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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-K
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT of 1934
 For the fiscal year ended March 29, 2009
 Commission File No. 0-23298
 QLogic Corporation
 (Exact name of registrant as specified in its charter)
 Delaware
    
    33-0537669(State of incorporation)
    
    (I.R.S. Employer Identification No.)26650 Aliso Viejo ParkwayAliso Viejo, California
    
    92656(Address of principal executive offices)
    
    (Zip Code)
 (949) 389-6000  (Registrants telephone number, including area code)
 
 Securities registered pursuant to Section 12(b) of the Act:
 Title of each class
    
    Name of each exchange on which registeredCommon Stock, $0.001 Par Value
    
    The NASDAQ Stock Market, LLC
 Securities registered pursuant to Section 12(g) of the Act:
None  (Title of class)
 
 þ o
 o þ
 þ o
 o o
 o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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TABLE OF CONTENTS  PART IItem 1. BusinessItem 1A. Risk FactorsItem 1B. Unresolved Staff CommentsItem 2. PropertiesItem 3. Legal ProceedingsItem 4. Submission of Matters to a Vote of Security HoldersPART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesItem 6. Selected Financial DataItem 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 7a. Quantitative and Qualitative Disclosures About Market RiskItem 8. Financial Statements and Supplementary DataItem 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureItem 9A. Controls and ProceduresItem 9B. Other InformationPART IIIItem 10. Directors, Executive Officers and Corporate GovernanceItem 11. Executive CompensationItem 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13. Certain Relationships and Related Transactions, and Director IndependenceItem 14. Principal Accountant Fees and ServicesPART IVItem 15. Exhibits and Financial Statement SchedulesSIGNATURESEXHIBIT INDEXEX-21.1EX-23.1EX-31.1EX-31.2EX-32    Table of Contents  
 PART I
 
 Item 1. Business
 Introduction
    Overview
 ®
 Customers, Markets and Applications
   
    
    General business information technology requirements;
    
    Data warehousing, data mining and online transaction processing;
    
    Media-rich environments such as film/video, broadcast, medical imaging,
computer-aided design, or CAD, and computer-aided manufacturing, or CAM;
    
    Server clustering, high-speed backup and data replication; and
    
    Research and scientific applications.
  2




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Our Networking Solutions
     Sales and Marketing
     3




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Engineering and Development
    Backlog
  Competition
  
    
    time-to-market;
    
    features and functionality;
    
    product quality, reliability and performance;
    
    price;
    
    new product innovation;
    
    customer relationships;
    
    design capabilities;
    
    customer service and technical support; and
    
    interoperability of components in the storage and server networking infrastructure.
  4




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Manufacturing
      Intellectual Property
  5




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Environment
    Working Capital
  Employees
  6




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Item 1A. Risk Factors
  The current economic downturn has resulted in a decrease in IT spending levels and could result in
further deterioration of our revenues and operating results.
    Our operating results may fluctuate in future periods, which could cause our stock price to
decline.
   
    
    the timing, size and mix of orders from customers;
    
    gain or loss of significant customers;
    
    customer policies pertaining to desired inventory levels of our products;
    
    negotiated rebates and extended payment terms;
    
    changes in our ability to anticipate in advance the mix of customer orders;
    
    levels of inventory our customers require us to maintain in our inventory hub locations;
    
    the availability and sale of new products;
 7




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
    
    shifts or changes in technology;
    
    changes in the mix or average selling prices of our products;
    
    variations in manufacturing capacities, efficiencies and costs;
    
    the availability and cost of components, including silicon chips;
    
    variations in product development costs, especially related to advanced technologies;
    
    variations in operating expenses;
    
    changes in effective income tax rates, including those resulting from changes in tax laws;
    
    our ability to timely produce products that comply with new environmental restrictions or
related requirements of our OEM customers;
    
    actual events, circumstances, outcomes and amounts differing from judgments, assumptions and
estimates used in determining the value of certain assets (including the amounts of related
valuation allowances), liabilities and other items reflected in our consolidated financial
statements;
    
    the timing of revenue recognition and revenue deferrals;
    
    gains or losses related to our investment securities;
    
    changes in accounting rules;
    
    changes in our accounting policies;
    
    general economic and other conditions affecting the timing of customer orders and capital
spending; or
    
    changes in the global economy that impact IT spending.
  We expect gross margin to vary over time, and our recent level of gross margin may not be
sustainable.
  
    
    changes in product mix;
    
    increased price competition;
    
    introduction of new products by us or our competitors, including products with advantages
in price, performance or features;
    
    our inability to reduce manufacturing-related or component costs;
    
    entry into new markets or the acquisition of new businesses;
    
    amortization and impairments of purchased intangible assets;
    
    sales discounts;
 8




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
    
    increases in material, labor or overhead costs;
    
    excess inventory and inventory holding charges;
    
    changes in distribution channels;
    
    increased warranty costs; and
    
    how well we execute our business strategy and operating plans.
 Our stock price may be volatile.
  
    
    differences between our actual revenues and operating results and the published
expectations of analysts;
    
    quarterly fluctuations in our revenues and operating results;
    
    introduction of new products or changes in product pricing policies by our competitors or
us;
    
    conditions in the markets in which we operate;
    
    changes in market projections by industry forecasters;
    
    changes in estimates of our earnings by industry analysts;
    
    operating results or forecasts of our major customers or competitors;
    
    overall market conditions for high technology equities;
    
    rumors or dissemination of false information; and
    
    general economic and geopolitical conditions.
  Our business is dependent, in large part, on the continued growth of the networking markets that we
serve and if these markets do not continue to develop, our business will suffer.
  
    
    educate potential OEM customers, distributors, resellers, system integrators, storage system
providers and end-user organizations about the benefits of our products;
    
    maintain and enhance our relationships with OEM customers, distributors, resellers, system
integrators and storage system providers;
    
    predict and base our products on standards which ultimately become industry standards; and
    
    achieve interoperability between our products and other components from diverse vendors.
 9




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Our business could be adversely affected by the broad adoption of server virtualization technology.
  Our business could be adversely affected by a significant increase in the market acceptance of
blade servers.
  Our financial condition will be materially harmed if we do not maintain and gain market acceptance
of our products.
  
    
    enhance our current products and develop and introduce in a timely manner new products that
keep pace with technological developments and industry standards;
    
    compete effectively on the basis of price and performance; and
    
    adequately address OEM and end-user customer requirements and achieve market acceptance.
   We depend on a small number of customers, and any decrease in revenues or cash flows from any one
of our major customers could adversely affect our results of operations and cause our stock price
to decline.
   10




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Our business may be subject to seasonal fluctuations and uneven sales patterns in the future.
  
    
    the tendency of our customers to close a disproportionate percentage of their sales
transactions in the last month, weeks and days of each quarter;
    
    spikes in sales during the fourth quarter of each calendar year that some of our customers
experience; and
    
    differences between our quarterly fiscal periods and the fiscal periods of our customers.
  Competition within the markets for our products is intense and includes various established
competitors.
   We expect the pricing of our products to continue to decline, which could reduce our revenues,
gross margins and profitability.
  11




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Our distributors may not adequately stock and sell our products and their reseller customers may
purchase products from our competitors, which could negatively affect our results of operations.
   We are dependent on sole source and limited source suppliers for certain key components.
  We are dependent on worldwide third-party subcontractors and contract manufacturers.
   Our investment securities portfolio could experience a decline in market value which could
materially and adversely affect our financial results.
  12




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Our products are complex and may contain undetected software or hardware errors that could lead to
an increase in our costs, reduce our net revenues or damage our reputation.
  The migration of our customers toward new products could adversely affect our results of
operations.
   Unanticipated changes in our tax provisions or adverse outcomes resulting from examination of our
income tax returns could adversely affect our results of operations.
  13




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Environmental compliance costs could adversely affect our results of operations.
  Because we have operations in foreign countries and depend on foreign customers and suppliers, we
are subject to international economic, currency, regulatory, political and other risks that could
harm our business, financial condition and results of operations.
  
    
    a greater difficulty of administering and managing our business globally;
    
    compliance with multiple and potentially conflicting regulatory requirements, such as import
or export requirements, tariffs and other barriers;
    
    less effective intellectual property protections;
    
    potentially longer accounts receivable collection cycles;
    
    currency fluctuations;
    
    overlapping or differing tax structures;
    
    potential restrictions on transferring funds between countries and difficulties associated
with repatriating cash generated or held outside of the U.S. in a tax-efficient manner;
    
    political and economic instability, including terrorism and war; and
    
    general trade restrictions.
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We may engage in mergers, acquisitions and strategic investments and these activities may adversely
affect our results of operations and stock price.
  
    
    the failure of markets for the products of acquired companies to develop as expected;
    
    uncertainties in identifying and pursuing target companies;
    
    difficulties in the assimilation of the operations, technologies and products of the acquired
companies;
    
    the existence of unknown defects in acquired companies products or assets that may not be
identified due to the inherent limitations involved in the due diligence process of an
acquisition;
    
    the diversion of managements attention from other business concerns;
    
    risks associated with entering markets or conducting operations with which we have no or
limited direct prior experience;
    
    risks associated with assuming the legal obligations of acquired companies;
    
    risks related to the effect that acquired companies internal control processes might have on
our financial reporting and managements report on our internal control over financial
reporting;
    
    the potential loss of, or impairment of our relationships with, current customers or failure
to retain the acquired companies customers;
    
    the potential loss of key employees of acquired companies; and
    
    the incurrence of significant exit charges if products or technologies acquired in business
combinations are unsuccessful.
   15




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If we are unable to attract and retain key personnel, we may not be able to sustain or grow our
business.
   We may experience difficulties in transitioning to smaller geometry process technologies.
  Our proprietary rights may be inadequately protected and difficult to enforce.
  Disputes relating to claimed infringement of intellectual property rights may adversely affect our
business.
  16




