8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): January 18, 2005

Juniper Networks, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)

Delaware	000-26339	770422528
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
1194 North Mathilda Avenue, Sunnyvale, California		94089
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: (408) 745-2000

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On January 18, 2005, Juniper Networks, Inc. ("Juniper Networks") issued a press release and held a conference call regarding its financial results for the quarter ending December 31, 2004. A copy of the press release is furnished as Exhibit 99.1 to this report and is incorporated by reference herein. The information in this report shall be deemed incorporated by reference into any registration statement heretofore or hereafter filed under the Securities Act of 1933, as amended, except to the extent that such information is superceded by information as of a subsequent date that is included in or incorporated by reference into such registration statement. The information in this report shall not be treated as filed for purposes of the Securities Exchange Act of 1934, as amended.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits

Exhibit No. Description
99.1 Press Release of Juniper Networks issued on January 18, 2005

Use of Non-GAAP Financial Information

To supplement our consolidated financial statements presented in accordance with GAAP, Juniper Networks uses non-GAAP measures of operating results, net income and earnings per share, which are adjusted from results based on GAAP to exclude certain expense and income items. These non-GAAP adjustments are provided to enhance the user’s overall understanding of our current financial performance and our prospects for the future. Specifically, we believe the non-GAAP results provide useful information to both management and investors by excluding certain expense and income items that we believe are not indicative of our core operating results. In addition, since we have historically reported non-GAAP results to the investment community, we believe the inclusion of non-GAAP numbers provides consistency in our financial reporting. Further, these non-GAAP results are one of the primary indicators managem ent uses for planning and forecasting in future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with accounting principles generally accepted in the United States.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Juniper Networks, Inc.
January 18, 2005	By:	Mitchell Gaynor
		Name: Mitchell Gaynor
		Title: Vice President and General Counsel

Exhibit Index

Exhibit No.	Description
99.1	Press release issued by Juniper Networks on January 18, 2005

EX-99.1

Investor Relations Contact:	Public Relations Contact:
Randi Paikoff Feigin	Kathy Durr
Tel: 408-745-2371 randi@juniper.net	Tel: 408-745-5058 kdurr@juniper.net

Juniper Networks, Inc. Reports Q4’04 and Year End 2004 Financial Results
2004 Net Revenue of $1.3B, up 90%, 2004 GAAP EPS of $0.25, up 178%, and
2004 Non-GAAP EPS of $0.44, up 214%, from 2003

Sunnyvale, CA – January 18, 2005 — Juniper Networks, Inc. (NASDAQ: JNPR) today reported its results for the quarter and annual periods ended December 31, 2004.

Net revenues for the fourth quarter were $430.1 million, compared to $207.0 million for the same period last year, an increase of 108 percent.

GAAP net income for the fourth quarter was $66.0 million or $0.11 per share, compared to $14.7 million or $0.03 per share in the fourth quarter of 2003. Non-GAAP net income was $85.9 million or $0.15 per share, compared to $27.7 million or $0.06 per share in the fourth quarter of 2003. See the table at the bottom of the Non-GAAP Condensed Consolidated Statements of Operations for a reconciliation of the non-GAAP net income to the GAAP net income.

Net revenues for the full year 2004 were $1,336.0 million, compared to $701.4 million during calendar year 2003, an increase of 90 percent.

GAAP net income for calendar year 2004 was $135.7 million or $0.25 per share, compared to $39.2 million or $0.09 per share during calendar year 2003. Non-GAAP net income for calendar year 2004 was $238.6 million or $0.44 per share, compared to $59.0 million or $0.14 per share during calendar year 2003. See the table at the bottom of the Non-GAAP Condensed Consolidated Statements of Operations for a reconciliation of the non-GAAP net income to the GAAP net income.

Cash provided by operations was $142.5 million for the fourth quarter, compared to cash provided by operations of $62.9 million for the same period last year. Cash provided by operations for 2004 was $439.4M, up from $178.6M in 2003. Capital expenditures and depreciation during the fourth quarter were $18.5 million and $11.5 million, respectively.

