-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PLaMABPpnSicd7QnzDG+qIk8rVywcu2t/fkgYqiTvvpiggwxdQzqwzZF2rD7vVuU VcGqJhEDs6JSCgTcMbuWCg== 0000891092-04-000149.txt : 20040115 0000891092-04-000149.hdr.sgml : 20040115 20040115160305 ACCESSION NUMBER: 0000891092-04-000149 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040115 ITEM INFORMATION: FILED AS OF DATE: 20040115 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NETSCOUT SYSTEMS INC CENTRAL INDEX KEY: 0001078075 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 042837575 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-26251 FILM NUMBER: 04527436 BUSINESS ADDRESS: STREET 1: 4 TECHNOLOGY PARK DR CITY: WESTFORD STATE: MA ZIP: 01886 BUSINESS PHONE: 9786144000 MAIL ADDRESS: STREET 1: 4 TECHNOLOGY PARK DRIVE CITY: WESTFORD STATE: MA ZIP: 01886 8-K 1 e16619_8k.txt FORM 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 January 15, 2004 ------------------------------------------------ Date of report (Date of earliest event reported) NetScout Systems, Inc. -------------------------------------------------- (Exact name of Registrant as specified in charter) Delaware 0000-26251 04-2837575 - ---------------------------- ---------------- ------------------- (State or Other Jurisdiction (Commission File (I.R.S. Employer of Incorporation) Number) Identification No.) 310 Littleton Road Westford, Massachusetts 01886 ------------------------------------------------------------ (Address of Principal Executive Offices) (Zip Code) (978) 614-4000 -------------------------------------------------- Registrant's telephone number, including area code Not Applicable ------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Item 12. Results of Operations and Financial Condition. The following information and the Exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing. On January 15, 2004, NetScout issued a press release regarding its financial results for the quarter ended December 31, 2003, its expectations of future performance and its intention to hold a conference call regarding these topics. NetScout's press release is furnished as Exhibit 99.1 to this report and is incorporated herein by reference. 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. NETSCOUT SYSTEMS, INC. Date: January 15, 2004 By: /s/ David P. Sommers --------------------------------------- David P. Sommers Chief Financial Officer and Senior Vice President, General Operations EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 99.1 Press release dated January 15, 2004. EX-99.1 3 e16619ex99_1.txt PRESS RELEASE Exhibit 99.1 NetScout Systems Reports Third Quarter Fiscal 2004 Financial Results WESTFORD, Mass., Jan. 15 /PRNewswire-FirstCall/ -- NetScout Systems, Inc. (Nasdaq: NTCT), a leading provider of network performance management solutions, today announced financial results for its third quarter of fiscal year 2004. Revenue for the third quarter of fiscal year 2004 ended December 31, 2003 was $18.9 million, compared to revenue of $17.5 million in the previous quarter and revenue of $18.2 million in the third quarter of fiscal year 2003. Net income for the quarter was $184,000, or $0.01 per diluted share, compared to breakeven, or $0.00 per diluted share, for the previous quarter and compared to a net loss of ($328,000), or ($0.01) per basic and diluted share, in the third quarter of fiscal year 2003. "We are encouraged with this quarter's results. Our revenue, profitability and cash increased sequentially and we exceeded our guidance for the quarter in all areas," said Anil Singhal, President and CEO of NetScout Systems. "The results of this quarter demonstrate that our industry-leading CDM(TM) technology is beginning to deliver on its promise of consolidating many performance management functions and traffic flow data into a single, integrated solution and of providing rich performance analysis and data for additional applications in important areas of security forensics, virus tracking, billing, modeling and simulation and policy-based orchestration. We are winning competitive bids and continue to gain attention in the market as customers recognize the value of our products in simplifying the management of their complex network environments." Financial Highlights for the Third Quarter: * Total revenue increased 8% sequentially and increased 4% from the third quarter of fiscal year 2003. Product revenue increased 13% sequentially and increased 5% from the third quarter of fiscal year 2003. Service revenue increased 1% sequentially and increased 14% from