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Dependence on third-party technology could adversely affect our business.
  If we fail to carefully manage the use of open source software in our products, we may be
required to license key portions of our products on a royalty-free basis or expose key parts of
source code.
  Our business could be materially adversely affected by changes in regulations or standards
regarding energy use of our products.
  Computer viruses and other forms of tampering with our computer systems or servers may disrupt our
operations and adversely affect our results of operations.
  Our facilities and the facilities of our suppliers and customers are located in regions that are
subject to natural disasters.
  17




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Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
  
 Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
  18




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PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
 Principal Market and Prices
  Sales PricesFiscal 2009
    
    High
    
    LowFirst Quarter
    
    $
    16.84
    
    
    $
    14.57Second Quarter
    
    
    20.21
    
    
    
    13.64Third Quarter
    
    
    16.37
    
    
    
    8.69Fourth Quarter
    
    
    13.90
    
    
    
    8.82
 Sales PricesFiscal 2008
    
    High
    
    LowFirst Quarter
    
    $
    18.23
    
    
    $
    16.19Second Quarter
    
    
    17.97
    
    
    
    11.46Third Quarter
    
    
    15.78
    
    
    
    12.75Fourth Quarter
    
    
    16.66
    
    
    
    12.04
 Number of Common Stockholders
  Dividends
  Recent Sales of Unregistered Securities
  Issuer Purchases of Equity Securities
  Total Number of
    
    Approximate DollarShares Purchased
    
    Value of Shares thatTotal Number of
    
    Average Price
    
    as Part of Publicly
    
    May Yet be PurchasedPeriod
    
    Shares Purchased
    
    Paid per Share
    
    Announced Plans
    
    Under the PlanDecember 29, 2008  January 25, 2009
    
    
    1,257,422
    
    
    $
    12.83
    
    
    
    1,257,422
    
    
    $
    292,798,000January 26, 2009  February 22, 2009
    
    
    931,115
    
    
    $
    11.17
    
    
    
    931,115
    
    
    $
    282,399,000February 23, 2009  March 29, 2009
    
    
    1,222,545
    
    
    $
    10.21
    
    
    
    1,222,545
    
    
    $
    269,917,000Total
    
    
    3,411,082
    
    
    $
    11.44
    
    
    
    3,411,082
    
    
    $
    269,917,000
  19




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Stockholder Return Performance
   COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURNS*
AMONG QLOGIC CORPORATION, THE STANDARD & POORS 500 INDEX
AND THE NASDAQ COMPUTER INDEX
 
 Cumulative Total Return3/28/04
    
    4/3/05
    
    4/2/06
    
    4/1/07
    
    3/30/08
    
    3/29/09QLogic Corporation
    
    $
    100.00
    
    
    $
    96.16
    
    
    $
    92.30
    
    
    $
    81.09
    
    
    $
    73.12
    
    
    $
    55.90S&P 500 Index
    
    
    100.00
    
    
    
    106.69
    
    
    
    119.20
    
    
    
    133.31
    
    
    
    126.54
    
    
    
    78.34NASDAQ Computer Index
    
    
    100.00
    
    
    
    102.19
    
    
    
    115.70
    
    
    
    122.39
    
    
    
    117.40
    
    
    
    82.40
 
 *
    
    $100 invested on 3/28/04 in stock or 3/31/04 in index, including reinvestment of dividends.
Indexes calculated on month-end basis. 20




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Item 6. Selected Financial Data
  Fiscal Year Ended (1) (2)March 29,
    
    
    March 30,
    
    
    April 1,
    
    
    April 2,
    
    
    April 3,2009
    
    
    2008
    
    
    2007 (3)
    
    
    2006 (4)
    
    
    2005(In thousands, except per share amounts)Statement of Operations DataNet revenues
    
    $
    633,862
    
    
    $
    597,866
    
    
    $
    586,697
    
    
    $
    494,077
    
    
    $
    428,719Cost of revenues
    
    
    210,075
    
    
    
    205,959
    
    
    
    191,982
    
    
    
    144,246
    
    
    
    121,074Gross profit
    
    
    423,787
    
    
    
    391,907
    
    
    
    394,715
    
    
    
    349,831
    
    
    
    307,645Operating expenses:Engineering and development
    
    
    133,252
    
    
    
    134,668
    
    
    
    135,315
    
    
    
    89,753
    
    
    
    82,791Sales and marketing
    
    
    86,959
    
    
    
    84,166
    
    
    
    86,731
    
    
    
    64,416
    
    
    
    54,582General and administrative
    
    
    32,639
    
    
    
    34,049
    
    
    
    31,044
    
    
    
    17,295
    
    
    
    16,659Special charges
    
    
    4,063
    
    
    
    5,328
    
    
    
    
    
    
    
    
    
    
    
    Purchased in-process research and development
    
    
    
    
    
    
    
    
    
    
    3,710
    
    
    
    10,510
    
    
    
    Total operating expenses
    
    
    256,913
    
    
    
    258,211
    
    
    
    256,800
    
    
    
    181,974
    
    
    
    154,032Operating income
    
    
    166,874
    
    
    
    133,696
    
    
    
    137,915
    
    
    
    167,857
    
    
    
    153,613Interest and other income, net
    
    
    2,134
    
    
    
    14,024
    
    
    
    16,872
    
    
    
    32,627
    
    
    
    17,873Income from continuing operations before income taxes
    
    
    169,008
    
    
    
    147,720
    
    
    
    154,787
    
    
    
    200,484
    
    
    
    171,486Income taxes
    
    
    60,219
    
    
    
    51,510
    
    
    
    49,369
    
    
    
    78,653
    
    
    
    60,071Income from continuing operations
    
    
    108,789
    
    
    
    96,210
    
    
    
    105,418
    
    
    
    121,831
    
    
    
    111,415Income from discontinued operations, net of income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    161,757
    
    
    
    46,181Net income
    
    $
    108,789
    
    
    $
    96,210
    
    
    $
    105,418
    
    
    $
    283,588
    
    
    $
    157,596Income from continuing operations per share:Basic
    
    $
    0.85
    
    
    $
    0.68
    
    
    $
    0.66
    
    
    $
    0.71
    
    
    $
    0.60Diluted
    
    $
    0.85
    
    
    $
    0.67
    
    
    $
    0.66
    
    
    $
    0.70
    
    
    $
    0.59Income from discontinued operations per share:Basic
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    0.95
    
    
    $
    0.25Diluted
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    0.93
    
    
    $
    0.25Net income per share:Basic
    
    $
    0.85
    
    
    $
    0.68
    
    
    $
    0.66
    
    
    $
    1.66
    
    
    $
    0.85Diluted
    
    $
    0.85
    
    
    $
    0.67
    
    
    $
    0.66
    
    
    $
    1.63
    
    
    $
    0.84Balance Sheet DataCash and cash equivalents and investment securities
    
    $
    378,269
    
    
    $
    376,409
    
    
    $
    543,922
    
    
    $
    665,640
    
    
    $
    812,338Total assets
    
    
    780,290
    
    
    
    810,966
    
    
    
    971,359
    
    
    
    937,707
    
    
    
    1,026,340Total stockholders equity
    
    
    626,545
    
    
    
    665,916
    
    
    
    874,531
    
    
    
    859,354
    
    
    
    956,183
 
 (1)
    
    The statement of operations data for all periods presented reflects the operating results of
the hard disk drive controller and tape drive controller business as discontinued operations.(2)
    
    The per share amounts for all periods presented reflect the effects of the two-for-one split
of our common stock in March 2006.(3)
    
    In fiscal 2007, the Company adopted Statement of Financial Accounting Standards No. 123
(revised 2004), Share-Based Payment. In addition, the Company completed the acquisitions of
PathScale, Inc. and SilverStorm Technologies, Inc. during fiscal 2007.(4)
    
    In fiscal 2006, the Company completed the acquisition of Troika Networks, Inc. 21




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Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 This Managements Discussion and Analysis of Financial Condition and Results of Operations
should be read in conjunction with our audited consolidated financial statements and related notes.
In this discussion and elsewhere in this report, we make forward-looking statements. These
forward-looking statements are made in reliance upon safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements include, without
limitation, descriptions of our expectations regarding future trends affecting our business and
other statements regarding future events or our objectives, goals, strategies, beliefs and
underlying assumptions that are other than statements of historical fact. When used in this report,
the words anticipates, believes, can, continue, could, estimates, expects, intends,
may, plans, potential, predicts, should, will and similar expressions, or the negative
of such expressions, are intended to identify these forward-looking statements. Our actual results
could differ materially from those anticipated in these forward-looking statements as a result of
several factors, including, but not limited to those factors set forth and discussed in Part I,
Item 1A Risk Factors and elsewhere in this report. In light of the significant uncertainties
inherent in the forward-looking information included in this report, the inclusion of this
information should not be regarded as a representation by us or any other person that our
objectives or plans will be achieved. We undertake no obligation to update or revise these
forward-looking statements, whether as a result of new information, future events or otherwise.
 Overview
 ®
   Fiscal Year and Fourth Quarter Financial Highlights and Other Information
   
    
    Net revenues for the fourth quarter of fiscal 2009 was $130.5 million compared to $159.7
million in the fourth quarter of fiscal 2008. Revenues from Host Products were $88.4
million compared to $110.3 million in the same quarter last year and revenues from Network
Products were $25.1 million compared to $27.5 million in the same quarter of fiscal 2008.
    
    Gross profit as a percentage of net revenues of 65.9% for the fourth quarter of fiscal
2009 compared to 66.3% for the fourth quarter of fiscal 2008.
    
    Operating income as a percentage of net revenues was 18.3% for the fourth quarter of
fiscal 2009 compared to 24.9% in the fourth quarter of fiscal 2008.
    
