Ubiquiti Networks Reports Q2 Fiscal 2013 Results

Ubiquiti Networks Reports Q2 Fiscal 2013 Results

  *Revenues of $74.9 million, an increase of 22% from the prior quarter
  *Strong rebound in airMAX revenues
  *Non-GAAP operating profitability of $21.0 million, an increase of 27.9%
    from the prior quarter
  *$26.8 million in net cash provided by operating activities
  *Quarterly GAAP and Non-GAAP Diluted EPS of $0.20

SAN JOSE, Calif., Feb. 7, 2013 (GLOBE NEWSWIRE) -- Ubiquiti Networks, Inc.
(Nasdaq:UBNT), a next-generation communications technology company, today
announced results for the second quarter of fiscal 2013, ended December 31,
2012.

For the second quarter of fiscal 2013, Ubiquiti reported revenues of $74.9
million, a decrease of 15% compared to revenues of $87.8 million for the same
period the prior year and an increase of 22% compared to the prior quarter.
For the six months ended December 31, 2012 Ubiquiti reported revenues of
$136.4 million, a decrease of 18% compared to revenues of $167.0 million for
the same period in the prior year.

For the second quarter of fiscal 2013, GAAP net income was $17.8 million, a
decrease of 28% compared to GAAP net income of $24.7 million for the same
period the prior year and an increase of 35% from the prior quarter. Non-GAAP
net income was $18.3 million, a decrease of 26% compared to $24.9 million for
the same period last year and an increase of 35% compared to the prior
quarter.

For the six months ended December 31, 2012, GAAP net income was $31.0 million,
a decrease of 33% compared to GAAP net income of $46.2 million for the same
period in the prior year. Non-GAAP net income was $31.9 million, a decrease of
32% compared to $46.6 million for the same period in the prior year.

The following table reconciles GAAP net income to non-GAAP net income and
weighted-average shares used in computing net income per share of common
stock-diluted to weighted-average shares used in computing non-GAAP Diluted
EPS:

                        Three Months Ended December Six Months Ended December
                         31,                         31,
                        2012          2011          2012         2011
                        (in thousands, except per share data)
                        (unaudited)
Net income               $17,803     $24,691     $30,982    $46,184
Stock-based
compensation, net of     536           211           929          421
taxes
Non-GAAP net income      $18,339     $24,902     $31,911    $46,605
Weighted-average shares
used in computing net    90,056        90,056        91,493       75,102
incomeper share of
common stock- diluted
Weighted-average
dilutive effect of stock —             —             —            3,247
options and restricted
stock units
Weighted-average shares
of Series A preferred    —            3,390         —            15,131
shares outstanding
Weighted-average shares
used in computing        90,056        93,446        91,493       93,480
non-GAAP diluted EPS (1)
Non-GAAP diluted EPS (1) $0.20       $0.27       $0.35      $0.50
                                                              
(1)Non-GAAP Diluted EPS is calculated using non-GAAP net income excluding
stock-based compensation, net of taxes and weighted-average shares outstanding
as if Series A preferred stock is treated as common stock for the periods
presented.

"Our second quarter's strong sequential improvements were driven in large
part, by our investments in the company's operational and legal
infrastructure.We have implemented a revamped logistics system, which has led
to lower lead times and days sales outstanding.Meanwhile, our airMAX
anti-counterfeit strategy has made significant progress in decreasing
counterfeit shipments and deterring counterfeit activities.Our
anti-counterfeit manufacturing technology is now fully implemented across all
platforms, including our newer airMAX technology," said Robert J. Pera,
Founder and Chief Executive Officer of Ubiquiti Networks."We are very excited
about Ubiquiti's continued growth prospects in the operator market as well as
new growth opportunities in the enterprise, security, and machine to machine
communications markets."

Recent Highlights

  *In September, the Company released EdgeMAX, a price/performance disruptive
    software and systems routing platform, offering what the company believes
    to be the world's first sub-$100 router technology with greater than 1
    million packet-per-second processing performance packed with powerful
    routing features.
    
  *In October, AirFiber, the Company's microwave backhaul solution, won the
    2012 Wireless Internet Provider Association product of the year award.
    
  *AirVision, the Company's IP video surveillance platform has been
    re-architected and vastly upgraded with the release of the Company's
    AirVision 2.0 NVR and management software.