the third quarter of fiscal year 2003. Royalty revenue decreased 3% sequentially and decreased 61% from the third quarter of fiscal year 2003. * Gross margin was 76% of total revenue, up 1 point both sequentially and compared to the third quarter of fiscal year 2003. * Cash flow from operations was positive. * Cash and short and long-term marketable securities increased by $1.5 million to $73.7 million. * 41 new customers were added worldwide. * 273 customers made repeat purchases. * 43 orders over $100,000 were received. * Direct sales represented 54% of total revenue; indirect sales to resellers represented 46% of total revenue. * International business comprised approximately 18% of total revenue. Product and Company Highlights: * NetScout unveiled QoS performance monitoring for large, complex networks as part of the recently released nGenius(R) Performance Manager 2.0 and related nGenius Probe firmware 6.0. This new enhanced monitoring capability allows enterprises and government agencies to improve the accuracy and success of network-based QoS implementations with features that allow IT managers to easily view application traffic composition and behavior within each configured QoS class in real-time and via historical web-based reports. * NetScout was awarded ISO 9001:2000 certification demonstrating the Company's ongoing commitment to provide the highest-quality products and service to its customers. The certification encompasses all of the design, manufacturing and customer service processes used by NetScout to produce and support its nGenius(R) Performance Management System products. To be granted the certification, NetScout met rigorous standards in its business processes and systems used to assure quality products and services for its customers. Guidance: For the fourth quarter of fiscal year 2004, the Company expects revenue to be in the range of $19 million to $20 million and net income per diluted share to be in the range of ($0.01) to $0.00. The Company expects to be cash neutral in the quarter. CONFERENCE CALL INSTRUCTIONS: The Company invites shareholders to listen to its conference call today at 4:30 p.m. ET, which will be webcast live through the Company's website at http://www.netscout.com. Alternatively, people can listen to the call by dialing 800-450-0788 for U.S./Canada and 612-332-0523 for international callers. A replay of the call will be available after 7:45 p.m. ET on January 15 for approximately two weeks. The number for the replay is 800-475-6701 for U.S./Canada and 320-365-3844 for international callers. The access code is 715486. About NetScout Systems, Inc. NetScout Systems, Inc. (Nasdaq: NTCT) is a market leader and pioneer of integrated network performance management products that unify performance across the enterprise. NetScout's nGenius(R) Performance Management System is helping more than 3,000 leading companies increase their return on infrastructure investments by optimizing the performance of networks and applications according to business priorities. NetScout is headquartered in Westford, Massachusetts and has offices worldwide. Further information is available at http://www.netscout.com. Safe Harbor: Forward-looking statements in this release are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. Investors are cautioned that statements in this press release, which are not strictly historical statements, including the plans, objectives and future financial performance of NetScout, constitute forward-looking statements which involve risks and uncertainties. Actual results could differ materially from the forward-looking statements. Risks and uncertainties which could cause actual results to differ include, without limitation, risks and uncertainties associated with the Company's strategic relationships with Cisco Systems and other partners, dependence upon broad-based acceptance of the company's network performance management solutions, the Company's ability to achieve and maintain a high rate of growth, introduction and market acceptance of new products and product enhancements such as the delivery of nGenius(R) product platform probes and software solutions and the implementation of the Company's CDM(TM) Technology strategy, the ability of the Company to take advantage of service provider opportunities, competitive pricing pressures, reliance on sole source suppliers, successful expansion and management of direct and indirect distribution channels, and dependence on proprietary technology, as well as risks associated with a continued climate of