Arris 8-K Arris Announces Preliminary and Unaudited Third 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
THIRD QUARTER 2009 RESULTS

Suwanee, Ga. (October 26, 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 third quarter 2009.

Revenues in the third quarter 2009 were $275.8 million, compared to second quarter 2009 revenues of $278.5 million and third quarter 2008 revenues of $297.6 million. Through the first nine months of 2009 and 2008, revenues were $807.8 million and $852.2 million, respectively.

Adjusted net income (a non-GAAP measure) for the third quarter 2009 was $0.25 per diluted share, compared to $0.27 per diluted share for the second quarter 2009 and $0.24 per diluted share for the third quarter of 2008. Year to date, adjusted net income was $0.69 per diluted share for 2009 as compared to $0.52 per diluted share in 2008. The increased profitability primarily reflects higher gross margins.

GAAP net income for the third quarter 2009 was $0.17 per diluted share, as compared to the second quarter 2009 of $0.18 per diluted share, and the third quarter 2008 of $0.18 per diluted share. Year to date, GAAP net income was $0.45 per diluted share for 2009 as compared to $0.27 per diluted share for 2008. Significant GAAP items in the third quarter 2009 that have been excluded in computing adjusted net income and earnings per shares include: amortization of intangibles, equity compensation expense, restructuring and acquisition-related costs, and non-cash interest related to convertible debt. A reconciliation of adjusted net income to GAAP net income per share is attached to this release and also can be found on the Company’s website (www.arrisi.com).

Gross margin in the third quarter 2009 was 41.9%, which compares to the second quarter 2009 of 42.1% and the third quarter 2008 of 35.7%. The year over year improvement primarily reflects continued strong CMTS sales.

The Company ended the third quarter 2009 with $577 million of cash resources, which includes $562 million of cash and short-term investments, and $15 million of long-term marketable security investments, up in the aggregate by

approximately $53 million from the end of the second quarter 2009 as a result of both strong earnings and lower working capital. The Company generated $63 million of cash from operating activities in the third quarter 2009 and $171 million through the first nine months of 2009, which compares to $46 million and $87 million in the same periods in 2008. Order backlog at the end of the third quarter 2009 was $170 million and the Company’s book to bill ratio in the third quarter was 1.01. These amounts compare to order backlog of $166 million and book to bill ratio of 1.04 in the second quarter of 2009.

“The ARRIS team continues to deliver products and services that our customers worldwide need in order to grow, meet the competition and enhance the subscriber experience,” said Bob Stanzione, ARRIS Chairman & CEO. “Rapid increases in internet TV traffic are altering the home video experience and creating demand for the ARRIS high speed data platform. We have taken key steps to grow our current business to include a strong video product suite in order to capitalize on today’s vision of a converged voice, data and video platform.”

During the quarter the Company announced the purchase of substantially all of the assets of Digeo, Inc., which provides products and a rich patent portfolio for video networking and multi-media services platforms as well the purchase of EGT, Inc. which provides video processing technologies that complement the Company’s VOD, ad insertion and switched digital video product offerings. Also during the quarter, the Company announced that two new customers, Bresnan Communications and Kabel Nord, had selected the market leading ARRIS C-4 CMTS product for deployment in their operation areas. International sales represent a growing portion of ARRIS revenues with Cablevison Mexico the third largest customer in the quarter and three Japanese and Canadian customers ranked in the top twenty customers.

“Our third quarter 2009 results reflect continuing strong market acceptance of ARRIS products,” said David Potts, ARRIS EVP & CFO. “Once again, our strong gross margins and cash generation demonstrate the financial strength of our Company. With respect to the fourth quarter 2009, we project that revenues for the Company will be in the range of $265 to $285 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 $0.13 to $0.17.”

ARRIS management will conduct a conference call at 5:00 pm EDT, today, Monday, October 26, 2009, to discuss these results in detail. You may participate in this conference call by dialing 888-679-8033 or 617-213-4846 for international calls prior to the start of the call and providing the ARRIS Group, Inc. name, conference passcode 82209148 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

Friday, October 30, 2009 by dialing 888-286-8010 or 617-801-6888 for international calls and using the passcode 23090362. A replay also will be made available for a period of 12 months following the conference call on ARRIS’ website atwww.arrisi.com.

