Investor Relations Contact: | Public Relations Contact: | |
Randi Paikoff Feigin | Kathy Durr | |
Tel: 408-745-2371 randi@juniper.net | Tel: 408-745-5058 kdurr@juniper.net | |
Juniper Networks, Inc. Reports Q4’04 and Year End 2004 Financial Results
2004 Net Revenue of $1.3B, up 90%, 2004 GAAP EPS of $0.25, up 178%, and
2004 Non-GAAP EPS of $0.44, up 214%, from 2003
Sunnyvale, CA – January 18, 2005 — Juniper Networks, Inc. (NASDAQ: JNPR) today reported its results for the quarter and annual periods ended December 31, 2004.
Net revenues for the fourth quarter were $430.1 million, compared to $207.0 million for the same period last year, an increase of 108 percent.
GAAP net income for the fourth quarter was $66.0 million or $0.11 per share, compared to $14.7 million or $0.03 per share in the fourth quarter of 2003. Non-GAAP net income was $85.9 million or $0.15 per share, compared to $27.7 million or $0.06 per share in the fourth quarter of 2003. See the table at the bottom of the Non-GAAP Condensed Consolidated Statements of Operations for a reconciliation of the non-GAAP net income to the GAAP net income.
Net revenues for the full year 2004 were $1,336.0 million, compared to $701.4 million during calendar year 2003, an increase of 90 percent.
GAAP net income for calendar year 2004 was $135.7 million or $0.25 per share, compared to $39.2 million or $0.09 per share during calendar year 2003. Non-GAAP net income for calendar year 2004 was $238.6 million or $0.44 per share, compared to $59.0 million or $0.14 per share during calendar year 2003. See the table at the bottom of the Non-GAAP Condensed Consolidated Statements of Operations for a reconciliation of the non-GAAP net income to the GAAP net income.
Cash provided by operations was $142.5 million for the fourth quarter, compared to cash provided by operations of $62.9 million for the same period last year. Cash provided by operations for 2004 was $439.4M, up from $178.6M in 2003. Capital expenditures and depreciation during the fourth quarter were $18.5 million and $11.5 million, respectively.
“The fourth quarter was strong in every dimension, which completed a year of record performance,” said Scott Kriens, CEO of Juniper Networks. “We are in the sweet spot of the new networking industry, with both opportunities and capabilities to extend our growth and leadership strengths in an expanding marketplace.”
Juniper Networks will host a conference call web cast today, January 18, 2005 at 1:45 p.m. PT/4:45 p.m. ET at: http://www.juniper.net/company/investor/conferencecall.html. The conference call will be archived on the Juniper Networks website until February 28, 2005. A replay will be accessible by telephone after 3:00 p.m. Pacific Time through January 25, 2005 by dialing 800-633-8284 (or 402-977-9140), reservation number, 21227354. The replays will be available 24 hours/day, including weekends.
About Juniper Networks, Inc.
Juniper Networks is the leader in delivering secure and assured communications over a single IP network. The company’s purpose-built, high performance IP platforms enable customers to support many different services and applications at scale. Service providers, enterprises, governments and research and education institutions worldwide rely on Juniper Networks to deliver products for building networks that are tailored to the specific needs of their users, services and applications. Juniper Networks’ portfolio of proven networking and security solutions supports the complex scale, security and performance requirements of the world’s most demanding networks. Additional information can be found atwww.juniper.net.
Juniper Networks, the Juniper Networks logo, NetScreen, NetScreen Technologies, the NetScreen logo, NetScreen-Global Pro, ScreenOS, and GigaScreen are registered trademarks of Juniper Networks, Inc. in the United States and other countries.
Statements in this release concerning Juniper Networks’ business outlook, future financial and operating results, and overall future prospects are forward looking statements that involve a number of uncertainties and risks. Actual results could differ materially from those anticipated in those forward-looking statements as a result of certain factors, including: general economic conditions globally or regionally; business and economic conditions in the networking industry; changes in overall technology spending; the network capacity requirements of communication service providers; increases in competition; the timing of orders and their fulfillment; availability and cost of key parts and supplies; ability to establish and maintain relationships with distributors and resellers; variations in the expected mix of products sold; changes in customer mix; customer and industry analyst perceptions of Juniper Networks and its technology, products and future prospects; delays in scheduled product availability; market acceptance of our products and services; rapid technological and market change; adoption of regulations or standards affecting our products, services or industry; the ability to successfully acquire, integrate and manage businesses and technologies; product defects, returns or vulnerabilities; the ability to recruit and retain key personnel; currency fluctuations; litigation; and other factors listed in our most recent report on Form 10-Q filed with the Securities and Exchange Commission. All statements made in this press release are made only as of the date set forth at the beginning of this release. Juniper Networks undertakes no obligation to update the information in this release in the event facts or circumstances subsequently change after the date of this press release.
