Juniper Networks (NYSE:JNPR), an industry leader in automated,
scalable and secure networks, today reported preliminary financial
results for the three months ended June 30, 2018 and provided
its outlook for the three months ending September 30, 2018.
Second Quarter 2018 Financial
Performance
Net revenues were $1,204.1 million, a decrease
of 8.0% year-over-year and an increase of 11.0% sequentially.
GAAP operating margin was 13.3%, a decrease from
19.7% in the second quarter of 2017, and an increase from 5.1% in
the first quarter of 2018.
Non-GAAP operating margin was 18.5%, a decrease
from 24.2% in the second quarter of 2017, and an increase from
12.3% in the first quarter of 2018.
GAAP net income was $116.5 million, a decrease
of 35.0% year-over-year and an increase of 239.0% sequentially,
resulting in diluted earnings per share of $0.33.
Non-GAAP net income was $170.2 million, a
decrease of 23.0% year-over-year and an increase of 71.0%
sequentially, resulting in diluted earnings per share of $0.48.
The reconciliation between GAAP and non-GAAP
results of operations is provided in a table immediately following
the Preliminary Net Revenues by Geographic Region table below.
"We exceeded our Q2 expectations, with strong
execution and enterprise strength complementing seasonal trends in
other areas of the business," said Rami Rahim, chief executive
officer, Juniper Networks. "While the timing of deployments is
impacting our Q3 outlook, we remain confident the business will
return to year-over-year growth during Q4 and that we have the
right solution portfolio and strategy to drive sustained
longer-term success."
"We demonstrated financial progress during the
second quarter, as both non-GAAP gross and operating margins were
above the mid-point of our guidance, and non-GAAP EPS exceeded the
high-end of our forecast," said Ken Miller, chief financial
officer, Juniper Networks. "While we believe we are making the
investments we need to win in the market, we remain focused on
improving profitability as we look to create shareholder
value."
Balance Sheet and Other Financial
Results
Total cash, cash equivalents, and investments as
of June 30, 2018 were $3,530.5 million, compared to
$4,214.6 million as of June 30, 2017, and
$3,448.4 million as of March 31, 2018.
Net cash flows provided by operations for the
second quarter of 2018 was $170.3 million, compared to $298.7
million in the second quarter of 2017, and $271.1 million in the
first quarter of 2018.
Days sales outstanding in accounts receivable,
or “DSO,” was 52 days in the second quarter of 2018, compared to 52
days in the second quarter of 2017, and 57 days in the first
quarter of 2018.
Capital expenditures were $37.1 million and
depreciation and amortization expense was $54.6 million during
the second quarter of 2018.
Juniper’s Board of Directors has declared a
quarterly cash dividend of $0.18 per share to be paid on September
25, 2018 to shareholders of record as of the close of business on
September 4, 2018.
Outlook
These metrics are provided on a non-GAAP basis,
except for revenue and share count. Earnings per share is on a
fully diluted basis. The outlook assumes that the exchange rate of
the U.S. dollar to other currencies will remain relatively stable
at current levels.
Our Q3 revenue guidance reflects stronger than
expected Q2 business, particularly in Enterprise and the timing of
certain Cloud and Service Provider deployments which are taking
longer to materialize. While customer spending remains dynamic and
difficult to predict, we continue to expect a return to year-over
year growth during the fourth quarter.
We expect gross margins to remain stable in Q3,
and improve with volume over time; however, the pace of this
improvement could be impacted by mix as well as other factors.
We expect annual operating expenses to be
approximately flat on a year-over-year basis.
Juniper's guidance for the quarter ending
September 30, 2018 is as follows:
- Revenues will be approximately $1,170 million, plus or minus
$30 million.
- Non-GAAP gross margin will be approximately 59.0%, plus or
minus 1.0%.
- Non-GAAP operating expenses will be approximately $490 million,
plus or minus $5 million.
- Non-GAAP operating margin will be approximately 17.1% at the
midpoint of revenue guidance.
