Arris 8-K Arris Announces Preliminary and Unaudited Second Quarter 2009 Results

Exhibit 99.1

FOR IMMEDIATE RELEASE Contact: Jim Bauer
Investor Relations
(678) 473-2647
jim.bauer@arrisi.com

ARRIS ANNOUNCES PRELIMINARY AND UNAUDITED
SECOND QUARTER 2009 RESULTS

Suwanee, Ga. (July 30, 2009)ARRIS Group, Inc. (NASDAQ:ARRS), a global technology leader in the development of advanced cable telephony, next generation high-speed data, demand driven video solutions, operations software and broadband access equipment, today announced preliminary and unaudited financial results for the second quarter 2009.

Revenues in the second quarter 2009 were $278.5 million, up 9.9% as compared to first quarter 2009 revenues of $253.5 million, and down 0.9% compared to second quarter 2008 revenues of $281.1 million. First half 2009 revenues were $532.0 million, down 4.1% as compared to $554.6 million for the same period in 2008.

Adjusted net income (a non GAAP measure) in the second quarter 2009 was $0.27 per diluted share, up 50% from $0.18 per diluted share in the first quarter 2009 and up 80% from $0.15 per diluted share in the second quarter of 2008.

GAAP net income in the second quarter 2009 was $0.18 per diluted share, up 80% as compared to the first quarter 2009 of $0.10 per diluted share, and up 200% as compared to the second quarter 2008 of $0.06 per diluted share. Significant GAAP items in the second quarter 2009 that have been excluded in computing adjusted net income and earnings per shares include: amortization of intangibles, equity compensation expense, and non-cash interest related to convertible debt. A reconciliation of adjusted earnings to GAAP earnings per share is attached to this release and also can be found on the Company’s website (www.arrisi.com).

Gross margin in the second quarter 2009 was 42.1%, up significantly from both the first quarter 2009 of 37.7% and the second quarter 2008 of 33.0%. The improvement reflects strong CMTS and MCS product sales.

The Company ended the second quarter 2009 with $524 million of cash and short-term investments, up approximately $100 million from the end of the first quarter 2009 as a result of both strong earnings and lower working capital, in particular accounts receivable. The Company generated $94.3 million of cash from operating activities in the second quarter 2009, and $108.2 million through

the first half of 2009. This amount compares to cash generated from operating activities of $40.9 million during the first half of 2008.

Order backlog at the end of the second quarter 2009 was $165.7 million and the Company’s book to bill ratio in the second quarter was 1.04. These amounts compare to order backlog of $155.0 million and book to bill ratio of 1.16 in the first quarter of 2009.

“I deeply appreciate the trust that our customers have placed in ARRIS as their technology partner in today’s challenging market. Our impressive second quarter performance speaks volumes as to the success of our new products and the value we bring to our customers,” said Bob Stanzione, ARRIS Chairman & CEO. “Continual increases in worldwide internet traffic and the resultant customer need to augment network capacity to meet both consumer demand and competitive threats continue to cause me to be optimistic about our business. ARRIS is a healthy company operating in a healthy industry segment and we are well positioned for further growth as the general economy improves.”

During the quarter the Company demonstrated its broad range of ARRIS wideband data and on-demand video products at the Japan Cable Show in Tokyo. The Japanese telecommunications market continues to be driven by intense bandwidth and data speed competition between cable operators, telcos and other access providers. Also during the quarter, the Company announced that it had concluded a series of interoperability test activities of its newest Video on Demand and Ad Insertion products with several technology companies. These products will help accelerate advertising revenue services for the cable industry.

“I am very pleased with our second quarter 2009 results, most notably our strong gross margins and cash generation. Our profitability has improved significantly. First half 2009 adjusted earnings were $0.45 per diluted share, up 67% or $0.18 per diluted share from the first half of 2008.” said David Potts, ARRIS EVP & CFO. “With respect to the third quarter 2009, we now project that revenues for the Company will be in the range of $260 to $280 million with adjusted net income per diluted share in the range of $0.22 to $0.26 and GAAP net income per diluted share, in the range of $0.14 to $0.18.