“The fourth quarter was strong in every dimension, which completed a year of record performance,” said Scott Kriens, CEO of Juniper Networks. “We are in the sweet spot of the new networking industry, with both opportunities and capabilities to extend our growth and leadership strengths in an expanding marketplace.”

Juniper Networks will host a conference call web cast today, January 18, 2005 at 1:45 p.m. PT/4:45 p.m. ET at: http://www.juniper.net/company/investor/conferencecall.html. The conference call will be archived on the Juniper Networks website until February 28, 2005. A replay will be accessible by telephone after 3:00 p.m. Pacific Time through January 25, 2005 by dialing 800-633-8284 (or 402-977-9140), reservation number, 21227354. The replays will be available 24 hours/day, including weekends.

About Juniper Networks, Inc.
Juniper Networks is the leader in delivering secure and assured communications over a single IP network. The company’s purpose-built, high performance IP platforms enable customers to support many different services and applications at scale. Service providers, enterprises, governments and research and education institutions worldwide rely on Juniper Networks to deliver products for building networks that are tailored to the specific needs of their users, services and applications. Juniper Networks’ portfolio of proven networking and security solutions supports the complex scale, security and performance requirements of the world’s most demanding networks. Additional information can be found at www.juniper.net.

Juniper Networks, the Juniper Networks logo, NetScreen, NetScreen Technologies, the NetScreen logo, NetScreen-Global Pro, ScreenOS, and GigaScreen are registered trademarks of Juniper Networks, Inc. in the United States and other countries.

Statements in this release concerning Juniper Networks’ business outlook, future financial and operating results, and overall future prospects are forward looking statements that involve a number of uncertainties and risks. Actual results could differ materially from those anticipated in those forward-looking statements as a result of certain factors, including: general economic conditions globally or regionally; business and economic conditions in the networking industry; changes in overall technology spending; the network capacity requirements of communication service providers; increases in competition; the timing of orders and their fulfillment; availability and cost of key parts and supplies; ability to establish and maintain relationships with distributors and resellers; variations in the expected mix of products sold; changes in customer mix; customer and industry analyst perceptions of Juniper Networks and its technology, products and future prospects; delays in scheduled product availability; market acceptance of our products and services; rapid technological and market change; adoption of regulations or standards affecting our products, services or industry; the ability to successfully acquire, integrate and manage businesses and technologies; product defects, returns or vulnerabilities; the ability to recruit and retain key personnel; currency fluctuations; litigation; and other factors listed in our most recent report on Form 10-Q filed with the Securities and Exchange Commission. 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 in this release in the event facts or circumstances subsequently change after the date of this press release.

Juniper Networks, Inc.
Condensed Consolidated Balance Sheets
(in thousands)

	December 31, 2004			December 31, 2003*
ASSETS
Current assets:
Cash and cash equivalents	$	713,182		$	365,606
Short-term investments		404,659			215,906
Accounts receivable, net		187,306			77,964
Prepaid expenses and other current assets		108,586			31,333
Total current assets		1,413,733			690,809
Property and equipment, net		275,612			244,491
Long-term investments		595,234			394,297
Restricted cash		31,226			30,837
Goodwill		4,427,930			983,397
Purchased intangible assets, net and other long-term assets		255,979			67,266
Total assets	$	6,999,714		$	2,411,097
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	113,890		$	61,237
Accrued compensation		82,946			42,650
Accrued warranty		38,921			35,324
Other accrued liabilities		107,330			66,743
Deferred revenue		159,750			59,434
Total current liabilities		502,837			265,388
Deferred revenue, net of current portion		22,700			15,878
Other long-term liabilities, net of current portion		81,440			25,312
Long-term debt		400,000			542,076
Commitments and contingencies
Stockholders’ equity:
Common stock and additional paid-in capital		5,888,220			1,557,376
Deferred stock compensation		(32,394	)		(1,228	)
Accumulated other comprehensive income (loss)		(716	)		4,414
Retained earnings		137,627			1,881
Total stockholders’ equity		5,992,737			1,562,443
Total liabilities and stockholders’ equity	$	6,999,714		$	2,411,097
*Certain amounts that were previously reported have been reclassified to conform to the current period presentation. Specifically, deferred revenue and restructuring liabilities have been reclassified between short-term and long-term accounts.