- Non-GAAP tax rate will be approximately 20.0%.
- Non-GAAP net income per share will be approximately $0.44, plus
or minus $0.03. This assumes a share count of approximately 350
million.
The guidance above is provided under ASC
606.
We plan to host an Investor Day in New York City
on Friday, November 9, 2018. Additional information will be
provided at a later date.
All forward-looking non-GAAP measures exclude
estimates for amortization of intangible assets, share-based
compensation expenses, acquisition-related charges, restructuring
benefits or charges, impairment charges, litigation settlement
benefits or charges and resolution charges, supplier component
remediation charges and recoveries, gain or loss on equity
investments, retroactive impact of certain tax settlements,
significant effects of tax legislation and judicial or
administrative interpretation of tax regulations, including the
impact of income tax reform, non-recurring income tax adjustments,
valuation allowance on deferred tax assets, and the income tax
effect of non-GAAP exclusions, and do not include the impact of any
future acquisitions, divestitures, or joint ventures that may occur
in the period. Juniper is unable to provide a reconciliation of
non-GAAP guidance measures to corresponding U.S. generally accepted
accounting principles or GAAP measures on a forward-looking basis
without unreasonable effort due to the overall high variability and
low visibility of most of the foregoing items that have been
excluded. For example, share-based compensation expense is impacted
by the Company’s future hiring needs, the type and volume of equity
awards necessary for such future hiring, and the price at which the
Company’s stock will trade in those future periods. Amortization of
intangible assets is significantly impacted by the timing and size
of any future acquisitions. The items that are being excluded are
difficult to predict and a reconciliation could result in
disclosure that would be imprecise or potentially misleading.
Material changes to any one of these items could have a significant
effect on our guidance and future GAAP results. Certain exclusions,
such as amortization of intangible assets and share-based
compensation expenses, are generally incurred each quarter, but the
amounts have historically and may continue to vary significantly
from quarter to quarter.
Second Quarter 2018 Financial Commentary
Available Online
A CFO Commentary reviewing the Company’s second
quarter 2018 financial results, as well as third quarter 2018
financial outlook will be furnished to the SEC on Form
8-K and published on the Company’s website at
http://investor.juniper.net. Analysts and investors are encouraged
to review this commentary prior to participating in the conference
call webcast.
Conference Call Webcast
Juniper Networks will host a conference call
webcast today, July 26, 2018, at 2:00 pm PT, to be broadcast
live over the Internet at http://investor.juniper.net. To
participate via telephone in the US, the toll free dial-in number
is 1-877-407-8033. Outside the US, dial +1-201-689-8033. Please
call 10 minutes prior to the scheduled conference call time. The
webcast replay will be archived on the Juniper Networks
website.
About Juniper Networks
Juniper Networks simplifies the complexities of
networking with products, solutions and services in the cloud
era to transform the way we connect, work and live. We remove
the traditional constraints of networking to enable our customers
and partners to deliver automated, scalable and secure networks
that connect the world. Additional information can be found
at Juniper Networks (www.juniper.net).
Investors and others should note that the
Company announces material financial and operational information to
its investors using its Investor Relations website, press releases,
SEC filings and public conference calls and webcasts. The Company
also intends to use the Twitter account @JuniperNetworks and the
Company’s blogs as a means of disclosing information about the
Company and for complying with its disclosure obligations under
Regulation FD. The social media channels that the Company intends
to use as a means of disclosing information described above may be
updated from time to time as listed on the Company’s Investor
Relations website.
Juniper Networks, the Juniper Networks logo,
Juniper, and Junos are registered trademarks of Juniper Networks,
Inc. and/or its affiliates in the United States and other
countries. Other names may be trademarks of their respective
owners.
