EX-99.1 2 exhibit99114q4earningsrele.htm PRESS RELEASE Exhibit 99.1 14Q4 Earnings Release (1)


NEWS RELEASE

NETGEAR® REPORTS FOURTH QUARTER AND FULL YEAR 2014 RESULTS

•
Fourth quarter 2014 net revenue of $353.2 million, as compared to $356.6 million in the comparable prior year quarter, decrease of 1.0% year over year.
•
Fourth quarter 2014 GAAP net loss per diluted share of $1.16, as compared to net income per diluted share of $0.30 in the comparable prior year quarter.
◦
Fourth quarter 2014 GAAP net loss includes a non-cash goodwill impairment charge of $74.2 million, resulting in a loss of $1.62 per diluted share, net of tax, relating to the Service Provider Business Unit.
◦
Fourth quarter 2014 non-GAAP net income per diluted share of $0.65, as compared to $0.59 in the comparable prior year quarter.
•
2014 net revenue of $1.39 billion, as compared to $1.37 billion in 2013, increase of 1.7% year over year.
•
2014 GAAP net income per diluted share of $0.24, as compared to $1.42 in 2013.
◦
2014 GAAP net income includes a non-cash goodwill impairment charge of $74.2 million, resulting in a loss of $1.54 per diluted share, net of tax, relating to the Service Provider Business Unit.
◦
2014 non-GAAP net income per diluted share of $2.54, as compared to $2.29 in 2013.
•
Company expects first quarter 2015 net revenue to be in the range of $300 million to $315 million, with non-GAAP operating margin in the range of 8.5% to 9.5%.

SAN JOSE, California - February 5, 2015 - NETGEAR, Inc. (NASDAQ: NTGR), a global networking company that delivers innovative products to consumers, businesses and service providers, today reported financial results for the fourth quarter and full year ended December 31, 2014.

Net revenue for the fourth quarter ended December 31, 2014 was $353.2 million, as compared to $356.6 million in the fourth quarter ended December 31, 2013, and $353.3 million in the third quarter ended September 28, 2014. Net loss, computed in accordance with GAAP, for the fourth quarter of 2014 was $40.4 million, or $1.16 net loss per diluted share. This compared to GAAP net income of $11.4 million, or $0.30 net income per diluted share, in the fourth quarter of 2013, and GAAP net income of $20.0 million, or $0.55 per diluted share, in the third quarter of 2014. Non-GAAP net income was $0.65 per diluted share in the fourth quarter of 2014, as compared to non-GAAP net income of $0.59 per diluted share in the fourth quarter of 2013 and $0.72 per diluted share in the third quarter of 2014.

Operating margin, computed in accordance with GAAP, for the fourth quarter of 2014 was -13.2%, as compared to 6.6% in the year ago comparable quarter, and 7.5% in the third quarter of 2014. Non-GAAP operating margin was 10.1% in the fourth quarter of 2014, as compared to 10.6% in the fourth quarter of 2013 and the third quarter of 2014.

Net revenue for the full year 2014 was $1.39 billion, a 1.7% increase as compared to $1.37 billion for 2013. Net income, computed in accordance with GAAP, for the full year 2014 was $8.8 million, or $0.24 per diluted share. This compared to GAAP net income of $55.2 million, or $1.42 per diluted share, for 2013. Non-GAAP net income was $2.54 per diluted share in the full year of 2014, as compared to non-GAAP net income of $2.29 per diluted share for 2013.

Operating margin, computed in accordance with GAAP, for the full year of 2014 was 2.0%, as compared to 6.8% for 2013. Non-GAAP operating margin was 10.1% in the full year of 2014, as compared to 10.2% for 2013.

The differences between GAAP and non-GAAP financial measures include adjustments, net of any tax effect, for amortization of intangibles, stock-based compensation expense, restructuring and other charges, acquisition-related expense, impact to cost of sales from acquisition accounting adjustments to inventory, litigation reserves, net, goodwill impairment charges, intangibles impairment charges, gain on litigation settlements, and the establishment of a valuation

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allowance associated with certain deferred tax assets. The accompanying schedules provide a reconciliation of financial measures computed on a GAAP basis to financial measures computed on a non-GAAP basis.