ARRIS management will conduct a conference call at 5:00pm EDT, today, Thursday, July 30, 2009, to discuss these results in detail. You may participate in this conference call by dialing 888-713-4217 or 617-213-4869 for international calls prior to the start of the call and providing the ARRIS Group, Inc. name, conference passcode 14472969 and Jim Bauer as the moderator. Please note that ARRIS will not accept any calls related to this earnings release until after the conclusion of the 5:00pm EDT conference call. A replay of the conference call can be accessed approximately two hours after the call through Tuesday, August

4, 2009 by dialing 888-286-8010 or 617-801-6888 for international calls and using the passcode 48051208. A replay also will be made available for a period of 12 months following the conference call on ARRIS’ website at www.arrisi.com.

ARRIS is a global communications technology company specializing in the design, engineering and supply of technology supporting triple and quad-play broadband services for residential and business customers around the world. The Company supplies broadband operators with the tools and platforms they need to deliver reliable telephony, demand driven video, next-generation advertising and high-speed data services. ARRIS products expand and help grow network capacity with access and outside plant construction equipment, reliably deliver voice, video and data services and assure optimal service delivery for end customers. Headquartered in Atlanta, Georgia, USA, ARRIS has R&D centers in Atlanta; Chicago; Beaverton, Oregon; State College, Pennsylvania; Wallingford, Connecticut; Ireland and China, and operates support and sales offices throughout the world. Information about ARRIS products and services can be found at http://www.arrisi.com.

Forward-looking statements:

Statements made in this press release, including those related to:

• growth expectations and business prospects;

• third quarter and 2009 revenues and net income;

• expected sales levels and acceptance of new ARRIS products;

• the general market outlook and industry trends

are forward-looking statements. These statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. Among other things,

• projected results for the third quarter as well as the general outlook for 2009 and beyond are based on preliminary estimates, assumptions and projections that management believes to be reasonable at this time, but are beyond management’s control;

• our customers operate in a capital intensive consumer based industry, and the current disruptions in the capital markets or changes in customer spending may adversely impact their ability or willingness to purchase the products that we offer; and

• because the market in which ARRIS operates is volatile, actions taken and contemplated may not achieve the desired impact relative to changing market conditions and the success of these strategies will be dependent on the effective implementation of those plans while minimizing organizational disruption.

In addition to the factors set forth elsewhere in this release, other factors that could cause results to differ from current expectations include: the uncertain current economic climate and its impact on our customers’ plans and access to capital; the impact of rapidly changing technologies; the impact of competition on product development and pricing; the ability of ARRIS to react to changes in general industry and market conditions including regulatory developments; rights to intellectual property, market trends and the adoption of industry standards; and consolidations within the telecommunications industry of both the customer and supplier base. These factors are not intended to be an all-encompassing list of risks and uncertainties that may affect the Company’s business. Additional information regarding these and other factors can be found in ARRIS’ reports filed with the Securities and Exchange Commission, including its Form 10-Q for the quarter ended March 31, 2009. In providing forward-looking statements, the Company expressly disclaims any obligation to update publicly or otherwise these statements, whether as a result of new information, future events or otherwise.

# # # # #

ARRIS GROUP, INC.
PRELIMINARY CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)