Safe Harbor
Statements in this release concerning Juniper
Networks’ business outlook, economic and market outlook; our future
financial and operating results; expectations with respect to our
market trends; expectations as to the timing of deployments; the
strength of our solution portfolio and strategy; our ability to
expand business opportunities, improve profitability and make
necessary investments; our expectations around obtaining revenue
and margin growth; and our overall future prospects are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act that involve a number of
uncertainties and risks. Actual results or events could differ
materially from those anticipated in those forward-looking
statements as a result of several factors, including: general
economic and political conditions globally or regionally; business
and economic conditions in the networking industry; changes in
overall technology spending by our customers; the network capacity
requirements of our customers and, in particular, cloud and
communication service providers; contractual terms that may result
in the deferral of revenue; the timing of orders and their
fulfillment; manufacturing and supply chain constraints, changes or
disruptions; availability of key product components; delays in
scheduled product availability; adoption of regulations or
standards affecting Juniper Networks products, services or the
networking industry; product defects, returns or vulnerabilities;
significant effects of tax legislation and judicial or
administrative interpretation of tax regulations, including the Tax
Cuts and Jobs Act; litigation settlements and resolutions; the
potential impact of activities related to the execution of capital
return, restructurings and product rationalization; the impact of
potential import tariffs, depending on their scope and how they are
implemented; and other factors listed in Juniper Networks’ most
recent report on Form 10-Q or 10-K filed with the Securities and
Exchange Commission. Note that our estimates as to tax rate and the
impact of the Tax Cuts and Jobs Act on our business are based on
current tax law, including current interpretations of the Tax Cuts
and Jobs Act, and could be affected by changing interpretations of
the Act, as well as additional legislation and guidance around the
Act. All statements made in this press release are made only as of
the date set forth at the beginning of this release. Juniper
Networks undertakes no obligation to update the information made in
this release in the event facts or circumstances subsequently
change after the date of this press release.
Use of Non-GAAP Financial
Information
Juniper Networks believes that the presentation
of non-GAAP financial information provides important supplemental
information to management and investors regarding financial and
business trends relating to the company’s financial condition and
results of operations. For further information regarding why
Juniper Networks believes that these non-GAAP measures provide
useful information to investors, the specific manner in which
management uses these measures, and some of the limitations
associated with the use of these measures, please refer to the
"Discussion of Non-GAAP Financial Measures" section of this press
release. The following tables and reconciliations can also be found
on our Investor Relations website at
