EX-99.1 2 exhibit1.htm EX-99.1 EX-99.1
     
Investor Relations Contact:
  Public Relations Contact:
Randi Paikoff Feigin
Tel: 408-745-2371
randi@juniper.net
  Kathy Durr
Tel: 408-745-5058
kdurr@juniper.net
 
 

Juniper Networks, Inc. Reports Q3’05 Financial Results
Q3’05 Net Revenue $546.4MM; GAAP EPS $0.14; Non-GAAP EPS $0.19

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

Net revenues for the third quarter were $546.4 million, compared with $375.0 million for the same period last year, an increase of 46 percent.

GAAP net income for the third quarter was $84.1 million or $0.14 per share, compared with a GAAP net income of $48.8 million or $0.08 per share in the third quarter of 2004. Non-GAAP net income was $114.7 million or $0.19 per share, compared with non-GAAP net income of $73.5 million or $0.13 per share in the third 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 $144.9 million for the third quarter, compared to cash provided by operations of $105.2 million for the same period last year. Capital expenditures and depreciation during the third quarter were $18.2 million and $13.5 million, respectively.

“Once again we’re very pleased with the results for the quarter, our momentum in the market, and the positive impact we’re seeing as a result of our ongoing focus and innovation,” commented Scott Kriens, chairman and CEO, Juniper Networks. “We continue to enjoy growing acceptance across our portfolio and with customers throughout the world.”

  •   During Q3 Juniper leveraged its innovation engine to drive the expansion of the portfolio. The new Secure Access 6000 SP, introduced this quarter, enables service providers to deliver additional revenue-generating network-based SSL VPN managed services. In addition, Juniper enhanced its Enterprise Infranet architecture with four new Secure SSL VPN hardware platforms and announced the availability of integrated IDP functionality on the ISG 1000/VPN appliance.

  •   As service providers, such as KPN and Korea Telecom, transition to more advanced and profitable “triple play” offerings, they looked to Juniper to provide highly reliable, secure and scalable solutions for these demanding infrastructures.

  •   The increasing demand for cross-portfolio solutions combining Juniper’s best-in-class routing and security platforms was evident this quarter. Customers such as AvantGo, provider of rich personalized mobile websites to PDAs and smartphones, are deploying Juniper Networks routers, as well as its integrated security appliances, to deliver a secure and assured experience to their customers.

  •   Juniper continued to experience market share momentum, having been recognized by Gartner as the leader in Broadband Aggregation and by Infonetics in SSL VPN and High-end Firewall/VPN. Juniper’s Core Router platform holds more than a third of the total market share in its category, while the Multi-service Edge portfolio holds greater than 25%.

Juniper Networks will host a conference call web cast today, October 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 November 19, 2005. A replay will be accessible by telephone after 3:00 p.m. Pacific Time through October 26th, 2005 by dialing 800-633-8284 (or 402-977-9140), reservation number, 21264032. 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.

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

                 
 
   September 30, 2005
   December 31, 2004
ASSETS
   (unaudited)
        
 
                
Current assets:
                
Cash and cash equivalents
   $ 888,404     $ 713,182  
Short-term investments
     497,716       404,659  
Accounts receivable, net
     240,888       187,306  
Prepaid expenses and other current assets
     114,435       108,586  
Total current assets
     1,741,443       1,413,733  
Property and equipment, net
     296,234       275,612  
Long-term investments
     598,969       595,234  
Restricted cash
     38,326       31,226  
Goodwill
     4,826,579       4,427,930  
Purchased intangible assets, net and other long-term assets
     316,248       255,979  
Total assets
   $ 7,817,799     $ 6,999,714  
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
 
                
Current liabilities:
                
Accounts payable
   $ 149,042     $ 113,890  
Other accrued liabilities
     225,296       229,197  
Deferred revenue
     209,200       159,750  
Total current liabilities
     583,538       502,837  
Deferred revenue, net of current portion
     34,020       22,700  
Convertible senior notes and other long-term liabilities
     489,342       481,440  
Commitments and contingencies
                
 
                
Stockholders’ equity:
                