Patrick Lo, Chairman and Chief Executive Officer of NETGEAR, commented, “We are very pleased with the fourth quarter performance of our Retail Business Unit and Commercial Business Unit. It was a record quarter for RBU in terms of net revenue, led by unprecedented demand for our high-end line of Nighthawk 802.11ac routers during the holiday season. Meanwhile, CBU grew on a year-over-year and sequential basis, benefiting from increased sales of our switching and storage products. Given the strength of these two business units, we will continue to invest our resources in both product development and sales coverage for these business units in 2015.”

Mr. Lo continued, “On the other hand, we saw a decline in our service provider revenue in Q4 and according to our customers, purchase constraints will deteriorate further in 2015 and for the foreseeable future. As such, we are taking definitive steps in two areas: re-sizing the cost structure of SPBU to match the reduced revenue outlook, and concentrating resources on long term and profitable accounts.”

Christine Gorjanc, Chief Financial Officer of NETGEAR, added, "NETGEAR’s fourth quarter of 2014 GAAP results include a non-cash goodwill impairment charge of $74.2 million relating to our Service Provider Business Unit, as its long-term revenue and profit outlook weakened.”

Ms. Gorjanc continued, "During the fourth quarter of 2014, we continued to leverage the strength of our balance sheet and cash position by repurchasing approximately 706,000 shares of NETGEAR common stock for $22.0 million, at an average price of $31.18 per share. We increased capital returns to our shareholders in 2014, which resulted in 2.8 million shares being repurchased for $90.6 million in the year ended December 31, 2014. We plan to continue to repurchase shares opportunistically using the share authorization that was recently approved by our Board of Directors in October 2014. Three million shares remain available for repurchase under this authorization as of the end of 2014.”

Mr. Lo continued, "Looking ahead to the first quarter of 2015, we are expecting net revenue to be in the range of $300 million to $315 million. The decline in revenue beyond normal seasonality is primarily due to the challenges faced by our Service Provider Business Unit. Non-GAAP operating margin is expected to be in the range of 8.5% to 9.5%, which includes an unfavorable impact of approximately 100 basis points as a result of the recent appreciation of the U.S. dollar, as compared to the recent fourth quarter.”


Investor Conference Call / Webcast Details
NETGEAR will review the fourth quarter results and discuss management's expectations for the first quarter of 2015 today, Thursday, February 5, 2015 at 5 p.m. ET (2 p.m. PT). The dial-in number for the live audio call is (201) 689-8471. A live webcast of the conference call will be available on NETGEAR's website at http://investor.netgear.com. A replay of the call will be available 2 hours following the call through midnight ET (9 p.m. PT) on Thursday, February 12, 2015 by telephone at (858) 384-5517 and via the web at http://investor.netgear.com. The account number to access the phone replay is 13599254.

About NETGEAR, Inc.
NETGEAR (NASDAQ: NTGR) is a global networking company that delivers innovative products to consumers, businesses and service providers. The Company's products are built on a variety of proven technologies such as wireless, Ethernet and powerline, with a focus on reliability and ease-of-use. The product line consists of wired and wireless devices that enable networking, broadband access and network connectivity. These products are available in multiple configurations to address the needs of the end-users in each geographic region in which the Company's products are sold. NETGEAR products are sold in approximately 44,000 retail locations around the globe, and through approximately 36,000 value-added resellers. The company's headquarters are in San Jose, Calif., with additional offices in approximately 25 countries. NETGEAR is an ENERGY STAR partner. More information is available at http://investor.netgear.com or by calling (408) 907-8000. Connect with NETGEAR at http://twitter.com/NETGEAR and http://www.facebook.com/NETGEAR.


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© 2015 NETGEAR, Inc. NETGEAR and the NETGEAR logo are trademarks or registered trademarks of NETGEAR, Inc. and its affiliates in the United States and/or other countries. Other brand and product names are trademarks or registered trademarks of their respective holders. The information contained herein is subject to change without notice. NETGEAR shall not be liable for technical or editorial errors or omissions contained herein. All rights reserved.

