Arris 8-K Arris Announces Preliminary and Unaudited

Exhibit 99.1

FOR IMMEDIATE RELEASE	Contact:	Bob Puccini
		Investor Relations
		(720) 895-7787
		bob.puccini@arrisi.com

ARRIS ANNOUNCES PRELIMINARY AND UNAUDITED

SECOND QUARTER 2012 RESULTS

Suwanee, Ga. (July 25, 2012)ARRIS Group, Inc. (NASDAQ:ARRS), today announced preliminary and unaudited financial results for the second quarter 2012.

Revenues in the second quarter 2012 were $349.3 million as compared to second quarter 2011 revenues of $265.8 million and as compared to first quarter 2012 revenues of $302.9 million. Through the first two quarters of 2012 and 2011, revenues were $652.2 million and $533.2 million respectively.

Adjusted net income (a non-GAAP measure) in the second quarter 2012 was $0.25 per diluted share, compared to $0.19 per diluted share for the first quarter 2012 and $0.24 per diluted share for the second quarter 2011. Year to date, adjusted net income was $0.44 per diluted share for 2012 as compared to $0.40 per diluted share in 2011.

GAAP net income in the second quarter 2012 was $0.13 per diluted share, as compared to second quarter 2011 GAAP net income of $0.13 per diluted share and first quarter 2012 GAAP net income of $0.05 per diluted share. Year to date, GAAP net income was $0.18 per diluted share in 2012 as compared to GAAP net income of $0.23 per diluted share in 2011. Significant GAAP items that have been adjusted in computing adjusted net income and adjusted net income per diluted share include: purchase accounting impacts related to acquired deferred revenue; amortization of intangible assets; long-term investment impairment; loss on the sale of a product line; equity compensation; non-cash interest expense; acquisition and restructuring charges; and certain discrete tax items. A reconciliation of adjusted net income to GAAP net income per diluted share is attached to this release and also can be found on the Company’s website (www.arrisi.com).

Gross margin for the second quarter 2012 was 33.9%, which compares to the second quarter 2011 gross margin of 40.2% and the first quarter 2012 gross margin of 36.0%.

The Company ended the second quarter 2012 with $576.3 million of cash resources, which includes $539.6 million of cash, cash equivalents and short-term investments, and $36.7 million of long-term marketable security investments, as compared to $567.2 million, in the aggregate, at the end of the first quarter 2012. During the second quarter 2012, the Company repurchased

approximately 1.4 million shares of ARRIS common stock for $15.2 million. Year to date the Company has repurchased 3.7 million shares for $41.6 million. The Company generated $30.6 million of cash from operating activities during the second quarter 2012 and $65.9 million through the first six months of 2012, which compares to $31.4 million and $27.8 million generated during the same periods in 2011.

Order backlog at the end of the second quarter 2012 was $251.9 million as compared to $154.2 million and $277.7 million at the end of the second quarter 2011 and the first quarter 2012, respectively. The Company’s book-to-bill ratio in the second quarter 2012 was 0.93 as compared to the second quarter 2011 of 0.91 and the first quarter 2012 of 1.43.

“I am very pleased with our second quarter and first half results. Sales were up over 15% in the second quarter 2012 compared to the first quarter 2012. On a year-to-date basis, sales were up 22% during the first half of 2012 as compared to the first half of 2011” said Bob Stanzione, ARRIS Chairman and CEO. “These results confirm that our investments over the past few years have positioned ARRIS with a portfolio aligned extremely well with our customers’ demands. I remain very encouraged as I look to the balance of 2012.”

During the second quarter ARRIS announced advances to its Media Gateway product that support advanced web services and application development. Additionally, the Company achieved a world record 4.7Gbit/s downstream throughput speed at Kabel Deutschland with the EuroDOCSIS™ 3.0-based ARRIS C4® CMTS and 12 ARRIS Touchstone® Cable Modem CM820’s.

ARRIS will be hosting an Investor and Analyst Conference in New York at the NASDAQ headquarters the morning of August 8.

“Our second quarter results were strong, with sales at the upper end of our guidance and adjusted net income above guidance” said David Potts, ARRIS EVP & CFO. “With respect to the third quarter 2012, we now project that revenues for the Company will be in the range of $348 to $368 million, with adjusted net income per diluted share in the range of $0.19 to $0.23 and GAAP net income per diluted share in the range of $0.09 to $0.13, reflecting strong demand, particularly for our DOCSIS 3.0 CPE products”

ARRIS management will conduct a conference call at 5:00 pm EDT, today, Wednesday, July 25, 2012, 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 pass code 75540304 and Bob Puccini as the moderator. Please note that ARRIS will not accept any calls related to this earnings release until after the conclusion of the conference call. A replay of the conference call can be accessed approximately two hours after the call through August 1, 2012 by

dialing 888-286-8010 or 617-801-6888 for international calls and using the pass code 22051173. 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 converged IP video solutions, 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, GA, USA, ARRIS has R&D centers in Suwanee, GA; Beaverton, OR; Lisle, IL; Kirkland, WA; State College, PA; Tel Aviv, Israel; 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;

