EXHIBIT 99.1
[IXIA LOGO]
FOR IMMEDIATE RELEASE
For more information, contact:
Tom Miller the blueshirt group
Chief Financial Officer Chris Danne, Brinlea Johnson
(818) 444-2325 (415) 217-7722
tmiller@ixiacom.com chris or brinlea@blueshirtgroup.com
IXIA ANNOUNCES FIRST QUARTER RESULTS
20TH CONSECUTIVE QUARTER OF PROFITABILITY - REVENUES INCREASE 22%
CALABASAS, Calif. -- April 17, 2003--Ixia (Nasdaq: XXIA) today reported
financial results for the first quarter ended March 31, 2003.
Net revenues for the first quarter of 2002 increased 22% on a year-over-year
basis to approximately $18.8 million compared to $15.4 million for the first
quarter of 2002. Net income on a GAAP basis for the first quarter of 2003,
including stock-based compensation, was $1.5 million or $0.02 per diluted share,
compared to $968,000, or $0.02 per diluted share, for the first quarter of 2002.
Our GAAP results include $931,000 of non-cash charges for stock-based
compensation associated with the issuance of stock options, warrants and
restricted stock prior to the Company's initial public offering in October 2000.
Excluding the effect of stock-based compensation, non-GAAP net income was $2.2
million, or $0.04 per diluted share, compared to $2.3 million, or $0.04 per
diluted share, for the same period last year.
"Despite the difficult market, we had another solid quarter of sequential growth
and high gross margins, as we benefited from the positive impact of a number of
our strategic initiatives," commented Errol Ginsberg, President and Chief
Executive Officer of Ixia. "For example, our decision to go direct in Japan had
a positive impact in the first quarter as we had record revenues from the Asia
Pacific region. Demand for 10 Gig products also continued to be solid,
decreasing from the fourth quarter but posting one of the better quarters ever
on this product line. Additionally, ANVL sales grew significantly,
underscoring our commitment to enhancing this data network testing solution and
investing in our sales effort for this product line acquired in the first
quarter of last year. Further, our decision to partner with leading software
companies such as NetIQ was also a strong factor in the quarter, helping drive
related hardware sales and moving us more firmly into the enterprise market."
"Sales of Packet Over SONET test products were soft and the general economic
environment remains difficult but we continue to make progress introducing new
products and driving into promising markets," added Mr. Ginsberg. "Our
commitment to R&D paid dividends as products introduced in the last year
accounted for over 40% of sales in the first quarter. Additionally, we added 29
new customers and over 20% of first quarter sales came from carrier, enterprise
and government accounts. While we believe that these sales to newer markets have
the potential to remain lumpy in the current environment, we believe we have the
right products to further penetrate the enterprise market and expand our
addressable opportunity."
During the quarter, Ixia increased cash and investments by approximately $4.9
million and, as of March 31, 2003, Ixia had approximately $127.1 million in cash
and investments, or $2.20 per outstanding share with no debt.
Ixia will host a conference call today for analysts and investors to discuss its
quarterly results at 5:00 p.m. ET. Open to the public, a live Web cast of the
conference call will be accessible from the "Investors" section of Ixia's Web
site (www.ixiacom.com). Following the live Web cast, an archived version will be
available on the Ixia Web site for 90 days.
NON-GAAP DISCLOSURE
Certain non-GAAP financial measures are included in this press release. Our GAAP
results have been adjusted to exclude stock-based compensation charges
associated with the issuance of stock options, warrants and restricted stock
prior to the Company's initial public offering in October 2000. These non-GAAP
financial measures are provided to enhance the user's overall understanding of
our financial performance and our prospects for the future. Specifically, we
believe non-GAAP measures can provide useful information to both management and
investors by excluding certain non-cash and non-recurring expenses that are not
indicative of our core operating results. Further, these non-GAAP financial
measures are one of the primary indicators
management uses for planning and forecasting future periods. In addition, since
we have historically reported non-GAAP measures to the investment community, we
believe the inclusion of non-GAAP measures provides consistency in our financial
reporting. The presentation of this additional information is not meant to be
considered a substitute for financial measures prepared in accordance with
generally accepted accounting principles. A reconciliation of GAAP to non-GAAP
net income is included below.
ABOUT IXIA
Ixia delivers powerful, distributed, multiport traffic generators, and
performance and conformance analyzers for wire-speed verification of optical
networking equipment, LAN, MAN, WAN, and SAN multilayer switches and routers.
Our analysis systems are used in the design, manufacture, and quality assurance
stages of network equipment development. Our Real World Traffic solutions
address the growing need to test Enterprise networks prior to deployment under
real load conditions with actual business application traffic. Our network
operations applications address the carrier's needs for a higher level of
control over the network itself. Ixia's analysis solutions utilize a variety of
interfaces - 10/100/1000 Mbps Ethernet, 10 Gigabit Ethernet, Packet Over SONET,
BERT, and USB, and are distinguished by their accuracy, reliability, and
adaptability to the industry's constant evolution.
