Arris 8-K Arris Announces Preliminary and Unaudited First Quarter 2008 Results

EXHIBIT 99.1

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

ARRIS ANNOUNCES PRELIMINARY AND UNAUDITED
FIRST QUARTER 2008 RESULTS

Suwanee, Ga. (April 29, 2008)ARRIS Group, Inc. (NASDAQ:ARRS), a global technology leader in advanced cable telephony & broadband access equipment, and next generation high-speed data, video, and operations software solutions, today announced preliminary and unaudited financial results for the first quarter 2008.

First quarter 2008 revenues of $273.5 million represented an increase of $38.2 million or 16%, as compared to the first quarter 2007 revenues of $235.3 million, primarily reflecting the acquisition of C-COR. First quarter 2008 gross margin was $85.2 million, or 31.2% as compared to $68.7 million or 29.2% in the first quarter 2007. Order backlog increased to $147.0 million in the quarter as compared to $136.7 million at year end 2007. Book-to-bill ratio in the first quarter was 1.04.

GAAP net income in the first quarter 2008 was $0.04 per diluted share, as compared to $0.34 per diluted share for the first quarter 2007. Non-GAAP net income in the first quarter 2008 was $0.12 per diluted share, as compared to $0.20 per diluted share for the first quarter 2007. Items excluded from non-GAAP income include: amortization of intangibles, certain acquisition gains and expenses, certain tax benefits and costs, equity compensation expense, and adjustments to restructuring accruals. A reconciliation of GAAP to non-GAAP earnings per share is attached to this release and also can be found on the Company’s website (www.arrisi.com).

In conjunction with the acquisition of C-COR, the Company implemented a new organizational structure in December 2007. As a result, effective with fourth quarter 2007 results, ARRIS began reporting financial results in three reporting segments: Broadband Communications Systems; Access, Transport & Supplies; and Media & Communications Systems. A summary of the first quarter revenue and gross margin for each of the segments is attached to this release and can be found on the Company’s website.

The Company ended the first quarter 2008 with $293.0 million of cash and short-term investments, which compares to $391.8 million at the end of the fourth

quarter 2007. The change in cash balance reflects the repurchase during the quarter of approximately 13 million shares in the open market for an aggregate consideration of approximately $76 million. During the quarter, the Company also redeemed $35 million of convertible debt originally issued by C-COR and paid approximately $12 million to retire various acquisition liabilities. The Company generated $30.5 million of cash from operating activities in the first quarter 2008.

“ARRIS begins 2008 with a sense of strong optimism,” said Bob Stanzione, ARRIS Chairman & CEO. “While the current economic climate is somewhat challenging, we see significant opportunities for further growth as the year unfolds. We are investing in our future, and have a strong portfolio of exciting products which solidify our industry leading position as a provider of end-to-end data, voice and video solutions for our domestic and international customers. As evidenced by our recent DOCSIS 3.0 CMTS win in Japan, our products continue to be selected by leading service providers worldwide, thereby helping diversify our customer base. We are well positioned to take advantage of customer and end user demands for high speed data services, VoIP, on-demand video, ad insertion, OSS solutions and network upgrades to accommodate increased high definition channel offerings. We will aggressively pursue these opportunities on a global basis.”

“The first quarter was in line with the guidance we provided in February with EPS coming in at the high end of the range. Notably, our gross margin for the quarter was 31%,” said David Potts, ARRIS EVP & CFO. “We anticipate continued improvement throughout the year. As a result, we now project that revenues for the Company in the second quarter 2008 will be in the range of $288 to $303 million with GAAP net income per diluted share in the range of $0.04 to $0.08 and non-GAAP net income per diluted share, in the range of $0.13 to $0.17. I remain confident that we are well-positioned to meet the insatiable demand for more bandwidth and speed, driven by accelerating entertainment and information applications.”

ARRIS management will conduct a conference call at 5:00pm EDT, today, Tuesday, April 29, 2008, to discuss these results in detail. You may participate in this conference call by dialing 888-713-4218 or 617-213-4870 for international calls prior to the start of the call and providing the ARRIS Group, Inc. name, conference passcode 43173899 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 May 2, 2008 by dialing 888-286-8010 or 617-801-6888 for international calls and using the passcode 89070320. 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 Suwanee, Georgia, USA, ARRIS has R&D centers in Atlanta, Chicago, Beaverton, State College, Wallingford, 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:

• second quarter and 2008 revenues and net income; and

• the general market outlook;

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 second quarter as well as the general outlook for 2008 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;

• 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-K for the year ended December 31, 2007. 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.
CONSOLIDATED BALANCE SHEETS
(in thousands)