• revenues and net income for the third quarter 2012, and beyond;

• expected sales levels and acceptance of new ARRIS products; and

• 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 2012 as well as the general outlook for 2012 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;

• ARRIS’ customers operate in a capital intensive consumer based industry, and the current volatility in the capital markets or changes in customer spending may adversely impact their ability or willingness to purchase the products that the Company offers; 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, 2012. 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, 2012			March 31, 2012			December 31, 2011			September 30, 2011			June 30, 2011
ASSETS
Current assets:
Cash and cash equivalents	$	199,395		$	215,808		$	235,875		$	354,659		$	360,281
Short-term investments, at fair value		340,166			298,539			282,904			220,318			231,254
Total cash, cash equivalents and short term investments		539,561			514,347			518,779			574,977			591,535
Restricted cash		3,942			3,943			4,101			3,647			3,646
Accounts receivable, net		179,371			183,427			152,437			165,821			152,436
Other receivables		1,414			5,071			8,789			5,296			406
Inventories, net		102,361			105,114			115,912			116,769			113,020
Prepaids		12,124			12,436			10,408			10,692			10,272
Current deferred income tax assets		21,972			22,068			22,048			24,239			22,681
Other current assets		16,766			16,792			27,071			21,695			25,216
Total current assets		877,511			863,198			859,545			923,136			919,212
Property, plant and equipment, net		56,175			57,810			61,375			57,619			57,100
Goodwill		194,626			195,267			194,542			233,430			233,440
Intangible assets, net		110,000			117,444			124,823			141,784			150,728
Investments		70,967			82,968			71,095			47,221			34,237
Noncurrent deferred income tax assets		47,228			42,106			38,433			9,637			9,839
Other assets		10,575			11,699			10,997			5,400			5,878
	$	1,367,082		$	1,370,492		$	1,360,810		$	1,418,227		$	1,410,434
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	44,800		$	54,576		$	40,671		$	38,918		$	27,825
Accrued compensation, benefits and related taxes		28,165			31,081			36,764			25,320			20,832
Accrued warranty		2,995			3,094			3,350			2,933			3,300
Deferred revenue		63,023			60,129			43,746			39,094			47,166
Other accrued liabilities		23,980			31,054			33,325			19,653			17,805
Total current liabilities		162,963			179,934			157,856			125,918			116,928
Long-term debt, net of current portion		215,823			212,765			209,766			206,825			208,336
Accrued pension		25,696			25,739			25,260			17,989			17,730
Accrued severance liability, net of current portion		3,758			3,884			4,191			—			—
Noncurrent income taxes payable		26,676			26,676			24,450			22,471			21,844
Noncurrent deferred income tax liabilities		340			352			337			21,117			24,808
Other noncurrent liabilities		21,039			22,371			22,745			16,253			17,367
Total liabilities		456,295			471,721			444,605			410,573			407,013
Stockholders’ equity:
Preferred stock		—			—			—			—			—
Common stock		1,473			1,467			1,449			1,446			1,443
Capital in excess of par value		1,259,946			1,247,763			1,245,115			1,237,852			1,228,729
Treasury stock at cost		(295,960	)		(280,724	)		(254,409	)		(220,034	)		(202,933	)
Unrealized gain (loss) on marketable securities		211			149			(267	)		26			1,530
Unfunded pension liability		(10,231	)		(10,231	)		(10,231	)		(5,813	)		(5,813	)
Accumulated deficit		(44,468	)		(59,469	)		(65,268	)		(5,639	)		(19,351	)
Cumulative translation adjustments		(184	)		(184	)		(184	)		(184	)		(184	)
Total stockholders’ equity		910,787			898,771			916,205			1,007,654			1,003,421
	$	1,367,082		$	1,370,492		$	1,360,810		$	1,418,227		$	1,410,434

ARRIS GROUP, INC.