http://investor.juniper.net.
A PDF accompanying this announcement is
available
at http://resource.globenewswire.com/Resource/Download/364abf02-3278-4715-8330-4cdacc9633c0
Juniper Networks,
Inc.Preliminary Condensed Consolidated Statements
of Operations(in millions, except per share
amounts)(unaudited)
|
Three Months EndedJune
30, |
|
Six Months EndedJune
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net revenues: |
|
|
|
|
|
|
|
Product |
$ |
824.9 |
|
|
$ |
917.2 |
|
|
$ |
1,535.7 |
|
|
$ |
1,746.1 |
|
Service |
379.2 |
|
|
391.7 |
|
|
751.0 |
|
|
783.8 |
|
Total net
revenues |
1,204.1 |
|
|
1,308.9 |
|
|
2,286.7 |
|
|
2,529.9 |
|
Cost of revenues: |
|
|
|
|
|
|
|
Product |
336.6 |
|
|
360.2 |
|
|
643.0 |
|
|
690.4 |
|
Service |
166.6 |
|
|
146.8 |
|
|
324.4 |
|
|
291.0 |
|
Total
cost of revenues |
503.2 |
|
|
507.0 |
|
|
967.4 |
|
|
981.4 |
|
Gross margin |
700.9 |
|
|
801.9 |
|
|
1,319.3 |
|
|
1,548.5 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Research
and development |
248.8 |
|
|
240.2 |
|
|
518.2 |
|
|
516.4 |
|
Sales and
marketing |
238.3 |
|
|
239.9 |
|
|
477.7 |
|
|
484.1 |
|
General
and administrative |
54.2 |
|
|
55.6 |
|
|
110.2 |
|
|
106.1 |
|
Restructuring (benefits) charges |
(0.2 |
) |
|
8.0 |
|
|
(2.1 |
) |
|
27.4 |
|
Total
operating expenses |
541.1 |
|
|
543.7 |
|
|
1,104.0 |
|
|
1,134.0 |
|
Operating income |
159.8 |
|
|
258.2 |
|
|
215.3 |
|
|
414.5 |
|
Other expense, net |
(8.9 |
) |
|
(13.0 |
) |
|
(23.0 |
) |
|
(28.7 |
) |
Income before income
taxes |
150.9 |
|
|
245.2 |
|
|
192.3 |
|
|
385.8 |
|
Income tax
provision |
34.4 |
|
|
65.4 |
|
|
41.4 |
|
|
97.2 |
|
Net income |
$ |
116.5 |
|
|
$ |
179.8 |
|
|
$ |
150.9 |
|
|
$ |
288.6 |
|
|
|
|
|
|
|
|
|
Net income per
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.33 |
|
|
$ |
0.47 |
|
|
$ |
0.43 |
|
|
$ |
0.76 |
|
Diluted |
$ |
0.33 |
|
|
$ |
0.47 |
|
|
$ |
0.42 |
|
|
$ |
0.74 |
|
Shares used in
computing net income per share: |
|
|
|
|
|
|
|
Basic |
349.0 |
|
|
380.4 |
|
|
352.2 |
|
|
380.6 |
|
Diluted |
351.3 |
|
|
385.6 |
|
|
356.8 |
|
|
387.6 |
|
Cash dividends declared
per common stock |
$ |
0.18 |
|
|
$ |
0.10 |
|
|
$ |
0.36 |
|
|
$ |
0.20 |
|
Juniper Networks,
Inc.Preliminary Net Revenues by Product and
Service(in millions)(unaudited)
|
Three Months EndedJune
30, |
|
Six Months EndedJune
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Routing |
$ |
490.6 |
|
|
$ |
572.5 |
|
|
$ |
898.7 |
|
|
$ |
1,094.1 |
|
Switching
|
254.8 |
|
|
276.0 |
|
|
484.8 |
|
|
517.6 |
|
Security |
79.5 |
|
|
68.7 |
|
|
152.2 |
|
|
134.4 |
|
Total
Product |
824.9 |
|
|
917.2 |
|
|
1,535.7 |
|
|
1,746.1 |
|
Total
Service |
379.2 |
|
|
391.7 |
|
|
751.0 |
|
|
783.8 |
|
Total |
$ |
1,204.1 |
|
|
$ |
1,308.9 |
|
|
$ |
2,286.7 |
|
|
$ |
2,529.9 |
|
Juniper Networks,
Inc.Preliminary Net Revenues by
Vertical(in millions)(unaudited)
|
Three Months EndedJune
30, |
|
Six Months EndedJune
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Cloud
|
$ |
279.8 |
|
|
$ |
379.6 |
|
|
$ |
548.1 |
|
|
$ |
711.2 |
|
Service Provider |
523.3 |
|
|
562.4 |
|
|
1,003.2 |
|
|
1,130.9 |
|
Enterprise |
401.0 |
|
|
366.9 |
|
|
735.4 |
|
|
687.8 |
|
Total |
$ |
1,204.1 |
|
|
$ |
1,308.9 |
|
|
$ |
2,286.7 |
|
|
$ |
2,529.9 |
|
Juniper Networks,
Inc.Preliminary Net Revenues by Geographic
Region(in millions)(unaudited)
|
Three Months EndedJune
30, |
|
Six Months EndedJune