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Juniper Networks, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
December 31, 2004 | December 31, 2003* | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 713,182 | $ | 365,606 | ||||
Short-term investments | 404,659 | 215,906 | ||||||
Accounts receivable, net | 187,306 | 77,964 | ||||||
Prepaid expenses and other current assets | 108,586 | 31,333 | ||||||
Total current assets | 1,413,733 | 690,809 | ||||||
Property and equipment, net | 275,612 | 244,491 | ||||||
Long-term investments | 595,234 | 394,297 | ||||||
Restricted cash | 31,226 | 30,837 | ||||||
Goodwill | 4,427,930 | 983,397 | ||||||
Purchased intangible assets, net and other long-term assets | 255,979 | 67,266 | ||||||
Total assets | $ | 6,999,714 | $ | 2,411,097 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 113,890 | $ | 61,237 | ||||
Accrued compensation | 82,946 | 42,650 | ||||||
Accrued warranty | 38,921 | 35,324 | ||||||
Other accrued liabilities | 107,330 | 66,743 | ||||||
Deferred revenue | 159,750 | 59,434 | ||||||
Total current liabilities | 502,837 | 265,388 | ||||||
Deferred revenue, net of current portion | 22,700 | 15,878 | ||||||
Other long-term liabilities, net of current portion | 81,440 | 25,312 | ||||||
Long-term debt | 400,000 | 542,076 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Common stock and additional paid-in capital | 5,888,220 | 1,557,376 | ||||||
Deferred stock compensation | (32,394 | ) | (1,228 | ) | ||||
Accumulated other comprehensive income (loss) | (716 | ) | 4,414 | |||||
Retained earnings | 137,627 | 1,881 | ||||||
Total stockholders’ equity | 5,992,737 | 1,562,443 | ||||||
Total liabilities and stockholders’ equity | $ | 6,999,714 | $ | 2,411,097 | ||||
*Certain amounts that were previously reported have been reclassified to conform to the current period presentation. Specifically, deferred revenue and restructuring liabilities have been reclassified between short-term and long-term accounts. |
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Juniper Networks, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||||||
Net revenues: | ||||||||||||||||
Product (1) | $ | 379,834 | $ | 179,104 | $ | 1,162,928 | $ | 602,455 | ||||||||
Service | 50,219 | 27,851 | 173,091 | 98,938 | ||||||||||||
Total net revenues | 430,053 | 206,955 | 1,336,019 | 701,393 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Product | 99,434 | 54,753 | 317,616 | 200,621 | ||||||||||||
Service | 27,317 | 15,876 | 92,958 | 56,728 | ||||||||||||
Total cost of revenues | 126,751 | 70,629 | 410,574 | 257,349 | ||||||||||||
Gross margin | 303,302 | 136,326 | 925,445 | 444,044 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 68,759 | 44,695 | 238,363 | 176,104 | ||||||||||||
Sales and marketing | 101,195 | 44,380 | 302,345 | 145,784 | ||||||||||||
General and administrative | 14,599 | 7,170 | 53,261 | 28,462 | ||||||||||||
Amortization of purchased intangibles and deferred stock compensation (2) | 28,523 | 5,375 | 100,737 | 22,698 | ||||||||||||
Restructuring costs | – | – | (5,058 | ) | 13,985 | |||||||||||
In-process research and development | – | – | 27,500 | – | ||||||||||||
Integration costs | – | – | 5,087 | – | ||||||||||||
Total operating expenses | 213,076 | 101,620 | 722,235 | 387,033 | ||||||||||||
Operating income | 90,226 | 34,706 | 203,210 | 57,011 | ||||||||||||
Interest and other income | 11,526 | 6,128 | 28,233 | 33,428 | ||||||||||||
Interest and other expense | (412 | ) | (5,410 | ) | (5,379 | ) | (39,099 | ) | ||||||||
Write-down of investments | – | – | (2,939 | ) | – | |||||||||||
Loss on redemption of convertible subordinated notes | – | (15,193 | ) | (4,107 | ) | (1,085 | ) | |||||||||
Gain on sale of investments | – | – | – | 8,739 | ||||||||||||