    Net income was $19.2 million, or $0.16 per diluted share, in the fourth quarter of fiscal
2009 compared to $22.8 million, or $0.17 per diluted share, in the fourth quarter of fiscal
2008.
 22




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
    
    Cash, cash equivalents and investment securities of $378.3 million at March 29, 2009
increased from $376.4 million at March 30, 2008.
    
    Accounts receivable was $68.5 million as of March 29, 2009, and decreased from $81.6
million as of March 30, 2008. Days sales outstanding (DSO) in receivables as of March 29,
2009 was 48 days compared to 47 days as of March 30, 2008.
    
    Inventories were $40.3 million as of March 29, 2009, compared to $27.5 million as of
March 30, 2008. Our annualized inventory turns in the fourth quarter of fiscal 2009 were
4.4 turns compared to 7.8 turns in the fourth quarter of fiscal 2008.
  Results of Operations
 Net Revenues
  2009
    
    
    2008
    
    
    2007(Dollars in millions)Net revenues:Host Products
    
    $
    440.9
    
    
    $
    437.9
    
    
    $
    410.6Network Products
    
    
    117.6
    
    
    
    101.8
    
    
    
    88.3Silicon Products
    
    
    61.4
    
    
    
    44.3
    
    
    
    76.7Royalty and Service
    
    
    14.0
    
    
    
    13.9
    
    
    
    11.1Total net revenues
    
    $
    633.9
    
    
    $
    597.9
    
    
    $
    586.7Percentage of net revenues:Host Products
    
    
    70
    %
    
    
    73
    %
    
    
    70
    %Network Products
    
    
    18
    
    
    
    17
    
    
    
    15Silicon Products
    
    
    10
    
    
    
    8
    
    
    
    13Royalty and Service
    
    
    2
    
    
    
    2
    
    
    
    2Total net revenues
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    23




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2009
    
    2008
    
    2007Hewlett-Packard
    
    
    21
    %
    
    
    20
    %
    
    
    16
    %IBM
    
    
    18
    %
    
    
    16
    %
    
    
    17
    %Sun Microsystems
    
    
    11
    %
    
    
    11
    %
    
    
    12
    %
   2009
    
    
    2008
    
    
    2007(In millions)United States
    
    $
    303.7
    
    
    $
    305.2
    
    
    $
    314.3Europe, Middle East and Africa
    
    
    154.5
    
    
    
    144.6
    
    
    
    132.0Asia-Pacific and Japan
    
    
    139.9
    
    
    
    113.1
    
    
    
    111.1Rest of world
    
    
    35.8
    
    
    
    35.0
    
    
    
    29.3$
    633.9
    
    
    $
    597.9
    
    
    $
    586.7
  Gross Profit
  2009
    
    2008
    
    2007(Dollars in millions)Gross profit
    
    $
    423.8
    
    
    $
    391.9
    
    
    $
    394.7Percentage of net revenues
    
    
    66.9
    %
    
    
    65.6
    %
    
    
    67.3
    %
 24




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##### Table of Contents



Operating Expenses
  2009
    
    
    2008
    
    
    2007(Dollars in millions)Operating expenses:Engineering and development
    
    $
    133.2
    
    
    $
    134.7
    
    
    $
    135.3Sales and marketing
    
    
    87.0
    
    
    
    84.2
    
    
    
    86.8General and administrative
    
    
    32.6
    
    
    
    34.0
    
    
    
    31.0Special charges
    
    
    4.1
    
    
    
    5.3
    
    
    
    Purchased in-process research and development
    
    
    
    
    
    
    
    
    
    
    3.7Total operating expenses
    
    $
    256.9
    
    
    $
    258.2
    
    
    $
    256.8Percentage of net revenues:Engineering and development
    
    
    21.0
    %
    
    
    22.5
    %
    
    
    23.1
    %Sales and marketing
    
    
    13.7
    
    
    
    14.1
    
    
    
    14.8General and administrative
    
    
    5.2
    
    
    
    5.7
    
    
    
    5.3Special charges
    
    
    0.6
    
    
    
    0.9
    
    
    
    Purchased in-process research and development
    
    
    
    
    
    
    
    
    
    
    0.6Total operating expenses
    
    
    40.5
    %
    
    
    43.2
    %
    
    
    43.8
    %
 Engineering and Development.
   25




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##### Table of Contents



Sales and Marketing.
   General and Administrative.
  Special Charges.
   Purchased In-Process Research and Development.
   26




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##### Table of Contents



Interest and Other Income, Net
  2009
    
    
    2008
    
    
    2007(In millions)Interest income
    
    $
    11.3
    
    
    $
    20.6
    
    
    $
    25.7Impairment of investment securities
    
    
    (16.4
    )
    
    
    (6.9
    )
    
    
    (8.1
    )Gain on sales of available-for-sale securities
    
    
    2.7
    
    
    
    0.8
    
    
    
    0.2Loss on sales of available-for-sale securities
    
    
    (1.2
    )
    
    
    (0.2
    )
    
    
    (1.8
    )Gain on sale of shares of a publicly-traded company
    
    
    2.1
    
    
    
    
    
    
    
    Gain related to put options
    
    
    9.3
    
    
    
    
    
    
    
    Loss on trading securities
    
    
    (5.8
    )
    
    
    
    
    
    
    Other
    
    
    0.1
    
    
    
    (0.3
    )
    
    
    0.9$
    2.1
    
    
    $
    14.0
    
    
    $
    16.9
        Income Taxes
  27




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##### Table of Contents



Liquidity and Capital Resources
        28




---



##### Table of Contents



2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    Thereafter
    
    
    Total(In millions)Operating leases
    
    $
    7.2
    
    
    $
    5.8
    
    
    $
    4.5
    
    
    $
    2.7
    
    
    $
    2.6
    
    
    $
    8.0
    
    
    $
    30.8Non-cancelable purchase obligations
    
    
    19.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19.0Total
    
    $
    26.2
    
    
    $
    5.8
    
    
    $
    4.5
    
    
    $
    2.7
    
    
    $
    2.6
    
    
    $
    8.0
    
    
    $
    49.8
  Critical Accounting Policies and Estimates
  29




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##### Table of Contents



Revenue Recognition
      Stock-Based Compensation
  30




---



##### Table of Contents



Income Taxes
    Investment Securities
      31




---



##### Table of Contents



Inventories
  Goodwill and Other Intangible Assets
    Long-Lived Assets
  32




---



##### Table of Contents



Recent Accounting Pronouncements
        33




---



##### Table of Contents



34




---



##### Table of Contents



Item 7a. Quantitative and Qualitative Disclosures About Market Risk
          35




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     Internal Control  Integrated Framework
  
 36




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 Internal Control  Integrated Framework
    Internal
Control  Integrated Framework
   
 37




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##### Table of Contents



QLOGIC CORPORATION
 CONSOLIDATED BALANCE SHEETS
March 29, 2009 and March 30, 2008
 2009
    
    
    2008(In thousands, except shareand per share amounts)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    203,722
    
    
    $
    160,009Short-term investment securities
    
    
    139,561
    
    
    
    160,497Accounts receivable, less allowance for doubtful accounts of $1,366 and $1,176 as of March 29, 2009
and March 30, 2008, respectively
    
    
    68,519
    
    
    
    81,642Inventories
    
    
    40,293
    
    
    
    27,520Deferred tax assets
    
    
    19,002
    
    
    
    32,227Other current assets
    
    
    10,854
    
    
    
    8,925Total current assets
    
    
    481,951
    
    
    
    470,820Long-term investment securities
    
    
    34,986
    
    
    
    55,903Property and equipment, net
    
    
    92,547
    
    
    
    93,726Goodwill
    
    
    118,859
    
    
    
    127,409Purchased intangible assets, net
    
    
    19,117
    
    
    
    34,652Deferred tax assets
    
    
    28,785
    
    
    
    25,870Other assets
    
    
    4,045
    
    
    
    2,586$
    780,290
    
    
    $
    810,966LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    36,874
    
    
    $
    35,643Accrued compensation
    
    
    28,702
    
    
    
    31,120Accrued taxes
    
    
    13,499
    
    
    
    5,262Deferred revenue
    
    
    7,470
    
    
    
    8,693Other current liabilities
    
    
    6,728
    
    
    
    5,952Total current liabilities
    
    
    93,273
    
    
    
    86,670Accrued taxes
    
    
    47,116
    
    
    
    48,163Deferred revenue
    
    
    8,559
    
    
    
    5,087Other liabilities
    
    
    4,797
    
    
    
    5,130Total liabilities
    
    
    153,745
    
    
    
    145,050Commitments and contingenciesSubsequent event (Note 16)Stockholders equity:Preferred stock, $0.001 par value; 1,000,000 shares authorized; no shares issued and outstanding
    
    
    
    
    
    
    Common stock, $0.001 par value; 500,000,000 shares authorized; 202,009,000 and 199,652,000 shares
issued at March 29, 2009 and March 30, 2008, respectively
    
    
    202
    
    
    
    200Additional paid-in capital
    
    
    712,064
    
    
    
    657,893Retained earnings
    
    
    1,193,727
    
    
    
    1,084,938Accumulated other comprehensive income (loss)
    
    
    634
    
    
    
    (2,530
    )Treasury stock, at cost: 82,478,000 and 66,638,000 shares at March 29, 2009 and March 30, 2008,
respectively
    
    
    (1,280,082
    )
    
    
    (1,074,585
    )Total stockholders equity
    
    
    626,545
    
    
    
    665,916$
    780,290
    
    
    $
    810,966
  38




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##### Table of Contents



QLOGIC CORPORATION
 CONSOLIDATED STATEMENTS OF INCOME
Years Ended March 29, 2009, March 30, 2008 and April 1, 2007
 2009
    
    
    2008
    
    
    2007(In thousands, except pershare amounts)Net revenues
    
    $
    633,862
    
    
    $
    597,866
    
    
    $
    586,697Cost of revenues
    
    
    210,075
    
    
    
