EXHIBIT 99.1
INVESTOR RELATIONS CONTACT: PUBLIC RELATIONS CONTACT:
RANDI PAIKOFF FEIGIN KATHY DURR
Tel: 408-745-2371 Tel: 408-745-5058
randi@juniper.net kdurr@juniper.net
JUNIPER NETWORKS, INC. REPORTS Q3'03 FINANCIAL RESULTS
NET REVENUE $172.1M; GAAP EPS $0.02; NON-GAAP EPS $0.04
Sunnyvale, CA - October 9, 2003 -- Juniper Networks, Inc. (NASDAQ: JNPR) today
reported its third quarter results for the period ending September 30, 2003.
Net revenues for the third quarter were $172.1 million, compared with $152.0
million for the same period last year, an increase of 13 percent.
GAAP net income for the third quarter was $7.2 million or $0.02 per share,
compared with a GAAP net loss of $88.3 million or $0.24 per share in the third
quarter of 2002. Non-GAAP net income, which excludes restructuring expenses,
in-process research and development expenses, integration expenses, the
amortization of purchased intangibles and deferred compensation, the write-down
of investments and the gain on the partial retirement of the 4.75% Convertible
Subordinated Notes was $14.7 million or $0.04 per share, compared with non-GAAP
net loss of $8.4 million or $0.02 per share in the third quarter of 2002.
Net revenues for the nine months ended September 30, 2003 were $494.4 million,
compared with $391.3 million for the same period last year, an increase of 26
percent.
GAAP net income for the nine months ended September 30, 2003 was $24.5 million
or $0.06 per share, compared with a GAAP net loss of $128.1 million or $0.37 per
share for the same period last year. Non-GAAP net income, which excludes an
adjustment to the purchase price of an acquisition, restructuring expenses,
in-process research and development expenses, integration expenses, the
amortization of purchased intangibles and deferred compensation, the gain on the
sale of investments, the write-down of investments and the gain on the partial
retirement of the 4.75% Convertible Subordinated Notes was $31.3 million or
$0.08 per share, compared with non-GAAP net loss of $7.5 million or $0.02 per
share for the same period last year.
Cash provided by operations was $42.9 million for the third quarter, which
brings cash provided by operations for the nine months ended September 30, 2003
to $115.6 million, compared to cash used in operations of $3.9 million for the
nine months ended September 30, 2002. Capital expenditures and depreciation
during the third quarter were $4.6 million and $11.1 million respectively.
"The quarter was once again strong, confirmed by all marketplace and financial
metrics," said Scott Kriens, chairman and CEO of Juniper Networks. "Juniper
continues to benefit immensely from the alignment we have built with the
business and networking strategy of our customers."
Juniper Networks will host a conference call web cast today, October 9, 2003 at
1:45 p.m. PT/4:45 p.m. ET at:
http://www.juniper.net/company/investor/conferencecall.html. In addition, there
will be an audio replay available through November 9, 2003 at
http://www.juniper.net/company/investor/conferencecall.html or you can call the
replay at
1
800-633-8284 (or 402-977-9140) and enter the reservation number, 21162087,
through October 16, 2003. The replays will be available 24 hours/day, including
weekends.
ABOUT JUNIPER NETWORKS
Juniper Networks transforms the business of networking by converting a commodity
- - bandwidth - into a dependable, secure, and highly valuable corporate asset.
Founded in 1996 to meet the stringent demands of service providers, Juniper
Networks is now relied upon by the world's leading network operators, government
agencies, research and education institutions, and information intensive
enterprises as the foundation for uncompromising networks. Juniper Networks is
headquartered in Sunnyvale, California. Additional information can be found at
www.juniper.net.
Juniper Networks is registered in the U.S. Patent and Trademark Office and in
other countries as a trademark of Juniper Networks, Inc. Broadband Cable
Processor, ERX, ESP, E-series, G1, G10, G-series, Internet Processor, Juniper
Your Net, JUNOS, JUNOScript, M5, M10, M20, M40, M40e, M160, M-series, NMC-RX,
SDX, ServiceGuard, T320, T640, T-series, UMC, and Unison are trademarks of
Juniper Networks, Inc. All other trademarks, service marks, registered
trademarks, or registered service marks are the property of their respective
owners.
Actual results could differ materially from those anticipated in forward-looking
statements in this release as a result of certain factors, including those set
forth in the risk factors described in the Company's SEC filings, including its
most recent Form 10K.
