Juniper Networks, Inc. Reports Q2’05 Financial Results Q2’05 Net Revenue $493.0MM; GAAP EPS $0.15; Non-GAAP EPS $0.18
Sunnyvale, CA – July 19, 2005 — Juniper Networks, Inc. (NASDAQ: JNPR) today reported its results for the quarter ended June 30, 2005.
Net revenues for the second quarter were $493.0 million, compared with $306.9 million for the same period last year, an increase of 61 percent.
GAAP net income for the second quarter was $89.0 million or $0.15 per share, compared with a GAAP net loss of $12.6 million or $0.02 per share in the second quarter of 2004. Non-GAAP net income was $104.3 million or $0.18 per share, compared with non-GAAP net income of $42.7 million or $0.08 per share in the second quarter of 2004. 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 $166.1 million for the second quarter, compared to cash provided by operations of $119.0 million for the same period last year. Capital expenditures and depreciation during the second quarter were $18.1 million and $12.9 million, respectively.
“The news for this quarter is once again growth – significant revenue growth, outpaced by earnings per share growth, all while our investment in innovation grows as well,” commented Scott Kriens, chairman and CEO, Juniper Networks. “The momentum we are enjoying in our brand, our portfolio and the corresponding market opportunity continues to be fueled by the confidence of our customers and the strong demand for the value we bring to the network.”
Juniper Networks continues to leverage its traffic processing expertise to enhance the value of the network for customers worldwide.
•
Juniper is helping its customers capitalize on the increasing demand for triple play services – voice, video and data — by delivering cost-effective solutions with assured levels of quality, security and availability. These solutions, such as the recently announced E320, are developed organically through Juniper’s internal innovation engine, through partnerships with market leaders, such as Avaya and through acquisitions such as that of Kagoor, delivering key Session Border Control technology to secure and assure the delivery of multimedia services.
•
Juniper continues to participate at the leading edge of IP-based converged network deployments. With Lucent and Siemens, Juniper is providing assured, high performance networking solutions for one of the most revolutionary projects the industry has seen — British Telecommunications 21st Century Network.
•
In the security market, Juniper continues to lead the emerging SSL VPN space, as enterprises looking for secure connections across a distributed organization, and service providers, offering both network and CPE-based managed security solutions, recognize the benefit of Juniper’s best-in-class solution.
•
Enterprises looking for secure and assured networking and security solutions to support mission critical requirements increasingly look to Juniper to address those needs. The United States Department of Labor’s Mine Safety and Heath Administration deployed the Juniper Networks Secure Access FIPS-compliant SSL VPNs to provide remote employees with secure access to agency network resources and information faster and more securely than their previous traditional access methods. Whether it is standalone routing, or combined routing and security, customers appreciate the focus and innovation Juniper brings to the problem.
Juniper Networks will host a conference call web cast today, July 19, 2005 at 1:45 p.m. (Pacific Time), to be broadcasted live over the Internet http://www.juniper.net/company/investor/conferencecall.html. The conference call will be archived on the Juniper Networks website until August 19, 2005. A replay will be accessible by telephone after 3:00 p.m. Pacific Time through July 26th, 2005 by dialing 800-633-8284 (or 402-977-9140), reservation number, 21250338. The replays will be available 24 hours/day, including weekends.
About Juniper Networks, Inc.
Juniper Networks is the leader in enabling 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.