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Americas |
$ |
675.7 |
|
|
$ |
800.8 |
|
|
$ |
1,263.3 |
|
|
$ |
1,512.4 |
|
Europe, Middle East,
and Africa |
308.9 |
|
|
288.2 |
|
|
616.9 |
|
|
572.7 |
|
Asia Pacific |
219.5 |
|
|
219.9 |
|
|
406.5 |
|
|
444.8 |
|
Total |
$ |
1,204.1 |
|
|
$ |
1,308.9 |
|
|
$ |
2,286.7 |
|
|
$ |
2,529.9 |
|
Juniper Networks,
Inc.Preliminary Reconciliations between GAAP and
non-GAAP Financial Measures(in millions, except
percentages and per share amounts)(unaudited)
|
|
Three Months Ended |
|
|
June 30, 2018 |
|
March 31, 2018 |
|
June 30, 2017 |
GAAP operating
income |
|
$ |
159.8 |
|
|
$ |
55.5 |
|
|
$ |
258.2 |
|
GAAP operating
margin |
|
13.3 |
% |
|
5.1 |
% |
|
19.7 |
% |
Share-based compensation expense |
C |
56.6 |
|
|
70.4 |
|
|
44.1 |
|
Share-based payroll tax expense |
C |
0.6 |
|
|
5.6 |
|
|
1.7 |
|
Amortization of purchased intangible assets |
A |
4.3 |
|
|
4.4 |
|
|
4.2 |
|
Restructuring (benefits) charges |
B |
(0.2 |
) |
|
(1.9 |
) |
|
8.0 |
|
Acquisition-related and other charges |
A |
— |
|
|
0.1 |
|
|
— |
|
Strategic
partnership-related charges |
B |
1.2 |
|
|
— |
|
|
— |
|
Litigation settlement benefits |
B |
— |
|
|
(0.6 |
) |
|
— |
|
Non-GAAP operating
income |
|
$ |
222.3 |
|
|
$ |
133.5 |
|
|
$ |
316.2 |
|
Non-GAAP operating
margin |
|
18.5 |
% |
|
12.3 |
% |
|
24.2 |
% |
|
|
|
|
|
|
|
GAAP net income |
|
$ |
116.5 |
|
|
$ |
34.4 |
|
|
$ |
179.8 |
|
Share-based compensation expense |
C |
56.6 |
|
|
70.4 |
|
|
44.1 |
|
Share-based payroll tax expense |
C |
0.6 |
|
|
5.6 |
|
|
1.7 |
|
Amortization of purchased intangible assets |
A |
4.3 |
|
|
4.4 |
|
|
4.2 |
|
Restructuring (benefits) charges |
B |
(0.2 |
) |
|
(1.9 |
) |
|
8.0 |
|
Acquisition-related and other charges |
A |
— |
|
|
0.1 |
|
|
— |
|
Strategic
partnership-related charges |
B |
1.2 |
|
|
— |
|
|
— |
|
Litigation settlement benefits |
B |
— |
|
|
(0.6 |
) |
|
— |
|
Income
tax effect of non-GAAP exclusions |
B |
(8.8 |
) |
|
(12.9 |
) |
|
(17.3 |
) |
Non-GAAP net
income |
|
$ |
170.2 |
|
|
$ |
99.5 |
|
|
$ |
220.5 |
|
|
|
|
|
|
|
|
GAAP diluted net income
per share |
|
$ |
0.33 |
|
|
$ |
0.10 |
|
|
$ |
0.47 |
|
Non-GAAP diluted net
income per share |
D |
$ |
0.48 |
|
|
$ |
0.28 |
|
|
$ |
0.57 |
|
Shares used in
computing diluted net income per share |
|
351.3 |
|
|
360.6 |
|
|
385.6 |
|
Discussion of Non-GAAP Financial
Measures
This press release, including the tables above,
includes the following non-GAAP financial measures derived from our
Preliminary Condensed Consolidated Statements of Operations:
operating income; operating margin; net income; and diluted net
income per share. These measures are not presented in accordance
with, nor are they a substitute for GAAP. In addition, these
measures may be different from non-GAAP measures used by other
companies, limiting their usefulness for comparison purposes. The
non-GAAP financial measures used in the table above should not be
considered in isolation from measures of financial performance
prepared in accordance with GAAP. Investors are cautioned that
there are material limitations associated with the use of non-GAAP
financial measures as an analytical tool. In particular, certain of
the adjustments to our GAAP financial measures reflect the
exclusion of items that are recurring and will be reflected in our
financial results for the foreseeable future.
