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): July 19, 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 July 19, 2005, Juniper Networks, Inc. ("Juniper Networks") issued a press release and held a conference call regarding its financial results for the quarter ended June 30, 2005. 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or hereafter filed under the Securities Act of 1933, as amended, except to the extent that such information is superceded by information as of a subsequent date that is included in or incorporated by reference into such registration statement.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 issued by Juniper Networks on July 19, 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.
July 19, 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 July 19, 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 Q2’05 Financial Results
Q2’05 Net Revenue $493.0MM; GAAP EPS $0.15; Non-GAAP EPS $0.18

Sunnyvale, CA – July 19, 2005 — Juniper Networks, Inc. (NASDAQ: JNPR) today reported its results for the quarter ended June 30, 2005.

Net revenues for the second quarter were $493.0 million, compared with $306.9 million for the same period last year, an increase of 61 percent.

GAAP net income for the second quarter was $89.0 million or $0.15 per share, compared with a GAAP net loss of $12.6 million or $0.02 per share in the second quarter of 2004. Non-GAAP net income was $104.3 million or $0.18 per share, compared with non-GAAP net income of $42.7 million or $0.08 per share in the second quarter of 2004. 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 $166.1 million for the second quarter, compared to cash provided by operations of $119.0 million for the same period last year. Capital expenditures and depreciation during the second quarter were $18.1 million and $12.9 million, respectively.

“The news for this quarter is once again growth – significant revenue growth, outpaced by earnings per share growth, all while our investment in innovation grows as well,” commented Scott Kriens, chairman and CEO, Juniper Networks. “The momentum we are enjoying in our brand, our portfolio and the corresponding market opportunity continues to be fueled by the confidence of our customers and the strong demand for the value we bring to the network.”

Juniper Networks continues to leverage its traffic processing expertise to enhance the value of the network for customers worldwide.

• Juniper is helping its customers capitalize on the increasing demand for triple play services – voice, video and data — by delivering cost-effective solutions with assured levels of quality, security and availability. These solutions, such as the recently announced E320, are developed organically through Juniper’s internal innovation engine, through partnerships with market leaders, such as Avaya and through acquisitions such as that of Kagoor, delivering key Session Border Control technology to secure and assure the delivery of multimedia services.

• Juniper continues to participate at the leading edge of IP-based converged network deployments. With Lucent and Siemens, Juniper is providing assured, high performance networking solutions for one of the most revolutionary projects the industry has seen — British Telecommunications 21^st Century Network.

• In the security market, Juniper continues to lead the emerging SSL VPN space, as enterprises looking for secure connections across a distributed organization, and service providers, offering both network and CPE-based managed security solutions, recognize the benefit of Juniper’s best-in-class solution.

• Enterprises looking for secure and assured networking and security solutions to support mission critical requirements increasingly look to Juniper to address those needs. The United States Department of Labor’s Mine Safety and Heath Administration deployed the Juniper Networks Secure Access FIPS-compliant SSL VPNs to provide remote employees with secure access to agency network resources and information faster and more securely than their previous traditional access methods. Whether it is standalone routing, or combined routing and security, customers appreciate the focus and innovation Juniper brings to the problem.

Juniper Networks will host a conference call web cast today, July 19, 2005 at 1:45 p.m. (Pacific Time), to be broadcasted live over the Internet http://www.juniper.net/company/investor/conferencecall.html. The conference call will be archived on the Juniper Networks website until August 19, 2005. A replay will be accessible by telephone after 3:00 p.m. Pacific Time through July 26th, 2005 by dialing 800-633-8284 (or 402-977-9140), reservation number, 21250338. The replays will be available 24 hours/day, including weekends.

About Juniper Networks, Inc.

Juniper Networks is the leader in enabling 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)

	June 30, 2005			December 31, 2004
ASSETS
Current assets:
Cash and cash equivalents	$	857,061		$	713,182
Short-term investments		445,465			404,659
Accounts receivable, net		205,366			187,306
Prepaid expenses and other current assets		106,540			108,586
Total current assets		1,614,432			1,413,733
Property and equipment, net		291,705			275,612
Long-term investments		580,124			595,234
Restricted cash		38,390			31,226
Goodwill		4,576,088			4,427,930
Purchased intangible assets, net and other long-term assets		283,077			255,979
Total assets	$	7,383,816		$	6,999,714
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	116,145		$	113,890
Other accrued liabilities		218,124			229,197
Deferred revenue		219,797			159,750
Total current liabilities		554,066			502,837
Deferred revenue, net of current portion		30,476			22,700
Convertible senior notes and other long-term liabilities		476,388			481,440
Commitments and contingencies
Stockholders’ equity:
Common stock and additional paid-in capital		6,045,410			5,888,220
Deferred stock compensation		(19,175	)		(32,394	)
Accumulated other comprehensive income		(5,422	)		(716	)
Retained earnings		302,073			137,627
Total stockholders’ equity		6,322,886			5,992,737
Total liabilities and stockholders’ equity	$	7,383,816		$	6,999,714