tight IT spending, and risks of further slowdowns or downturns in economic conditions generally and in the market for network performance management solutions specifically. For a more detailed description of the risk factors associated with the Company, please refer to the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2003 and its quarterly report on Form 10-Q for the quarter ended September 30, 2003 on file with the Securities and Exchange Commission. NetScout assumes no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein. NetScout and the NetScout logo and nGenius are registered trademarks of NetScout Systems, Inc. CDM and the CDM logo, Universal Response Time, Power Alarms, Workspaces and MasterCare and the MasterCare logo are trademarks of NetScout Systems, Inc. NetScout reserves the right, at its sole discretion, to make changes at any time in its technical information and specifications and service and support programs. The Company's condensed consolidated statements of operations and balance sheets are attached. NetScout Systems, Inc. Condensed Consolidated Balance Sheets (In thousands) (Unaudited) December 31, March 31, 2003 2003 Assets Current assets: Cash and cash equivalents $23,154 $43,823 Marketable securities 38,028 27,442 Accounts receivable, net 9,486 11,906 Inventories 2,973 2,982 Refundable income taxes 1,935 1,226 Deferred income taxes 1,667 1,782 Prepaids and other current assets 2,037 2,088 Total current assets 79,280 91,249 Fixed assets, net 5,844 6,912 Capitalized software development costs 1,049 - Goodwill, net 28,839 28,839 Other intangible assets, net - 272 Deferred income taxes 7,586 7,651 Long-term marketable securities 12,528 - Total assets $135,126 $134,923 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $1,915 $1,403 Accrued compensation 3,728 3,658 Accrued other 2,201 1,819 Deferred revenue 14,619 16,242 Total current liabilities 22,463 23,122 Stockholders' equity: Common stock 34 34 Additional paid-in capital 110,101 108,835 Accumulated other comprehensive income (11) 7 Deferred compensation (26) (132) Treasury stock (26,490) (26,366) Retained earnings 29,055 29,423 Total stockholders' equity 112,663 111,801 Total liabilities and stockholders' equity $135,126 $134,923 NetScout Systems, Inc. Condensed Consolidated Statements of Operations (In thousands) (Unaudited) Three Months Ended Nine Months Ended December 31, December 31, 2003 2002 2003 2002 Revenue: Product $11,190 $10,641 $29,696 $31,473 Service 7,268 6,401 21,017 18,086 License and royalty 432 1,113 1,295 4,382 Total revenue 18,890 18,155 52,008 53,941 Cost of revenue: Product(1) 3,462 3,363 9,601 10,212 Service (including stock-based compensation of $-, $2, $2 and $5, respectively) 1,066 1,228 3,132 3,362 Total cost of revenue 4,528 4,591 12,733 13,574 Gross margin 14,362 13,564 39,275 40,367 Operating expenses: Research and development (including stock-based compensation of $24, $46, $95 and $779, respectively)(2) 3,836 4,050 10,515 12,834 Sales and marketing (including stock-based compensation of $3, $16, $13 and $54, respectively) 8,655 8,502 24,637 25,289 General and administrative (including stock-based compensation of $-, $2, $- and $5, respectively) 1,553 1,708 4,752 5,953 Amortization of other intangible assets - 272 272 816 Total operating expenses 14,044 14,532 40,176 44,892 Income (Loss) from operations 318 (968) (901) (4,525) Interest income and other expenses, net 167 258 524 897 Income (loss) before income tax expense (benefit) 485 (710) (377) (3,628) Income tax expense (benefit) 301 (382) (9) (1,443) Net income (loss) $184 $(328) $(368) $(2,185) Basic net income (loss) per share $0.01 $(0.01) $(0.01) $(0.07) Diluted net income (loss) per share $0.01 $(0.01) $(0.01) $(0.07) Shares used in computing: Basic net income (loss) per share 30,182 29,940 30,092 29,870 Diluted net income (loss) per share 31,440 29,940 30,092 29,870 (1) Cost of product revenue includes amortization of capitalized software of $166 and $276 for the three and nine months ended December 31, 2003. (2) Research and development costs are net of capitalized software development costs of $0 for the three months ended December 31, 2003 and $1,325 for the nine months ended December 31, 2003. SOURCE NetScout Systems, Inc. -0- 01/15/2004 /CONTACT: Catherine Taylor, Director of Investor Relations of NetScout Systems, Inc., +1-978-614-4286, IR@netscout.com/ /Web site: http://www.netscout.com/ (NTCT) CO: NetScout Systems, Inc. ST: Massachusetts IN: NET CPR STW SU: ERN CCA MAV -----END PRIVACY-ENHANCED MESSAGE-----