    205,959
    
    
    
    191,982Gross profit
    
    
    423,787
    
    
    
    391,907
    
    
    
    394,715Operating expenses:Engineering and development
    
    
    133,252
    
    
    
    134,668
    
    
    
    135,315Sales and marketing
    
    
    86,959
    
    
    
    84,166
    
    
    
    86,731General and administrative
    
    
    32,639
    
    
    
    34,049
    
    
    
    31,044Special charges
    
    
    4,063
    
    
    
    5,328
    
    
    
    Purchased in-process research and development
    
    
    
    
    
    
    
    
    
    
    3,710Total operating expenses
    
    
    256,913
    
    
    
    258,211
    
    
    
    256,800Operating income
    
    
    166,874
    
    
    
    133,696
    
    
    
    137,915Interest and other income, net
    
    
    2,134
    
    
    
    14,024
    
    
    
    16,872Income before income taxes
    
    
    169,008
    
    
    
    147,720
    
    
    
    154,787Income taxes
    
    
    60,219
    
    
    
    51,510
    
    
    
    49,369Net income
    
    $
    108,789
    
    
    $
    96,210
    
    
    $
    105,418Net income per share:Basic
    
    $
    0.85
    
    
    $
    0.68
    
    
    $
    0.66Diluted
    
    $
    0.85
    
    
    $
    0.67
    
    
    $
    0.66Number of shares used in per share calculations:Basic
    
    
    127,776
    
    
    
    142,167
    
    
    
    159,081Diluted
    
    
    128,570
    
    
    
    142,901
    
    
    
    160,680
  39




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##### Table of Contents



QLOGIC CORPORATION
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOME
Years Ended March 29, 2009, March 30, 2008 and April 1, 2007
 AccumulatedCommon Stock
    
    
    Additional
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    TotalOutstanding
    
    
    
    
    
    
    Paid-In
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    StockholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Stock
    
    
    Equity(In thousands)Balance at April 2, 2006
    
    
    162,092
    
    
    $
    195
    
    
    $
    537,648
    
    
    $
    883,310
    
    
    $
    (1,799
    )
    
    $
    (560,000
    )
    
    $
    859,354Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    105,418
    
    
    
    
    
    
    
    
    
    
    
    105,418Change in unrealized gains and losses on investment
securities, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,968
    
    
    
    
    
    
    
    1,968Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    107,386Issuance of common stock under stock plans
(including tax benefit of $5,816)
    
    
    2,578
    
    
    
    3
    
    
    
    39,516
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,519Stock-based compensation expense related to stock
options, restricted stock units and employee stock
purchases
    
    
    
    
    
    
    
    
    
    
    30,279
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,279Common stock issued related to business acquisitions
    
    
    40
    
    
    
    
    
    
    
    1,072
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,072Purchases of treasury stock
    
    
    (9,293
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (163,079
    )
    
    
    (163,079
    )Balance at April 1, 2007
    
    
    155,417
    
    
    
    198
    
    
    
    608,515
    
    
    
    988,728
    
    
    
    169
    
    
    
    (723,079
    )
    
    
    874,531Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    96,210
    
    
    
    
    
    
    
    
    
    
    
    96,210Change in unrealized gains and losses on investment
securities, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,699
    )
    
    
    
    
    
    
    (2,699
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    93,511Issuance of common stock under stock plans
(including tax benefit of $288)
    
    
    1,591
    
    
    
    2
    
    
    
    14,982
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,984Stock-based compensation expense related to stock
options, restricted stock units and employee stock
purchases
    
    
    
    
    
    
    
    
    
    
    31,764
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,764Common stock issued related to business acquisition
    
    
    154
    
    
    
    
    
    
    
    2,632
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,632Purchases of treasury stock
    
    
    (24,148
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (351,506
    )
    
    
    (351,506
    )Balance at March 30, 2008
    
    
    133,014
    
    
    
    200
    
    
    
    657,893
    
    
    
    1,084,938
    
    
    
    (2,530
    )
    
    
    (1,074,585
    )
    
    
    665,916Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    108,789
    
    
    
    
    
    
    
    
    
    
    
    108,789Change in unrealized gains and losses on investment
securities, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,164
    
    
    
    
    
    
    
    3,164Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    111,953Issuance of common stock under stock plans
(including tax benefit of $279)
    
    
    2,246
    
    
    
    2
    
    
    
    23,818
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,820Stock-based compensation expense related to stock
options, restricted stock units and employee stock
purchases
    
    
    
    
    
    
    
    
    
    
    28,646
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,646Common stock issued related to business acquisition
    
    
    111
    
    
    
    
    
    
    
    1,707
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,707Purchases of treasury stock
    
    
    (15,840
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (205,497
    )
    
    
    (205,497
    )Balance at March 29, 2009
    
    
    119,531
    
    
    $
    202
    
    
    $
    712,064
    
    
    $
    1,193,727
    
    
    $
    634
    
    
    $
    (1,280,082
    )
    
    $
    626,545
  40




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##### Table of Contents



QLOGIC CORPORATION
 CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended March 29, 2009, March 30, 2008 and April 1, 2007
 2009
    
    
    2008
    
    
    2007(In thousands)Cash flows from operating activities:Net income
    
    $
    108,789
    
    
    $
    96,210
    
    
    $
    105,418Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    32,525
    
    
    
    30,857
    
    
    
    27,554Stock-based compensation
    
    
    28,646
    
    
    
    31,764
    
    
    
    30,279Acquisition-related:Amortization of purchased intangible assets
    
    
    15,032
    
    
    
    16,725
    
    
    
    12,940Stock-based compensation
    
    
    173
    
    
    
    1,209
    
    
    
    9,092Purchased in-process research and development
    
    
    
    
    
    
    
    
    
    
    3,710Deferred income taxes
    
    
    16,660
    
    
    
    (14,549
    )
    
    
    (4,154
    )Impairment of investment securities
    
    
    16,407
    
    
    
    6,867
    
    
    
    8,094Net gains on trading securities
    
    
    (3,456
    )
    
    
    
    
    
    
    Gain on sale of shares of a publicly-traded company
    
    
    (2,075
    )
    
    
    
    
    
    
    Provision for losses on accounts receivable
    
    
    278
    
    
    
    399
    
    
    
    30Loss on disposal of property and equipment
    
    
    402
    
    
    
    1,328
    
    
    
    214Impairment of intangible assets
    
    
    
    
    
    
    2,338
    
    
    
    Changes in operating assets and liabilities, net of acquisitions:Accounts receivable
    
    
    12,845
    
    
    
    (8,503
    )
    
    
    (2,275
    )Inventories
    
    
    (12,773
    )
    
    
    11,415
    
    
    
    2,771Other assets
    
    
    (2,126
    )
    
    
    3,593
    
    
    
    (1,906
    )Accounts payable
    
    
    707
    
    
    
    7,282
    
    
    
    (7,401
    )Accrued compensation
    
    
    (884
    )
    
    
    (1,940
    )
    
    
    2,264Accrued taxes
    
    
    7,190
    
    
    
    20,635
    
    
    
    2,809Deferred revenue
    
    
    2,249
    
    
    
    6,412
    
    
    
    3,706Other liabilities
    
    
    688
    
    
    
    (453
    )
    
    
    (2,076
    )Net cash provided by operating activities
    
    
    221,277
    
    
    
    211,589
    
    
    
    191,069Cash flows from investing activities:Purchases of available-for-sale securities
    
    
    (122,437
    )
    
    
    (185,707
    )
    
    
    (298,220
    )Proceeds from sales and maturities of available-for-sale securities
    
    
    161,320
    
    
    
    425,033
    
    
    
    366,677Proceeds from disposition of trading securities
    
    
    4,550
    
    
    
    
    
    
    
    Reclassification of cash equivalents to investment securities
    
    
    (57,209
    )
    
    
    
    
    
    
    Distributions from other investment securities
    
    
    48,855
    
    
    
    
    
    
    
    Purchases of property and equipment
    
    
    (30,721
    )
    
    
    (30,001
    )
    
    
    (31,708
    )Acquisition of businesses, net of cash acquired
    
    
    
    
    
    
    67
    
    
    
    (142,521
    )Restricted cash placed in escrow
    
    
    
    
    
    
    
    
    
    
    (24,000
    )Restricted cash received from escrow
    
    
    
    
    
    
    
    
    
    
    12,508Net cash provided by (used in) investing activities
    
    
    4,358
    
    
    
    209,392
    
    
    
    (117,264
    )Cash flows from financing activities:Proceeds from issuance of stock under stock plans
    
    
    23,541
    
    
    
    14,696
    
    
    
    33,703Tax benefit from issuance of stock under stock plans
    
    
    279
    
    
    
    288
    
    
    
    5,816Payoff of line of credit assumed in acquisition
    
    
    
    
    
    
    
    
    
    
    (1,632
    )Purchases of treasury stock
    
    
    (205,742
    )
    
    
    (352,760
    )
    
    
    (160,080
    )Net cash used in financing activities
    
    
    (181,922
    )
    
    
    (337,776
    )
    
    
    (122,193
    )Net increase (decrease) in cash and cash equivalents
    
    
    43,713
    
    
    
    83,205
    
    
    
    (48,388
    )Cash and cash equivalents at beginning of year
    
    
    160,009
    
    
    
    76,804
    
    
    
    125,192Cash and cash equivalents at end of year
    
    $
    203,722
    
    
    $
    160,009
    
    
    $
    76,804Supplemental disclosure of cash flow information:Cash paid during the year for:Income taxes
    
    $
    37,101
    
    
    $
    41,475
    
    
    $
    47,552
  41




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##### Table of Contents



QLOGIC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1. Description of Business and Summary of Significant Accounting Policies
 General Business Information
 ®
 Principles of Consolidation
  Financial Reporting Period
  Use of Estimates
   Revenue Recognition
  42