Mr. Pera added, "Just as we anticipate strong demand ahead with AirFiber and
EdgeMAX rounding out our airMAX technology offering, UniFi (wireless LAN) has
the potential to become our next major growth opportunity as we work to expand
its functionality during this calendar year.AirVision version 2.0 also has
been completely architected and will also launch soon.Finally, our enterprise
machine to machine communications platform (mFi) will have several new updates
and products this year."

Business Outlook

Ubiquiti currently believes the demand environment in its end markets supports
the following forecast for the Company's fiscal third quarter ending March 31,
2013:

  *Revenues of between $76 million and $84 million
  *GAAP Diluted EPS of between $0.19 and $0.23
  *Non-GAAP Diluted EPS of between $0.20 and
    $0.24

Conference Call

Ubiquiti Networks will discuss the Company's financial results by conference
call at 2:00 p.m. PST today.Instructions for listening to the conference call
over the Web are available on the investor relations portion of UBIQUITI
NETWORKS's website at www.ubnt.com.

About Ubiquiti Networks

Ubiquiti Networks (Nasdaq:UBNT) is closing the digital divide by building
network communication platforms for everyone and everywhere. With over 10
million devices deployed in over 200 countries, Ubiquiti is transforming
under-networked businesses and communities. Our leading edge
platforms,airMAX™, UniFi™, airFiber™, airVision™, mFi™ and EdgeMAX™ combine
innovative technology, disruptive price performance and the support of a
global user community to eliminate barriers to connectivity.  For more
information, join our community athttp://www.ubnt.com.

The Ubiquiti Networks, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=10852

Use of Non-GAAP Financial Information

To supplement our condensed consolidated financial results prepared under
generally accepted accounting principles, or GAAP, we use non-GAAP measures of
net income and earnings per diluted share that are adjusted to exclude certain
recurring costs, expenses and gains such as stock based compensation expense
and the tax effects of these non-GAAP adjustments.In addition, our non-GAAP
adjustments present shares of Series A preferred stock as if these shares had
been converted to common stock throughout the periods
presented.Reconciliations of the adjustments to GAAP results for the three
and six months ended December 31, 2012 and 2011 are provided below.In
addition, an explanation of the ways in which management uses non-GAAP
financial information to evaluate its business, the substance behind
management's decision to use this non-GAAP financial information, the material
limitations associated with the use of non-GAAP financial information, the
manner in which management compensates for those limitations, and the
substantive reasons management believes that this non-GAAP financial
information provides useful information to investors is included under "About
our Non-GAAP Net Income and Adjustments" after the tables below.

These non-GAAP measures are not in accordance with or an alternative to GAAP
and may be materially different from other non-GAAP measures, including
similarly titled non-GAAP measures, used by other companies.The presentation
of this additional information should not be considered in isolation from, as
a substitute for, or superior to, net income or earnings per diluted share
prepared in accordance with GAAP.

Safe Harbor for Forward Looking Statements

Certain statements in this press release are forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Statements
other than statements of historical fact including words such as "look",
"anticipate", "believe", "estimate", "expect", "consider" and "plan" and
statements in the future tense are forward looking statements.The statements
in this press release that could be deemed forward-looking statements include
statements regarding anticipated strong demand, growth prospects, expected
product launches and new updates, market positioning, potential of new
technology platforms, effect of anti-counterfeit manufacturing processes,
short and long term opportunities, and any statements or assumptions
underlying any of the foregoing.

Forward-looking statements are subject to certain risks and uncertainties that
could cause our actual future results to differ materially, or cause a
material adverse impact on our results.Potential risks and uncertainties
include, but are not limited to, fluctuations in our operating results;
varying demand for our products due to the financial and operating condition
of our distributors and their customers, distributors inventory management
practices and general economic conditions; impact of counterfeiting and our
ability to contain that; our reliance on a limited number of distributors;
inability of our contract manufacturers and suppliers to meet our demand; our
dependence on Qualcomm Atheros for chipsets without a short-term alternative;
as we move into new markets competition from certain of our current or
potential competitors who may be more established in such markets; our ability
to keep pace with technological and market developments; success and timing of
new product introductions by us and the performance of our products generally;
if we fail to effectively manage the significant increase in our transactional
sales volumes; we may become subject to warranty claims, product liability and
product recalls; that a substantial majority of our sales are into countries
outside the United States and we are subject to numerous U.S.export control
and economic sanctions laws; costs related to responding to government
inquiries related to regulatory compliance; our reliance on the Ubiquiti
Community; our reliance on certain key members of our management team,
including our founder and chief executive officer, Robert J.Pera; adverse
tax-related matters such as tax audits, changes in our effective tax rate or
new tax legislative proposals; whether the final determination of our income
tax liability may be materially different from our income tax provisions; the
impact of any intellectual property litigation and claims for indemnification
and litigation related to U.S.Securities laws and economic and political
conditions in the United States and abroad.We discuss these risks in greater
detail under the heading "Risk Factors" and elsewhere in our Annual Report on
Form 10-K for the year ended June 30, 2012 and in our Quarterly Reports on
Form 10-Q for the quarters ended September30, 2012 and December31, 2012 and
other filings filed with the U.S.Securities and Exchange Commission (the
SEC), which are available at the SEC's website at www.sec.gov.Copies may also
be obtained by contacting Ubiquiti Networks' Investor Relations Department, or
by email at investor.relations@ubnt.com or Ubiquiti Networks' Investor
Relations website at www.ubnt.com.