Contact:
NETGEAR Investor Relations
Christopher Genualdi
netgearIR@netgear.com
(408) 890-3520

Page 3


Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 for NETGEAR, Inc.:
This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. The words “anticipate,” “expect,” “believe,” “will,” “may,” “should,” “estimate,” “project,” “outlook,” “forecast” or other similar words are used to identify such forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. The forward-looking statements represent NETGEAR, Inc.’s expectations or beliefs concerning future events based on information available at the time such statements were made and include statements regarding: expected net revenue and non-GAAP operating margin; expectations regarding the timing and market acceptance of recent and anticipated new product introductions that position the Company for growth; expectations regarding the Company’s market share and leadership position in various product categories; and expectations regarding repurchases of the Company’s common stock. These statements are based on management's current expectations and are subject to certain risks and uncertainties, including the following: future demand for the Company's products may be lower than anticipated; consumers may choose not to adopt the Company's new product offerings or adopt competing products; product performance may be adversely affected by real world operating conditions; the Company may be unsuccessful or experience delays in manufacturing and distributing its new and existing products; telecommunications service providers may choose to slow their deployment of the Company's products or utilize competing products; the Company may be unable to collect receivables as they become due; the Company may fail to manage costs, including the cost of developing new products and manufacturing and distribution of its existing offerings; the Company may fail to successfully continue to effect operating expense savings; changes in the level of NETGEAR's cash resources and the Company's planned usage of such resources, including potential repurchases of the Company’s common stock; changes in the Company's stock price and developments in the business that could increase the Company's cash needs; fluctuations in foreign exchange rates; and the actions and financial health of the Company's customers. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Further information on potential risk factors that could affect NETGEAR and its business are detailed in the Company's periodic filings with the Securities and Exchange Commission, including, but not limited to, those risks and uncertainties listed in the section entitled “Part II - Item 1A. Risk Factors,” pages 51 through 71, in the Company's quarterly report on Form 10-Q for the fiscal quarter ended September 28, 2014, filed with the Securities and Exchange Commission on November 4, 2014. NETGEAR undertakes no obligation to release publicly any revisions to any forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Use of Non-GAAP Financial Information:
To supplement our consolidated financial statements presented on a GAAP basis, NETGEAR uses non-GAAP financial measures, which are adjusted to exclude certain expenses and tax adjustments, where applicable. We believe non-GAAP financial measures are appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our current period GAAP results are made with the intent of providing both management and investors a more complete understanding of NETGEAR's underlying operational results and trends and our marketplace performance. For example, the non-GAAP results are an indication of our baseline performance before charges that are considered by management to be outside of our core operating results. In addition, these adjusted non-GAAP results are among the primary indicators management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial measures prepared in accordance with generally accepted accounting principles in the United States.    


-Financial Tables Attached-


Page 4



NETGEAR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

 
December 31,
2014
 
December 31,
2013
 
 
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
141,234

 
$
143,009

Short-term investments
115,895

 
105,145

Accounts receivable, net
275,689

 
266,484

Inventories
222,883

 
224,456

Deferred income taxes
29,039

 
27,239

Prepaid expenses and other current assets
38,225

 
33,778

Total current assets
822,965

 
800,111

Property and equipment, net
29,694

 
27,194

Intangibles, net
66,230

 
84,118

Goodwill
81,721

 
155,916

Other non-current assets
48,077

 
26,591

Total assets
$
1,048,687

 
$
1,093,930

 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
106,357

 
$
114,531

Accrued employee compensation
21,588

 
16,551

Other accrued liabilities
143,742

 
143,218

Deferred revenue
30,023

 
24,496

Income taxes payable
2,406

 
1,287

Total current liabilities
304,116

 
300,083

Non-current income taxes payable
15,252

 
13,804

Other non-current liabilities
7,754

 
6,260

Total liabilities
327,122

 
320,147

Stockholders' equity:
 
 
 
