QLogic Corp. reports record second quarter results.

COSTA MESA, Calif.--(BUSINESS WIRE)--Oct. 16, 1996--QLogic Corp. (NASDAQ:QLGC), a leader in the I/O industry, on Wednesday announced that revenues for its second fiscal quarter ended Sept. 29, 1996, rose to a record $16.7 million, up 28 percent compared with the $13.1 million reported for the same quarter a year ago.

Second quarter net income grew 450 percent to a record $1.2 million, or 20 cents per share, compared to the $214,000, or 4 cents per share, reported a year ago.

"Revenues from the host computer sector expanded more than 80 percent from the year ago period, driven by increasing demand from our workstation and UNIX/NT server OEMs. Our peripheral sector also continued to record sequential and year-to-year growth," noted H.K. Desai, the company's president and chief executive officer.

"Second quarter gross margin rose to 42.5 percent from 39.1 percent in the first fiscal quarter and from 35.3 percent for the same period a year ago, benefiting from improved manufacturing efficiencies. While the company elected to increase its investment in engineering and development in the second quarter to a record level of $2.5 million, or 15.2 percent of revenues, operating profit also rose from the same period a year ago and from the prior quarter, reaching 11.2 percent of revenue."

For the first half of fiscal 1997, revenues expanded 43 percent to $32.5 million, compared with the $22.7 million reported for the same period a year ago. First half net income grew to $2.1 million, or a record 36 cents per share, compared with the loss of $510,000, or 9 cents per share, reported a year ago.

"Second quarter bookings grew 10 percent sequentially, outpacing shipments," continued Desai. "Demand for QLogic's high-performance I/O solutions rose as UltraSCSI-equipped disk drives became available during the last quarter, and we initiated shipments to a significant new OEM in the workstation sector."

Many of QLogic's design wins over the past year are based on the company's new-generation 40 Megabyte per second UltraSCSI technology, that provides a virtually transparent migration path from today's 20 Megabyte per second FastSCSI standard. During the second quarter, QLogic also captured several new SCSI design wins in the host and peripheral sectors.

QLogic is a leading designer and supplier of semiconductor and board-level I/O (input/output) products. The company's products provide high performance connections between a computer and its attached peripherals. Historically, QLogic has targeted the high performance sector of the I/O market, focusing on the SCSI (Small Computer Systems Interface) standard. The company's I/O expertise extends to emerging standards, including Fibre Channel, which are currently experiencing early industry acceptance.

With the exception of historical information, the statements set forth above include forward-looking statements that involve risks and uncertainties. The company wishes to caution readers that a number of important factors could cause actual results to differ materially from those in the forward-looking statements.

Those factors include the company's ability to develop and produce new technologies; the timing of volume deployment of UltraSCSI products in the storage industry; new and changing technologies; a change in semiconductor foundry conditions; fluctuations or cancellations in orders from OEM customers; the company's ability to compete effectively with other companies; and cancellation of OEM products associated with design wins.

These and other factors which could cause actual results to differ materially from those in the forward-looking statements are also discussed in the company's filing with the Securities and Exchange Commission, including its recent filings on Form 10-K and Form 10-Q.

More information on QLogic is available from the company's SEC filings. Contact QLogic Corp., 3545 Harbor Blvd., Costa Mesa, Calif. 92626. Sales 800/662-4471. Corporate 714/438-2200. World Wide Web http://www.qlc.com. -0-

                         QLOGIC CORPORATION
              CONDENSED CONSOLIDATED BALANCE SHEETS
                           (Unaudited)
                          (in thousands)


                              ASSETS

                                    Sept. 29, 1996     March 31, 1996

Current assets:
 Cash                                $  9,594           $  8,414
 Accounts and notes receivable,
   net                                  8,317              7,033
 Inventories, net                       6,219              6,670
 Deferred income taxes                    794                648
 Prepaid expenses and other
  current assets                          320                239
      Total current assets             25,244             23,004

 Property and equipment, net            4,533              5,520
 Other assets                             639                 15
                                     $ 30,416           $ 28,539

-0-


                LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Accounts payable                    $  4,527           $  6,177
 Accrued expenses                       5,095              3,218
 Current installments of capitalized
  lease obligations                       240                275
      Total current liabilities         9,862              9,670

 Capitalized lease obligations,
  excluding current installments          461                576
 Other non-current liabilities            924              2,016

 Total stockholders' equity            19,169             16,277

                                     $ 30,416           $ 28,539

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                         QLOGIC CORPORATION
          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                             (Unaudited)
          (in thousands, except share and per share data)

                        Three Months Ended         Six Months Ended
                        Sept. 29,   Oct. 1,       Sept. 29,   Oct. 1
                          1996       1995           1996       1995

Net revenues            $16,725     $13,105       $32,465     $22,675
Cost of sales             9,622       8,476        19,207      14,471
    Gross profit          7,103       4,629        13,258       8,204

Operating expenses:
 Engineering and
   development            2,536       1,672         4,625       3,325
 Selling and marketing    1,466       1,642         2,823       3,631
 General and
   administrative         1,229         940         2,346       2,035

    Total operating
      expenses            5,231       4,254         9,794       8,991

Operating income (loss)   1,872         375         3,464        (787)
    Interest income
      (expense)              92         (15)          151         (33)

Income (loss) before
 income taxes             1,964         360         3,615        (820)

    Income tax
      provision (benefit)   786         146         1,470        (310)

Net income (loss)       $ 1,178     $   214       $ 2,145     $  (510)

Earnings (loss) per
 share                  $  0.20     $  0.04       $  0.36     $ (0.09)

Weighted-average number
 of common and common
 equivalent shares    6,027,500   5,604,823     6,029,306   5,552,458

CONTACT: QLogic Corp., Costa Mesa

Thomas R. Anderson, Vice President, CFO

714/668-5092 (Phone)

714/668-5090 (Fax)

Michael R. Manning, Secretary & Treasurer

714/668-5344 (Phone)

714/668-5384 (Fax)