About ARRIS

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 carrier-grade telephony, demand driven video, next-generation advertising, network and workforce management solutions, access and transport architectures and ultra high-speed data services. Headquartered in Suwanee, Georgia, USA, ARRIS has R&D centers in Suwanee; Beaverton, OR; Chicago, IL; Kirkland, WA; State College, PA; Wallingford, CT; Waltham, MA; Cork, Ireland; and Shenzhen, China, and operates support and sales offices throughout the world. Information about ARRIS products and services can be found atwww.arrisi.com.

Forward-looking statements:

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

• growth expectations and business prospects;

• fourth 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 fourth 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 June 30, 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)

	September 30,			June 30,			March 31,			December 31,			September 30,
	2009			2009			2009			2008			2008
ASSETS
Current assets:
Cash and cash equivalents	$	461,795		$	476,846		$	398,938		$	409,894		$	305,987
Short-term investments, at fair value		99,917			47,195			25,494			17,371			23,571
		561,712			524,041			424,432			427,265			329,558
Restricted cash		4,473			4,552			4,550			5,673			5,768
Accounts receivable, net		119,125			128,482			155,792			159,443			180,367
Other receivables		2,235			5,904			6,636			4,749			5,180
Inventories, net		100,024			115,944			120,774			129,752			139,598
Prepaids		10,764			7,700			6,994			8,004			5,156
Income taxes recoverable		4,212			366			3,232			362			1,896
Current deferred income tax assets		32,883			41,166			49,027			44,004			42,714
Other current assets		12,981			11,995			15,083			19,420			20,236
Total current assets		848,409			840,150			786,520			798,672			730,473
Property, plant and equipment, net		58,339			60,048			59,438			59,204			60,268
Goodwill		234,416			231,684			231,684			231,684			449,418
Intangible assets, net		201,351			208,822			218,085			227,348			236,689
Investments		30,574			10,317			14,593			14,681			15,086
Noncurrent deferred income tax assets		3,593			3,870			3,771			12,157			3,988
Other assets		7,648			6,251			5,483			6,576			7,173
	$	1,384,330		$	1,361,142		$	1,319,574		$	1,350,322		$	1,503,095
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	42,659		$	48,859		$	44,422		$	75,863		$	54,304
Accrued compensation, benefits and related taxes		27,054			20,753			15,583			27,024			21,831
Accrued warranty		5,292			5,185			5,306			5,652			6,354
Deferred revenue		35,423			43,727			44,006			44,461			35,986
Current portion of long-term debt		148			148			147			146			234
Current deferred income tax liability		250			248			241			1,059			—
Other accrued liabilities		34,979			35,852			31,922			25,410			30,205
Total current liabilities		145,805			154,772			141,627			179,615			148,914
Long-term debt, net of current portion		208,433			205,710			203,080			211,870			209,340
Accrued pension		18,914			19,665			19,289			18,820			10,622
Noncurrent income tax payable		10,632			12,386			12,441			9,607			10,128
Noncurrent deferred income tax liability		35,188			33,999			42,530			41,598			67,403
Other noncurrent liabilities		15,301			15,094			14,391			15,343			18,088
Total liabilities		434,273			441,626			433,358			476,853			464,495
Stockholders’ equity:
Preferred stock		—			—			—			—			—
Common stock		1,385			1,379			1,368			1,362			1,360
Capital in excess of par value		1,177,958			1,169,223			1,159,054			1,159,097			1,155,211
Treasury stock at cost		(75,960	)		(75,960	)		(75,960	)		(75,960	)		(75,960	)
Unrealized loss on marketable securities		(60	)		(161	)		(372	)		(274	)		(128	)
Unfunded pension liability		(8,070	)		(8,070	)		(8,070	)		(8,070	)		(3,358	)
Accumulated deficit		(145,012	)		(166,711	)		(189,620	)		(202,502	)		(38,341	)
Cumulative translation adjustments		(184	)		(184	)		(184	)		(184	)		(184	)
Total stockholders’ equity		950,057			919,516			886,216			873,469			1,038,600
	$	1,384,330		$	1,361,142		$	1,319,574		$	1,350,322		$	1,503,095