Common stock
35

 
37

Additional paid-in capital
454,144

 
421,901

Accumulated other comprehensive income
38

 
69

Retained earnings
267,348

 
351,776

Total stockholders' equity
721,565

 
773,783

Total liabilities and stockholders' equity
$
1,048,687

 
$
1,093,930



Page 5



NETGEAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share and percentage data)
(Unaudited)

 
Three Months Ended
 
Twelve Months Ended
 
December 31,
2014
 
September 28,
2014
 
December 31,
2013
 
December 31,
2014
 
December 31,
2013
 
 
 
 
 
 
 
 
 
 
Net revenue
$
353,182

 
$
353,338

 
$
356,620

 
$
1,393,515

 
$
1,369,633

Cost of revenue
252,708

 
251,005

 
255,831

 
995,597

 
976,018

Gross profit
100,474

 
102,333

 
100,789

 
397,918

 
393,615

Gross margin
28.4
 %
 
29.0
%
 
28.3
%
 
28.6
%
 
28.7
%
Operating expenses:
 
 
 
 
 
 
 
 
 
Research and development
22,908

 
23,337

 
22,529

 
90,902

 
85,168

Sales and marketing
39,644

 
39,283

 
37,544

 
157,017

 
153,804

General and administrative
11,557

 
11,726

 
12,339

 
46,552

 
48,915

Restructuring and other charges
19

 
1,360

 
3,378

 
2,209

 
5,335

Litigation reserves, net
(1,265
)
 
69

 
1,446

 
(1,011
)
 
5,354

Goodwill impairment charges
74,196

 
—

 
—

 
74,196

 
—

Intangibles impairment charges
—

 
—

 
—

 
—

 
2,000

Total operating expenses
147,059

 
75,775

 
77,236

 
369,865

 
300,576

Income (loss) from operations
(46,585
)
 
26,558

 
23,553

 
28,053

 
93,039

Operating margin
(13.2
)%
 
7.5
%
 
6.6
%
 
2.0
%
 
6.8
%
Interest income
79

 
68

 
85

 
253

 
400

Other income (expense), net
544

 
2,246

 
(494
)
 
2,455

 
(457
)
Income (loss) before income taxes
(45,962
)
 
28,872

 
23,144

 
30,761

 
92,982

Provision for income taxes
(5,609
)
 
8,847

 
11,712

 
21,973

 
37,765

Net income (loss)
$
(40,353
)
 
$
20,025

 
$
11,432

 
$
8,788

 
$
55,217

 
 
 
 
 
 
 
 
 
 
Net income (loss) per share:
 
 
 
 
 
 
 
 
 
Basic
$
(1.16
)
 
$
0.56

 
$
0.30

 
$
0.25

 
$
1.44

Diluted
$
(1.16
)
 
$
0.55

 
$
0.30

 
$
0.24

 
$
1.42

 
 
 
 
 
 
 
 
 
 
Weighted average shares used to compute net income per share:
 
 
 
 
 
 
 
 
 
Basic
34,726

 
35,643

 
37,845

 
35,771

 
38,379

Diluted
34,726

 
36,250

 
38,408

 
36,445

 
38,948

 
 
 
 
 
 
 
 
 
 


Page 6



NETGEAR, INC.
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES
(In thousands, except percentage data)
(Unaudited)

STATEMENT OF OPERATIONS DATA:
 
Three Months Ended
 
Twelve Months Ended
 
December 31,
2014
 
September 28,
2014
 
December 31,
2013
 
December 31,
2014
 
December 31,
2013
 
 
 
 
 
 
 
 
 
 
GAAP gross profit
$
100,474

 
$
102,333

 
$
100,789

 
$
397,918

 
$
393,615

Amortization of intangibles
2,625

 
2,625

 
2,664

 
10,488

 
8,803

Stock-based compensation expense
504

 
573

 
503

 
2,037

 
1,577

Impact to cost of sales from acquisition accounting adjustments to inventory
—

 
—

 
—

 
—

 
568

Non-GAAP gross profit
$
103,603

 
$
105,531

 
$
103,956

 
$
410,443

 
$
404,563

Non-GAAP gross margin
29.3
%
 
29.9
%
 
29.2
%
 
29.5
%
 
29.5
%
 
 
 