Given these uncertainties, you should not place undue reliance on these
forward-looking statements.Also, forward-looking statements represent our
management's beliefs and assumptions only as of the date made.Ubiquiti
Networks undertakes no obligation to update information contained in this
press release.You should review our SEC filings carefully and with the
understanding that our actual future results may be materially different from
what we expect.

Ubiquiti Networks Inc.
Condensed Consolidated Statement of Operations
(In thousands, except per share data)
(Unaudited)
                                                              
                                Three Months Ended  Six Months Ended December
                                 December 31,        31,
                                2012      2011      2012         2011
Revenues                         $74,901 $87,817 $136,436   $166,984
Cost of revenues                 44,416    50,527    80,931       96,681
Gross profit                     30,485    37,290    55,505       70,303
                                                              
Operating expenses:                                            
Research and development         5,052     3,683     9,763        7,052
Sales, general and               5,314     2,431     9,848        4,575
administrative
Total operating expenses         10,366    6,114     19,611       11,627
Income from operations           20,119    31,176    35,894       58,676
Interest income (expense) and    (197)    (312)    (283)       (946)
other, net
Income before provision for      19,922    30,864    35,611       57,730
income taxes
Provision for income taxes       2,119     6,173     4,629        11,546
Net income                       $17,803 $24,691 $30,982    $46,184
                                                              
Preferred stock cumulative
dividend and accretion of cost   —         (9,704)  —            (112,431)
of preferred stock
Less allocation of net income to
participating preferred          —         (559)    —            —
stockholders
Net income (loss) attributable   $17,803 $14,428 $30,982    $(66,247)
to common stockholders—basic
Undistributed earnings
re-allocated to common           —         15        —            —
stockholders
Net income (loss) attributable   $17,803 $14,443 $30,982    $(66,247)
to common stockholders—diluted
                                                              
Net income (loss) per share of                                 
common stock:
Basic                            $0.20   $0.16   $0.35      $(0.88)
Diluted                          $0.20   $0.16   $0.34      $(0.88)
                                                              
Weighted average shares used in
computing net income (loss) per                                
share of common stock:
Basic                            88,094    87,487    89,532       75,102
Diluted                          90,056    90,056    91,493       75,102



Ubiquiti Networks Inc.
Reconciliation of GAAP Net Income to Non-GAAP Net Income
(In thousands, except per share data)
(Unaudited)
                        Three Months Ended December Six Months Ended December
                         31,                         31,
                        2012          2011          2012         2011
Net income               $17,803     $24,691     $ 30,982    $46,184
Stock-based                                                    
compensation:
Cost of revenues         104           27            185         33
Research and development 401           116           667         232
Sales, general and       388           208           697         437
administrative
Tax effect of non-GAAP   (357)        (140)        (620)       (281)
adjustments
Non-GAAP net income      $18,339     $24,902     $ 31,911    $46,605
Non-GAAP diluted EPS (1) $0.20        $0.27        $ 0.35      $0.50
                                                              
Weighted-average shares
used in non-GAAP diluted 90,056        93,446        91,493      93,480
EPS (1)

(1) Non-GAAP Diluted EPS is calculated using non-GAAP net income excluding
stock-based compensation, net of taxes and weighted-average shares outstanding
as if Series A preferred stock is treated as common stock for the periods
presented.