	June 30,			March 31,			December 31,			September 30,			June 30,
	2009			2009			2008			2008			2008
ASSETS
Current assets:
Cash and cash equivalents	$	476,846		$	398,938		$	409,894		$	305,987		$	290,266
Short-term investments, at fair value		47,195			25,494			17,371			23,571			7,503
Total cash, cash equivalents and short-term investments		524,041			424,432			427,265			329,558			297,769
Restricted cash		4,552			4,550			5,673			5,768			7,051
Accounts receivable, net		128,482			155,792			159,443			180,367			178,178
Other receivables		5,904			6,636			4,749			5,180			9,067
Inventories, net		115,944			120,774			129,752			139,598			144,507
Prepaids		7,700			6,994			8,004			5,156			5,305
Current deferred income tax assets		41,166			49,027			44,004			42,714			47,412
Other current assets		12,361			18,315			19,782			22,132			18,916
Total current assets		840,150			786,520			798,672			730,473			708,205
Property, plant and equipment, net		60,048			59,438			59,204			60,268			60,823
Goodwill		231,684			231,684			231,684			449,418			452,398
Intangible assets, net		208,822			218,085			227,348			236,689			244,575
Investments		10,317			14,593			14,681			15,086			9,937
Noncurrent deferred income tax assets		3,870			3,771			12,157			3,988			4,256
Other assets		6,251			5,483			6,576			7,173			9,488
	$	1,361,142		$	1,319,574		$	1,350,322		$	1,503,095		$	1,489,682
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	48,859		$	44,422		$	75,863		$	54,304		$	68,476
Accrued compensation, benefits and related taxes		20,753			15,583			27,024			21,831			18,072
Accrued warranty		5,185			5,306			5,652			6,354			7,566
Deferred revenue		43,727			44,006			44,461			35,986			37,614
Current portion of long-term debt		148			147			146			234			314
Current deferred income tax liability		248			241			1,059			—			—
Other accrued liabilities		35,852			31,922			25,410			30,205			26,884
Total current liabilities		154,772			141,627			179,615			148,914			158,926
Long-term debt, net of current portion		205,710			203,080			211,870			209,340			206,865
Accrued pension		19,665			19,289			18,820			10,622			11,362
Noncurrent income tax payable		12,386			12,441			9,607			10,128			6,250
Noncurrent deferred income tax liability		33,999			42,530			41,598			67,403			74,805
Other noncurrent liabilities		15,094			14,391			15,343			18,088			18,694
Total liabilities		441,626			433,358			476,853			464,495			476,902
Stockholders’ equity:
Preferred stock		—			—			—			—			—
Common stock		1,379			1,368			1,362			1,360			1,358
Capital in excess of par value		1,169,223			1,159,054			1,159,097			1,155,211			1,151,680
Treasury stock at cost		(75,960	)		(75,960	)		(75,960	)		(75,960	)		(76,007	)
Unrealized gain (loss) on marketable securities		(161	)		(372	)		(274	)		(128	)		66
Unfunded pension liability		(8,070	)		(8,070	)		(8,070	)		(3,358	)		(3,358	)
Accumulated deficit		(166,711	)		(189,620	)		(202,502	)		(38,341	)		(60,775	)
Cumulative translation adjustments		(184	)		(184	)		(184	)		(184	)		(184	)
Total stockholders’ equity		919,516			886,216			873,469			1,038,600			1,012,780
	$	1,361,142		$	1,319,574		$	1,350,322		$	1,503,095		$	1,489,682

ARRIS GROUP, INC.
PRELIMINARY CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)

	For the Three Months						For the Six Months
	Ended June 30,						Ended June 30,
	2009			2008			2009			2008
Net sales	$	278,521		$	281,110		$	532,039		$	554,616
Cost of sales		161,241			188,226			319,249			376,484
Gross margin		117,280			92,884			212,790			178,132
Gross margin %		42.1	%		33.0	%		40.0	%		32.1	%
Operating expenses:
Selling, general, and administrative expenses		39,128			37,046			74,471			74,028
Research and development expenses		30,143			27,662			58,538			55,784
Restructuring charges		592			175			712			580
Amortization of intangible assets		9,263			12,454			18,526			25,708
		79,126			77,337			152,247			156,100
Operating income		38,154			15,547			60,543			22,032
Other expense (income):
Interest expense		4,278			4,291			8,765			8,312
Loss (gain) on investments		(512	)		171			(215	)		173
Loss (gain) on foreign currency		1,570			350			2,528			(640	)
Interest income		(363	)		(1,702	)		(748	)		(4,387	)
Gain on debt retirement		—			—			(4,151	)		—
Other (income) expense, net		(522	)		65			(625	)		29
Income from continuing operations before income taxes		33,703			12,372			54,989			18,545
Income tax expense		10,794			4,543			19,198			6,887
Net income	$	22,909		$	7,829		$	35,791		$	11,658
Net income per common share
Basic	$	0.18		$	0.06		$	0.29		$	0.09
Diluted	$	0.18		$	0.06		$	0.28		$	0.09
Weighted average common shares:
Basic		124,412			122,741			123,849			126,752
Diluted		128,054			124,651			126,482			128,190