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##### Table of Contents



QLOGIC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
    Research and Development
  Advertising Costs
  Income Taxes
  43




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##### Table of Contents



QLOGIC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
   Net Income per Share
  Concentration of Credit Risk
     Cash and Cash Equivalents
  Investment Securities
  44




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##### Table of Contents



QLOGIC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
      Accounts Receivable and Allowance for Doubtful Accounts
  Inventories
  Property and Equipment
  Goodwill and Other Intangible Assets
   45




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##### Table of Contents



QLOGIC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  Long-Lived Assets
   Warranty
  Comprehensive Income
  Foreign Currency Translation
  Stock-Based Compensation
  46




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##### Table of Contents



QLOGIC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  Recent Accounting Pronouncements
       47




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##### Table of Contents



QLOGIC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
   Note 2. Business Combinations
 SilverStorm Technologies
  PathScale
    48




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##### Table of Contents



QLOGIC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  Troika Networks
    Purchased In-Process Research and Development
    49




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##### Table of Contents



QLOGIC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 Note 3. Net Income per Share
  2009
    
    
    2008
    
    
    2007(In thousands, except per share amounts)Net income
    
    $
    108,789
    
    
    $
    96,210
    
    
    $
    105,418Shares:Weighted-average shares outstanding  basic
    
    
    127,776
    
    
    
    142,167
    
    
    
    159,081Dilutive potential common shares, using treasury stock method
    
    
    794
    
    
    
    734
    
    
    
    1,599Weighted-average shares outstanding  diluted
    
    
    128,570
    
    
    
    142,901
    
    
    
    160,680Net income per share:Basic
    
    $
    0.85
    
    
    $
    0.68
    
    
    $
    0.66Diluted
    
    $
    0.85
    
    
    $
    0.67
    
    
    $
    0.66
  Note 4. Investment Securities
  March 29,
    
    
    March 30,2009
    
    
    2008(In thousands)Available-for-sale securities
    
    $
    136,027
    
    
    $
    216,400Trading securities
    
    
    34,891
    
    
    
    Other investment securities
    
    
    3,629
    
    
    
    Total investment securities
    
    
    174,547
    
    
    
    216,400Less short-term investment securities
    
    
    139,561
    
    
    
    160,497Long-term investment securities
    
    $
    34,986
    
    
    $
    55,903
 50




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##### Table of Contents



QLOGIC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 Available-For-Sale Securities
  Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    EstimatedCost
    
    
    Gains
    
    
    Losses
    
    
    Fair Value(In thousands)March 29, 2009U.S. Government and agency securities
    
    $
    51,776
    
    
    $
    868
    
    
    $
    (4
    )
    
    $
    52,640Corporate debt obligations
    
    
    39,434
    
    
    
    390
    
    
    
    (190
    )
    
    
    39,634Asset and mortgage-backed securities
    
    
    20,691
    
    
    
    418
    
    
    
    (96
    )
    
    
    21,013Municipal bonds
    
    
    2,530
    
    
    
    61
    
    
    
    
    
    
    
    2,591Total debt securities
    
    
    114,431
    
    
    
    1,737
    
    
    
    (290
    )
    
    
    115,878Certificate of deposit
    
    
    20,054
    
    
    
    
    
    
    
    
    
    
    
    20,054Auction rate preferred securities
    
    
    100
    
    
    
    
    
    
    
    (5
    )
    
    
    95Total available-for-sale securities
    
    $
    134,585
    
    
    $
    1,737
    
    
    $
    (295
    )
    
    $
    136,027March 30, 2008Corporate debt obligations
    
    $
    68,234
    
    
    $
    635
    
    
    $
    (168
    )
    
    $
    68,701U.S. Government and agency securities
    
    
    40,242
    
    
    
    964
    
    
    
    
    
    
    
    41,206Asset and mortgage-backed securities
    
    
    35,373
    
    
    
    490
    
    
    
    (28
    )
    
    
    35,835Auction rate debt securities
    
    
    25,640
    
    
    
    
    
    
    
    (1,582
    )
    
    
    24,058Municipal bonds
    
    
    4,548
    
    
    
    67
    
    
    
    
    
    
    
    4,615Total debt securities
    
    
    174,037
    
    
    
    2,156
    
    
    
    (1,778
    )
    
    
    174,415Auction rate preferred securities
    
    
    36,425
    
    
    
    
    
    
    
    (4,580
    )
    
    
    31,845Publicly-traded common stock
    
    
    10,140
    
    
    
    
    
    
    
    
    
    
    
    10,140Total available-for-sale securities
    
    $
    220,602
    
    
    $
    2,156
    
    
    $
    (6,358
    )
    
    $
    216,400
  Amortized
    
    
    EstimatedCost
    
    
    Fair Value(In thousands)Due in one year or less
    
    $
    27,056
    
    
    $
    27,285Due after one year through three years
    
    
    59,316
    
    
    
    60,255Due after three years through five years
    
    
    8,536
    
    
    
    8,551Due after five years
    
    
    19,523
    
    
    
    19,787$
    114,431
    
    
    $
    115,878
   51




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##### Table of Contents



QLOGIC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
   Less Than 12 Months
    
    
    12 Months or Greater
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedDescription of Securities
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    Losses(In thousands)March 29, 2009Corporate debt obligations
    
    $
    10,605
    
    
    $
    (190
    )
    
    $
    
    
    
    $
    
    
    
    $
    10,605
    
    
    $
    (190
    )U.S. Government and agency securities
    
    
    2,002
    
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    2,002
    
    
    
    (4
    )Asset and mortgage-backed securities
    
    
    2,842
    
    
    
    (96
    )
    
    
    
    
    
    
    
    
    
    
    2,842
    
    
    
    (96
    )Auction rate preferred securities
    
    
    95
    
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    95
    
    
    
    (5
    )Total
    
    $
    15,544
    
    
    $
    (295
    )
    
    $
    
    
    
    $
    
    
    
    $
    15,544
    
    
    $
    (295
    )March 30, 2008Corporate debt obligations
    
    $
    25,510
    
    
    $
    (168
    )
    
    $
    
    
    
    $
    
    
    
    $
    25,510
    
    
    $
    (168
    )Asset and mortgage-backed securities
    
    
    6,927
    
    
    
    (28
    )
    
    
    
    
    
    
    
    
    
    
    6,927
    
    
    
    (28
    )Auction rate debt securities
    
    
    23,899
    
    
    
    (1,582
    )
    
    
    
    
    
    
    
    
    
    
    23,899
    
    
    
    (1,582
    )Auction rate preferred securities
    
    
    26,545
    
    
    
    (4,580
    )
    
    
    
    
    
    
    
    
    
    
    26,545
    
    
    
    (4,580
    )Total
    
    $
    82,881
    
    
    $
    (6,358
    )
    
    $
    
    
    
    $
    
    
    
    $
    82,881
    
    
    $
    (6,358
    )
 Trading Securities
  March 29,2009(In thousands)Auction rate debt securities
    
    $
    20,741Auction rate preferred securities
    
    
    4,869Put options related to auction rate securities
    
    
    9,281Total trading securities
    
    $
    34,891
    52




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##### Table of Contents



QLOGIC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
   Other Investment Securities
   Fair Value Measurements
  
    
    Level 1  Quoted prices in active markets for identical assets or liabilities.
    
    Level 2  Inputs other than Level 1 that are observable, either directly or
indirectly, such as quoted prices for similar assets or liabilities; quoted prices in
markets that are not active; or other inputs that are observable or can be corroborated by
observable market data for substantially the full term of the assets or liabilities.
    
    Level 3  Unobservable inputs that are supported by little or no market activity and
that are significant to the fair value of the assets or liabilities.
 53




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##### Table of Contents



QLOGIC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  Fair Value Measurements UsingLevel 1
    
    
    Level 2
    
    
    Level 3
    
    
    Total(In thousands)U.S. Government and agency securities
    
    $
    52,640
    
    
    $
    
    
    
    $
    
    
    
    $
    52,640Corporate debt obligations
    
    
    36,586
    
    
    
    3,048
    
    
    
    
    
    
    
    39,634Asset and mortgage-backed securities
    
    
    3,621
    
    
    
    17,392
    
    
    
    
    
    
    
    21,013Auction rate debt securities
    
    
    
    
    
    
    
    
    
    
    20,741
    
    
    
    20,741Municipal bonds
    
    
    2,591
    
    
    
    
    
    
    
    
    
    
    
    2,591Total debt securities
    
    
    95,438
    
    
    
    20,440
    
    
    
    20,741
    
    
    
    136,619Certificate of deposit
    
    
    20,054
    
    
    
    
    
    
    
    
    
    
    
    20,054Auction rate preferred securities
    
    
    
    
    
    
    
    
    
    
    4,964
    
    
    
    4,964Put options related to certain auction rate securities
    
    
    
    
    
    
    
    
    
    
    9,281
    
    
    
    9,281Other investment securities
    
    
    
    
    
    
    3,629
    
    
    
    
    
    
    
    3,629Balance as of March 29, 2009
    
    $
    115,492
    
    
    $
    24,069
    
    
    $
    34,986
    
    
    $
    174,547
   Change inBeginning
    
    
    Total Realized
    
    
    Unrealized
    
    
    Sales and Other
    
    
    EndingYear Ended March 29, 2009
    
    Balance
    
    
    Gains (Losses)
    
    
    Losses
    
    
    Settlements
    
    
    Balance(In thousands)Auction rate debt securities
    
    $
    24,058
    
    
    $
    (3,571
    )
    
    $
    1,582
    
    
    $
    (1,328
    )
    
    $
    20,741Auction rate preferred securities
    
    
    31,845
    
    
    
    (4,952
    )
    
    
    4,575
    
    
    
    (26,504
    )
    
    
    4,964Put options related to certain
auction rate securities
    
    
    