Common stock and additional paid-in capital
     6,355,320       5,888,220  
Deferred stock compensation
     (22,729 )     (32,394 )
Accumulated other comprehensive income
     (7,818 )     (716 )
Retained earnings
     386,126       137,627  
Total stockholders’ equity
     6,710,899       5,992,737  
Total liabilities and stockholders’ equity
   $ 7,817,799     $ 6,999,714  

2

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

                                 
    Three Months Ended   Nine Months Ended
    September 30,   September 30,
    2005   2004   2005   2004
 
                                
Net revenues:
                                
Product
   $ 466,427     $ 325,240     $ 1,282,439     $ 783,094  
Service
     79,926       49,774       206,054       122,872  
Total net revenues
     546,353       375,014       1,488,493       905,966  
 
                                
Cost of revenues:
                                
Product
     131,915       87,730       365,718       218,182  
Service
     39,172       25,304       103,784       65,641  
Total cost of revenues
     171,087       113,034       469,502       283,823  
Gross margin
     375,266       261,980       1,018,991       622,143  
 
                                
Operating expenses:
                                
Research and development
     90,504       64,881       247,870       169,604  
Sales and marketing
     116,222       81,953       309,930       201,150  
General and administrative
     26,801       12,426       57,663       38,662  
In-process research and development
     3,800       –       5,700       27,500  
Integration costs
     –       –       –       5,087  
Restructuring costs
     (192 )     (1,223 )     (6,752 )     (5,058 )
Amortization of purchased intangibles and deferred stock compensation (1)
     29,389       33,025       75,282       72,214  
Total operating expenses
     266,524       191,062       689,693       509,159  
Operating income
     108,742       70,918       329,298       112,984  
Interest and other income
     15,567       6,412       40,062       16,707  
Interest and other expense
     (851 )     (987 )     (2,726 )     (4,967 )
Gain (loss) on investments
     1,698       (2,939 )     1,698       (2,939 )
Loss on redemption of convertible subordinated notes
     –       –       –       (4,107 )
Income before income taxes
     125,156       73,404       368,332       117,678  
Provision for income taxes
     41,103       24,645       119,833       47,933  
Net income
   $ 84,053     $ 48,759     $ 248,499     $ 69,745  
 
                                
Net income per share:
                                
Basic
   $ 0.15     $ 0.09     $ 0.45     $ 0.15  
Diluted*
   $ 0.14     $ 0.08     $ 0.42     $ 0.13  
 
                                
Shares used in computing net income per share:
                                
Basic
     561,799       533,447       550,347       478,044  
Diluted*
     605,413       582,578       595,997       534,770  
* 2004 amounts have been restated to include shares issuable upon conversion of the Senior Notes in accordance with EITF 04-8.
 
                                
(1) Amortization of deferred stock compensation relates to the following cost and expense categories by period:
Cost of revenues – Product
   $ 355     $ 879     $ 536     $ 2,174  
Cost of revenues – Service
     273       –       884       –  
Research and development
     3,840       7,155       8,271       16,276  
Sales and marketing
     1,600       6,107       3,348       13,885  
General and administrative
     330       437       802       1,544  
Total
   $ 6,398     $ 14,578     $ 13,841     $ 33,879  

See accompanying Notes to the Condensed Consolidated Financial Statements

3

Juniper Networks, Inc.
Non-GAAP Condensed Consolidated Statements of Operations (3)
(in thousands, except per share amounts)
(unaudited)

                                 
    Three Months Ended   Nine Months Ended
    September 30,   September 30,
    2005   2004   2005   2004
 
                                
Net revenues:
                                
Product
   $ 466,427     $ 325,240     $ 1,282,439     $ 783,094  
Service
     79,926       49,774       206,054       122,872  
Total net revenues
     546,353       375,014       1,488,493       905,966  
 
                                
Cost of revenues:
                                
Product
     131,915       87,730       365,718       218,182  
Service
     39,172       25,304       103,784       65,641  
Total cost of revenues
     171,087       113,034       469,502       283,823  
Gross margin
     375,266       261,980       1,018,991       622,143  
 
                                
Operating expenses:
                                
