Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - ARUBA NETWORKS, INC. | d440395d8k.htm |
Exhibit 99.1
ARUBA NETWORKS REPORTS RECORD FISCAL FIRST QUARTER 2013
FINANCIAL RESULTS
| • | First Quarter Revenue Increased by 21 Percent Year-Over-Year to $144.5 million |
| • | Cash and Short Term Investments Increased to $377.5 million |
SUNNYVALE, Calif., November 15, 2012 – Aruba Networks, Inc. (NASDAQ: ARUN) today released financial results for its first quarter of fiscal year 2013 ended October 31, 2012.
Revenue for Q1’13 of $144.5 million grew 21 percent from the $119.4 million reported in Q1’12. GAAP net loss for Q1’13 was $0.8 million, or a loss of $0.01 per share, compared with GAAP net loss of $0.5 million, or $0.00 per share, in Q1’12.
Non-GAAP net income for Q1’13 was $22.1 million, or $0.18 per share, compared with non-GAAP net income of $16.7 million, or $0.14 per share, in Q1’12. A reconciliation between GAAP and non-GAAP information is contained in the tables below.
“We delivered a strong first quarter with 21 percent revenue growth year-over-year and our fourteenth consecutive quarter of record revenue,” said Dominic Orr, Aruba’s president and chief executive officer. “During the quarter, we saw healthy growth across our major products and core verticals.”
“The proliferation of mobile devices, BYOD and new applications such as Unified Communications continue to drive demand for our solutions and make mobility a clear priority for CIOs around the world. We believe that with our industry leading technology and strong momentum in the marketplace, we are well positioned to capitalize on these trends and expand our market share.”
Commenting on the company’s financial results, Michael Galvin, Aruba’s chief financial officer, added, “In addition to achieving record revenue, we delivered strong gross margin and operating margin results. Due to solid working capital management, we generated $36.9 million in cash flow from operations and ended the quarter with $377.5 million in cash, cash equivalents and short-term investments.”
Recent Highlights
| • | Introduced Controller-Less WLAN Solutions with Leading Enterprise Grade Performance. Aruba Instant Enterprise is a major new software release that delivers the first controller-less Wi-Fi solution for best-in-class security, resiliency and scale for distributed enterprises. Also as part of Aruba Instant Enterprise, Aruba unveiled Aruba Activate, a cloud-based, zero-touch provisioning service that enables enterprise IT, managed service providers and resellers to dramatically reduce the operational expenses associated with large scale, distributed Wi-Fi deployments. |
| • | Introduced a New Software Release to Deliver New Levels of High Availability, Resilient Connectivity, for Mobile Devices and Applications. The new Aruba OS software release for its mobility controllers will help enterprises ensure consistent, predictable performance and fast recovery for today’s challenging mobile environments. |
| • | Regional Medical Center at Memphis (The MED) Selected Aruba to Replace its Cisco Wireless Network with an Aruba WLAN. The existing Cisco 802.11/b/g wireless network will be replaced with an Aruba 802.11n wireless network and will expand coverage across its main hospital and four clinics. The MED also will deploy the AirWave network management system, Aruba ClearPass Policy Manager and ClearPass Guest. |
Conference Call Information
Aruba will host a conference call for analysts and investors to discuss its first quarter of fiscal year 2013 results today at 4:30 p.m. Eastern time (1:30 p.m. Pacific time). Open to the public, investors may access the call by dialing +1-480-629-9808. A live webcast of the conference call will also be accessible from the “Investor Relations” section of the company’s website at www.arubanetworks.com. Following the webcast, an archived version will be available on the website for twelve months. To hear the replay, parties in the United States and Canada should call 1-800-406-7325 and enter passcode 4573529. International parties can access the replay at +1-303-590-3030 and should enter passcode 4573529.
Forward-Looking Statements
This press release contains forward-looking statements, including statements about our expectation that the proliferation of mobile devices, BYOD and new applications will continue to drive demand for our solutions and that with our industry leading technology and strong momentum in the marketplace, we are well positioned to capitalize on these trends and expand our market share.
These forward-looking statements involve risks and uncertainties, as well as assumptions which, if they do not fully materialize or prove incorrect, could cause Aruba’s results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include: (1) business and economic conditions and growth trends in the networking industry, our vertical markets and various geographic regions; and (2) changes in overall information technology spending; as well as those risks and uncertainties included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in Aruba’s Annual Report on Form 10-K for the fiscal year ended July 31, 2012, which was filed with the SEC on October 11, 2012, and is available on Aruba’s investor relations website at www.arubanetworks.com and on the SEC’s website at www.sec.gov. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements to reflect events that occur or circumstances that exist after the date on which they were made.
Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP net income and non-GAAP earnings per share (EPS). The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
Non-GAAP net income and EPS. Aruba defines non-GAAP net income as net income plus stock-based expenses and related payroll taxes, amortization of acquired intangible assets and other acquisition related expenses, and the change in the valuation of the contingent rights liability, less the related tax effects. Aruba defines non-GAAP EPS as non-GAAP net income divided by the weighted average diluted shares outstanding. Aruba’s management regularly uses these non-GAAP financial measures to understand and manage its business and believes that these non-GAAP financial measures provide meaningful supplemental information regarding the company’s performance by excluding certain expenses that may not be indicative of Aruba’s “recurring operating results,” meaning its operating performance excluding not only stock-based expenses and related payroll taxes, but also discrete charges that are infrequent in nature. Further, Aruba’s management excludes from non-GAAP net income the tax effects of these non-GAAP financial measures, as without excluding these tax effects, investors would only see the gross effect that excluding these expenses had on the company’s operating results. Because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use, Aruba’s management believes that providing non-GAAP financial measures that exclude stock-based expenses allows investors to compare these results with those of other companies, as well as providing management with an important tool for financial and operational decision making and for evaluating the company’s operating results over different periods of time. Similarly, by excluding amortization expense of acquired intangible assets and other acquisition related expenses, and the change in the valuation of the contingent rights liability, less the related tax effects, Aruba’s management believes that investors can better understand and measure the company’s recurring operating results.
There are a number of limitations related to the use of non-GAAP net income and EPS versus net income and EPS calculated in accordance with GAAP. First, these non-GAAP financial measures exclude some costs, namely stock-based expenses and related payroll taxes, that are recurring. Stock-based expenses and related payroll taxes have been and will continue to be for the foreseeable future a significant recurring expense in Aruba’s business. Second, stock-based awards are an important part of Aruba’s employees’ compensation and impacts their performance. Third, the components of the costs that Aruba excludes in its calculation of non-GAAP net income may differ from the components that its peer companies exclude when they report their results of operations. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures and evaluates these non-GAAP financial measures together with their most directly comparable financial measures calculated in accordance with GAAP. The accompanying tables provide reconciliations between these financial measures and their most directly comparable GAAP equivalents.
A copy of this press release can be found on the investor relations page of Aruba Networks’ website at www.arubanetworks.com.
# # #
About Aruba Networks, Inc.
Aruba Networks is a leading provider of next-generation network access solutions for the mobile enterprise. The company’s Mobile Virtual Enterprise (MOVE) architecture unifies wired and wireless network infrastructures into one seamless access solution for corporate headquarters, mobile business professionals, remote workers and guests. This unified approach to access networks enables IT organizations and users to securely address the Bring Your Own Device (BYOD) phenomenon, dramatically improving productivity and lowering capital and operational costs.
Listed on the NASDAQ and Russell 2000® Index, Aruba is based in Sunnyvale, California, and has operations throughout the Americas, Europe, Middle East, Africa and Asia Pacific regions. For real-time news updates, follow Aruba on Twitter and Facebook or read our corporate blog, Aruba Atmosphere.
© 2012 Aruba Networks, Inc. Aruba Networks’ trademarks include the design mark for AirWave, Aruba Networks®, Aruba Wireless Networks®, the registered Aruba the Mobile Edge Company logo, the registered AirWave logo, Aruba Mobility Management System®, Mobile Edge Architecture®, People Move. Networks Must Follow®, RFProtect®, Green Island®. All rights reserved. All other trademarks are the property of their respective owners.