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

	For the Three Months						For the Nine Months
	Ended September 30,						Ended September 30,
	2009			2008			2009			2008
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Net sales	$	275,772		$	297,551		$	807,811		$	852,167
Cost of sales		160,299			191,417			479,548			567,901
Gross margin		115,473			106,134			328,263			284,266
Gross margin %		41.9	%		35.7	%		40.6	%		33.4	%
Operating expenses:
Selling, general, and administrative expenses		36,311			33,012			110,782			107,040
Research and development expenses		30,909			27,473			89,447			83,257
Restructuring charges		73			202			785			782
Amortization of intangible assets		9,281			9,146			27,807			34,854
		76,574			69,833			228,821			225,933
Operating income		38,899			36,301			99,442			58,333
Other expense (income):
Interest expense		4,356			4,360			13,121			12,672
Loss (gain) on investments		(238	)		37			(453	)		210
Loss (gain) on foreign currency		1,114			382			3,642			(258	)
Interest income		(424	)		(1,504	)		(1,172	)		(5,891	)
Gain on debt retirement		—			—			(4,152	)		—
Other income, net		(263	)		(72	)		(887	)		(43	)
Income from continuing operations before income taxes		34,354			33,098			89,343			51,643
Income tax expense		12,655			10,664			31,853			17,551
Net income	$	21,699		$	22,434		$	57,490		$	34,092
Net income per common share
Basic	$	0.17		$	0.18		$	0.46		$	0.27
Diluted	$	0.17		$	0.18		$	0.45		$	0.27
Weighted average common shares:
Basic		125,326			122,922			124,381			125,466
Diluted		129,695			125,420			127,916			127,249

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

	For the Three Months						For the Nine Months
	Ended September 30,						Ended September 30,
	2009			2008			2009			2008
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Operating Activities:
Net income	$	21,699		$	22,434		$	57,490		$	34,092
Depreciation		5,408			5,426			15,370			15,521
Amortization of intangible assets		9,281			9,146			27,807			34,854
Stock compensation expense		4,260			2,895			11,714			8,286
Deferred income tax provision		9,751			3,856			13,678			2,863
Amortization of deferred finance fees		180			190			548			571
Provision for doubtful accounts		11			151			1			365
Loss (gain) on investments		(238	)		37			(453	)		210
Gain on disposal of fixed assets		(76	)		(13	)		(46	)		(15	)
Non-cash interest expense		2,772			2,710			8,308			7,972
Gain on debt retirement		—			—			(4,152	)		—
Excess tax benefits from stock-based compensation plans		(1,471	)		(24	)		(2,027	)		(24	)
Changes in operating assets & liabilities, net of effects of acquisitions and disposals:
Accounts receivable		9,830			(1,819	)		40,801			(12,103	)
Other receivables		2,359			736			539			(4,001	)
Inventory		16,641			5,182			30,449			(6,028	)
Income taxes payable/recoverable		(4,800	)		4,972			(2,868	)		(657	)
Accounts payable and accrued liabilities		(9,757	)		(10,567	)		(32,620	)		9,743
Other, net		(2,800	)		285			6,665			(5,117	)
Net cash provided by operating activities		63,050			45,597			171,204			86,532
Investing Activities:
Purchases of property, plant, and equipment		(3,459	)		(4,652	)		(14,327	)		(16,444	)
Cash paid for acquisition, net of cash acquired		(7,930	)		(5,647	)		(8,130	)		(10,066	)
Cash proceeds from sale of property, plant & equipment		207			13			208			250
Purchases of investments		(93,079	)		(70,111	)		(151,845	)		(86,998	)
Disposals of investments		20,479			50,006			54,416			122,486
Net cash provided by (used in) investing activities		(83,782	)		(30,391	)		(119,678	)		9,228
Financing Activities:
Payment of debt and capital lease obligations		(49	)		(322	)		(10,677	)		(35,518	)
Repurchase of common stock		—			—			—			(75,960	)
Excess tax benefits from stock-based compensation plans		1,471			24			2,027			24
Repurchase of shares to satisfy minimum tax withholdings		—			—			(2,180	)		(1,035	)
Fees and proceeds from issuance of common stock, net		4,259			813			11,205			(1,081	)
Net cash provided by (used in) financing activities		5,681			515			375			(113,570	)
Net increase (decrease) in cash and cash equivalents		(15,051	)		15,721			51,901			(17,810	)
Cash and cash equivalents at beginning of period		476,846			290,266			409,894			323,797
Cash and cash equivalents at end of period	$	461,795		$	305,987		$	461,795		$	305,987

