Extreme Networks Posts Second Fiscal Quarter 2013 Financial Results
Feb 04, 2013 (Close-Up Media via COMTEX) --
Extreme Networks announced revenue of $75.6 million for its second quarter of fiscal 2013 ending December 31.
In a release on January 30, the Company noted that this represents a 9.0 percent decrease compared to revenue of $82.8 million reported for the second quarter of fiscal 2012 and a 0.7 percent decrease compared to the first quarter of fiscal 2013. GAAP net loss for the second quarter was $4.2 million, or $0.04 per diluted share, a decrease year-over-year compared to GAAP net income of $4.1 million, or $0.04 per diluted share, for the second quarter of fiscal 2012. On a non-GAAP basis, net income for the second quarter of fiscal 2013 was $2.8 million, or $0.03 per diluted share, compared to non-GAAP net income for the second quarter of fiscal 2012 of $5.8 million, or $0.06 per diluted share.
"Q2 results were in-line with our revised targets and we are encouraged by the order growth in our 10G and 40G products during the quarter," stated Oscar Rodriguez, President and CEO of Extreme Networks. "We continued to gain a strategic footprint in the data center space. Our flagship Open Fabric product, the BlackDiamond X8 switch, gained traction across geographies and market verticals and had its best quarter to date and the pipeline of opportunities continues to grow, even in a very weak global economy."
-GAAP operating margin includes $1.6 million of stock based compensation, a favorable litigation settlement of $0.4 million and $5.2 million of restructuring charges impacting approximately 13 percent of the employee base, with a plan to transition certain functions to a lower cost region and the reduction of certain facility related costs. These items are excluded from our non-GAAP operating margin.
-Cash and investments ended the quarter at $196.2 million, as compared to $202.6 million at Q1 of fiscal 2013. Cash provided by operations was $1.0 million. During the quarter, we repurchased 1.9 million shares for $6.7 million as a portion of the previously announced three year $75 million buy-back program.
-Accounts receivable balance ending Q2 was $42.6 million, a (net) increase of $7.9 million from Q1 of fiscal 2013, with days sales outstanding (DSO) of 52, an increase of 11 days from Q1 of fiscal 2013. This increase was primarily due to receipt of customer orders and related shipments later in the quarter than normal.
-Inventory ending Q2 was $17.9 million, a (net) decrease of $4.9 million from Q1 of fiscal 2013 and represents 55 days of inventory (DOI), sequentially down 12 days from Q1 of fiscal 2013.
Recent Business Highlights:
-CRN Magazine honored Extreme Networks with its 2012 Tech Innovator Award for the Industry Leading BlackDiamond X8 Data Center Fabric Switch.
-Extreme Networks, with its open and modular ExtremeXOS operating system, continues delivering on its SDN roadmap with support of two SDN applications: Big Switch Networks' Big Tap, providing traffic monitoring and dynamic network visibility with flow filtering, and for virtualized data center networks, Big Switch Networks BVS (Big Virtual Switch).
-The Company announced a restructuring plan on January 3, 2013 to streamline its operations. A significant portion of the plan has been implemented. Once the plan is fully implemented the restructuring plan is expected to reduce approximately $7.0 million in quarterly costs. Along with strengthening our long term competitive position, the actions taken will facilitate Extreme Networks achieving its target of a quarterly 10 percent non-GAAP operating income margin by the end of fiscal 2013.
For its third quarter of fiscal 2013 ending March 31, 2013, the Company is targeting revenue in a range of $70 million to $75 million with GAAP and non-GAAP gross margin targeted to be between 54 percent and 55 percent. GAAP operating expenses are targeted to decrease by $8 million to $9 million and by $4 million to $5 million on a non-GAAP basis. Interest Income and Other Expense is targeted to be approximately $0.2 million with Tax Expense targeted to be approximately $0.6 million. GAAP net income is targeted at $3.0 million to $5.0 million, or $0.03 to $0.06 per diluted share. Non-GAAP net income is targeted in a range of $4.0 million to $7.0 million, or $0.04 to $0.08 per diluted share. The GAAP and non-GAAP net income targets are based on an estimated 93.5 million diluted weighted average shares. Targeted non-GAAP earnings exclude expenses related to stock-based compensation expense of approximately $1.5 million and restructuring charges of approximately $0.6 million.
Extreme Networks is a company focusing on Ethernet switching for cloud, data center and mobile networks.
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