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2005			2004			2005			2004
Net revenues:
Product (1)	$	423,732		$	263,670		$	816,012		$	457,854
Service		69,296			43,229			126,128			73,098
Total net revenues		493,028			306,899			942,140			530,952
Cost of revenues:
Product		121,324			73,887			233,804			130,452
Service		33,897			22,883			64,612			40,337
Total cost of revenues		155,221			96,770			298,416			170,789
Gross margin		337,807			210,129			643,724			360,163
Operating expenses:
Research and development		81,238			58,093			157,366			104,723
Sales and marketing		102,280			75,657			193,708			119,197
General and administrative		15,395			17,371			30,862			26,236
In-process research and development		1,900			27,500			1,900			27,500
Integration costs		–			5,087			–			5,087
Restructuring costs		(6,560	)		(3,835	)		(6,560	)		(3,835	)
Amortization of purchased intangibles and deferred stock compensation		23,929			35,060			45,893			39,189
Total operating expenses		218,182			214,933			423,169			318,097
Operating income (expense)		119,625			(4,804	)		220,555			42,066
Interest and other income		13,417			5,309			24,495			10,295
Interest and other expense		(1,096	)		(1,480	)		(1,876	)		(3,980	)
Gain (loss) on redemption of convertible subordinated notes		–			(4,107	)		–			(4,107	)
Income (loss) before income taxes		131,946			(5,082	)		243,174			44,274
Provision for income taxes		42,935			7,472			78,728			23,288
Net income (loss)	$	89,011		$	(12,554	)	$	164,446		$	20,986
Net income (loss) per share:
Basic	$	0.16		$	(0.02	)	$	0.30		$	0.05
Diluted(2)	$	0.15		$	(0.02	)	$	0.28		$	0.04
Shares used in computing net income (loss) per share:
Basic		546,662			506,189			544,622			450,343
Diluted(2)		591,050			506,189			589,953			489,738
(1) Product net revenues are generated from groups of similar products as follows:
Infrastructure	$	330,473		$	219,834		$	634,604		$	414,018
Security		93,259			43,836			181,408			43,836
Total	$	423,732		$	263,670		$	816,012		$	457,854
(2)2004 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 ⁽³⁾
(in thousands, except per share amounts)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2005			2004			2005			2004
Net revenues:
Product	$	423,732		$	263,670		$	816,012		$	457,854
Service		69,296			43,229			126,128			73,098
Total net revenues		493,028			306,899			942,140			530,952
Cost of revenues:
Product		121,324			73,887			233,804			130,452
Service		33,897			22,883			64,612			40,337
Total cost of revenues		155,221			96,770			298,416			170,789
Gross margin		337,807			210,129			643,724			360,163
Operating expenses:
Research and development		81,238			58,093			157,366			104,723
Sales and marketing		102,280			75,657			193,708			119,197
General and administrative		15,395			17,371			30,862			26,236
Total operating expenses		198,913			151,121			381,936			250,156
Operating income		138,894			59,008			261,788			110,007
Interest and other income		13,417			5,309			24,495			10,295
Interest and other expense		(1,096	)		(1,480	)		(1,876	)		(3,980	)
Income before income taxes		151,215			62,837			284,407			116,322
Provision for income taxes		46,877			20,108			88,167			37,223
Net income	$	104,338		$	42,729		$	196,240		$	79,099
Net income per share:
Basic	$	0.19		$	0.08		$	0.36		$	0.18
Diluted(2)	$	0.18		$	0.08		$	0.33		$	0.16
Shares used in computing net income per share:
Basic		546,662			506,189			544,622			450,343
Diluted(2)		591,050			557,618			589,953			489,738

⁽²⁾2004 amounts have been restated to include shares issuable upon conversion of the Zero Coupon Convertible Senior Notes due June 15, 2008

⁽³⁾ The non-GAAP statements exclude in-process research and development, integration costs, restructuring costs, amortization of purchased intangibles and deferred stock compensation, and the loss on redemption of the convertible subordinated notes. See reconciliation to GAAP information below:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2005			2004			2005			2004
Non-GAAP net income	$	104,338		$	42,729		$	196,240		$	79,099
In-process research and development		(1,900	)		(27,500	)		(1,900	)		(27,500	)
Integration costs		–			(5,087	)		–			(5,087	)
Restructuring costs		6,560			3,835			6,560			3,835
Amortization of purchased intangibles and deferred stock compensation		(23,929	)		(35,060	)		(45,893	)		(39,189	)
Loss on redemption of convertible subordinated notes		–			(4,107	)		–			(4,107	)
Income tax effect		3,942			12,636			9,439			13,935
Net income (loss)	$	89,011		$	(12,554	)	$	164,446		$	20,986

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

	Six months ended June 30,
	2005			2004
OPERATING ACTIVITIES:
Net income	$	164,446		$	20,986
Adjustments to reconcile net income to net cash from operating activities:
Depreciation		24,618			18,712
Amortization of purchased intangibles, deferred stock compensation and debt costs		46,734			42,557
In-process research and development		1,900			27,500
Tax benefit of employee stock option plans		64,595			–
Loss on redemption of convertible subordinated notes		–			4,107
Changes in operating assets and liabilities:
Accounts receivable, net		(13,142	)		(34,742	)
Prepaid expenses, other current assets and other long-term assets		(23,390	)		(16,242	)
Accounts payable		2,181			8,151
Accrued warranty		(2,849	)		5,757
Other accrued liabilities		(31,420	)		41,302
Deferred revenue		66,836			73,689
Net cash provided by operating activities		300,509			191,777
INVESTING ACTIVITIES:
Purchases of property and equipment, net		(40,637	)		(19,680	)
Purchases of available-for-sale investments		(426,810	)		(348,140	)
Maturities and sales of available-for-sale investments		398,859			520,221
Increase in restricted cash		(7,164	)		(90	)
Minority equity investments		(968	)		(1,180	)
Cash paid in connection with acquisitions made, net of cash and cash equivalents acquired		(155,256	)		40,889
Net cash provided by (used in) investing activities		(231,976	)		192,020
FINANCING ACTIVITIES:
Proceeds from issuance of common stock		75,346			71,469
Redemption of convertible subordinated notes		–			(144,967	)
Net cash (used in) provided by financing activities		75,346			(73,498	)
Net increase in cash and cash equivalents		143,879			310,299
Cash and cash equivalents at beginning of period		713,182			365,606
Cash and cash equivalents at end of period	$	857,061		$	675,905