    
    
    
    9,281
    
    
    
    
    
    
    
    
    
    
    
    9,281Total
    
    $
    55,903
    
    
    $
    758
    
    
    $
    6,157
    
    
    $
    (27,832
    )
    
    $
    34,986
 Note 5. Inventories
  2009
    
    
    2008(In thousands)Raw materials
    
    $
    15,780
    
    
    $
    7,403Finished goods
    
    
    24,513
    
    
    
    20,117$
    40,293
    
    
    $
    27,520
 54




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##### Table of Contents



QLOGIC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 Note 6. Property and Equipment
  2009
    
    
    2008(In thousands)Land
    
    $
    11,663
    
    
    $
    11,663Buildings and improvements
    
    
    39,549
    
    
    
    37,240Production and test equipment
    
    
    160,978
    
    
    
    140,812Furniture and fixtures
    
    
    7,909
    
    
    
    7,849220,099
    
    
    
    197,564Less accumulated depreciation and amortization
    
    
    127,552
    
    
    
    103,838$
    92,547
    
    
    $
    93,726
 Note 7. Goodwill and Purchased Intangible Assets
 Goodwill
  2009
    
    
    2008(In thousands)Balance at beginning of year
    
    $
    127,409
    
    
    $
    102,910Adjustment to purchase price allocation
    
    
    (8,550
    )
    
    
    891Contingent consideration
    
    
    
    
    
    
    23,675Other adjustments
    
    
    
    
    
    
    (67
    )Balance at end of year
    
    $
    118,859
    
    
    $
    127,409
 Purchased Intangible Assets
  March 29, 2009
    
    
    March 30, 2008Gross
    
    
    
    
    
    
    Net
    
    
    Gross
    
    
    
    
    
    
    NetCarrying
    
    
    Accumulated
    
    
    Carrying
    
    
    Carrying
    
    
    Accumulated
    
    
    CarryingValue
    
    
    Amortization
    
    
    Value
    
    
    Value
    
    
    Amortization
    
    
    Value(In thousands)Acquisition-related intangibles:Core/developed technology
    
    $
    43,700
    
    
    $
    27,277
    
    
    $
    16,423
    
    
    $
    43,700
    
    
    $
    15,737
    
    
    $
    27,963Customer relationships
    
    
    9,700
    
    
    
    7,814
    
    
    
    1,886
    
    
    
    9,700
    
    
    
    4,580
    
    
    
    5,120Other
    
    
    775
    
    
    
    697
    
    
    
    78
    
    
    
    775
    
    
    
    439
    
    
    
    33654,175
    
    
    
    35,788
    
    
    
    18,387
    
    
    
    54,175
    
    
    
    20,756
    
    
    
    33,419Other purchased intangibles:Technology-related
    
    
    2,911
    
    
    
    2,181
    
    
    
    730
    
    
    
    2,596
    
    
    
    1,363
    
    
    
    1,233$
    57,086
    
    
    $
    37,969
    
    
    $
    19,117
    
    
    $
    56,771
    
    
    $
    22,119
    
    
    $
    34,652
  2009
    
    
    2008
    
    
    2007(In thousands)Cost of revenues
    
    $
    12,491
    
    
    $
    13,668
    
    
    $
    13,087Engineering and development
    
    
    125
    
    
    
    314
    
    
    
    267Sales and marketing
    
    
    3,234
    
    
    
    3,544
    
    
    
    2,692$
    15,850
    
    
    $
    17,526
    
    
    $
    16,046
 55




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##### Table of Contents



QLOGIC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  Fiscal
    
    (In thousands)2010
    
    $
    7,9802011
    
    
    5,6012012
    
    
    5,536$
    19,117
 Note 8. Stockholders Equity
 Capital Stock
  Treasury Stock
   Note 9. Stock-Based Compensation
 Employee Stock Purchase Plan
  Stock Incentive Compensation Plans
   56




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##### Table of Contents



QLOGIC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
       Weighted-Weighted-
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateNumber of
    
    
    Exercise
    
    
    Contractual
    
    
    IntrinsicShares
    
    
    Price
    
    
    Term (Years)
    
    
    Value(In thousands)
    
    
    
    
    
    
    
    
    (In thousands)Outstanding at April 2, 2006
    
    
    24,854
    
    
    $
    20.90Options assumed as part of acquisition
    
    
    308
    
    
    
    3.00Granted
    
    
    4,512
    
    
    
    18.50Exercised
    
    
    (2,173
    )
    
    
    12.64Forfeited (cancelled pre-vesting)
    
    
    (884
    )
    
    
    15.73Expired (cancelled post-vesting)
    
    
    (490
    )
    
    
    27.44Outstanding at April 1, 2007
    
    
    26,127
    
    
    
    21.01Granted
    
    
    4,027
    
    
    
    16.24Exercised
    
    
    (954
    )
    
    
    10.32Forfeited (cancelled pre-vesting)
    
    
    (2,054
    )
    
    
    16.91Expired (cancelled post-vesting)
    
    
    (1,067
    )
    
    
    22.36Outstanding at March 30, 2008
    
    
    26,079
    
    
    
    20.94Granted
    
    
    4,117
    
    
    
    15.07Exercised
    
    
    (1,485
    )
    
    
    13.09Forfeited (cancelled pre-vesting)
    
    
    (1,121
    )
    
    
    15.93Expired (cancelled post-vesting)
    
    
    (1,650
    )
    
    
    22.42Outstanding at March 29, 2009
    
    
    25,940
    
    
    $
    20.58
    
    
    
    5.2
    
    
    $
    365Vested and expected to vest at March 29, 2009
    
    
    22,975
    
    
    $
    20.72
    
    
    
    5.0
    
    
    $
    344Exercisable at March 29, 2009
    
    
    19,483
    
    
    $
    22.14
    
    
    
    4.0
    
    
    $
    243
 57




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##### Table of Contents



QLOGIC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  Weighted-AverageGrantNumber of
    
    
    DateShares
    
    
    Fair Value(In thousands)Outstanding and unvested at April 2, 2006
    
    
    
    
    
    $
    Granted
    
    
    968
    
    
    
    18.82Forfeited
    
    
    (29
    )
    
    
    18.09Outstanding and unvested at April 1, 2007
    
    
    939
    
    
    
    18.84Granted
    
    
    842
    
    
    
    16.52Vested (a)
    
    
    (214
    )
    
    
    18.79Forfeited
    
    
    (294
    )
    
    
    17.72Outstanding and unvested at March 30, 2008
    
    
    1,273
    
    
    
    17.57Granted
    
    
    944
    
    
    
    14.89Vested (a)
    
    
    (364
    )
    
    
    17.72Forfeited
    
    
    (160
    )
    
    
    16.12Outstanding and unvested at March 29, 2009
    
    
    1,693
    
    
    $
    16.18
 
 (a)
    
    During fiscal 2009 and 2008, the Company issued 233,000 and 136,000 shares of
common stock, respectively, in connection with the vesting of restricted stock units
during each year. The difference between the number of shares vested and issued is the
result of restricted stock units withheld in satisfaction of minimum tax withholding
obligations associated with the vesting. Stock-Based Compensation Expense
  2009
    
    
    2008
    
    
    2007(In thousands)Cost of revenues
    
    $
    2,058
    
    
    $
    2,128
    
    
    $
    1,897Engineering and development
    
    
    14,991
    
    
    
    14,531
    
    
    
    11,190Sales and marketing
    
    
    5,545
    
    
    
    6,255
    
    
    
    8,155General and administrative
    
    
    6,052
    
    
    
    8,850
    
    
    
    9,037$
    28,646
    
    
    $
    31,764
    
    
    $
    30,279
   2009
    
    2008
    
    2007Employee Stock
    
    
    
    
    
    Employee Stock
    
    
    
    
    
    Employee StockStock Options
    
    Purchase Plan
    
    Stock Options
    
    Purchase Plan
    
    Stock Options
    
    Purchase PlanFair value
    
    $
    5.64
    
    
    $
    3.39
    
    
    $
    6.43
    
    
    $
    3.39
    
    
    $
    8.31
    
    
    $
    4.09Expected volatility
    
    
    37
    %
    
    
    45
    %
    
    
    38
    %
    
    
    35
    %
    
    
    46
    %
    
    
    29
    %Risk-free interest rate
    
    
    3.4
    %
    
    
    0.9
    %
    
    
    4.7
    %
    
    
    4.0
    %
    
    
    4.9
    %
    
    
    5.0
    %Expected life (years)
    
    
    5.2
    
    
    
    0.25
    
    
    
    5.1
    
    
    
    0.25
    
    
    
    5.0
    
    
    
    0.25Dividend yield
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
   58




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##### Table of Contents



QLOGIC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
      Note 10. Employee Retirement Savings Plan
  Note 11. Special Charges
    Workforcereductions
    
    
    Facility
    
    
    Total(In thousands)Charged to costs and expenses
    
    $
    3,641
    
    
    $
    285
    
    
    $
    3,926Cash payments
    
    
    (2,343
    )
    
    
    
    
    
    
    (2,343
    )Non-cash adjustments
    
    
    
    
    
    
    8
    
    
    
    8Balance as of March 29, 2009
    
    $
    1,298
    
    
    $
    293
    
    
    $
    1,591
 59




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##### Table of Contents



QLOGIC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  ContractWorkforce
    
    
    cancellationreductions
    
    
    and other
    
    
    Total(In thousands)Charged to costs and expenses
    
    $
    3,761
    
    
    $
    1,235
    
    
    $
    4,996Cash payments
    
    
    (3,202
    )
    
    
    (742
    )
    
    
    (3,944
    )Non-cash adjustments
    
    
    
    
    
    
    60
    
    
    
    60Balance as of March 30, 2008
    
    
    559
    
    
    
    553
    
    
    
    1,112Charged to costs and expenses
    
    
    