Income before income taxes | 101,340 | 20,231 | 219,018 | 58,994 | ||||||||||||
Provision for income taxes | 35,339 | 5,498 | 83,272 | 19,795 | ||||||||||||
Net income | $ | 66,001 | $ | 14,733 | $ | 135,746 | $ | 39,199 | ||||||||
Net income per share: | ||||||||||||||||
Basic | $ | 0.12 | $ | 0.04 | $ | 0.28 | $ | 0.10 | ||||||||
Diluted* | $ | 0.11 | $ | 0.03 | $ | 0.25 | $ | 0.09 | ||||||||
Shares used in computing net income per share: | ||||||||||||||||
Basic | 538,158 | 389,343 | 493,073 | 382,180 | ||||||||||||
Diluted* | 588,583 | 433,577 | 542,625 | 413,821 | ||||||||||||
(1) Product net revenues are generated from groups of similar products as follows: | ||||||||||||||||
Infrastructure | $ | 299,863 | $ | 179,104 | $ | 975,729 | $ | 602,455 | ||||||||
Security | 79,971 | – | 187,199 | – | ||||||||||||
Total | $ | 379,834 | $ | 179,104 | $ | 1,162,928 | $ | 602,455 | ||||||||
(2) Amortization of deferred stock compensation relates to the following cost and expense categories by period: | ||||||||||||||||
Cost of revenues | $ | 676 | $ | 15 | $ | 2,850 | $ | (33 | ) | |||||||
Research and development | 5,217 | 511 | 21,493 | 1,925 | ||||||||||||
Sales and marketing | 3,800 | 78 | 17,685 | 205 | ||||||||||||
General and administrative | 383 | 17 | 1,927 | (60 | ) | |||||||||||
Total | $ | 10,076 | $ | 621 | $ | 43,955 | $ | 2,037 | ||||||||
*2003 amounts have been restated to include shares issuable upon conversion of the Zero Coupon Convertible Senior Notes due June 15, 2008 |
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Juniper Networks, Inc.
Non-GAAP Condensed Consolidated Statements of Operations (1)
(in thousands, except per share amounts)
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||||||
Net revenues: | ||||||||||||||||
Product | $ | 379,834 | $ | 179,104 | $ | 1,162,928 | $ | 602,455 | ||||||||
Service | 50,219 | 27,851 | 173,091 | 98,938 | ||||||||||||
Total net revenues | 430,053 | 206,955 | 1,336,019 | 701,393 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Product | 99,434 | 54,753 | 317,616 | 200,621 | ||||||||||||
Service | 27,317 | 15,876 | 92,958 | 56,728 | ||||||||||||
Total cost of revenues | 126,751 | 70,629 | 410,574 | 257,349 | ||||||||||||
Gross margin | 303,302 | 136,326 | 925,445 | 444,044 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 68,759 | 44,695 | 238,363 | 176,104 | ||||||||||||
Sales and marketing | 101,195 | 44,380 | 302,345 | 145,784 | ||||||||||||
General and administrative | 14,599 | 7,170 | 53,261 | 28,462 | ||||||||||||
Total operating expenses | 184,553 | 96,245 | 593,969 | 350,350 | ||||||||||||
Operating income | 118,749 | 40,081 | 331,476 | 93,694 | ||||||||||||
Interest and other income | 8,024 | 6,128 | 24,731 | 32,238 | ||||||||||||
Interest and other expense | (412 | ) | (5,410 | ) | (5,379 | ) | (39,099 | ) | ||||||||
Income before income taxes | 126,361 | 40,799 | 350,828 | 86,833 | ||||||||||||
Provision for income taxes | 40,436 | 13,056 | 112,265 | 27,787 | ||||||||||||
Net income | $ | 85,925 | $ | 27,743 | $ | 238,563 | $ | 59,046 | ||||||||
Net income per share: | ||||||||||||||||
Basic | $ | 0.16 | $ | 0.07 | $ | 0.48 | $ | 0.15 | ||||||||
Diluted* | $ | 0.15 | $ | 0.06 | $ | 0.44 | $ | 0.14 | ||||||||
Shares used in computing net income per share: | ||||||||||||||||
Basic | 538,158 | 389,343 | 493,073 | 382,180 | ||||||||||||
Diluted* | 588,583 | 433,577 | 542,625 | 413,821 | ||||||||||||
*2003 amounts have been restated to include shares issuable upon conversion of the Zero Coupon Convertible Senior Notes due June 15, 2008 |