2
JUNIPER NETWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, December 31,
2003 2002
------------ ------------
(unaudited) (A)
ASSETS
Current assets:
Cash and cash equivalents $ 457,510 $ 194,435
Short-term investments 309,143 384,036
Accounts receivable, net 48,526 78,501
Prepaid expenses and other current assets 24,409 23,957
----------- -----------
Total current assets 839,588 680,929
Property and equipment, net 243,526 266,962
Long-term investments 557,346 583,664
Restricted cash 24,983 --
Goodwill 983,397 987,661
Purchased intangible assets, net and other
long-term assets 79,076 95,453
----------- -----------
Total assets $ 2,727,916 $ 2,614,669
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 54,057 $ 51,747
Accrued warranty 32,598 32,358
Other accrued liabilities 120,723 111,773
Deferred revenue 53,779 46,146
----------- -----------
Total current liabilities 261,157 242,024
Convertible subordinated notes 542,076 942,114
Convertible senior notes 400,000 --
Commitments and contingencies
Stockholders' equity:
Common stock and additional-paid-in-capital 1,532,209 1,461,910
Deferred stock compensation (1,849) (11,113)
Accumulated other comprehensive income 7,175 17,052
Accumulated deficit (12,852) (37,318)
----------- -----------
Total stockholders' equity 1,524,683 1,430,531
----------- -----------
Total liabilities and stockholders' equity $ 2,727,916 $ 2,614,669
=========== ===========
(A) The balance sheet at December 31, 2002 has been derived from the audited
consolidated financial statements at that date.
3
JUNIPER NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three months ended Nine months ended
September 30, September 30,
------------------------ ------------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Net revenues:
Product $ 147,110 $ 130,264 $ 423,351 $ 333,822
Service 25,018 21,762 71,087 57,459
--------- --------- --------- ---------
Total net revenues 172,128 152,026 494,438 391,281
Cost of revenues:
Product 48,694 54,336 145,868 130,200
Service 14,245 14,529 40,852 36,816
--------- --------- --------- ---------
Total cost of revenues 62,939 68,865 186,720 167,016
--------- --------- --------- ---------
Gross margin 109,189 83,161 307,718 224,265
Operating expenses:
Research and development 44,932 48,771 131,409 117,610
Sales and marketing 34,710 37,749 101,404 91,221
General and administrative 6,524 9,108 21,292 27,761
Restructuring 13,985 22,830 13,985 22,830
In-process research and development -- 83,479 -- 83,479
Integration -- 2,507 -- 2,507
Amortization of purchased intangible assets and
deferred stock compensation (1) 1,998 8,727 17,323 17,640
--------- --------- --------- ---------
Total operating expenses 102,149 213,171 285,413 363,048
--------- --------- --------- ---------
Operating income (loss) 7,040 (130,010) 22,305 (138,783)
Interest and other income 8,031 13,987 27,300 46,119
Interest and other expense (9,386) (13,631) (33,689) (43,526)
Gain on sale of investments -- -- 8,739 --
Write-down of investments -- (19,851) -- (50,451)
Gain on retirement of convertible subordinated notes 9,220 62,855 14,108 62,855
Equity in net loss of joint venture -- (180) -- (1,316)
--------- --------- --------- ---------
Income (loss) before income taxes 14,905 (86,830) 38,763 (125,102)
Provision for income taxes 7,700 1,500 14,297 3,000
--------- --------- --------- ---------
Net income (loss) $ 7,205 $ (88,330) $ 24,466 $(128,102)
========= ========= ========= =========
Net income (loss) per share:
Basic $ 0.02 $ (0.24) $ 0.06 $ (0.37)
========= ========= ========= =========
Diluted $ 0.02 $ (0.24) $ 0.06 $ (0.37)
========= ========= ========= =========
Shares used in computing net income (loss) per share:
Basic 384,795 369,944 379,792 343,423
========= ========= ========= =========
Diluted 408,083 369,944 399,525 343,423
========= ========= ========= =========
(1) Amortization of deferred stock compensation
relates to the following cost and expense categories
by period:
Cost of revenues $ (287) $ 294 $ (48) $ 927
Research and development (2,098) 2,197 1,414 5,356
Sales and marketing (573) 609 127 1,705
General and administrative (346) 325 (77) 1,058
--------- --------- --------- ---------
Total $ (3,304) $ 3,425 $ 1,416 $ 9,046
========= ========= ========= =========
4
JUNIPER NETWORKS, INC.