ARRIS GROUP, INC.
PRELIMINARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

	For the Three Months						For the Six Months
	Ended June 30,						Ended June 30,
	2009			2008			2009			2008
Operating Activities:
Net income	$	22,909		$	7,829		$	35,791		$	11,658
Depreciation		5,135			5,132			9,962			10,095
Amortization of intangible assets		9,263			12,454			18,526			25,708
Stock compensation expense		4,053			2,840			7,454			5,391
Deferred income tax provision (benefit)		(762	)		5,396			3,927			(993	)
Amortization of deferred finance fees		179			190			368			381
Provision for doubtful accounts		(16	)		9			(10	)		214
Loss (gain) on investments		(512	)		171			(215	)		173
Loss (gain) on disposal of fixed assets		30			(2	)		30			(2	)
Non-cash interest expense		2,718			2,657			5,536			5,262
Gain on debt retirement		—			—			(4,152	)		—
Excess tax benefits from stock-based compensation plans		(125	)		—			(556	)
Changes in operating assets & liabilities, net of effects of acquisitions and disposals:
Accounts receivable		27,326			(4,948	)		30,971			(10,284	)
Other receivables		212			(2,993	)		(1,820	)		(4,737	)
Inventory		4,830			(21,455	)		13,808			(11,210	)
Income taxes payable		3,055			(3,895	)		1,932			(5,629	)
Accounts payable and accrued liabilities		12,926			11,010			(22,863	)		20,310
Other, net		3,088			(3,975	)		9,465			(5,402	)
Net cash provided by operating activities		94,309			10,420			108,154			40,935
Investing Activities:
Purchases of property, plant, and equipment		(5,802	)		(5,363	)		(10,868	)		(11,792	)
Cash paid for acquisition, net of cash acquired		—			(227	)		(200	)		(4,419	)
Cash proceeds from sale of property, plant & equipment		1			13			1			237
Purchases of short-term-investments		(34,896	)		—			(58,766	)		(16,887	)
Disposals of short-term-investments		18,131			41,980			33,937			72,480
Net cash provided by (used in) investing activities		(22,566	)		36,403			(35,896	)		39,619
Financing Activities:
Payment of debt and capital lease obligations		(36	)		(99	)		(10,628	)		(35,196	)
Repurchase of common stock		—			—			—			(75,960	)
Excess tax benefits from stock-based compensation plans		125			—			556			—
Repurchase of shares to satisfy minimum tax withholdings		(373	)		(796	)		(2,180	)		(1,035	)
Fees and proceeds from issuance of common stock, net		6,449			823			6,946			(1,894	)
Net cash provided by (used in) financing activities		6,165			(72	)		(5,306	)		(114,085	)
Net increase (decrease) in cash and cash equivalents		77,908			46,751			66,952			(33,531	)
Cash and cash equivalents at beginning of period		398,938			243,515			409,894			323,797
Cash and cash equivalents at end of period	$	476,846		$	290,266		$	476,846		$	290,266

ARRIS GROUP, INC.
PRELIMINARY SUPPLEMENTAL NET INCOME RECONCILIATION
(in thousands, except per share data)
(unaudited)