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

	Q1 2009						Q2 2009						Q3 2009						Sept YTD 2009
				Per Diluted						Per Diluted						Per Diluted						Per Diluted
	Amount			Share			Amount			Share			Amount			Share			Amount			Share
Net income (loss)	$	12,882		$	0.10		$	22,909		$	0.18		$	21,699		$	0.17		$	57,490			0.45
Highlighted items:
Impacting gross margin:
Stock compensation expense		303			—			366			—			394			—			1,063			0.01
Impacting operating expenses:
Acquisition costs, restructuring, and other		120			—			592			—			348			—			1,060			0.01
Amortization of intangible assets		9,263			0.07			9,263			0.07			9,281			0.07			27,807			0.22
Stock compensation expense		3,098			0.02			3,687			0.03			3,866			0.03			10,651			0.08
Impacting other (income) / expense:
Non-cash interest expense		2,818			0.02			2,718			0.02			2,772			0.02			8,308			0.06
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			—			—			(166	)		—			1,289			0.01
Tax related to highlighted items above		(3,646	)		(0.03	)		(5,322	)		(0.04	)		(6,218	)		(0.05	)		(15,186	)		(0.12	)
Total highlighted items		9,259			0.07			11,304			0.09			10,277			0.08			30,840			0.24
Net income excluding highlighted items	$	22,141		$	0.18		$	34,213		$	0.27		$	31,976		$	0.25		$	88,330		$	0.69
Weighted average common shares — diluted					124,920						128,054						129,695						127,916

	Q1 2008						Q2 2008							Q3 2008						Sept YTD 2008
				Per Diluted							Per Diluted						Per Diluted						Per Diluted
	Amount			Share			Amount				Share			Amount			Share			Amount			Share
Net income (loss)	$	3,829		$	0.03		$	7,829			$	0.06		$	22,434		$	0.18		$	34,092		$	0.27
Highlighted items:
Impacting gross margin:
Stock compensation expense		201			—			245				—			264			—			710			0.01
Impacting operating expenses:
Integration costs		427			—			—				—			—			—			427			—
Restructuring charges		405			—			175				—			202			—			782			0.01
Amortization of intangible assets		13,254			0.10			12,454				0.10			9,146			0.07			34,854			0.27
Stock compensation expense		2,350			0.02			2,595				0.02			2,631			0.02			7,576			0.06
Impacting other (income) / expense:
Non-cash interest expense		2,605			0.02			2,657				0.02			2,710			0.02			7,972			0.06
Impacting income tax expense:
Adjustments of tax related to goodwill impairment and certain provision to return adjustments		—			—			—				—			(1,530	)		(0.01	)		(1,530	)		(0.01	)
Tax related to highlighted items above		(7,268	)		(0.06	)		(6,726	)			(0.05	)		(5,164	)		(0.04	)		(19,158	)		(0.15	)
Total highlighted items		11,974			0.09			11,400				0.09			8,259			0.07			31,633			0.25
Net income excluding highlighted items	$	15,803		$	0.12		$	19,229		��	$	0.15		$	30,693		$	0.24		$	65,725		$	0.52
Weighted average common shares — diluted					131,981							124,651						125,420						127,249

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 acquisition costs, restructuring, and other 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 and third quarter of 2009, a tax expense of approximately $1.3 million was recorded for state valuation allowances, research and development tax credits and provision to return differences resulting from filing of the 2008 tax return. During the first quarter of 2008, ARRIS recorded incremental costs of $0.4 million as a result of the C-COR integration. In the third quarter of 2008, ARRIS recorded a net tax benefit of $1.6 million related to provision to return differences resulting from the filing of the 2007 tax return.

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)
Q4 EPS 2009 Guidance

Estimated GAAP EPS — diluted	$	0.13 - $0.17
Reconciling Items:
Amortization of intangibles, after tax*		0.05
Stock compensation expense, after tax		0.02
Non-cash interest expense, after tax		0.01
Acquisition, restructuring and other, after tax		0.01
Subtotal		0.09
Estimated adjusted (non-GAAP) EPS — diluted	$	0.22 - $0.26

* Does not include the amortization for the Digeo intangibles as the valuation has not been completed.

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