1
Juniper Networks, Inc. Condensed Consolidated Balance Sheets (in thousands)
June 30, 2005
December 31, 2004
ASSETS
Current assets:
Cash and cash equivalents
$
857,061
$
713,182
Short-term investments
445,465
404,659
Accounts receivable, net
205,366
187,306
Prepaid expenses and other current assets
106,540
108,586
Total current assets
1,614,432
1,413,733
Property and equipment, net
291,705
275,612
Long-term investments
580,124
595,234
Restricted cash
38,390
31,226
Goodwill
4,576,088
4,427,930
Purchased intangible assets, net and other long-term assets
283,077
255,979
Total assets
$
7,383,816
$
6,999,714
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
116,145
$
113,890
Other accrued liabilities
218,124
229,197
Deferred revenue
219,797
159,750
Total current liabilities
554,066
502,837
Deferred revenue, net of current portion
30,476
22,700
Convertible senior notes and other long-term liabilities
476,388
481,440
Commitments and contingencies
Stockholders’ equity:
Common stock and additional paid-in capital
6,045,410
5,888,220
Deferred stock compensation
(19,175
)
(32,394
)
Accumulated other comprehensive income
(5,422
)
(716
)
Retained earnings
302,073
137,627
Total stockholders’ equity
6,322,886
5,992,737
Total liabilities and stockholders’ equity
$
7,383,816
$
6,999,714
2
Juniper Networks, Inc. Condensed Consolidated Statements of Operations (in thousands, except per share amounts)
Three Months Ended
Six Months Ended
June 30,
June 30,
2005
2004
2005
2004
Net revenues:
Product (1)
$
423,732
$
263,670
$
816,012
$
457,854
Service
69,296
43,229
126,128
73,098
Total net revenues
493,028
306,899
942,140
530,952
Cost of revenues:
Product
121,324
73,887
233,804
130,452
Service
33,897
22,883
64,612
40,337
Total cost of revenues
155,221
96,770
298,416
170,789
Gross margin
337,807
210,129
643,724
360,163
Operating expenses:
Research and development
81,238
58,093
157,366
104,723
Sales and marketing
102,280
75,657
193,708
119,197
General and administrative
15,395
17,371
30,862
26,236
In-process research and development
1,900
27,500
1,900
27,500
Integration costs
–
5,087
–
5,087
Restructuring costs
(6,560
)
(3,835
)
(6,560
)
(3,835
)
Amortization of purchased intangibles and deferred stock compensation
23,929
35,060
45,893
39,189
Total operating expenses
218,182
214,933
423,169
318,097
Operating income (expense)
119,625
(4,804
)
220,555
42,066
Interest and other income
13,417
5,309
24,495
10,295
Interest and other expense
(1,096
)
(1,480
)
(1,876
)
(3,980
)
Gain (loss) on redemption of convertible subordinated notes
–
(4,107
)
–
(4,107
)
Income (loss) before income taxes
131,946
(5,082
)
243,174
44,274
Provision for income taxes
42,935
7,472
78,728
23,288
Net income (loss)
$
89,011
$
(12,554
)
$
164,446
$
20,986
Net income (loss) per share:
Basic
$
0.16
$
(0.02
)
$
0.30
$
0.05
Diluted(2)
$
0.15
$
(0.02
)
$
0.28
$
0.04
Shares used in computing net income (loss) per share:
Basic
546,662
506,189
544,622
450,343
Diluted(2)
591,050
506,189
589,953
489,738
(1) Product net revenues are generated from groups of similar products as follows:
Infrastructure
$
330,473
$
219,834
$
634,604
$
414,018
Security
93,259
43,836
181,408
43,836
Total
$
423,732
$
263,670
$
816,012
$
457,854
(2)2004 amounts have been restated to include shares issuable upon conversion of the Zero Coupon Convertible Senior Notes due June 15, 2008
3
Juniper Networks, Inc. Non-GAAP Condensed Consolidated Statements of Operations (3) (in thousands, except per share amounts)
Three Months Ended
Six Months Ended
June 30,
June 30,
2005
2004
2005
2004
Net revenues:
Product
$
423,732
$
263,670
$
816,012
$
457,854
Service
69,296
43,229
126,128
73,098
Total net revenues
493,028
306,899
942,140
530,952
Cost of revenues:
Product
121,324
73,887
233,804
130,452