Juniper Networks, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2004			2003			2004			2003
Net revenues:
Product (1)	$	379,834		$	179,104		$	1,162,928		$	602,455
Service		50,219			27,851			173,091			98,938
Total net revenues		430,053			206,955			1,336,019			701,393
Cost of revenues:
Product		99,434			54,753			317,616			200,621
Service		27,317			15,876			92,958			56,728
Total cost of revenues		126,751			70,629			410,574			257,349
Gross margin		303,302			136,326			925,445			444,044
Operating expenses:
Research and development		68,759			44,695			238,363			176,104
Sales and marketing		101,195			44,380			302,345			145,784
General and administrative		14,599			7,170			53,261			28,462
Amortization of purchased intangibles and deferred stock compensation (2)		28,523			5,375			100,737			22,698
Restructuring costs		–			–			(5,058	)		13,985
In-process research and development		–			–			27,500			–
Integration costs		–			–			5,087			–
Total operating expenses		213,076			101,620			722,235			387,033
Operating income		90,226			34,706			203,210			57,011
Interest and other income		11,526			6,128			28,233			33,428
Interest and other expense		(412	)		(5,410	)		(5,379	)		(39,099	)
Write-down of investments		–			–			(2,939	)		–
Loss on redemption of convertible subordinated notes		–			(15,193	)		(4,107	)		(1,085	)
Gain on sale of investments		–			–			–			8,739
Income before income taxes		101,340			20,231			219,018			58,994
Provision for income taxes		35,339			5,498			83,272			19,795
Net income	$	66,001		$	14,733		$	135,746		$	39,199
Net income per share:
Basic	$	0.12		$	0.04		$	0.28		$	0.10
Diluted*	$	0.11		$	0.03		$	0.25		$	0.09
Shares used in computing net income per share:
Basic		538,158			389,343			493,073			382,180
Diluted*		588,583			433,577			542,625			413,821
(1) Product net revenues are generated from groups of similar products as follows:
Infrastructure	$	299,863		$	179,104		$	975,729		$	602,455
Security		79,971			–			187,199			–
Total	$	379,834		$	179,104		$	1,162,928		$	602,455
(2) Amortization of deferred stock compensation relates to the following cost and expense categories by period:
Cost of revenues	$	676		$	15		$	2,850		$	(33	)
Research and development		5,217			511			21,493			1,925
Sales and marketing		3,800			78			17,685			205
General and administrative		383			17			1,927			(60	)
Total	$	10,076		$	621		$	43,955		$	2,037
*2003 amounts have been restated to include shares issuable upon conversion of the Zero Coupon Convertible Senior Notes due June 15, 2008

Juniper Networks, Inc.
Non-GAAP Condensed Consolidated Statements of Operations ⁽¹⁾
(in thousands, except per share amounts)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2004			2003			2004			2003
Net revenues:
Product	$	379,834		$	179,104		$	1,162,928		$	602,455
Service		50,219			27,851			173,091			98,938
Total net revenues		430,053			206,955			1,336,019			701,393
Cost of revenues:
Product		99,434			54,753			317,616			200,621
Service		27,317			15,876			92,958			56,728
Total cost of revenues		126,751			70,629			410,574			257,349
Gross margin		303,302			136,326			925,445			444,044
Operating expenses:
Research and development		68,759			44,695			238,363			176,104
Sales and marketing		101,195			44,380			302,345			145,784
General and administrative		14,599			7,170			53,261			28,462
Total operating expenses		184,553			96,245			593,969			350,350
Operating income		118,749			40,081			331,476			93,694
Interest and other income		8,024			6,128			24,731			32,238
Interest and other expense		(412	)		(5,410	)		(5,379	)		(39,099	)
Income before income taxes		126,361			40,799			350,828			86,833
Provision for income taxes		40,436			13,056			112,265			27,787
Net income	$	85,925		$	27,743		$	238,563		$	59,046
Net income per share:
Basic	$	0.16		$	0.07		$	0.48		$	0.15
Diluted*	$	0.15		$	0.06		$	0.44		$	0.14
Shares used in computing net income per share:
Basic		538,158			389,343			493,073			382,180
Diluted*		588,583			433,577			542,625			413,821
*2003 amounts have been restated to include shares issuable upon conversion of the Zero Coupon Convertible Senior Notes due June 15, 2008