Research and development
     90,504       64,881       247,870       169,604  
Sales and marketing
     116,222       81,953       309,930       201,150  
General and administrative
     16,961       12,426       47,823       38,662  
Total operating expenses
     223,687       159,260       605,623       409,416  
Operating income
     151,579       102,720       413,368       212,727  
Interest and other income
     15,567       6,412       40,062       16,707  
Interest and other expense
     (851 )     (987 )     (2,726 )     (4,967 )
Income before income taxes
     166,295       108,145       450,704       224,467  
Provision for income taxes
     51,551       34,606       139,718       71,829  
Net income
   $ 114,744     $ 73,539     $ 310,986     $ 152,638  
 
                                
Net income per share:
                                
Basic
   $ 0.20     $ 0.14     $ 0.57     $ 0.32  
Diluted(2)
   $ 0.19     $ 0.13     $ 0.52     $ 0.29  
 
                                
Shares used in computing net income per share:
                                
Basic
     561,799       533,447       550,347       478,044  
Diluted(2)
     605,413       582,578       595,997       534,770  

(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, the loss on redemption of the convertible subordinated notes, patent cross licensing expense, and the gain/loss on investments. See reconciliation to GAAP information below:

                                 
    Three Months Ended   Nine Months Ended
    September 30,   September 30,
    2005   2004   2005   2004
Non-GAAP net income
   $ 114,744     $ 73,539     $ 310,986     $ 152,638  
In-process research and development
     (3,800 )     —       (5,700 )     (27,500 )
Integration costs
     —       —       —       (5,087 )
Restructuring and acquisition related costs
     352       1,223       6,912       5,058  
Amortization of purchased intangibles and deferred stock compensation
     (29,389 )     (33,025 )     (75,282 )     (72,214 )
Loss on redemption of convertible subordinated notes
     —       —       —       (4,107 )
Patent cross licensing expense
     (10,000 )     —       (10,000 )     —  
Gain (loss) on investments
     1,698       (2,939 )     1,698       (2,939 )
Income tax effect
     10,448       9,961       19,885       23,896  
Net income (loss)
   $ 84,053     $ 48,759     $ 248,499     $ 69,745  

4

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

                         
    Nine months ended
    September 30,
    2005   2004
Operating Activities:            
Net income   $ 248,499     $69,745
 
                        
Adjustments to reconcile net income to net cash from operating activities:            
Depreciation     38,161     29,313
Amortization of purchased intangibles, deferred stock compensation and debt issuance costs     76,486     75,945
Loss on disposal of property and equipment     277     –
Tax benefit of employee stock option plans   95,376
     –  
In-process research and development     5,700     27,500
(Gain) loss on investments     (1,698 )   2,939
Loss on redemption of convertible subordinated notes     –     4,107
 
                        
Changes in operating assets and liabilities:            
Accounts receivable, net     (43,481 )   (56,132)
Prepaid expenses, other current assets and other long-term assets     (37,271 )   (17,851)
Accounts payable     35,452     20,891
Accrued warranty     (1,347 )   4,895
Other accrued liabilities     (28,268 )   51,791
Deferred revenue     57,547     83,854
Net cash provided by operating activities     445,433     296,997
Investing Activities:            
Purchases of property and equipment, net     (58,873 )   (44,689)
Purchases of available-for-sale investments     (639,350 )   (583,639)
Maturities and sales of available-for-sale investments     540,938     672,941
Increase in restricted cash     (7,100 )   (132)
Minority equity investments     (9,823 )   (1,180)
Acquisition of businesses, net of cash and cash equivalents     (199,060 )   40,889
Net cash (used in) provided by investing activities     (373,268 )   84,190
Financing Activities:            
Proceeds from issuance of common stock     103,057     121,090
Redemption of convertible subordinated notes     –     (144,967)
Retirement of common stock     –     (55,202)
Net cash provided by (used in) financing activities     103,057     (79,079)
Net increase in cash and cash equivalents     175,222     302,108
Cash and cash equivalents at beginning of period     713,182     365,606
Cash and cash equivalents at end of period   $ 888,404     $667,714
                 
Supplemental Disclosure of Non-Cash Investing Activities                
Common stock issued in connection with business combinations
   $ 221,221     $ 3,651,226  
Stock options assumed in connection with business combinations
   $ 65,185     $ 520,503  

See accompanying Notes to the Condensed Consolidated Financial Statements

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