    
    
    
    137
    
    
    
    137Cash payments
    
    
    (559
    )
    
    
    (225
    )
    
    
    (784
    )Non-cash adjustments
    
    
    
    
    
    
    (10
    )
    
    
    (10
    )Balance as of March 29, 2009
    
    $
    
    
    
    $
    455
    
    
    $
    455
  Note 12. Interest and Other Income, net
  2009
    
    
    2008
    
    
    2007Interest income
    
    $
    11,295
    
    
    $
    20,590
    
    
    $
    25,713Impairment of investment securities
    
    
    (16,407
    )
    
    
    (6,867
    )
    
    
    (8,094
    )Gain on sales of available-for-sale securities
    
    
    2,695
    
    
    
    804
    
    
    
    191Loss on sales of available-for-sale securities
    
    
    (1,131
    )
    
    
    (197
    )
    
    
    (1,853
    )Gain on sale of shares of a publicly-traded company
    
    
    2,075
    
    
    
    
    
    
    
    Gain related to put option (see Note 4)
    
    
    9,281
    
    
    
    
    
    
    
    Loss on trading securities
    
    
    (5,825
    )
    
    
    
    
    
    
    Other
    
    
    151
    
    
    
    (306
    )
    
    
    915$
    2,134
    
    
    $
    14,024
    
    
    $
    16,872
 Note 13. Commitments and Contingencies
 Leases
  Fiscal Year
    
    (In thousands)2010
    
    $
    7,1912011
    
    
    5,7862012
    
    
    4,5172013
    
    
    2,7302014
    
    
    2,581Thereafter
    
    
    7,954Total future minimum lease payments
    
    $
    30,759
  Litigation
  60




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QLOGIC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 Indemnifications
  Note 14. Income Taxes
  2009
    
    
    2008
    
    
    2007(In thousands)United States
    
    $
    130,573
    
    
    $
    96,450
    
    
    $
    102,603International
    
    
    38,435
    
    
    
    51,270
    
    
    
    52,184$
    169,008
    
    
    $
    147,720
    
    
    $
    154,787
  2009
    
    
    2008
    
    
    2007(In thousands)Current:Federal
    
    $
    32,147
    
    
    $
    53,371
    
    
    $
    45,618State
    
    
    7,524
    
    
    
    8,784
    
    
    
    4,032Foreign
    
    
    3,888
    
    
    
    3,904
    
    
    
    3,996Total current
    
    
    43,559
    
    
    
    66,059
    
    
    
    53,646Deferred:Federal
    
    
    17,465
    
    
    
    (10,918
    )
    
    
    (3,067
    )State
    
    
    (511
    )
    
    
    (3,947
    )
    
    
    (331
    )Foreign
    
    
    (294
    )
    
    
    316
    
    
    
    (879
    )Total deferred
    
    
    16,660
    
    
    
    (14,549
    )
    
    
    (4,277
    )Total income taxes
    
    $
    60,219
    
    
    $
    51,510
    
    
    $
    49,369
   2009
    
    
    2008
    
    
    2007(In thousands)Expected income tax provision at the statutory rate
    
    $
    59,153
    
    
    $
    51,702
    
    
    $
    54,175State income taxes, net of federal tax benefit
    
    
    7,370
    
    
    
    4,954
    
    
    
    2,406Tax rate differential on foreign earnings and other international related tax items
    
    
    997
    
    
    
    (5,752
    )
    
    
    (10,400
    )Benefit from research and other credits
    
    
    (5,370
    )
    
    
    (4,800
    )
    
    
    (1,772
    )Stock-based compensation
    
    
    3,681
    
    
    
    4,239
    
    
    
    5,469Resolution of prior period tax matters
    
    
    (8,892
    )
    
    
    
    
    
    
    (3,920
    )Valuation allowance
    
    
    3,469
    
    
    
    
    
    
    
    Other, net
    
    
    (189
    )
    
    
    1,167
    
    
    
    3,411$
    60,219
    
    
    $
    51,510
    
    
    $
    49,369
 61




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QLOGIC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  2009
    
    
    2008(In thousands)Deferred tax assets:Reserves and accruals not currently deductible
    
    $
    21,502
    
    
    $
    24,325Stock-based compensation
    
    
    12,322
    
    
    
    9,129Capital loss carryovers
    
    
    7,739
    
    
    
    1,751Net operating loss carryforwards
    
    
    5,859
    
    
    
    7,397Foreign tax credits
    
    
    4,278
    
    
    
    9,387Research credits
    
    
    3,804
    
    
    
    3,227Investment securities
    
    
    3,095
    
    
    
    7,445State income taxes
    
    
    2,572
    
    
    
    6,098Other
    
    
    1,668
    
    
    
    3,471Total gross deferred tax assets
    
    
    62,839
    
    
    
    72,230Valuation allowance
    
    
    (3,469
    )
    
    
    Total deferred tax assets, net of valuation allowance
    
    
    59,370
    
    
    
    72,230Deferred tax liabilities:Research and development expenditures
    
    
    8,223
    
    
    
    6,083Purchased intangible assets
    
    
    3,360
    
    
    
    8,050Total deferred tax liabilities
    
    
    11,583
    
    
    
    14,133Net deferred tax assets
    
    $
    47,787
    
    
    $
    58,097
  2009
    
    
    2008(In thousands)Current assets
    
    $
    19,002
    
    
    $
    32,227Noncurrent assets
    
    
    28,785
    
    
    
    25,870Net deferred tax assets
    
    $
    47,787
    
    
    $
    58,097
      62




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##### Table of Contents



QLOGIC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
     2009
    
    
    2008(In thousands)Balance at beginning of year
    
    $
    40,162
    
    
    $
    32,911Additions based on tax positions related to the current year
    
    
    14,957
    
    
    
    7,865Additions for tax positions of prior years
    
    
    5,357
    
    
    
    5,006Reductions for tax positions of prior years
    
    
    (15,521
    )
    
    
    (4,375
    )Settlements with taxing authorities
    
    
    (1,848
    )
    
    
    Lapses of statute of limitations
    
    
    (1,581
    )
    
    
    (1,245
    )Balance at end of year
    
    $
    41,526
    
    
    $
    40,162
   Note 15. Product Revenues, Geographic Revenues and Significant Customers
  Product Revenues
  63




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QLOGIC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
  2009
    
    
    2008
    
    
    2007(In thousands)Host Products
    
    $
    440,862
    
    
    $
    437,882
    
    
    $
    410,607Network Products
    
    
    117,551
    
    
    
    101,758
    
    
    
    88,307Silicon Products
    
    
    61,426
    
    
    
    44,323
    
    
    
    76,652Royalty and Service
    
    
    14,023
    
    
    
    13,903
    
    
    
    11,131$
    633,862
    
    
    $
    597,866
    
    
    $
    586,697
 Geographic Revenues
  2009
    
    
    2008
    
    
    2007(In thousands)United States
    
    $
    303,729
    
    
    $
    305,146
    
    
    $
    314,300Europe, Middle East and Africa
    
    
    154,463
    
    
    
    144,631
    
    
    
    131,954Asia-Pacific and Japan
    
    
    139,850
    
    
    
    113,063
    
    
    
    111,130Rest of world
    
    
    35,820
    
    
    
    35,026
    
    
    
    29,313$
    633,862
    
    
    $
    597,866
    
    
    $
    586,697
 Significant Customers
  2009
    
    2008
    
    2007Hewlett-Packard
    
    
    21
    %
    
    
    20
    %
    
    
    16
    %IBM
    
    
    18
    %
    
    
    16
    %
    
    
    17
    %Sun Microsystems
    
    
    11
    %
    
    
    11
    %
    
    
    12
    %
 Note 16. Subsequent Event
   64




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QLOGIC CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Note 17. Condensed Quarterly Results (Unaudited)
  Three Months EndedJune
    
    September (1)
    
    December (2)
    
    March (3)(In thousands, except per share amounts)Fiscal 2009:Net revenues
    
    $
    168,427
    
    
    $
    171,197
    
    
    $
    163,691
    
    
    $
    130,547Gross profit
    
    
    112,669
    
    
    
    116,183
    
    
    
    108,921
    
    
    
    86,014Operating income
    
    
    47,781
    
    
    
    49,926
    
    
    
    45,307
    
    
    
    23,860Net income
    
    
    31,647
    
    
    
    27,155
    
    
    
    30,790
    
    
    
    19,197Net income per share:Basic
    
    
    0.24
    
    
    
    0.21
    
    
    
    0.24
    
    
    
    0.16Diluted
    
    
    0.24
    
    
    
    0.20
    
    
    
    0.24
    
    
    
    0.16Fiscal 2008:Net revenues
    
    $
    139,777
    
    
    $
    140,326
    
    
    $
    158,040
    
    
    $
    159,723Gross profit
    
    
    88,914
    
    
    
    91,313
    
    
    
    105,803
    
    
    
    105,877Operating income
    
    
    22,735
    
    
    
    27,176
    
    
    
    44,077
    
    
    
    39,708Net income
    
    
    18,995
    
    
    
    22,580
    
    
    
    31,870
    
    
    
    22,765Net income per share:Basic
    
    
    0.12
    
    
    
    0.16
    
    
    
    0.23
    
    
    
    0.17Diluted
    
    
    0.12
    
    
    
    0.16
    
    
    
    0.23
    
    
    
    0.17
 
 (1)
    
    During the three months ended September 28, 2008, the Company recorded impairment charges
related to investment securities of $5.0 million.(2)
    
    During the three months ended December 28, 2008, the Company recorded impairment charges of
$4.3 million related to investment securities, a $4.5 million loss upon the transfer of
auction rate securities from the available-for-sale classification to trading securities and
an $8.1 million gain for the initial recognition of the put options related to auction rate
securities owned by the Company (see Note 4).(3)
    
