, the recurring revenue expert, has been named "Bronze Sponsor" of SYS-CON's 15th International Cloud Expo®, which will take place on November 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Aria Systems helps leading businesses connect their customers with the products and services they love. Industry leaders like Pitney Bowes, Experian, AAA NCNU, VMware, HootSuite and many others choose Aria to power their recurring revenue business and deliver exceptional experiences to their customers.
SYS-CON Events announced today that AgilePoint, the leading provider of Microsoft-centric Business Process Management software, will exhibit at SYS-CON's 2nd International @ThingsExpo which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. AgilePoint is the leading provider of Microsoft-based Business Process Management (BPM) software products, has 1,300+ on-premise and cloud deployments in 25+ countries and provides the same advanced BPM feature set as J2EE vendors like IBM and Appian for the Microsoft .NET native environment. AgilePoint customer...
The Internet of Things (IoT) promises to evolve the way the world does business; however, understanding how to apply it to your company can be a mystery. Most people struggle with understanding the potential business uses or tend to get caught up in the technology, resulting in solutions that fail to meet even minimum business goals. In his session at Internet of @ThingsExpo, Jesse Shiah, CEO / President / Co-Founder of AgilePoint Inc., will show what is needed to leverage the IoT to transform your business. He will discuss opportunities and challenges ahead for the IoT from a market and tec...
SYS-CON Events announced today that Utimaco will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Utimaco is a leading manufacturer of hardware based security solutions that provide the root of trust to keep cryptographic keys safe, secure critical digital infrastructures and protect high value data assets. Only Utimaco delivers a general-purpose hardware security module (HSM) as a customizable platform to easily integrate into existing software solutions, embed business logic and build s...
One of the biggest challenges when developing connected devices is identifying user value and delivering it through successful user experiences. In his session at Internet of @ThingsExpo, Mike Kuniavsky, Principal Scientist, Innovation Services at PARC, will describe an IoT-specific approach to user experience design that combines approaches from interaction design, industrial design and service design to create experiences that go beyond simple connected gadgets to create lasting, multi-device experiences grounded in people’s real needs and desires.
Samsung VP Jacopo Lenzi, who headed the company's recent SmartThings acquisition under the auspices of Samsung's Open Innovaction Center (OIC), answered a few questions we had about the deal. This interview was in conjunction with our interview with SmartThings CEO Alex Hawkinson. IoT Journal: SmartThings was developed in an open, standards-agnostic platform, and will now be part of Samsung's Open Innovation Center. Can you elaborate on your commitment to keep the platform open? Jacopo Lenzi: Samsung recognizes that true, accelerated innovation cannot be driven from one source, but requires a...
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at Internet of @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, will discuss how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money! Speaker Bio: Esmeralda Swartz, CMO of MetraTech, has spent 16 years as a marketing, product management, and busin...
SYS-CON Events announced today that TeleStax, the main sponsor of Mobicents, will exhibit at Internet of @ThingsExpo, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. TeleStax provides Open Source Communications software and services that facilitate the shift from legacy SS7 based IN networks to IP based LTE and IMS networks hosted on private (on-premise), hybrid or public clouds. TeleStax products include Restcomm, JSLEE, SMSC Gateway, USSD Gateway, SS7 Resource Adaptors, SIP Servlets, Rich Multimedia Services, Presence Services/RCS, Diame...
Things are being built upon cloud foundations to transform organizations. This CEO Power Panel at 15th Cloud Expo, moderated by Roger Strukhoff, Cloud Expo and @ThingsExpo conference chair, will address the big issues involving these technologies and, more important, the results they will achieve. How important are public, private, and hybrid cloud to the enterprise? How does one define Big Data? And how is the IoT tying all this together?
We certainly live in interesting technological times. And no more interesting than the current competing IoT standards for connectivity. Various standards bodies, approaches, and ecosystems are vying for mindshare and positioning for a competitive edge. It is clear that when the dust settles, we will have new protocols, evolved protocols, that will change the way we interact with devices and infrastructure. We will also have evolved web protocols, like HTTP/2, that will be changing the very core of our infrastructures. At the same time, we have old approaches made new again like micro-services...