PRELIMINARY CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2012			2011			2012			2011
Net sales	$	349,327		$	265,799		$	652,228		$	533,235
Cost of sales		230,801			158,901			424,794			329,391
Gross margin		118,526			106,898			227,434			203,844
Operating expenses:
Selling, general, and administrative expenses		40,135			35,868			79,678			72,706
Research and development expenses		42,881			36,629			87,028			72,669
Acquisition costs		102			—			709			—
Loss on sale of product line		—			—			337			—
Restructuring charges		1,039			—			6,242			—
Amortization of intangible assets		7,444			8,944			14,823			17,888
		91,601			81,441			188,817			163,263
Operating income		26,925			25,457			38,617			40,581
Other expense (income):
Interest expense		4,422			4,180			8,772			8,405
Loss (gain) on investments		356			(334	)		(605	)		(757	)
Loss on foreign currency		540			79			1,348			967
Interest income		(729	)		(886	)		(1,484	)		(1,664	)
Other (income) expense, net		(226	)		(419	)		(662	)		(532	)
Income from continuing operations before income taxes		22,562			22,837			31,248			34,162
Income tax expense		7,561			6,147			10,448			5,908
Net income	$	15,001		$	16,690		$	20,800		$	28,254
Net income per common share:
Basic	$	0.13		$	0.14		$	0.18		$	0.23
Diluted	$	0.13		$	0.13		$	0.18		$	0.23
Weighted average common shares:
Basic		113,842			121,800			114,457			122,047
Diluted		115,111			123,711			116,352			124,720

ARRIS GROUP, INC.

PRELIMINARY CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2012			2011			2012			2011
Operating Activities:
Net income	$	15,001		$	16,690		$	20,800		$	28,254
Depreciation		6,982			5,813			14,177			11,668
Amortization of intangible assets		7,444			8,944			14,823			17,888
Amortization of deferred finance fees		160			163			320			326
Non-cash interest expense		3,058			2,889			6,057			5,721
Deferred income tax provision (benefit)		(5,085	)		(3,559	)		(9,720	)		(11,403	)
Stock compensation expense		7,867			5,925			14,516			11,209
Provision for doubtful accounts		—			—			54			—
Loss on sale of product line		—			—			337			—
Loss (gain) on disposal of fixed assets		3			(1	)		6			33
Loss (gain) on investments		356			(334	)		(605	)		(757	)
Excess tax benefits from stock-based compensation plans		(806	)		453			(2,460	)		(3,247	)
Changes in operating assets & liabilities, net of effects of acquisitions and disposals:
Accounts receivable		4,056			(2,460	)		(27,743	)		(26,503	)
Other receivables		3,700			5,583			7,393			6,117
Inventory		2,753			(7,233	)		9,996			(11,257	)
Income taxes payable/recoverable		2,087			10,321			8,452			12,591
Accounts payable and accrued liabilities		(17,262	)		(8,432	)		5,136			(15,480	)
Other, net		279			(3,382	)		4,327			2,649
Net cash provided by operating activities		30,593			31,380			65,866			27,809
Investing Activities:
Purchases of investments		(62,587	)		(43,480	)		(140,353	)		(142,841	)
Disposals of investments		31,253			73,482			83,161			179,431
Purchases of property & equipment, net		(5,494	)		(6,296	)		(9,256	)		(12,547	)
Cash proceeds from sale of property & equipment		—			1			—			43
Cash proceeds from sale of product line		—			—			3,249			—
Net cash provided by (used in) investing activities		(36,828	)		23,707			(63,199	)		24,086
Financing Activities:
Repurchase of common stock		(15,236	)		(57,647	)		(41,551	)		(57,647	)
Excess income tax benefits from stock-based compensation plans		806			(453	)		2,460			3,247
Repurchase of shares to satisfy employee tax withholdings		(19	)		—			(8,052	)		(8,245	)
Fees and proceeds from issuance of common stock, net		4,271			4,547			7,996			17,910
Net cash used in financing activities		(10,178	)		(53,553	)		(39,147	)		(44,735	)
Net increase (decrease) in cash and cash equivalents		(16,413	)		1,534			(36,480	)		7,160
Cash and cash equivalents at beginning of period		215,808			358,747			235,875			353,121
Cash and cash equivalents at end of period	$	199,395		$	360,281		$	199,395		$	360,281

ARRIS GROUP, INC.

PRELIMINARY SUPPLEMENTAL SALES & NET INCOME RECONCILIATION

(in thousands, except per share data) (unaudited)