    During the three months ended March 29, 2009, the Company recorded impairment charges related
to investment securities of $4.4 million, recorded a gain of $2.1 million related to the sale
of all of its remaining holdings in common stock of a publicly-traded company and recorded
special charges of $2.7 million associated with a workforce reduction initiative. During the
three months ended March 30, 2008, the Company recorded impairment charges related to
investment securities of $6.9 million. 65




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##### Table of Contents



Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
 Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
  Managements Report on Internal Control Over Financial Reporting
  Internal Control  Integrated Framework
  Changes in Internal Control over Financial Reporting
  
 Item 9B. Other Information
  66




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##### Table of Contents



PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance
   
 Item 11. Executive Compensation
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
   
 Item 13. Certain Relationships and Related Transactions, and Director Independence
  
 Item 14. Principal Accountant Fees and Services
  67




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##### Table of Contents



PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
 Consolidated Financial Statements
  FINANCIAL STATEMENT INDEX
 PageNumberReports of Independent Registered Public Accounting Firm
    
    
    36Consolidated Balance Sheets as of March 29, 2009 and March 30, 2008
    
    
    38Consolidated Statements of Income for the years ended March 29, 2009, March 30, 2008 and April 1, 2007
    
    
    39Consolidated Statements of Stockholders Equity and Comprehensive Income for the years ended
March 29, 2009, March 30, 2008 and April 1, 2007
    
    
    40Consolidated Statements of Cash Flows for the years ended March 29, 2009, March 30, 2008 and April 1, 2007
    
    
    41Notes to Consolidated Financial Statements
    
    
    42
 Financial Statement Schedule
    Exhibits
  68




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##### Table of Contents



SIGNATURES
  QLOGIC CORPORATIONBy:
    
    /s/ H.K. DESAI

H.K. DesaiChairman of the Board andChief Executive Officer
  POWER OF ATTORNEY
   Signature
    
    Title
    
    DatePrincipal Executive Officer:/s/ H.K. Desai

H.K. Desai
    
    Chairman of the Board and
Chief Executive Officer
    
    May 21, 2009Principal Financial and Accounting Officer:/s/ Simon Biddiscombe

Simon Biddiscombe
    
    Senior Vice President and
Chief Financial Officer
    
    May 21, 2009/s/ Joel S. Birnbaum

Joel S. Birnbaum
    
    Director
    
    May 21, 2009/s/ James R. Fiebiger

James R. Fiebiger
    
    Director
    
    May 21, 2009/s/ Balakrishnan S. Iyer

Balakrishnan S. Iyer
    
    Director
    
    May 21, 2009/s/ Kathryn B. Lewis

Kathryn B. Lewis
    
    Director
    
    May 21, 2009/s/ George D. Wells

George D. Wells
    
    Director
    
    May 21, 2009
 69




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##### Table of Contents



SCHEDULE II
 QLOGIC CORPORATION
 VALUATION AND QUALIFYING ACCOUNTS
 Additions:Charged to
    
    Deductions:Balance at
    
    Costs and
    
    Amounts
    
    Balance atBeginning of
    
    Expenses
    
    Written Off, Net
    
    End ofYear
    
    or Revenues
    
    of Recoveries
    
    Year(In thousands)Year ended March 29, 2009:Allowance for doubtful accounts
    
    $
    1,176
    
    
    $
    278
    
    
    $
    88
    
    
    $
    1,366Sales returns and allowances
    
    $
    7,601
    
    
    $
    37,074
    
    
    $
    35,827
    
    
    $
    8,848Year ended March 30, 2008:Allowance for doubtful accounts
    
    $
    1,075
    
    
    $
    399
    
    
    $
    298
    
    
    $
    1,176Sales returns and allowances
    
    $
    5,219
    
    
    $
    29,820
    
    
    $
    27,438
    
    
    $
    7,601Year ended April 1, 2007:Allowance for doubtful accounts
    
    $
    1,239
    
    
    $
    30
    
    
    $
    194
    
    
    $
    1,075Sales returns and allowances
    
    $
    4,102
    
    
    $
    26,503
    
    
    $
    25,386
    
    
    $
    5,219
 70




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNo.
    
    Description3.1
    
    Certificate of Incorporation of Emulex Micro Devices Corporation,
dated November 13, 1992. (incorporated by reference to Exhibit 3.1
of the Registrants Registration Statement on Form 10/A filed on
February 15, 1994)3.2
    
    EMD Incorporation Agreement, dated as of January 1, 1993.
(incorporated by reference to Exhibit 3.2 of the Registrants
Registration Statement on Form 10/A filed on February 15, 1994)3.3
    
    Certificate of Amendment of Certificate of Incorporation, dated
May 26, 1993. (incorporated by reference to Exhibit 3.3 of the
Registrants Registration Statement on Form 10/A filed on February
15, 1994)3.4
    
    Certificate of Amendment of Certificate of Incorporation, dated
February 24, 1994. (incorporated by reference to Exhibit 3.4 of
the Registrants Annual Report on Form 10-K for the year ended
March 30, 2003)3.5
    
    Certificate of Designation of Rights, Preferences and Privileges
of Series A Junior Participating Preferred Stock, dated June 4,
1996. (incorporated by reference to Exhibit 3.5 of the
Registrants Annual Report on Form 10-K for the year ended March
30, 2003)3.6
    
    Certificate of Amendment of Certificate of Incorporation, dated
February 5, 1999. (incorporated by reference to Exhibit 3.6 of the
Registrants Annual Report on Form 10-K for the year ended March
28, 1999)3.7
    
    Certificate of Amendment of Certificate of Incorporation, dated
January 4, 2000. (incorporated by reference to Exhibit 3.7 of the
Registrants Quarterly Report on Form 10-Q for the quarter ended
December 26, 1999)3.8
    
    Certificate of Amendment of Certificate of Incorporation, dated
September 28, 2000. (incorporated by reference to Exhibit 3.8 of
the Registrants Annual Report on Form 10-K for the year ended
March 30, 2003)3.9
    
    By-Laws of QLogic Corporation, as amended. (incorporated by
reference to Exhibit 3.9 of the Registrants Current Report on
Form 8-K filed on November 12, 2008)10.1
    
    QLogic Corporation Non-Employee Director Stock Option Plan, as
amended.* (incorporated by reference to Exhibit 4.1 of the
Registrants Registration Statement on Form S-8 filed on February
6, 2004 (File No. 333-112572))10.2
    
    QLogic Corporation Stock Awards Plan, as amended.* (incorporated
by reference to Exhibit 4.2 of the Registrants Registration
Statement on Form S-8 filed on February 6, 2004 (File No.
333-112572))10.3
    
    Form of Indemnification Agreement between QLogic Corporation and
Directors and Executive Officers.* (incorporated by reference to
Exhibit 10.1 of the Registrants Current Report on Form 8-K filed
on April 7, 2006)10.4
    
    QLogic Corporation 1998 Employee Stock Purchase Plan, Amended and
Restated Effective May 22, 2008.* (incorporated by reference to
Exhibit 10.3 of the Registrants Current Report on Form 8-K filed
on September 4, 2008)10.5
    
    QLogic Corporation 2005 Performance Incentive Plan, Amended and
Restated Effective July 16, 2008.* (incorporated by reference to
Exhibit 10.1 of the Registrants Current Report on Form 8-K filed
on September 4, 2008)
 71




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##### Table of Contents



ExhibitNo.
    
    Description10.6
    
    Terms and Conditions of Nonqualified Stock Option under the QLogic
Corporation 2005 Performance Incentive Plan.* (incorporated by
reference to Exhibit 10.1 of the Registrants Quarterly Report on
Form 10-Q for the quarter ended July 2, 2006)10.7
    
    Terms and Conditions of Incentive Stock Option under the QLogic
Corporation 2005 Performance Incentive Plan.* (incorporated by
reference to Exhibit 10.2 of the Registrants Quarterly Report on
Form 10-Q for the quarter ended July 2, 2006)10.8
    
    Terms and Conditions of Stock Unit Award under the QLogic
Corporation 2005 Performance Incentive Plan.* (incorporated by
reference to Exhibit 10.1 of the Registrants Quarterly Report on
Form 10-Q for the quarter ended December 28, 2008)10.9
    
    Change in Control Severance Agreement, dated December 18, 2008,
between QLogic Corporation and H.K. Desai.* (incorporated by
reference to Exhibit 10.2 of the Registrants Quarterly Report on
Form 10-Q for the quarter ended December 28, 2008)10.10
    
    Change in Control Severance Agreement, dated December 18, 2008,
between QLogic Corporation and Simon Biddiscombe.* (incorporated
by reference to Exhibit 10.3 of the Registrants Quarterly Report
on Form 10-Q for the quarter ended December 28, 2008)10.11
    
    Employment Separation and Mutual General Releases Agreement, dated
July 14, 2008, between Denis Maynard and QLogic Corporation.*
(incorporated by reference to Exhibit 10.1 of the Registrants
Quarterly Report on Form 10-Q for the quarter ended June 29, 2008)10.12
    
    Non-Employee Director Equity Award Program under the QLogic
Corporation 2005 Performance Incentive Plan.* (incorporated by
reference to Exhibit 10.2 of the Registrants Current Report on
Form 8-K filed on September 4, 2008)21.1
    
    Subsidiaries of the Registrant.23.1
    
    Consent of Independent Registered Public Accounting Firm.24
    
    Power of Attorney (included on signature page).31.1
    
    Certification of Chief Executive Officer pursuant to Rule
13a-14(a) of the Securities Exchange Act of 1934, as amended, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Rule
13a-14(a) of the Securities Exchange Act of 1934, as amended, as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32
    
    Certification of Chief Executive Officer and Chief Financial
Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act
of 1934, as amended, and 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Compensation plan, contract or arrangement required to be filed as an exhibit pursuant to
applicable rules of the Securities and Exchange Commission. 72