(1) The non-GAAP statements exclude restructuring costs, amortization of purchased intangibles and deferred stock compensation, in-process research and development, integration costs, write-down of investments, loss on redemption of convertible subordinated notes, gain on sale of investments and a prior period acquisition related adjustment. See reconciliation to GAAP information below:
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||||||
Non-GAAP net income | $ | 85,925 | $ | 27,743 | $ | 238,563 | $ | 59,046 | ||||||||
Amortization of purchased intangibles and deferred stock compensation | (28,523 | ) | (5,375 | ) | (100,737 | ) | (22,698 | ) | ||||||||
Restructuring costs | – | – | 5,058 | (13,985 | ) | |||||||||||
In-process research and development | – | – | (27,500 | ) | – | |||||||||||
Integration costs | – | – | (5,087 | ) | – | |||||||||||
Gain from non-recurring engineering contract | 3,502 | – | 3,502 | – | ||||||||||||
Acquisition related adjustment | – | – | – | 1,190 | ||||||||||||
Write-down of investments | – | – | (2,939 | ) | – | |||||||||||
Loss on redemption of convertible subordinated notes | – | (15,193 | ) | (4,107 | ) | (1,085 | ) | |||||||||
Gain on sale of investments | – | – | – | 8,739 | ||||||||||||
Income tax effect | 5,097 | 7,558 | 28,993 | 7,992 | ||||||||||||
Net income | $ | 66,001 | $ | 14,733 | $ | 135,746 | $ | 39,199 |
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Juniper Networks, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
Year Ended December 31, | ||||||||
2004 | 2003 | |||||||
OPERATING ACTIVITIES: | ||||||||
Net income | $ | 135,746 | $ | 39,199 | ||||
Adjustments to reconcile net income to net cash from operating activities: | ||||||||
Depreciation | 40,843 | 43,998 | ||||||
Amortization of purchased intangibles, deferred stock compensation and debt costs | 104,831 | 26,042 | ||||||
Restructuring and other | 321 | 3,621 | ||||||
In-process research and development | 27,500 | – | ||||||
Write-down of investments | 2,939 | – | ||||||
Loss on redemption of convertible subordinated notes | 4,107 | 1,085 | ||||||
Gain on sale of investments | – | (8,739 | ) | |||||
Tax benefit of employee stock option plans | 65,988 | 10,813 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable, net | (81,398 | ) | 537 | |||||
Prepaid expenses, other current assets and other long-term assets | (56,253 | ) | (3,092 | ) | ||||
Accounts payable | 29,390 | 12,963 | ||||||
Accrued compensation | 40,296 | 17,528 | ||||||
Accrued warranty | 3,597 | 2,966 | ||||||
Other accrued liabilities | 27,893 | 2,467 | ||||||
Deferred revenue | 93,648 | 29,166 | ||||||
Net cash provided by operating activities | 439,448 | 178,554 | ||||||
INVESTING ACTIVITIES: | ||||||||
Purchases of property and equipment, net | (63,185 | ) | (19,388 | ) | ||||
Purchases of available-for-sale investments | (739,437 | ) | (734,679 | ) | ||||
Maturities and sales of available-for-sale investments | 704,740 | 1,085,929 | ||||||
Increase in restricted cash | (249 | ) | (30,837 | ) | ||||
Minority equity investments | (1,225 | ) | (900 | ) | ||||
Cash and cash equivalents acquired in connection with the NetScreen acquisition, net of cash paid | 40,889 | – | ||||||
Net cash (used in) provided by investing activities | (58,467 | ) | 300,125 | |||||
FINANCING ACTIVITIES: | ||||||||
Proceeds from issuance of common stock | 175,172 | 91,755 | ||||||
Redemption of convertible subordinated notes | (144,967 | ) | (792,013 | ) | ||||
Retirement of common stock | (63,610 | ) | – | |||||
Proceeds from issuance of convertible senior notes | – | 392,750 | ||||||
Net cash used in financing activities | (33,405 | ) | (307,508 | ) | ||||
Net increase in cash and cash equivalents | 347,576 | 171,171 | ||||||
Cash and cash equivalents at beginning of period | 365,606 | 194,435 | ||||||
Cash and cash equivalents at end of period | $ | 713,182 | $ | 365,606 |
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