Service
33,897
22,883
64,612
40,337
Total cost of revenues
155,221
96,770
298,416
170,789
Gross margin
337,807
210,129
643,724
360,163
Operating expenses:
Research and development
81,238
58,093
157,366
104,723
Sales and marketing
102,280
75,657
193,708
119,197
General and administrative
15,395
17,371
30,862
26,236
Total operating expenses
198,913
151,121
381,936
250,156
Operating income
138,894
59,008
261,788
110,007
Interest and other income
13,417
5,309
24,495
10,295
Interest and other expense
(1,096
)
(1,480
)
(1,876
)
(3,980
)
Income before income taxes
151,215
62,837
284,407
116,322
Provision for income taxes
46,877
20,108
88,167
37,223
Net income
$
104,338
$
42,729
$
196,240
$
79,099
Net income per share:
Basic
$
0.19
$
0.08
$
0.36
$
0.18
Diluted(2)
$
0.18
$
0.08
$
0.33
$
0.16
Shares used in computing net income per share:
Basic
546,662
506,189
544,622
450,343
Diluted(2)
591,050
557,618
589,953
489,738
(2)2004 amounts have been restated to include shares issuable upon conversion of the Zero Coupon Convertible Senior Notes due June 15, 2008
(3) The non-GAAP statements exclude in-process research and development, integration costs, restructuring costs, amortization of purchased intangibles and deferred stock compensation, and the loss on redemption of the convertible subordinated notes. See reconciliation to GAAP information below:
Three Months Ended
Six Months Ended
June 30,
June 30,
2005
2004
2005
2004
Non-GAAP net income
$
104,338
$
42,729
$
196,240
$
79,099
In-process research and development
(1,900
)
(27,500
)
(1,900
)
(27,500
)
Integration costs
–
(5,087
)
–
(5,087
)
Restructuring costs
6,560
3,835
6,560
3,835
Amortization of purchased intangibles and deferred stock compensation
(23,929
)
(35,060
)
(45,893
)
(39,189
)
Loss on redemption of convertible subordinated notes
–
(4,107
)
–
(4,107
)
Income tax effect
3,942
12,636
9,439
13,935
Net income (loss)
$
89,011
$
(12,554
)
$
164,446
$
20,986
4
Juniper Networks, Inc. Condensed Consolidated Statements of Cash Flows (in thousands)
Six months ended June 30,
2005
2004
OPERATING ACTIVITIES:
Net income
$
164,446
$
20,986
Adjustments to reconcile net income to net cash from operating activities:
Depreciation
24,618
18,712
Amortization of purchased intangibles, deferred stock compensation and debt costs
46,734
42,557
In-process research and development
1,900
27,500
Tax benefit of employee stock option plans
64,595
–
Loss on redemption of convertible subordinated notes
–
4,107
Changes in operating assets and liabilities:
Accounts receivable, net
(13,142
)
(34,742
)
Prepaid expenses, other current assets and other long-term assets
(23,390
)
(16,242
)
Accounts payable
2,181
8,151
Accrued warranty
(2,849
)
5,757
Other accrued liabilities
(31,420
)
41,302
Deferred revenue
66,836
73,689
Net cash provided by operating activities
300,509
191,777
INVESTING ACTIVITIES:
Purchases of property and equipment, net
(40,637
)
(19,680
)
Purchases of available-for-sale investments
(426,810
)
(348,140
)
Maturities and sales of available-for-sale investments
398,859
520,221
Increase in restricted cash
(7,164
)
(90
)
Minority equity investments
(968
)
(1,180
)
Cash paid in connection with acquisitions made, net of cash and cash equivalents acquired
(155,256
)
40,889
Net cash provided by (used in) investing activities
(231,976
)
192,020
FINANCING ACTIVITIES:
Proceeds from issuance of common stock
75,346
71,469
Redemption of convertible subordinated notes
–
(144,967
)
Net cash (used in) provided by financing activities
75,346
(73,498
)
Net increase in cash and cash equivalents
143,879
310,299
Cash and cash equivalents at beginning of period
713,182
365,606
Cash and cash equivalents at end of period
$
857,061
$
675,905
5
We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.