 
 
 
 
 
 
 
GAAP research and development
$
22,908

 
$
23,337

 
$
22,529

 
$
90,902

 
$
85,168

Stock-based compensation expense
(1,038
)
 
(1,255
)
 
(1,089
)
 
(4,916
)
 
(3,943
)
Non-GAAP research and development
$
21,870

 
$
22,082

 
$
21,440

 
$
85,986

 
$
81,225

 
 
 
 
 
 
 
 
 
 
GAAP sales and marketing
$
39,644

 
$
39,283

 
$
37,544

 
$
157,017

 
$
153,804

Amortization of intangibles
(1,771
)
 
(1,771
)
 
(1,771
)
 
(7,085
)
 
(6,414
)
Stock-based compensation expense
(1,409
)
 
(1,409
)
 
(1,508
)
 
(6,168
)
 
(5,379
)
Non-GAAP sales and marketing
$
36,464

 
$
36,103

 
$
34,265

 
$
143,764

 
$
142,011

 
 
 
 
 
 
 
 
 
 
GAAP general and administrative
$
11,557

 
$
11,726

 
$
12,339

 
$
46,552

 
$
48,915

Stock-based compensation expense
(1,837
)
 
(1,925
)
 
(1,870
)
 
(6,893
)
 
(6,563
)
Acquisition related expense
—

 
—

 
(16
)
 
(8
)
 
(940
)
Non-GAAP general and administrative
$
9,720

 
$
9,801

 
$
10,453

 
$
39,651

 
$
41,412

 
 
 
 
 
 
 
 
 
 
GAAP total operating expenses
$
147,059

 
$
75,775

 
$
77,236

 
$
369,865

 
$
300,576

Amortization of intangibles
(1,771
)
 
(1,771
)
 
(1,771
)
 
(7,085
)
 
(6,414
)
Stock-based compensation expense
(4,284
)
 
(4,589
)
 
(4,467
)
 
(17,977
)
 
(15,885
)
Restructuring and other charges
(19
)
 
(1,360
)
 
(3,378
)
 
(2,209
)
 
(5,335
)
Acquisition related expense
—

 
—

 
(16
)
 
(8
)
 
(940
)
Litigation reserves, net
1,265

 
(69
)
 
(1,446
)
 
1,011

 
(5,354
)
Goodwill impairment charges
(74,196
)
 
—

 
—

 
(74,196
)
 
—

Intangibles impairment charges
—

 
—

 
—

 
—

 
(2,000
)
Non-GAAP total operating expenses
$
68,054

 
$
67,986

 
$
66,158

 
$
269,401

 
$
264,648


Page 7


NETGEAR, INC.
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED)
(In thousands, except percentage data)
(Unaudited)

STATEMENT OF OPERATIONS DATA (CONTINUED):

 
Three Months Ended
 
Twelve Months Ended
 
December 31,
2014
 
September 28,
2014
 
December 31,
2013
 
December 31,
2014
 
December 31,
2013
 
 
 
 
 
 
 
 
 
 
GAAP operating (loss) income
$
(46,585
)
 
$
26,558

 
$
23,553

 
$
28,053

 
$
93,039

Amortization of intangibles
4,396

 
4,396

 
4,435

 
17,573

 
15,217

Stock-based compensation expense
4,788

 
5,162

 
4,970

 
20,014

 
17,462

Restructuring and other charges
19

 
1,360

 
3,378

 
2,209

 
5,335

Acquisition-related expense
—

 
—

 
16

 
8

 
940

Impact to cost of sales from acquisition accounting adjustments to inventory
—

 
—

 
—

 
—

 
568

Litigation reserves, net
(1,265
)
 
69

 
1,446

 
(1,011
)
 