We utilize a number of different financial
measures, both GAAP and non-GAAP, in analyzing and assessing the
overall performance of our business, in making operating decisions,
forecasting and planning for future periods, and determining
payments under compensation programs. We consider the use of the
non-GAAP measures presented above to be helpful in assessing the
performance of the continuing operation of our business. By
continuing operation, we mean the ongoing revenue and expenses of
the business, excluding certain items that render comparisons with
prior periods or analysis of on-going operating trends more
difficult, such as expenses not directly related to the actual cash
costs of development, sale, delivery or support of our products and
services, or expenses that are reflected in periods unrelated to
when the actual amounts were incurred or paid. Consistent with this
approach, we believe that disclosing non-GAAP financial measures to
the readers of our financial statements provides such readers with
useful supplemental data that, while not a substitute for financial
measures prepared in accordance with GAAP, allows for greater
transparency in the review of our financial and operational
performance. In addition, we have historically reported non-GAAP
results to the investment community and believe that continuing to
provide non-GAAP measures provides investors with a tool for
comparing results over time. In assessing the overall health of our
business for the periods covered by the table above and, in
particular, in evaluating the financial line items presented in the
table above, we have excluded items in the following three general
categories, each of which are described below: Acquisition-Related
Charges, Other Items, and Share-Based Compensation Related Items.
We also provide additional detail below regarding the shares used
to calculate our non-GAAP net income per share. Notes identified
for line items in the table above correspond to the appropriate
note description below. With respect to the items excluded from our
forward-looking non-GAAP measures and reconciliation of such
measures, please see the “Outlook” section above.
Note A: Acquisition-Related Charges. We exclude
certain expense items resulting from acquisitions
including amortization of purchased intangible assets
associated with our acquisitions. The amortization of purchased
intangible assets associated with our acquisitions results in our
recording expenses in our GAAP financial statements that were
already expensed by the acquired company before the acquisition and
for which we have not expended cash. Moreover, had we internally
developed the products acquired, the amortization of intangible
assets, and the expenses of uncompleted research and development
would have been expensed in prior periods. Accordingly, we analyze
the performance of our operations in each period without regard to
such expenses. In addition, acquisitions result in non-continuing
operating expenses, which would not otherwise have been incurred by
us in the normal course of our business operations. We believe that
providing non-GAAP information for acquisition-related expense
items in addition to the corresponding GAAP information allows the
users of our financial statements to better review and understand
the historic and current results of our continuing operations, and
also facilitates comparisons to less acquisitive peer
companies.
Note B: Other Items. We exclude certain other
items that are the result of either unique or unplanned events,
including the following, when applicable: (i) restructuring
benefits or charges; (ii) strategic partnership-related charges
(iii) litigation settlement benefits or charges; (iv) gain or loss
on equity investments; (v) significant effects of tax
legislation and judicial or administrative interpretation of tax
regulations, including the impact of income tax reform; (vi) the
income tax effect on our financial statements of excluding items
related to our non-GAAP financial measures. It is difficult to
estimate the amount or timing of these items in advance. Although
these events are reflected in our GAAP financial statements, these
unique or unplanned transactions may limit the comparability of our
on-going operations with prior and future periods. Restructuring
benefits or charges result from events that arise from unforeseen
circumstances, which often occur outside of the ordinary course of
continuing operations. These expenses do not accurately reflect the
underlying performance of our continuing business operations for
the period in which they are incurred. We also exclude certain
expenses incurred for the formation of a strategic partnership, as
they are directly related an event that is distinct and does not
reflect current ongoing business operations. In the case of legal
settlements, these gains or losses are recorded in the period in
which the matter is concluded or resolved even though the subject
matter of the underlying dispute may relate to multiple or
different periods. As such, we believe that these expenses do not
accurately reflect the underlying performance of our continuing
operations for the period in which they are incurred. Additionally,
the impact of certain income tax reform, including the revaluation
of our deferred tax assets and liabilities and the deemed
repatriation of accumulated foreign earnings, are unique events
that occur in periods that are generally unrelated to the level of
business activity to which such tax reform or legislation applies.