	Q1 2009						Q2 2009						First Half 2009
				Per Diluted						Per Diluted						Per Diluted
	Amount			Share			Amount			Share			Amount			Share
Net income	$	12,882		$	0.10		$	22,909		$	0.18		$	35,791		$	0.28
Highlighted items:
Impacting gross margin:
Stock compensation expense		303			0.00			366			—			669			0.01
Impacting operating expenses:
Restructuring charges		120			0.00			592			—			712			0.01
Amortization of intangible assets		9,263			0.07			9,263			0.07			18,526			0.15
Stock compensation expense		3,098			0.02			3,687			0.03			6,785			0.05
Impacting other (income) / expense:
Non-cash interest expense		2,818			0.02			2,718			0.02			5,536			0.04
Gain on repurchase of debt		(4,152	)		(0.03	)		—			—			(4,152	)		(0.03	)
Impacting income tax expense:
Adjustments of income tax valuation allowances and research & development credits and other		1,455			0.01			—			—			1,455			0.01
Tax related to highlighted items above		(3,646	)		(0.03	)		(5,322	)		(0.04	)		(8,968	)		(0.07	)
Total highlighted items		9,259			0.07			11,304			0.09			20,563			0.16
Net income excluding highlighted items	$	22,141		$	0.18		$	34,213		$	0.27		$	56,354		$	0.45
Weighted average common shares — diluted					124,920						128,054						126,482

	Q1 2008						Q2 2008						First Half 2008
				Per Diluted						Per Diluted						Per Diluted
	Amount			Share			Amount			Share			Amount			Share (1)
Net income	$	3,829		$	0.03		$	7,829		$	0.06		$	11,658		$	0.09
Highlighted items:
Impacting gross margin:
Stock compensation expense		201			—			245			0.00			446			—
Impacting operating expenses:
Integration costs		427			—			—			—			427			—
Restructuring charges		405			—			175			0.00			580			—
Amortization of intangible assets		13,254			0.10			12,454			0.10			25,708			0.20
Stock compensation expense		2,350			0.02			2,595			0.02			4,945			0.04
Impacting other (income) / expense:
Non-cash interest expense		2,605			0.02			2,657			0.02			5,262			0.04
Impacting income tax expense:
Tax related to highlighted items above		(7,268	)		(0.06	)		(6,726	)		(0.05	)		(13,994	)		(0.11	)
Total highlighted items		11,974			0.09			11,400			0.09			23,374			0.18
Net income excluding highlighted items	$	15,803		$	0.12		$	19,229		$	0.15		$	35,032		$	0.27
Weighted average common shares — diluted					131,981						124,651						128,190

With respect to stock compensation expense, ARRIS records non-cash compensation expense related to grants of options and restricted stock. Depending upon the size, timing and the terms of the grants, this non-cash compensation expense may vary significantly. With respect to amortization of intangibles, the intangibles being amortized relate to our recent acquisition of C-COR. The restructuring charge adjustments reflect items that, although they or similar items might recur, are of a nature and magnitude that identifying them separately provides investors with a greater ability to project ARRIS’ future performance. With respect to the convertible debt non-cash interest, ARRIS records non-cash interest expense related to the 2013 convertible debt as a result of the adoption of FSP ABP 14-1 on January 1, 2009. Disclosing the non-cash piece provides investors with the information regarding interest that will not be paid out in cash. During the first quarter of 2009, ARRIS repurchased a portion of their convertible debt and recognized a gain of approximately $4.2 million. In the first quarter of 2009, a tax expense of approximately $1.5 million was recorded for state valuation allowances and research and development tax credits. During the first quarter of 2008, ARRIS recorded incremental costs of $0.4 million as a result of the C-COR integration.

In assessing operating performance and preparing budgets and forecasts, ARRIS’ management considers performance after making these adjustments and believes that providing investors with the same information provides greater transparency and insight into management’s analysis.

ARRIS GROUP, INC.
Net Income Reconciliation (unaudited)
Q3 EPS 2009 Guidance

Estimated GAAP EPS — diluted	$0.14 - $0.18
Reconciling Items:
Amortization of intangibles, after tax	0.05
Stock compensation expense, after tax	0.02
Non-cash interest expense, after tax	0.01
Subtotal	0.08
Estimated adjusted (non-GAAP) EPS — diluted	$0.22 - $0.26

See the Supplemental Net Income Reconciliation for a discussion regarding management’s reasoning for providing this adjusted financial measure