⁽¹⁾ The non-GAAP statements exclude restructuring costs, amortization of purchased intangibles and deferred stock compensation, in-process research and development, integration costs, write-down of investments, loss on redemption of convertible subordinated notes, gain on sale of investments and a prior period acquisition related adjustment. See reconciliation to GAAP information below:

	Three Months Ended						Year Ended
	December 31,						December 31,
	2004			2003			2004			2003
Non-GAAP net income	$	85,925		$	27,743		$	238,563		$	59,046
Amortization of purchased intangibles and deferred stock compensation		(28,523	)		(5,375	)		(100,737	)		(22,698	)
Restructuring costs		–			–			5,058			(13,985	)
In-process research and development		–			–			(27,500	)		–
Integration costs		–			–			(5,087	)		–
Gain from non-recurring engineering contract		3,502			–			3,502			–
Acquisition related adjustment		–			–			–			1,190
Write-down of investments		–			–			(2,939	)		–
Loss on redemption of convertible subordinated notes		–			(15,193	)		(4,107	)		(1,085	)
Gain on sale of investments		–			–			–			8,739
Income tax effect		5,097			7,558			28,993			7,992
Net income	$	66,001		$	14,733		$	135,746		$	39,199

Juniper Networks, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)

	Year Ended December 31,
	2004			2003
OPERATING ACTIVITIES:
Net income	$	135,746		$	39,199
Adjustments to reconcile net income to net cash from operating activities:
Depreciation		40,843			43,998
Amortization of purchased intangibles, deferred stock compensation and debt costs		104,831			26,042
Restructuring and other		321			3,621
In-process research and development		27,500			–
Write-down of investments		2,939			–
Loss on redemption of convertible subordinated notes		4,107			1,085
Gain on sale of investments		–			(8,739	)
Tax benefit of employee stock option plans		65,988			10,813
Changes in operating assets and liabilities:
Accounts receivable, net		(81,398	)		537
Prepaid expenses, other current assets and other long-term assets		(56,253	)		(3,092	)
Accounts payable		29,390			12,963
Accrued compensation		40,296			17,528
Accrued warranty		3,597			2,966
Other accrued liabilities		27,893			2,467
Deferred revenue		93,648			29,166
Net cash provided by operating activities		439,448			178,554
INVESTING ACTIVITIES:
Purchases of property and equipment, net		(63,185	)		(19,388	)
Purchases of available-for-sale investments		(739,437	)		(734,679	)
Maturities and sales of available-for-sale investments		704,740			1,085,929
Increase in restricted cash		(249	)		(30,837	)
Minority equity investments		(1,225	)		(900	)
Cash and cash equivalents acquired in connection with the NetScreen acquisition, net of cash paid		40,889			–
Net cash (used in) provided by investing activities		(58,467	)		300,125
FINANCING ACTIVITIES:
Proceeds from issuance of common stock		175,172			91,755
Redemption of convertible subordinated notes		(144,967	)		(792,013	)
Retirement of common stock		(63,610	)		–
Proceeds from issuance of convertible senior notes		–			392,750
Net cash used in financing activities		(33,405	)		(307,508	)
Net increase in cash and cash equivalents		347,576			171,171
Cash and cash equivalents at beginning of period		365,606			194,435
Cash and cash equivalents at end of period	$	713,182		$	365,606