We believe this limits comparability with prior periods and that
these expenses do not accurately reflect the underlying performance
of our continuing business operations for the period in which they
are incurred. We also believe providing financial information
with and without the income tax effect of excluding items related
to our non-GAAP financial measures provide our management and users
of the financial statements with better clarity regarding the
on-going performance and future liquidity of our business. Because
of these factors, we assess our operating performance with these
amounts both included and excluded, and by providing this
information, we believe the users of our financial statements are
better able to understand the financial results of what we consider
our continuing operations.
Note C: Share-Based Compensation Related Items.
We provide non-GAAP information relative to our expense for
share-based compensation and related payroll tax. Due to the
varying available valuation methodologies, subjective assumptions
and the variety of award types, which affect the calculations of
share-based compensation, we believe that the exclusion of
share-based compensation and related payroll tax allows for more
accurate comparisons of our operating results to our peer companies
and is useful to investors to understand the impact of share-based
compensation to our results of operations. Further, expense
associated with granting share-based awards does not reflect any
cash expenditures by the company as no cash is expended.
Note D: Non-GAAP Net Income Per Share Items. We
provide diluted non-GAAP net income per share. The diluted non-GAAP
net income per share includes additional dilution from potential
issuance of common stock, except when such issuances would be
anti-dilutive.
Juniper Networks,
Inc.Preliminary Condensed Consolidated Balance
Sheets(in millions)(unaudited)
|
June 30, 2018 |
|
December 31, 2017 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
2,690.4 |
|
|
$ |
2,006.5 |
|
Short-term investments |
432.3 |
|
|
1,026.1 |
|
Accounts
receivable, net of allowances |
702.2 |
|
|
852.0 |
|
Prepaid
expenses and other current assets |
279.7 |
|
|
299.9 |
|
Total
current assets |
4,104.6 |
|
|
4,184.5 |
|
Property and equipment,
net |
987.1 |
|
|
1,021.1 |
|
Long-term
investments |
407.8 |
|
|
988.4 |
|
Purchased intangible
assets, net |
119.4 |
|
|
128.1 |
|
Goodwill |
3,096.1 |
|
|
3,096.2 |
|
Other long-term
assets |
406.0 |
|
|
415.5 |
|
Total
assets |
$ |
9,121.0 |
|
|
$ |
9,833.8 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
183.2 |
|
|
$ |
217.6 |
|
Accrued
compensation |
199.6 |
|
|
186.0 |
|
Deferred
revenue |
872.1 |
|
|
1,030.3 |
|
Short-term debt |
349.5 |
|
|
— |
|
Other
accrued liabilities |
204.1 |
|
|
304.3 |
|
Total
current liabilities |
1,808.5 |
|
|
1,738.2 |
|
Long-term debt |
1,788.2 |
|
|
2,136.3 |
|
Long-term deferred
revenue |
365.1 |
|
|
509.0 |
|
Long-term income taxes
payable |
615.6 |
|
|
650.6 |
|
Other long-term
liabilities |
125.9 |
|
|
118.8 |
|
Total
liabilities |
4,703.3 |
|
|
5,152.9 |
|
Total
stockholders' equity |
4,417.7 |
|
|
4,680.9 |
|
Total
liabilities and stockholders' equity |
$ |
9,121.0 |
|
|
$ |
9,833.8 |
|
Juniper Networks,
Inc.Preliminary Condensed Consolidated Statements
of Cash Flows(in millions)(unaudited)
|
Six Months EndedJune