# # #
| IR Contacts |
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| Aruba Networks, Inc. |
The Blueshirt Group, Investor Relations | |
| Michael Galvin |
Chris Danne, Maria Riley | |
| Chief Financial Officer |
+1-415-217-7722 | |
| ir@arubanetworks.com |
ir@arubanetworks.com |
Aruba Networks, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
| October 31, | July 31, | |||||||
| 2012 | 2012 | |||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 157,319 | $ | 133,629 | ||||
| Short-term investments |
220,187 | 212,601 | ||||||
| Accounts receivable, net |
73,016 | 80,190 | ||||||
| Inventory |
28,164 | 22,202 | ||||||
| Deferred costs |
11,176 | 11,241 | ||||||
| Prepaids and other |
19,513 | 18,996 | ||||||
| Deferred income tax assets, current |
35,328 | 34,584 | ||||||
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| Total current assets |
544,703 | 513,443 | ||||||
| Property and equipment, net |
22,688 | 19,901 | ||||||
| Goodwill |
56,947 | 56,947 | ||||||
| Intangible assets, net |
25,115 | 27,036 | ||||||
| Deferred income tax assets, non-current |
19,794 | 20,664 | ||||||
| Other non-current assets |
9,446 | 10,905 | ||||||
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| Total non-current assets |
133,990 | 135,453 | ||||||
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| Total assets |
$ | 678,693 | $ | 648,896 | ||||
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| Liabilities and Stockholders’ Equity |
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| Current liabilities: |
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| Accounts payable and accrued liabilities |
$ | 69,178 | $ | 74,879 | ||||
| Income taxes payable |
4,553 | 2,032 | ||||||
| Deferred revenue, current |
88,230 | 80,602 | ||||||
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| Total current liabilities |
161,961 | 157,513 | ||||||
| Deferred revenue, non-current |
25,670 | 22,375 | ||||||
| Other non-current liabilities |
1,391 | 2,118 | ||||||
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| Total non-current liabilities |
27,061 | 24,493 | ||||||
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| Total liabilities |
189,022 | 182,006 | ||||||
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| Stockholders’ equity |
||||||||
| Common stock |
11 | 11 | ||||||
| Additional paid-in capital |
605,693 | 582,077 | ||||||
| Accumulated other comprehensive loss |
(1,414 | ) | (1,405 | ) | ||||
| Accumulated deficit |
(114,619 | ) | (113,793 | ) | ||||
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| Total Stockholders’ equity |
489,671 | 466,890 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 678,693 | $ | 648,896 | ||||
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Aruba Networks, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
| Three months ended | ||||||||
| October 31, | October 31, | |||||||
| 2012 | 2011 | |||||||
| Revenue: |
||||||||
| Product |
$ | 119,222 | $ | 101,131 | ||||
| Professional services and support |
25,260 | 18,220 | ||||||
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| Total revenue |
144,482 | 119,351 | ||||||
| Cost of revenue: |
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| Product |
36,161 | 32,068 | ||||||
| Professional services and support |
5,957 | 4,546 | ||||||
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| Total cost of revenue |
42,118 | 36,614 | ||||||
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| Gross profit |
102,364 | 82,737 | ||||||
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| Operating expenses: |
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| Research and development |
31,963 | 24,468 | ||||||
| Sales and marketing |
53,919 | 45,615 | ||||||
| General and administrative |
11,951 | 11,100 | ||||||
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| Total operating expenses |
97,833 | 81,183 | ||||||
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| Operating income |
4,531 | 1,554 | ||||||
| Other income (expense), net |
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| Interest income |
316 | 276 | ||||||
| Other income (expense), net |
276 | 827 | ||||||
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| Total other income (expense), net |
592 | 1,103 | ||||||
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| Income before income taxes |
5,123 | 2,657 | ||||||
| Provision for income taxes |
5,949 | 3,124 | ||||||
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| Net loss |
$ | (826 | ) | $ | (467 | ) | ||
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| Shares used in computing net loss per common share, basic |
111,976 | 105,937 | ||||||
| Net loss per common share, basic |
$ | (0.01 | ) | $ | (0.00 | ) | ||
| Shares used in computing net loss per common share, diluted |
111,976 | 105,937 | ||||||
| Net loss per common share, diluted |
$ | (0.01 | ) | $ | (0.00 | ) | ||
Note: Certain prior year amounts have been reclassified to conform to the current year presentation.
Aruba Networks, Inc.
Consolidated Statements of Operations
(GAAP to Non-GAAP Reconciliation)
(In thousands, except per share data)
(Unaudited)
| Three months ended | ||||||||
| October 31, | October 31, | |||||||
| 2012 | 2011 | |||||||
| GAAP net loss |
$ | (826 | ) | $ | (467 | ) | ||
| Plus: |
||||||||
| a) Stock-based compensation expenses |
22,562 | 19,265 | ||||||
| b) Payroll taxes on stock-based compensation expenses |
636 | 505 | ||||||
| c) Amortization expense of acquired intangible assets and other acquisition related expenses |
2,664 | 1,988 | ||||||
| d) Change in valuation of contingent rights liability |
(401 | ) | (918 | ) | ||||
| e) Income tax effect of non-GAAP exclusions |
(2,547 | ) | (3,658 | ) | ||||
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| Non-GAAP net income |
$ | 22,088 | $ | 16,715 | ||||
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| GAAP net loss per common share |
$ | (0.01 | ) | $ | (0.00 | ) | ||
| Plus: |
||||||||
| a) Stock-based compensation expenses |
0.18 | 0.16 | ||||||
| b) Payroll taxes on stock-based compensation expenses |
0.01 | — | ||||||
| c) Amortization expense of acquired intangible assets and other acquisition related expenses |
0.02 | 0.02 | ||||||
| d) Change in valuation of contingent rights liability |
— | (0.01 | ) | |||||
| e) Income tax effect of non-GAAP exclusions |
(0.02 | ) | (0.03 | ) | ||||
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| Non-GAAP net income per common share |
$ | 0.18 | $ | 0.14 | ||||
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| Shares used in computing diluted GAAP net loss per common share |
111,976 | 105,937 | ||||||
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| Shares used in computing diluted non-GAAP net income per common share |
122,355 | 118,470 | ||||||
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Aruba Networks, Inc.