	March 31,			December 31,			September 30,			June 30,			March 31,
	2008			2007			2007			2007			2007
	(unaudited)						(unaudited)			(unaudited)			(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	243,515		$	323,797		$	370,708		$	444,020		$	441,317
Short-term investments, at fair value		49,513			68,011			217,845			160,315			134,610
Total cash, cash equivalents and short-term investments		293,028			391,808			588,553			604,335			575,927
Restricted cash		7,186			6,977			3,142			3,136			3,128
Accounts receivable, net		159,881			166,953			130,216			120,680			125,756
Other receivables		6,074			4,330			5,000			6,845			9,888
Inventories, net		125,105			131,792			118,227			90,542			78,186
Prepaids		5,680			5,856			3,626			3,250			3,500
Current deferred income tax assets		47,051			44,939			19,602			23,239			26,818
Other current assets		8,209			4,841			13,703			10,773			4,001
Total current assets		652,214			757,496			882,069			862,800			827,204
Property, plant and equipment, net		60,747			59,156			31,251			30,196			28,076
Goodwill		453,454			455,352			150,569			150,569			150,569
Intangible assets, net		257,029			269,893			115			172			230
Investments		10,200			6,412			8,916			3,151			3,569
Noncurrent deferred income tax assets		—			—			16,238			17,294			18,639
Other assets		12,624			10,181			9,084			7,517			7,790
	$	1,446,268		$	1,558,490		$	1,098,242		$	1,071,699		$	1,036,077
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	60,490		$	58,852		$	35,540		$	46,015		$	41,337
Accrued compensation, benefits and related taxes		14,397			26,177			18,857			14,631			9,991
Accrued warranty		13,365			14,370			7,346			7,829			7,968
Deferred revenue		19,901			8,474			6,273			7,195			5,488
Current portion of long-term debt		310			35,305			—			—			—
Other accrued liabilities		27,980			42,121			20,854			20,806			26,923
Total current liabilities		136,443			185,299			88,870			96,476			91,707
Long-term debt, net of current portion		276,686			276,765			276,000			276,000			276,000
Accrued pension		10,905			10,455			11,810			12,778			12,420
Noncurrent income tax payable		6,487			6,322			5,262			4,334			4,334
Noncurrent deferred income tax liability		43,402			41,796			—			—			—
Other long-term liabilities		14,258			12,086			5,143			5,288			5,606
Total liabilities		488,181			532,723			387,085			394,876			390,067
Stockholders’ equity:
Preferred stock		—			—			—			—			—
Common stock		1,357			1,356			1,104			1,102			1,096
Capital in excess of par value		1,095,716			1,093,498			789,348			782,717			773,839
Treasury stock at cost		(76,007	)		(572	)		—			—			—
Unrealized gain (loss) on marketable securities		151			20			(151	)		—			1,345
Unfunded pension liability		(3,358	)		(3,358	)		(4,462	)		(4,462	)		(4,462	)
Accumulated deficit		(59,588	)		(64,993	)		(74,498	)		(102,350	)		(125,624	)
Cumulative translation adjustments		(184	)		(184	)		(184	)		(184	)		(184	)
Total stockholders’ equity		958,087			1,025,767			711,157			676,823			646,010
	$	1,446,268		$	1,558,490		$	1,098,242		$	1,071,699		$	1,036,077

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

	For the Three Months
	Ended March 31,
	2008			2007
	(unaudited)			(unaudited)
Net sales	$	273,506		$	235,253
Cost of sales		188,258			166,506
Gross margin		85,248			68,747
Gross margin %		31.2	%		29.2	%
Operating expenses:
Selling, general, and administrative expenses		36,982			24,175
Research and development expenses		28,122			18,096
Restructuring and impairment charges		405			421
Amortization of intangible assets		13,254			58
		78,763			42,750
Operating income		6,485			25,997
Other expense (income):
Interest expense		1,504			1,668
Loss on investments and notes receivable		2			19
(Gain) loss on foreign currency		(990	)		322
Interest income		(2,685	)		(6,483	)
Gain related to terminated acquisition, net of expenses		—			(22,835	)
Other (income) expense, net		(36	)		65
Income from continuing operations before income taxes		8,690			53,241
Income tax expense		3,285			15,597
Net income	$	5,405		$	37,644
Net income per common share:
Basic	$	0.04		$	0.35
Diluted	$	0.04		$	0.34
Weighted average common shares:
Basic		130,763			108,467
Diluted		131,981			110,988

