Exhibit 99.1
(IXIA LOGO)
FOR IMMEDIATE RELEASE
For more information, contact:
Tom Miller the blueshirt group
Chief Financial Officer Chris Danne, Rakesh Mehta
(818) 444-2325 (415) 217-7722
tmiller@ixiacom.com chris or rakesh@blueshirtgroup.com
IXIA ANNOUNCES FOURTH QUARTER RESULTS
REVENUES INCREASE 28% YEAR-OVER-YEAR AND 7% SEQUENTIALLY
23RD CONSECUTIVE QUARTER OF PROFITABILITY
CALABASAS, CA -- January 29, 2004--Ixia (Nasdaq: XXIA) today reported financial
results for the fourth quarter ended December 31, 2003.
Net revenues for the fourth quarter of 2003 increased 28% on a year-over-year
basis to $23.0 million compared to $18.0 million for the fourth quarter of 2002.
Net income on a GAAP basis for the fourth quarter of 2003 was $2.3 million, or
$0.04 per diluted share, compared to $225,000, or less than one cent per diluted
share, for the fourth quarter of 2002.
Ixia's fourth quarter GAAP results included non-cash charges of $1.3 million
related to acquisition related intangible assets and $374,000 for stock-based
compensation and a tax benefit of $150,000 associated with stock-based
compensation. Excluding the effects of these items, non-GAAP net income was $3.8
million, or $0.06 per diluted share, compared to $2.8 million, or $0.05 per
diluted share, for the same period last year after excluding the effects of
similar items.
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"Revenues increased 7% over a very strong third quarter, driven by increasing
software sales and penetration of new markets," commented Errol Ginsberg,
President and Chief Executive Officer of Ixia. "Internationally, we saw good
strength in Europe and Canada, while sales to Asia Pacific were lower compared
to the third quarter's record levels but still showed strong year-over-year
growth. Revenue from enterprise customers doubled sequentially, and we were
pleased with our success in penetrating our first enterprise vertical --
financial services -- with key sales to Merrill Lynch, Morgan Stanley, Wells
Fargo and leading U.S. stock exchanges. Momentum in this strategic financial
services vertical is being driven by strong demand for both our Ethernet
hardware products and our innovative software products such as Chariot."
"Overall, software sales accounted for 16% of total revenue, increasing
sequentially by 31%," added Mr. Ginsberg. "The success of our software product
offerings was also reflected in a record 114 new customers for the quarter
including such leaders as Booz Allen Hamilton, Coca-Cola, Naval Research Labs,
and Rogers Cable. Late in the quarter, we launched IxChariot, which offers full
integration of the Chariot product line into our Real World Traffic suite. We
expect IxChariot to become an increasing percentage of our Chariot sales and to
improve gross profit margins on the product line."
As of December 31, 2003, Ixia had approximately $121.9 million in cash and
investments 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 in the "Investors" section on the Ixia Web site for 90 days.
NON-GAAP INFORMATION
Certain non-GAAP financial measures are included in this press release. These
non-GAAP financial measures are provided to enhance the user's overall
understanding of our financial performance. Specifically, we believe that
certain non-cash charges, as well as
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the related tax effects, are not indicative of our core operating results. By
excluding these items, our non-GAAP results provide information to both
management and investors that is useful in assessing Ixia's core operating
performance and in evaluating and comparing our results of operations on a
consistent basis from period to period. These non-GAAP financial measures are
used by management to evaluate financial results and to plan and forecast future
periods. The presentation of this additional information is not meant to be
considered a substitute for the corresponding financial measures prepared in
accordance with generally accepted accounting principles. Investors are
encouraged to review the reconciliations of GAAP to non-GAAP financial results
which are included below.
ABOUT IXIA
Ixia is a leading, global provider of high performance IP network testing
solutions. Its highly scalable solutions generate, capture, characterize, and
emulate network and application traffic, establishing definitive performance and
conformance metrics of network devices or systems under test. Ixia's testing
solutions are used by network equipment manufacturers, semiconductor
manufacturers, service providers, and large enterprises to validate the
functionality and reliability of complex IP networks, devices, and applications.
Ixia's Real World Traffic Suite addresses the growing need to test applications
and networks prior to deployment under realistic load conditions. Ixia's
analysis solutions utilize a wide range of industry-standard interfaces,
including Ethernet, SONET, and ATM, and are distinguished by their performance,
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. IxChariot and Real
World Traffic are trademarks of Ixia. Other trademarks used in this release are
the trademarks or registered trademarks of their respective owners.
SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:
Certain statements made in this press release are forward-looking statements,
including, without limitation, statements regarding possible future revenues,
growth and
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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 and data communications industries in particular, consistency
of orders from significant customers, our success in exploiting the rights
acquired from NetIQ Corporation with respect to the Chariot product, the timing
of new product releases, our success in developing and producing new products
and market acceptance of our products. These and other risk factors that may
affect Ixia's financial results in the future are discussed in Ixia's periodic
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.