For more information, contact Ixia at 26601 W. Agoura Road, Calabasas, CA 91302;
(818) 871-1800, Fax: (818) 871-1805; Email: info@ixiacom.com or visit our Web
Site at http://www.ixiacom.com.
Ixia and the Ixia logo are registered trademarks of Ixia. ANVL and Real World
Traffic are trademarks of Ixia.
SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:
Certain statements made in this news release are forward-looking statements,
including, without limitation, statements regarding possible future revenues and
earnings per share, growth and profitability and future business and market
share. In some cases, such forward-looking statements can be identified by terms
such as "may," "will," "expect," "plan," "believe," "estimate," "predict" or the
like. Such statements reflect the Company's current intent, belief and
expectations and are subject to risks and uncertainties that could cause the
Company's actual results to differ materially from those expressed or implied in
the forward-looking statements. Factors that may cause future results to differ
materially from the Company's current expectations include, among other things:
the current economic slowdown in general and decreasing capital availability and
investment in the telecommunications industry in particular, consistency of
orders from significant customers, the timing of new product releases, our
success in developing and producing new products, market acceptance of our
products and competitive pressures including competition for limited source
components. These and other risk factors that may affect Ixia's financial
results in the future are discussed in Ixia's SEC filings, including its Annual
Report on Form 10-K for the year ended December 31, 2002. Ixia undertakes no
obligation to update any forward-looking statements, whether as a result of new
information, future events or otherwise.
IXIA
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
MARCH 31, DECEMBER 31,
2003 2002
----------- ------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 53,905 $ 58,865
Short-term investments in marketable securities 8,151 12,050
Accounts receivable, net 10,147 9,351
Inventories 5,230 5,121
Prepaid expenses and other current assets 6,210 6,232
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Total current assets 83,643 91,619
Investments in marketable securities 65,062 51,306
Property and equipment, net 7,192 7,003
Goodwill 1,592 1,592
Other intangible assets, net 4,042 4,030
Other assets 2,068 2,111
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Total assets $ 163,599 $ 157,661
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,145 $ 960
Accrued expenses 5,453 4,049
Deferred revenues 2,375 1,958
Income taxes payable 1,859 1,527
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Total liabilities 11,832 8,494
Shareholders' equity:
Common stock, without par value; 200,000 shares
authorized, 57,755 and 57,595 shares issued and
outstanding as of March 31, 2003 and December 31,
2002, respectively 79,292 79,206
Additional paid-in capital 47,046 47,045
Deferred stock-based compensation (2,035) (3,036)
Retained earnings 27,464 25,952
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Total shareholders' equity 151,767 149,167
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Total liabilities and shareholders' equity $ 163,599 $ 157,661
========= =========
IXIA
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(unaudited)
THREE MONTHS ENDED
MARCH 31,
------------------------
2003 2002
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Net revenues $18,813 $15,442
Cost of revenues(1) 3,309 2,978
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Gross profit 15,504 12,464
Operating expenses:
Research and development 5,030 3,804
Sales and marketing 6,039 4,091
General and administrative 1,995 1,733
Amortization of purchased intangible assets 228 168
Stock-based compensation(2) 881 1,652
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Total operating expenses 14,173 11,448
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Income from operations 1,331 1,016
Interest income, net 795 639
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Income before income taxes 2,126 1,655
Income tax expense 614 687
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Net income $ 1,512 $ 968
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Earnings per share:
Basic $ 0.03 $ 0.02
Diluted $ 0.02 $ 0.02
Weighted average number of common and common equivalent
shares outstanding:
Basic 57,632 56,233
Diluted 60,670 60,775
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(1)Stock-based compensation included in cost of revenues $ 50 $ 138
======= =======
(2)Stock-based compensation included in:
Research and development $ 511 $ 1,011
Sales and marketing 255 409
General and administrative 115 232
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$ 881 $ 1,652
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IXIA
NON-GAAP CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(unaudited)
THREE MONTHS ENDED
MARCH 31,
------------------------
2003 2002
------- -------
Net revenues $18,813 $15,442
Cost of revenues 3,259 2,840
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Gross profit 15,554 12,602
Operating expenses:
Research and development 5,030 3,804
Sales and marketing 6,039 4,091
General and administrative 1,995 1,733
Amortization of purchased intangible assets 228 168
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Total operating expenses 13,292 9,796
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Income from operations 2,262 2,806
Interest income, net 795 639
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Income before income taxes 3,057 3,445
Income tax expense 877 1,137
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Non-GAAP net income $ 2,180 $ 2,308
======= =======
Non-GAAP earnings per share:
Basic $ 0.04 $ 0.04
Diluted $ 0.04 $ 0.04
Weighted average number of common and common equivalent
shares outstanding:
Basic 57,632 56,233
Diluted 60,670 60,775
Reconciliation of Non-GAAP net income to GAAP net income (in thousands):
THREE MONTHS ENDED
MARCH 31,
------------------------
2003 2002
------- -------
Non-GAAP net income $ 2,180 $ 2,308
Stock-based compensation (931) (1,790)
Income tax effect 263 450
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Net income $ 1,512 $ 968
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