SAN JOSE, Calif., April 9, 2015 /PRNewswire/ -- Extreme Networks,
Inc. (Nasdaq: EXTR), a leading provider of high performance network
solutions, today announced preliminary unaudited results for the
quarter ended March 31, 2015.
Summary of Guidance and Preliminary, Unaudited Results for Q3 of
Fiscal 2015
|
Guidance
|
Preliminary
Results
|
Metric
|
Low End
|
High End
|
Low End
|
High End
|
GAAP Revenue (in
millions)
|
$129
|
$139
|
$117
|
$119
|
Non-GAAP Revenue (in
millions)
|
$130
|
$140
|
$118
|
$120
|
GAAP Gross
Margin
|
51%
|
52%
|
48.6%
|
49.7%
|
Non-GAAP Gross
Margin
|
55%
|
56%
|
53%
|
54%
|
GAAP Operating
Expenses (in millions)
|
$83.0
|
$84.6
|
$79.1
|
$80.1
|
Non-GAAP Operating
Expenses (in millions)
|
$72.5
|
$74.5
|
$69.0
|
$70.0
|
GAAP Net Loss per
Diluted Share
|
($0.20)
|
($0.14)
|
($0.24)
|
($0.23)
|
Non-GAAP Net
Income/(Loss) per Diluted Share
|
($0.03)
|
$0.02
|
($0.09)
|
($0.07)
|
The anticipated results in this press release are based on
management's preliminary unaudited analysis of operations for the
quarter ended March 31,
2015.
"Extreme experienced a number of challenges this quarter
affecting revenue," stated Chuck
Berger, president and CEO of Extreme
Networks. "In the U.S. and Canada, we experienced deferred spending at
several key accounts in the higher education market as well as
several stadium and venue deals pushing out of the March quarter.
Currency impacts in Europe
and Latin America resulted in
customers delaying or cancelling purchases. Operating
expenses came in below the low end of guidance due to tighter
expense management throughout the quarter which we plan to continue
going forward. Additionally, we continued to reduce our
outstanding debt by $20.6 million and
expect ending cash balances to be in the range of $74 million to $76 million."
The estimates for non-GAAP revenue for the quarter ended
March 31, 2015 include purchase
accounting adjustments for deferred revenue of approximately
$0.8 million related to our
acquisition of Enterasys Networks. The estimates for non-GAAP gross
margin include adjustments of approximately $4.3 million for amortization of intangibles,
approximately $0.8 million for
purchase accounting adjustments and approximately $0.5 million stock based compensation expense.
The estimate for non-GAAP operating expenses exclude approximately
$6.5 million for amortization of
non-product intangibles and integration expenses related to our
acquisition of Enterasys as well as stock based compensation
expenses of approximately $3.6
million.
Effective April 6, 2015,
Jeff White, who served as our Chief
Revenue Officer, is no longer with the Company. We are
currently in the process of identifying a successor.
Company to release final fiscal Q3'15 results on Wednesday, May 6, 2015
Extreme will release and discuss its final results for the third
quarter ending March 31, 2015 and
guidance for the fourth quarter, on Wednesday May 6, 2015, in a press release
followed by conference call at 5:00 p.m.
ET. The toll-free dial in phone number is 877-303-9826
and the dial in number from an international location is
224-357-2194; the call ID is 20788580. A live webcast of the
earnings conference call will be made available after the
conference call on the Extreme Investor Relations website
at http://investor.extremenetworks.com/. The conference
call and webcast will include forward looking information.
About Extreme Networks
Extreme Networks,
Inc. (NASDAQ: EXTR) is setting a new standard for superior
customer experience by delivering network-powered innovation and
market leading service and support. The company delivers
high-performance switching and routing products for data center and
core-to-edge networks, wired/wireless LAN access, and unified
network management and control. Our award-winning solutions include
software-defined networking (SDN), cloud and high-density Wi-Fi,
BYOD and enterprise mobility, identity access management and
security. Extreme Networks is a partner-driven organization
with a worldwide network of solution providers, distributors, OEMs,
and system integrators, technology partners, alliance partners, and
training partners. Headquartered in San Jose, CA, Extreme
Networks has more than 14,000 customers in over 80 countries. For
more information, visit the company's website
at http://www.extremenetworks.com.