(in thousands, except per share data)	Q2 2012												YTD 2012
	Amount			Per Diluted Share									Amount			Per Diluted Share
Sales	$	349,327											$	652,228
Highlighted items:
Purchase accounting impacts of deferred revenue		663			0.01									1,921			0.02
Sales excluding highlighted items	$	349,990											$	654,149
	Q2 2012						Q2 2011						YTD 2012						YTD 2011
	Amount			Per Diluted Share			Amount			Per Diluted Share			Amount			Per Diluted Share			Amount			Per Diluted Share
Net income	$	15,001		$	0.13		$	16,690		$	0.13		$	20,800		$	0.18		$	28,254		$	0.23
Highlighted items:
Impacting gross margin:
Purchase accounting impacts of deferred revenue		663			0.01			—			—			1,921			0.02			—			—
Stock compensation expense		809			0.01			557			—			1,559			0.01			994			0.01
Impacting operating expenses:
Acquisition costs		102			—			—			—			709			0.01			—			—
Restructuring		1,039			—			—			—			6,242			0.05			—			—
Amortization of intangible assets		7,444			0.06			8,944			0.07			14,823			0.13			17,888			0.14
Loss of sale of product line		—			—			—			—			337			—			—			—
Stock compensation expense		7,058			0.06			5,368			0.04			12,957			0.11			10,215			0.08
Impacting other (income) / expense:
Non-cash interest expense		3,058			0.03			2,889			0.02			6,057			0.05			5,721			0.05
Impairment of investment		466			—			—			—			466			—			—			—
Impacting income tax expense:
Adjustments of income tax valuation allowances and other		—			—			—			—			—			—			(3,583	)		(0.03	)
Tax related to highlighted items above		(6,749	)		(0.06	)		(4,915	)		(0.04	)		(14,870	)		(0.13	)		(9,939	)		(0.08	)
Total highlighted items		13,890			0.12			12,843			0.10			30,201			0.26			21,296			0.17
Net income excluding highlighted items	$	28,891		$	0.25		$	29,533		$	0.24		$	51,001		$	0.44		$	49,550		$	0.40
Weighted average common shares - diluted					115,111						123,711						116,352						124,720

See the Notes to GAAP / Adjusted Non-GAAP Financial Measures

Notes to GAAP to Adjusted Non-GAAP Financial Measures

The Company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP” or referred to herein as “reported”). However, management believes that certain non-GAAP financial measures provide management and other users with additional meaningful financial information that should be considered when assessing our ongoing performance. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the factors management uses in planning for and forecasting future periods. Non-GAAP financial measures should be viewed in addition to, and not as an alternative to, the Company’s reported results prepared in accordance with GAAP. Our non-GAAP financial measures reflect adjustments based on the following items, as well as the related income tax effects:

Purchase Accounting Impacts Related to Deferred Revenue: In connection with our acquisition of BigBand, business combination rules require us to account for the fair values of arrangements for which acceptance has not been obtained, and post contract support in our purchase accounting. The non-GAAP adjustment to our sales and cost of sales is intended to include the full amounts of such revenues. We believe the adjustment to these revenues is useful as a measure of the ongoing performance of our business. We have historically experienced high renewal rates related to our support agreements and our objective is to increase the renewal rates on acquired post contract support agreements; however, we cannot be certain that our customers will renew our contracts.

Stock-Based Compensation Expense: We have excluded the effect of stock-based compensation expenses in calculating our non-GAAP operating expenses and net income measures. Although stock-based compensation is a key incentive offered to our employees, we continue to evaluate our business performance excluding stock-based compensation expenses. We record non-cash compensation expense related to grants of options and restricted stock. Depending upon the size, timing and the terms of the grants, the non-cash compensation expense may vary significantly but will recur in future periods.

Acquisition Costs: We have excluded the effect of acquisition related and other expenses and the effect of restructuring expenses in calculating our non-GAAP operating expenses and net income measures. We incurred significant expenses in connection with our recent acquisition of BigBand, which we generally would not have otherwise incurred in the periods presented as part of our continuing operations. Acquisition related expenses consist of transaction costs, costs for transitional employees, other acquired employee related costs, and integration related outside services. We believe it is useful to understand the effects of these items on our total operating expenses.

Restructuring Costs: We have excluded the effect of restructuring charges in calculating our non-GAAP operating expenses and net income measures. Restructuring expenses consist of employee severance, abandoned facilities, and other exit costs. We believe it is useful to understand the effects of these items on our total operating expenses.

Loss on Sale of Product Line: We have excluded the effect of a loss on the sale of a product line in calculating our non-GAAP operating expenses and net income measures. We believe it is useful to understand the effects of these items on our total operating expenses.

Amortization of Intangible Assets: We have excluded the effect of amortization of intangible assets in calculating our non-GAAP operating expenses and net income measures. Amortization of intangible assets is non-cash, and is inconsistent in amount and frequency and is significantly affected by the timing and size of our acquisitions. Investors should note that the use of intangible assets contributed to our revenues earned during the periods presented and will contribute to our future period revenues as well. Amortization of intangible assets will recur in future periods.

Non-Cash Interest on Convertible Debt: We have excluded the effect of non-cash interest in calculating our non-GAAP operating expenses and net income measures. We record the accretion of the debt discount related to the equity component non-cash interest expense. We believe it is useful to understand the component of interest expense that will not be paid out in cash.

Impairment of Investment: We have excluded the effect of an other-than-temporary impairment of a cost method investment in calculating our non-GAAP financial measures. We believe it is useful to understand the effect of this non-cash item in our other expense (income).

Income Tax Expense: We have excluded the tax effect of the non-GAAP items mentioned above. Additionally, we have excluded the effects of certain tax adjustments related to state valuation allowances, research and development tax credits and provision to return differences.