5,354

Goodwill impairment charges
74,196

 
—

 
—

 
74,196

 
—

Intangibles impairment charges
—

 
—

 
—

 
—

 
2,000

Non-GAAP operating income
$
35,549

 
$
37,545

 
$
37,798

 
$
141,042

 
$
139,915

Non-GAAP operating margin
10.1
%
 
10.6
%
 
10.6
%
 
10.1
%
 
10.2
%
 
 
 
 
 
 
 
 
 
 
GAAP other income (expense), net
$
544

 
$
2,246

 
$
(494
)
 
$
2,455

 
$
(457
)
Gain on litigation settlements
—

 
(2,800
)
 
—

 
(2,800
)
 
—

Non-GAAP other income (expense), net
$
544

 
$
(554
)
 
$
(494
)
 
$
(345
)
 
$
(457
)
 
 
 
 
 
 
 
 
 
 
GAAP net income (loss)
$
(40,353
)
 
$
20,025

 
$
11,432

 
$
8,788

 
$
55,217

Amortization of intangibles
4,396

 
4,396

 
4,435

 
17,573

 
15,217

Stock-based compensation expense
4,788

 
5,162

 
4,970

 
20,014

 
17,462

Restructuring and other charges
19

 
1,360

 
3,378

 
2,209

 
5,335

Acquisition-related expense
—

 
—

 
16

 
8

 
940

Impact to cost of sales from acquisition accounting adjustments to inventory
—

 
—

 
—

 
—

 
568

Litigation reserves, net
(1,265
)
 
69

 
1,446

 
(1,011
)
 
5,354

Goodwill impairment charges
74,196

 
—

 
—

 
74,196

 
—

Intangibles impairment charges
—

 
—

 
—

 
—

 
2,000

Gain on litigation settlements
—

 
(2,800
)
 
—

 
(2,800
)
 
—

Tax effect and tax related adjustments
(18,898
)
 
(2,030
)
 
(3,075
)
 
(26,477
)
 
(12,813
)
Non-GAAP net income
$
22,883

 
$
26,182

 
$
22,602

 
$
92,500

 
$
89,280


Page 8


NETGEAR, INC.
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED)
(Unaudited)

STATEMENT OF OPERATIONS DATA (CONTINUED):

 
Three Months Ended
 
Twelve Months Ended
 
December 31,
2014
 
September 28,
2014
 
December 31,
2013
 
December 31,
2014
 
December 31,
2013
 
 
 
 
 
 
 
 
 
 
NET INCOME (LOSS) PER DILUTED SHARE:
 
 
 
 
 
 
 
 
GAAP net income (loss) per diluted share
$
(1.16
)
 
$
0.55

 
$
0.30

 
$
0.24

 
$
1.42

Amortization of intangibles
0.12

 
0.12

 
0.12

 
0.48

 
0.39

Stock-based compensation expense
0.14

 
0.14

 
0.13

 
0.55

 
0.45

Restructuring and other charges
0.00

 
0.04

 
0.09

 
0.06

 
0.14

Acquisition-related expense
—

 
—

 
0.00

 
0.00

 
0.02

Impact to cost of sales from acquisition accounting adjustments to inventory
—

 
—

 
—

 
—

 
0.01

Litigation reserves, net
(0.04
)
 
0.00

 
0.04

 
(0.03
)
 
0.14

Goodwill impairment charges
2.10

 
—

 
—

 
2.04

 
—

Intangibles impairment charges
—

 
—

 
—

 
—

 
0.05

Gain on litigation settlements
—

 
(0.08
)
 
—

 
(0.08
)
 
—

Tax effect and tax related adjustments
(0.53
)
 
(0.05
)
 
(0.09
)
 
(0.72
)
 
(0.33
)
Non-GAAP net income per diluted share *
$
0.65

 
$
0.72

 
$
0.59

 
$
2.54

 
$
2.29

 
 
 
 
 
 
 
 
 
 
Shares used in computing GAAP net income (loss) per diluted share

34,726

 
36,250

 
38,408

 
36,445

 
38,948

Shares used in computing non-GAAP net income per diluted share
35,348

 
36,250

 
38,408

 
36,445

 
38,948

*The sum of per diluted share impact may not total to non-GAAP net income per diluted share due to different share counts used in calculating GAAP net loss per diluted share and non-GAAP net income per diluted share. The GAAP net loss per diluted share calculation used a lower share count as it excluded potentially dilutive shares which are included in calculating non-GAAP net income per diluted share.