NON-GAAP CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (1)
(in thousands, except per share amounts)
(unaudited)
Three months ended Nine months
September 30, ended September 30,
------------------------ ------------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Net revenues:
Product $ 147,110 $ 130,264 $ 423,351 $ 333,822
Service 25,018 21,762 71,087 57,459
--------- --------- --------- ---------
Total net revenues 172,128 152,026 494,438 391,281
Cost of revenues:
Product 48,694 54,336 145,868 130,200
Service 14,245 14,529 40,852 36,816
--------- --------- --------- ---------
Total cost of revenues 62,939 68,865 186,720 167,016
--------- --------- --------- ---------
Gross profit 109,189 83,161 307,718 224,265
Operating expenses:
Research and development 44,932 48,771 131,409 117,610
Sales and marketing 34,710 37,749 101,404 91,221
General and administrative 6,524 9,108 21,292 27,761
--------- --------- --------- ---------
Total operating expenses 86,166 95,628 254,105 236,592
--------- --------- --------- ---------
Operating income (loss) 23,023 (12,467) 53,613 (12,327)
Interest income 8,031 13,987 26,110 46,119
Interest and other expense (9,386) (13,631) (33,689) (43,526)
Equity in net loss of joint venture -- (180) -- (1,316)
--------- --------- --------- ---------
Income (loss) before income taxes 21,668 (12,291) 46,034 (11,050)
Provision for income taxes 6,934 (3,933) 14,731 (3,536)
--------- --------- --------- ---------
Net income (loss) $ 14,734 $ (8,358) $ 31,303 $ (7,514)
========= ========= ========= =========
Net income (loss) per share:
Basic $ 0.04 $ (0.02) $ 0.08 $ (0.02)
========= ========= ========= =========
Diluted $ 0.04 $ (0.02) $ 0.08 $ (0.02)
========= ========= ========= =========
Shares used in computing net income (loss)
per share:
Basic 384,795 369,944 379,792 343,423
========= ========= ========= =========
Diluted 408,083 369,944 399,525 343,423
========= ========= ========= =========
(1) The non-GAAP statements exclude an adjustment to the purchase price of an
acquisition, the restructuring expenses, the in-process research and development
expenses, the integration expenses, the impact of the amortization of purchased
intangibles and deferred stock compensation, the gain from the sale of
investments, the impairment write-down of investments and the gain on the
retirement of convertible subordinated notes. See reconciliation to GAAP
information below.
5
JUNIPER NETWORKS, INC.
RECONCILIATION OF NON-GAAP TO GAAP CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands)
Three months ended Nine months
September 30, ended September 30,
------------------------ ------------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Non-GAAP net income (loss) $ 14,734 $ (8,358) $ 31,303 $ (7,514)
Acquisition related adjustment -- -- 1,190 --
Restructuring (13,985) (22,830) (13,985) (22,830)
In-process research and development -- (83,479) -- (83,479)
Integration -- (2,507) -- (2,507)
Amortization of purchased intangible
assets and deferred stock
compensation (1,998) (8,727) (17,323) (17,640)
Gain on sale of investments -- -- 8,739 --
Write-down of investments -- (19,851) -- (50,451)
Gain on retirement of convertible
subordinated notes 9,220 62,855 14,108 62,855
Income tax effect (766) (5,433) 434 (6,536)
--------- --------- --------- ---------
GAAP net income (loss) $ 7,205 $ (88,330) $ 24,466 $(128,102)
========= ========= ========= =========
6
JUNIPER NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine months ended
September 30,
------------------------
2003 2002
--------- ---------
OPERATING ACTIVITIES:
Net income (loss) $ 24,466 $(128,102)
Adjustments to reconcile net income (loss) to net
cash from operating activities:
Depreciation 35,754 28,919
Amortization of purchased intangibles, deferred
stock compensation, debt costs and other
non-cash transactions 23,597 25,735
In-process research and development -- 83,479
Gain on sale of investments (8,739) --
Write-down of investments -- 50,451
Gain on retirement of convertible subordinated (14,108) (62,855)
notes
Changes in operating assets and liabilities:
Accounts receivable, net 29,975 40,563
Prepaid expenses, other current assets and other
assets 1,268 10,222
Accounts payable 5,783 (18,351)
Accrued warranty 240 3,778
Other accrued liabilities 9,740 (31,877)
Deferred revenue 7,633 (5,828)
--------- ---------
Net cash provided by (used in) operating
activities 115,609 (3,866)
INVESTING ACTIVITIES:
Purchases of property and equipment, net (14,136) (24,755)
Purchases of available-for-sale investments (671,826) (707,688)
Maturities and sales of available-for-sale 770,334 882,902
investments
Increase in restricted cash (25,000) --
Cash paid in connection with the Unisphere Networks
acquisition, net of cash and cash equivalents
acquired -- (375,803)
Minority equity investments (900) (1,075)
--------- ---------
Net cash provided by (used in) investing activities 58,472 (226,419)
FINANCING ACTIVITIES:
Proceeds from issuance of common stock 77,403 18,185
Proceeds from issuance of convertible senior notes 392,750 --
Retirement of convertible subordinated notes (381,159) (145,975)
--------- ---------
Net cash provided by (used in) financing
activities 88,994 (127,790)
--------- ---------
Net increase (decrease) in cash and cash 263,075 (358,075)
equivalents
Cash and cash equivalents at beginning of period 194,435 606,845
--------- ---------
Cash and cash equivalents at end of period $ 457,510 $ 248,770
========= =========
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest $ 42,863 $ 53,787
Supplemental disclosure of non-cash investing
and financing activities:
Common stock issued in connection with the
Unisphere Networks acquisition $ -- $ 359,888
Common stock issued in connection with the
Pacific Broadband earn out provision $ -- $ 10,844
7