30, |
|
2018 |
|
2017(*) |
Cash flows from
operating activities: |
|
|
|
Net income |
$ |
150.9 |
|
|
$ |
288.6 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
Share-based compensation expense |
127.0 |
|
|
106.1 |
|
Depreciation, amortization, and accretion |
110.9 |
|
|
112.1 |
|
Other |
1.5 |
|
|
(1.8 |
) |
Changes in operating
assets and liabilities, net of effects from acquisitions: |
|
|
|
Accounts
receivable, net |
147.5 |
|
|
304.8 |
|
Prepaid
expenses and other assets |
(26.5 |
) |
|
46.4 |
|
Accounts
payable |
(28.8 |
) |
|
(5.1 |
) |
Accrued
compensation |
15.8 |
|
|
(20.6 |
) |
Income
taxes payable |
(77.7 |
) |
|
27.9 |
|
Other
accrued liabilities |
(27.5 |
) |
|
(32.4 |
) |
Deferred
revenue |
48.3 |
|
|
19.3 |
|
Net cash
provided by operating activities |
441.4 |
|
|
845.3 |
|
Cash flows from
investing activities: |
|
|
|
Purchases of property
and equipment |
(79.3 |
) |
|
(64.3 |
) |
Purchases of
available-for-sale debt investments |
(114.4 |
) |
|
(776.4 |
) |
Proceeds from sales of
available-for-sale debt investments |
995.4 |
|
|
429.1 |
|
Proceeds from
maturities and redemptions of available-for-sale debt
investments |
289.9 |
|
|
350.4 |
|
Purchases of equity
investments |
(6.3 |
) |
|
(12.3 |
) |
Proceeds from sales of
equity investments |
29.5 |
|
|
— |
|
Proceeds from Pulse
note receivable |
— |
|
|
75.0 |
|
Payment of escrow
balance related to prior year acquisition |
(31.5 |
) |
|
— |
|
Net cash
provided by investing activities |
1,083.3 |
|
|
1.5 |
|
Cash flows from
financing activities: |
|
|
|
Repurchase and
retirement of common stock, including prepayment under an
accelerated share repurchase program |
(754.2 |
) |
|
(255.3 |
) |
Proceeds from issuance
of common stock |
29.5 |
|
|
35.5 |
|
Payment of
dividends |
(124.9 |
) |
|
(75.8 |
) |
Change in customer
financing arrangement |
(16.3 |
) |
|
— |
|
Other |
(0.5 |
) |
|
— |
|
Net cash
used in financing activities |
(866.4 |
) |
|
(295.6 |
) |
Effect of foreign
currency exchange rates on cash, cash equivalents and restricted
cash |
(5.4 |
) |
|
9.4 |
|
Net
increase in cash, cash equivalents and restricted cash |
652.9 |
|
|
560.6 |
|
Cash, cash equivalents
and restricted cash at beginning of period |
2,059.1 |
|
|
1,880.6 |
|
Cash, cash equivalents
and restricted cash at end of period |
$ |
2,712.0 |
|
|
$ |
2,441.2 |
|
________________________________
(*) During the first quarter of fiscal 2018, the
Company adopted the new accounting pronouncement requiring
classification of restricted cash to be included with cash and cash
equivalents when reconciling the beginning of period and end of
period total amounts on the statement of cash flows. The adoption
of this standard resulted in $47.4 million and $48.7 million
increase in cash, cash equivalents and restricted cash in the
beginning and ending balances, respectively for the six months
ended June 30, 2017. The adoption did not have a material impact on
the cash flow activity presented on the Company's Condensed
Consolidated Statements of Cash Flows for the six months ended June
30, 2017. The Company applied this provision on a retrospective
basis.
Investor Relations:Jess LubertJuniper
Networks(408) 936-3734jlubert@juniper.net
Media Relations:Leslie MooreJuniper
Networks(408) 936-5767llmoore@juniper.net
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