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IXIA
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
DECEMBER 31, DECEMBER 31,
2003 2002
------------ -----------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 41,708 $ 58,865
Short-term investments in marketable securities 22,143 12,050
Accounts receivable, net 17,121 9,351
Inventories 5,585 5,121
Income taxes receivable 2,011 --
Prepaid expenses and other current assets 6,927 6,232
------------ ------------
Total current assets 95,495 91,619
Investments in marketable securities 58,072 51,306
Property and equipment, net 6,907 7,003
Goodwill 1,592 1,592
Purchased technology and other intangible assets, net 19,960 4,030
Other assets 2,992 2,111
------------ ------------
Total assets $ 185,018 $ 157,661
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 806 $ 960
Accrued expenses 8,825 4,049
Deferred revenues 5,436 1,958
Income taxes payable 2,897 1,527
------------ ------------
Total current liabilities 17,964 8,494
Shareholders' equity:
Common stock, without par value; 200,000 shares
authorized, 59,642 and 57,595 shares issued and
outstanding as of December 31, 2003 and 2002,
respectively 84,048 79,206
Additional paid-in capital 48,710 47,045
Deferred stock-based compensation (419) (3,036)
Retained earnings 34,656 25,952
Accumulated other comprehensive income 59 --
------------ ------------
Total shareholders' equity 167,054 149,167
------------ ------------
Total liabilities and shareholders' equity $ 185,018 $ 157,661
============ ============
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IXIA
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------- --------------------
2003 2002 2003 2002
-------- -------- --------- --------
(unaudited) (unaudited)
Net revenues $ 23,049 $ 18,034 $ 83,533 $ 67,594
Cost of revenues(1) 4,526 3,533 15,761 13,310
Amortization of purchased technology 595 -- 1,183 --
-------- -------- -------- --------
Gross profit 17,928 14,501 66,589 54,284
Operating expenses:
Research and development 5,373 4,746 20,664 17,522
Sales and marketing 6,596 5,343 24,884 19,432
General and administrative 2,316 1,901 8,899 7,194
Amortization of intangible assets 300 257 1,070 941
Stock-based compensation(2) 342 935 1,762 4,907
Impairment of goodwill and other intangible
assets 410 1,677 410 1,677
-------- -------- -------- --------
Total operating expenses 15,337 14,859 57,689 51,673
-------- -------- -------- --------
Income (loss) from operations 2,591 (358) 8,900 2,611
Interest income 733 672 3,062 2,743
-------- -------- -------- --------
Income before income taxes 3,324 314 11,962 5,354
Income tax expense 1,011 89 3,258 1,944
-------- -------- -------- --------
Net income $ 2,313 $ 225 $ 8,704 $ 3,410
======== ======== ======== ========
Earnings per share:
Basic $ 0.04 $ 0.00 $ 0.15 $ 0.06
Diluted $ 0.04 $ 0.00 $ 0.14 $ 0.06
Weighted average number of common and common
equivalent shares outstanding:
Basic 59,472 57,430 58,344 56,902
Diluted 64,343 59,847 62,227 60,609
- ----------
(1)Stock-based compensation included in Cost
of revenues $ 32 $ 84 $ 157 $ 398
======== ======== ======== ========
(2)Stock-based compensation:
Research and development $ 222 $ 508 $ 1,316 $ 2,864
Sales and marketing 70 313 166 1,385
General and administrative 50 114 280 658
-------- -------- -------- --------
$ 342 $ 935 $ 1,762 $ 4,907
======== ======== ======== ========
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IXIA
NON-GAAP CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(unaudited)
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------- -------------------
2003 2002 2003 2002
-------- -------- -------- --------
Net revenues $ 23,049 $ 18,034 $ 83,533 $ 67,594
Cost of revenues 4,494 3,449 15,604 12,912
-------- -------- -------- --------
Gross profit 18,555 14,585 67,929 54,682
Operating expenses:
Research and development 5,373 4,746 20,664 17,522
Sales and marketing 6,596 5,343 24,884 19,432
General and administrative 2,316 1,901 8,899 7,194
-------- -------- -------- --------
Total operating expenses 14,285 11,990 54,447 44,148
-------- -------- -------- --------
Income from operations 4,270 2,595 13,482 10,534
Interest income 733 672 3,062 2,743
-------- -------- -------- --------
Income before income taxes 5,003 3,267 16,544 13,277
Income tax expense 1,161 461 4,448 3,194
-------- -------- -------- --------
Non-GAAP net income $ 3,842 $ 2,806 $ 12,096 $ 10,083
======== ======== ======== ========
Non-GAAP earnings per share:
Basic $ 0.06 $ 0.05 $ 0.21 $ 0.18
Diluted $ 0.06 $ 0.05 $ 0.19 $ 0.17
Weighted average number of common and common
equivalent shares outstanding:
Basic 59,472 57,430 58,344 56,902
Diluted 64,343 59,847 62,227 60,609
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IXIA
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME
(IN THOUSANDS)
(unaudited)
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------- -------------------
2003 2002 2003 2002
-------- -------- -------- --------
GAAP net income as presented above $ 2,313 $ 225 $ 8,704 $ 3,410
Stock-based compensation included in:
Cost of revenues 32 84 157 398
Research and development 222 508 1,316 2,864
Sales and marketing 70 313 166 1,385
General and administrative 50 114 280 658
Amortization of purchased technology,
intangible assets and impairment of
goodwill and other intangible assets 1,305 1,934 2,663 2,618
Taxbenefit of disqualifying dispositions
related to stock options for which
compensation expense had been recognized in
the GAAP financials (150) (372) (1,190) (1,250)
-------- -------- -------- --------
Non-GAAP net income $ 3,842 $ 2,806 $ 12,096 $ 10,083
======== ======== ======== ========
Diluted weighted average number of
common shares 64,343 59,847 62,227 60,609
GAAP diluted earnings per share $ 0.04 $ 0.00 $ 0.14 $ 0.06
Non-GAAP diluted earnings per share $ 0.06 $ 0.05 $ 0.19 $ 0.17
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