Extreme Networks and the Extreme Networks logo
are either trademarks or registered trademarks of Extreme
Networks, Inc. in the United States and/or other
countries. All other names are the property of their respective
owners.
Non-GAAP Financial Measures
Extreme
Networks provides all financial information required in
accordance with generally accepted accounting principles (GAAP).
The Company is providing with this press release non-GAAP revenue,
non-GAAP gross margins, non-GAAP operating expenses, and non-GAAP
income/(loss) per share. In preparing non-GAAP information, the
Company has excluded, where applicable, the impact of acquisition
and integration costs, purchase accounting adjustments,
amortization of acquired intangibles, and share-based
compensation. The Company believes that excluding these items
provides both management and investors with additional insight into
its current operations, the trends affecting the Company and the
Company's marketplace performance. In particular, management finds
it useful to exclude these items in order to more readily correlate
the Company's operating activities with the Company's ability to
generate cash from operations. Accordingly, management uses these
non-GAAP measures, along with the comparable GAAP information, in
evaluating the Company's historical performance and in planning its
future business activities. Please note that the Company's non-GAAP
measures may be different than those used by other companies. The
additional non-GAAP financial information the Company presents
should be considered in conjunction with, and not as a substitute
for, the Company's financial information presented in accordance
with GAAP. The Company has provided a non-GAAP reconciliation
of the results for the period presented in this release, which are
adjusted to exclude acquisition and integration costs, purchase
accounting adjustments, amortization of acquired intangibles, and
share-based compensation expense. These measures should only
be used to evaluate the Company's results of operations in
conjunction with the corresponding GAAP measures for comparable
financial information and understanding of the Company's ongoing
performance as a business. Extreme Networks uses both
GAAP and non-GAAP measures to evaluate and manage its
operations.
Forward Looking Statements:
Actual results, including
with respect to the Company's financial targets and general
business prospects, could differ materially due to a number of
factors, including the risks that:
- The Company may not achieve targeted revenues for the Company's
products and services given increasing price competition and
product technology developments in key network switching equipment
markets;
- Ongoing uncertainty in global economic conditions,
infrastructure development or customer demand could negatively
affect product demand, collectability of receivables and other
related matters as consumers and businesses may defer purchases or
payments, or default on payments;
- The Company may be unable to effectively integrate the
businesses of Extreme Networks and Enterasys
Networks, both in terms of customer acceptance of combined product
lines as well as the need to align the Company's cost structure to
meet the company's financial goals, including controlling expenses,
and meeting financial covenants as part of the Company's debt
financing used to acquire Enterasys Networks;
- The Company may not accurately anticipate demand from end
customers, which can result in increased inventory and reduced
orders as it experiences wide fluctuations in supply and
demand;
- The Company is dependent on third parties to manufacture its
products and any potential production delays could preclude the
Company from shipping sufficient quantities to meet customer orders
or could result in higher production costs and lower margins;
- The Company may be unable to complete development and
commercialization of products under development, such as its
pipeline of new network switches and related software;
- The Company may be adversely affected by ongoing
litigation.
The matters set forth in this press release are forward-looking
statements within the meaning of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995. These
forward-looking statements speak only as of the date of this
release. Because such statements deal with future events, they are
subject to risks and uncertainties. Other important factors that
could cause actual results to differ materially are contained in
the Company's 10-Qs and 10-Ks that are on file with the Securities
and Exchange Commission. http://www.sec.gov. More information
about potential factors that could affect the Company's business
and financial results is included in its filings with
the Securities and Exchange Commission, including, without
limitation, under the captions: "Management's Discussion and
Analysis of Financial Condition and Results of Operations," and
"Risk Factors," which are on file with the Securities and
Exchange Commission. Except as required under the U.S.
federal securities laws and the rules and regulations of
the SEC, Extreme Networks disclaims any obligation
to update any forward-looking statements after the date of this
release, whether as a result of new information, future events,
developments, changes in assumptions or otherwise.
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SOURCE Extreme Networks, Inc.