The only place to be June 9-11 is Cloud Expo & @ThingsExpo 2015 East at the Javits Center in New York City. Join us there as delegates from all over the world come to listen to and engage with speakers & sponsors from the leading Cloud Computing, IoT & Big Data companies. Cloud Expo & @ThingsExpo are the leading events covering the booming market of Cloud Computing, IoT & Big Data for the enterprise. Speakers from all over the world will be hand-picked for their ability to explore the economic strategies that utility/cloud computing provides. Whether public, private, or in a hybrid form, clo...
SYS-CON Events announces a new pavilion on the Cloud Expo floor where WebRTC converges with the Internet of Things. Pavilion will showcase WebRTC and the Internet of Things. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices--computers, smartphones, tablets, and sensors – connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades.
SYS-CON Events announced today that Gridstore™, the leader in software-defined storage (SDS) purpose-built for Windows Servers and Hyper-V, will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Gridstore™ is the leader in software-defined storage purpose built for virtualization that is designed to accelerate applications in virtualized environments. Using its patented Server-Side Virtual Controller™ Technology (SVCT) to eliminate the I/O blender effect and accelerate applications Gridsto...
SYS-CON Events announced today that Red Hat, the world's leading provider of open source solutions, will exhibit at Internet of @ThingsExpo, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Red Hat is the world's leading provider of open source software solutions, using a community-powered approach to reliable and high-performing cloud, Linux, middleware, storage and virtualization technologies. Red Hat also offers award-winning support, training, and consulting services. As the connective hub in a global network of enterprises, partners, a...
As the Internet of Things unfolds, mobile and wearable devices are blurring the line between physical and digital, integrating ever more closely with our interests, our routines, our daily lives. Contextual computing and smart, sensor-equipped spaces bring the potential to walk through a world that recognizes us and responds accordingly. We become continuous transmitters and receivers of data. In his session at Internet of @ThingsExpo, Andrew Bolwell, Director of Innovation for HP’s Printing and Personal Systems Group, will discuss how key attributes of mobile technology – touch input, senso...
The Internet of Things (IoT) is making everything it touches smarter – smart devices, smart cars and smart cities. And lucky us, we’re just beginning to reap the benefits as we work toward a networked society. However, this technology-driven innovation is impacting more than just individuals. The IoT has an environmental impact as well, which brings us to the theme of this month’s #IoTuesday Twitter chat. The ability to remove inefficiencies through connected objects is driving change throughout every sector, including waste management. BigBelly Solar, located just outside of Boston, is trans...
Connected devices and the Internet of Things are getting significant momentum in 2014. In his session at Internet of @ThingsExpo, Jim Hunter, Chief Scientist & Technology Evangelist at Greenwave Systems, will examine three key elements that together will drive mass adoption of the IoT before the end of 2015. The first element is the recent advent of robust open source protocols (like AllJoyn and WebRTC) that facilitate M2M communication. The second is broad availability of flexible, cost-effective storage designed to handle the massive surge in back-end data in a world where timely analytics...
Internet of @ThingsExpo Silicon Valley announced on Thursday its first 12 all-star speakers and sessions for its upcoming event, which will take place November 4-6, 2014, at the Santa Clara Convention Center in California. @ThingsExpo, the first and largest IoT event in the world, debuted at the Javits Center in New York City in June 10-12, 2014 with over 6,000 delegates attending the conference. Among the first 12 announced world class speakers, IBM will present two highly popular IoT sessions, which will take place November 4-6, 2014 at the Santa Clara Convention Center in Santa Clara, Calif...
From a software development perspective IoT is about programming "things," about connecting them with each other or integrating them with existing applications. In his session at @ThingsExpo, Yakov Fain, co-founder of Farata Systems and SuranceBay, will show you how small IoT-enabled devices from multiple manufacturers can be integrated into the workflow of an enterprise application. This is a practical demo of building a framework and components in HTML/Java/Mobile technologies to serve as a platform that can integrate new devices as they become available on the market.