Extreme Networks Exceeds Revenue Guidance For Quarter

Feb. 3, 2010 - PRLog -- Extreme Networks, Inc.  today announced financial results for its 2010 fiscal second quarter ended December 27, 2009.  For the quarter, net revenue was $79.4 million, above the guidance for the quarter of $76 to $78 million. This represents a sequential increase in revenue of roughly 20 percent compared to revenue of $66.3 million in the previous quarter and approximately a 9 percent decrease compared to revenue of $ 87.5 million in the second quarter of last year.

Second quarter non-GAAP operating income was $4.3 million or 5.4 percent of net revenue, compared to $2.6 million or 3.0 percent of net revenue in the second quarter of last year.  Additionally, non-GAAP net income was $4.8 million or $0.05 per diluted share, compared to non-GAAP net income of $3.5 million or $0.04 per diluted share in the second quarter of last year.  Non-GAAP financial results exclude the impact of stock-based compensation and restructuring charges.  A reconciliation of GAAP to non-GAAP financial measures is included in the accompanying financial tables.

“Operating under a simpler and more functional structure, we worked with our suppliers to resolve supply chain constraints and improved operational execution across the company,” said Bob L. Corey, CFO and acting President & CEO of Extreme Networks.  “In early December, we announced our Data Center vision to help Customers migrate from the physical to the virtual to the cloud, all without forcing a technology or operating methodology on the Customer.  In January, we announced the most current additions to our Data Center product line, the Black Diamond 8900 XL modules and the X480 stackable switches, both of which are expected to be available in Q3.”

For the second quarter, net revenue in North America was $27.5 million, revenue in EMEA was $37.8 million, and revenue in APAC was $14.1 million.  That compares to revenue of $26.9 million in North America, $ 28.1 million in EMEA, and $11.4 million in APAC in the previous quarter.

Net loss on a GAAP basis for the second quarter was $1.4 million or $0.02 per diluted share, which included a restructuring charge of $4.1 million and a charge of approximately $2.0 million related to stock based compensation.  The net loss this quarter of $1.4 million compares to net income of $2.5 million or $0.03 per diluted share in the second quarter of last year.  Operating loss on a GAAP basis for the second quarter was $1.9 million, compared to operating income of $1.6 million for the second quarter of last year.

Conference Call and Slide Presentation

Extreme Networks will host a conference call to discuss these results today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time).  The conference call may be heard by dialing 1-800-289-0459 (international callers dial 1-913-312-0725).  A 48-hour replay will be available following the call by dialing 1-888-203-1112 (international callers dial 1-719-457-0820); the replay passcode is 1370354.  In addition, a live webcast and replay of the call will be available at http://investor.extremenetworks.com.



PLEASE NOTE: throughout the conference call, the Company will refer to a slide presentation that will be posted in the Investor Relations section of the Company's website at http://investor.extremenetworks.com.



Non-GAAP Financial Measures

Extreme Networks provides all financial information required in accordance with generally accepted accounting principles (GAAP).  To supplement our consolidated financial statements presented in accordance with GAAP, we are also providing with this press release non-GAAP net income.  In preparing our non-GAAP information, we have excluded, where applicable, the impact of restructuring charges (a non-recurring charge) and share-based compensation (a non-cash charge).  Because of the non-recurring and/or non-cash nature of these charges, we believe that excluding them provides both management and investors with additional insight into our current operations, the trends affecting the Company and the Company’s marketplace performance.  In particular, management finds it useful to exclude these charges in order to more readily correlate the Company’s operating activities with the Company’s ability to generate cash from operations.  Accordingly, management uses these non-GAAP measures, along with the comparable GAAP information, in evaluating our historical performance and in planning our future business activities.  Please note that our non-GAAP measures may be different than those used by other companies.  The additional non-GAAP financial information we present should be considered in conjunction with, and not as a substitute for, our financial information presented in accordance with GAAP.  We have provided a non-GAAP reconciliation of the Consolidated Statement of Operations for the periods presented in this release, which are adjusted to exclude restructuring charges and share-based compensation expense for these periods.  These measures should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures for comparable financial information and understanding of the Company’s ongoing performance as a business.  Extreme Networks uses both GAAP and non-GAAP measures to evaluate and manage its operations.