Page 9


SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands, except per share data, DSO, inventory turns, weeks of channel inventory, headcount and percentage data)
(Unaudited)

 
Three Months Ended
 
December 31,
2014
 
September 28,
2014
 
June 29,
2014
 
March 30,
2014
 
December 31,
2013
 
 
 
 
 
 
 
 
 
 
Cash, cash equivalents and short-term investments
$
257,129

 
$
242,648

 
$
242,729

 
$
240,261

 
$
248,154

Cash, cash equivalents and short-term investments per diluted share
$
7.40

 
$
6.69

 
$
6.59

 
$
6.44

 
$
6.46

 
 
 
 
 
 
 
 
 
 
Accounts receivable, net
$
275,689

 
$
278,568

 
$
282,900

 
$
291,251

 
$
266,484

Days sales outstanding (DSO)
73

 
72

 
76

 
74

 
69

 
 
 
 
 
 
 
 
 
 
Inventories
$
222,883

 
$
206,494

 
$
194,533

 
$
201,630

 
$
224,456

Ending inventory turns
4.5

 
4.9

 
4.9

 
5.0

 
4.6

 
 
 
 
 
 
 
 
 
 
Weeks of channel inventory:
 
 
 
 
 
 
 
 
 
U.S. retail channel
7.8

 
7.7

 
10.5

 
9.7

 
9.4

U.S. distribution channel
12.0

 
10.6

 
12.0

 
9.8

 
11.2

EMEA distribution channel
5.4

 
4.4

 
4.0

 
4.1

 
4.6

APAC distribution channel
7.2

 
6.8

 
9.0

 
7.1

 
8.5

 
 
 
 
 
 
 
 
 
 
Deferred revenue (current and non-current)
$
31,621

 
$
35,654

 
$
35,229

 
$
32,070

 
$
26,433

 
 
 
 
 
 
 
 
 
 
Headcount
1,038

 
1,047

 
1,033

 
1,023

 
1,029

Non-GAAP diluted shares
35,348

 
36,250

 
36,808

 
37,305

 
38,408

 
 
 
 
 
 
 
 
 
 

NET REVENUE BY GEOGRAPHY
 
Three Months Ended
 
Twelve Months Ended
 
December 31,
2014
 
September 28,
2014
 
December 31,
2013
 
December 31,
2014
 
December 31,
2013
Americas
$
194,673

55
%
 
$
193,904

55
%
 
$
211,307

59
%
 
$
770,890

56
%
 
$
789,318

58
%
EMEA
106,237

30
%
 
108,421

31
%
 
99,976

28
%
 
421,887

30
%
 
412,688

30
%
APAC
52,272

15
%
 
51,013

14
%
 
45,337

13
%
 
200,738

14
%
 
167,627

12
%
Total
$
353,182

100
%
 
$
353,338

100
%
 
$
356,620

100
%
 
$
1,393,515

100
%
 
$
1,369,633

100
%

NET REVENUE BY SEGMENT
 
Three Months Ended
 
Twelve Months Ended
 
December 31,
2014
 
September 28,
2014
 
December 31,
2013
 
December 31,
2014
 
December 31,
2013
Retail
$
147,864

42
%
 
$
131,341

38
%
 
$
135,906

38
%
 
$
508,100

36
%
 
$
509,924

37
%
Commercial
79,393

22
%
 
71,974

20
%
 
75,007

21
%
 
305,677

22
%
 
311,261

23
%
Service Provider
125,925

36
%
 
150,023

42
%
 
145,707

41
%
 
579,738

42
%
 
548,448

40
%
Total
$
353,182

100
%
 
$
353,338

100
%
 
$
356,620

100
%
 
$
1,393,515

100
%
 
$
1,369,633

100
%


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