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

	For the Three Months
	Ended March 31,
	2008			2007
	(unaudited)			(unaudited)
Operating Activities:
Net income	$	5,405		$	37,644
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		4,963			2,497
Amortization of intangible assets		13,254			58
Stock compensation expense		2,551			2,656
Deferred income tax provision (benefit)		(506	)		4,702
Amortization of deferred finance fees		279			279
Provision for doubtful accounts		205			371
Gain related to previously written off receivables		—			(377	)
Loss on investments		2			19
Gain related to terminated acquisition, net of expenses		—			(22,835	)
Excess tax benefits from stock-based compensation plans		—			(4,855	)
Changes in operating assets & liabilities, net of effects of acquisitions and disposals:
Accounts receivable		7,502			(10,823	)
Other receivables		(1,744	)		(7,332	)
Inventory		7,501			16,040
Income taxes payable		81			1,293
Accounts payable and accrued liabilities		(10,294	)		(24,842	)
Other, net		1,316			1,470
Net cash provided by (used in) operating activities		30,515			(4,035	)
Investing Activities:
Purchases of property, plant, and equipment		(6,429	)		(2,287	)
Cash proceeds related to terminated acquisition, net of expenses		—			10,881
Cash paid for hedge related to terminated acquisition		—			(26,469	)
Cash proceeds from hedge related to terminated acquisition		—			38,750
Cash paid for acquisition, net of cash acquired		(4,192	)		—
Cash proceeds from sale of property, plant & equipment		224			—
Purchases of short-term investments		(16,887	)		(128,135	)
Disposals of short-term investments		30,500			81,100
Net cash provided by (used in) investing activities		3,216			(26,160	)
Financing Activities:
Payment of debt and capital lease obligations		(35,097	)		—
Treasury stock repurchase		(75,960	)		—
Excess tax benefits from stock-based compensation plans		—			4,855
Repurchase of shares to satisfy minimum tax withholdings		(239	)		—
Fees and proceeds from issuance of common stock, net		(2,717	)		5,039
Net cash (used in) provided by financing activities		(114,013	)		9,894
Net decrease in cash and cash equivalents		(80,282	)		(20,301	)
Cash and cash equivalents at beginning of period		323,797			461,618
Cash and cash equivalents at end of period	$	243,515		$	441,317

ARRIS GROUP, INC.
Supplemental Second Quarter
Net Income Reconciliation (unaudited)
Q2 EPS 2008 Guidance

Estimated GAAP EPS	$0.04 - $0.08
Reconciling Items
Amortization of Intangibles, after tax	0.07
Stock Compensation Expense, after tax	0.02
Subtotal	0.09
Estimated Non GAAP EPS	$0.13 - $0.17

See the GAAP to Non-GAAP EPS reconciliation for a discussion regarding management’s reasoning for providing this non-GAAP financial measure

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

	Q1 2008						Q1 2007
				Per Diluted						Per Diluted
	Amount			Share			Amount			Share
Net income	$	5,405		$	0.04		$	37,644		$	0.34
Highlighted items:
Impacting gross margin:
Stock compensation expense		201			—			165			—
Impacting operating expenses:
Gains related to previously written off receivables		—			—			(377	)		—
Integration costs		427			—			—			—
Restructuring charges — adjustments to existing accruals		405			—			421			—
Amortization of intangible assets		13,254			0.10			58			—
Stock compensation expense		2,350			0.02			2,491			0.02
Impacting net income from continuing operations:
Gains related to terminated acquisition, net of expenses		—			—			(22,835	)		(0.21	)
Impacting income tax expense:
Adjustments of income tax valuation allowances and research & development credits and other		—			—			(3,246	)		(0.03	)
Tax related to highlighted items above		(6,294	)		(0.05	)		7,754			0.07
Total highlighted items		10,343			0.08			(15,569	)		(0.14	)
Net income excluding highlighted items	$	15,748		$	0.12		$	22,075		$	0.20
Weighted average common shares — diluted					131,981						110,988

ARRIS believes that presenting net income and related per share amounts adjusted for the items detailed above provides meaningful information that will allow investors to more easily understand ARRIS’ financial performance and compare its period-to-period results. 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. In prior periods, ARRIS highlighted significant losses related to bad debt expense associated with certain customers. ARRIS recognized a gain in Q1 of 2007 associated with these previously written off receivables. 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. During the first quarter of 2007, ARRIS announced that it entered into a transaction agreement with TANDBERG Television ASA, in which ARRIS was to buy all the outstanding shares of TANDBERG. ARRIS was subsequently outbid by another buyer and the transaction agreement was terminated during the first quarter 2007. ARRIS recorded gains, net before tax, of $22.8 million related to the termination of the transaction (termination fee, foreign exchange gains, and expenses). The net termination fee resulted in a capital gain which provided greater access to prior tax capital losses that had previously been viewed as more likely than not unrealizable. As a result, net income tax valuation allowances totaling $3.2 million were reversed in the first quarter 2007. 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 expects to continue providing similar information in the future with schedules reconciling the differences between GAAP and non-GAAP financial measures.

ARRIS GROUP, INC
SUPPLEMENTAL SALES AND GROSS MARGIN INFORMATION
(in thousands, except gross margin percentages)
(unaudited)

							Q1 2007 incl C-
	Q1 2008			Q1 2007			COR (1,2)
Broadband Communications Systems
Sales		189,637			199,000			199,000
Gross Margin		57,991			62,451			62,451
Gross Margin %		30.6	%		31.4	%		31.4	%
Access, Transport & Supplies
Sales		72,894			36,006			93,490
Gross Margin		21,876			6,426			30,215
Gross Margin %		30.0	%		17.8	%		32.3	%
Media & Communications Systems
Sales		10,975			247			15,783
Gross Margin		5,381			(130	)		8,826
Gross Margin %		49.0	%		-52.6	%		55.9	%
Total
Sales		273,506			235,253			308,273
Gross Margin		85,248			68,747			101,492
Gross Margin %		31.2	%		29.2	%		32.9	%

(1)	Sum of Arris and C-Cor reported sales and gross margins, unaudited
(2)	C-COR gross margin has been adjusted to conform to ARRIS accounting policies with respect to freight billed to customers.