Condensed Consolidated Statements of Operations
As a Percentage of Total Revenue
(Unaudited)
| Three months ended | ||||||||
| October 31, | October 31, | |||||||
| 2012 | 2011 | |||||||
| Revenue: |
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| Product |
82.5 | % | 84.7 | % | ||||
| Professional services and support |
17.5 | % | 15.3 | % | ||||
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| Total revenue |
100.0 | % | 100.0 | % | ||||
| Cost of revenue: |
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| Product |
25.0 | % | 26.9 | % | ||||
| Professional services and support |
4.2 | % | 3.8 | % | ||||
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| Total cost of revenue |
29.2 | % | 30.7 | % | ||||
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| Gross profit |
70.8 | % | 69.3 | % | ||||
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| Operating expenses: |
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| Research and development |
22.1 | % | 20.5 | % | ||||
| Sales and marketing |
37.3 | % | 38.2 | % | ||||
| General and administrative |
8.3 | % | 9.3 | % | ||||
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| Total operating expenses |
67.7 | % | 68.0 | % | ||||
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| Operating income |
3.1 | % | 1.3 | % | ||||
| Other income (expense), net |
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| Interest income |
0.2 | % | 0.2 | % | ||||
| Other income (expense), net |
0.2 | % | 0.7 | % | ||||
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| Total other income (expense), net |
0.4 | % | 0.9 | % | ||||
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| Income before income taxes |
3.5 | % | 2.2 | % | ||||
| Provision for income taxes |
4.1 | % | 2.6 | % | ||||
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| Net loss |
(0.6 | %) | (0.4 | %) | ||||
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Note: Certain prior year amounts have been reclassified to conform to the current year presentation.
Aruba Networks, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Three Months Ended | ||||||||
| October 31, | ||||||||
| 2012 | 2011 | |||||||
| Cash flows from operating activities |
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| Net loss |
$ | (826 | ) | $ | (467 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: |
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| Depreciation and amortization |
5,051 | 4,079 | ||||||
| Provision for doubtful accounts |
117 | 12 | ||||||
| Write downs for excess and obsolete inventory |
1,868 | 1,403 | ||||||
| Stock-based compensation expenses |
22,562 | 19,265 | ||||||
| Accretion of purchase discounts on short-term investments |
263 | 308 | ||||||
| Change in carrying value of contingent rights liability |
(401 | ) | (918 | ) | ||||
| Deferred income taxes |
126 | 13,362 | ||||||
| Recovery of escrow funds |
— | (702 | ) | |||||
| Excess tax benefit associated with stock-based compensation |
(925 | ) | (8,318 | ) | ||||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
7,057 | 590 | ||||||
| Inventory |
(8,602 | ) | 2,345 | |||||
| Prepaids and other |
208 | (6,849 | ) | |||||
| Deferred costs |
65 | (3,990 | ) | |||||
| Other assets |
1,459 | (14,727 | ) | |||||
| Deferred revenue |
10,923 | 22,830 | ||||||
| Accounts payable and other liabilities |
(5,198 | ) | (20,899 | ) | ||||
| Income taxes payable |
3,163 | 9,220 | ||||||
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| Net cash provided by operating activities |
36,910 | 16,544 | ||||||
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| Cash flows from investing activities |
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| Purchases of short-term investments |
(67,037 | ) | (53,351 | ) | ||||
| Proceeds from sales of short-term investments |
20,252 | 7,523 | ||||||
| Proceeds from maturities of short-term investments |
38,166 | 14,000 | ||||||
| Purchases of property and equipment |
(5,357 | ) | (3,417 | ) | ||||
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| Net cash used in investing activities |
(13,976 | ) | (35,245 | ) | ||||
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| Cash flows from financing activities |
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| Proceeds from issuance of common stock |
11,336 | 10,856 | ||||||
| Repurchase of common stock |
(11,524 | ) | — | |||||
| Excess tax benefit associated with stock-based compensation |
925 | 8,318 | ||||||
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| Net cash provided by financing activities |
737 | 19,174 | ||||||
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| Effect of exchange rate changes on cash and cash equivalents |
19 | (5 | ) | |||||
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| Net increase in cash and cash equivalents |
23,690 | 468 | ||||||
| Cash and cash equivalents, beginning of period |
133,629 | 80,773 | ||||||
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| Cash and cash equivalents, end of period |
$ | 157,319 | $ | 81,241 | ||||
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| Supplemental disclosure of cash flow information |
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| Income taxes paid |
$ | 1,180 | $ | 453 | ||||
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