Ubiquiti Networks, Inc.
Reconciliation of Weighted-Average Shares Used in Computing Net Income Per
Share of Common Stock-Diluted
to Weighted-Average Shares Used In Computing Non-GAAP Diluted EPS
(In thousands, except per share data)
(Unaudited)
                                    Three Months Ended     Six Months Ended
                                     December 31,           December 31,
                                    2012        2011       2012      2011
Weighted-average shares used in
computing net income per share of    90,056      90,056     91,493    75,102
common stock- diluted
Add back:                                                          
Weighted-average dilutive effect of
stock options and restricted stock   —           —          —         3,247
units
Weighted-average shares of Series A  —           3,390      —         15,131
preferred shares outstanding
Weighted-average shares used in      90,056      93,446     91,493    93,480
computing non-GAAP diluted EPS



Ubiquiti Networks Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share amounts)
(Unaudited)
                                         December 31, 2012 June 30, 2012^(1)
Assets                                                     
Current assets:                                            
Cash and cash equivalents                 $148,301        $122,060
Accounts receivable, net                  55,902            75,644
Inventories                               14,623            7,734
Current deferred tax asset                882               882
Prepaid expenses and other current assets 2,771             1,577
Total current assets                      222,479           207,897
Property and equipment, net               5,664             4,471
Long-term deferred tax asset              232               232
Other long–term assets                    1,804             1,136
Total assets                              $230,179        $213,736
Liabilities, Convertible Preferred Stock                   
and Stockholders' Deficit
Current liabilities:                                       
Accounts payable                          $27,747         $26,450
Customer deposits                         1,392             235
Deferred revenues                         815               805
Income taxes payable                      5,353             946
Debt – short-term                         5,009             6,968
Other current liabilities                 14,931            17,031
Total current liabilities                 55,247            52,435
Long–term taxes payable                   7,727             7,727
Debt – long-term                          73,601            22,623
Total liabilities                         136,575           82,785
Stockholders' deficit:                                     
Common stock                              87                92
Additional paid–in capital                130,658           128,981
Treasury stock                            (123,864)        (69,515)
Retained earnings                         86,723            71,393
Total stockholders' deficit               93,604            130,951
Total liabilities, convertible preferred  $230,179        $213,736
stock and stockholders' deficit

(1) Derived from audited consolidated statements as of and for the year
ended June 30, 2012.



Ubiquiti Networks Inc.
Revenue by Product Category and Geographical Area
(In thousands)
(Unaudited)
                                                              
                        Three Months Ended December Six Months Ended December
                         31,                         31,
                        2012          2011          2012         2011
                                                              
Revenue by Product                                             
Category
airMAX                   $48,752     $52,939     $80,809    $102,774
New Platforms            11,905        4,226         27,533       6,960
Other systems            4,835         18,254        8,619        31,019
Systems                  65,492        75,419        116,961      140,753
Embedded radio           1,519         2,567         3,233        5,792
Antennas/other           7,890         9,831         16,242       20,439
Total revenues           $74,901     $87,817     $136,436   $166,984
                                                              
Revenue by Geographical                                        
Area
North America            $12,106     $21,440     $32,467    $46,381
South America            17,081        24,250        27,324       44,085
Europe, the Middle East  35,929        30,356        59,073       55,139
and Africa
Asia Pacific             9,785         11,771        17,572       21,379
Total revenues           $74,901     $87,817     $136,436   $166,984

About our Non-GAAP Net Income and Adjustments

Use of Non-GAAP Financial Information

To supplement our condensed consolidated financial results prepared under
generally accepted accounting principles, or GAAP, we use non-GAAP measures of
net income and earnings per diluted share that are GAAP net income and GAAP
earnings per diluted share adjusted to exclude certain recurring costs,
expenses and gains.

We believe that the presentation of non-GAAP net income and non-GAAP earnings
per diluted share provides important supplemental information regarding
non-cash expenses, significant recurring items that we believe are important
to understanding our financial, and business trends relating to our financial
condition and results of operations.Non-GAAP net income and non-GAAP earnings
per diluted share are among the primary indicators used by management as a
basis for planning and forecasting future periods and by management and our
board of directors to determine whether our operating performance has met
specified targets and thresholds.Management uses non-GAAP net income and
non-GAAP earnings per diluted share when evaluating operating performance
because it believes that the exclusion of the items described below, for which
the amounts and/or timing may vary significantly depending upon the Company's
activities and other factors, facilitates comparability of the Company's
operating performance from period to period.We have chosen to provide this
information to investors so they can analyze our operating results in the same
way that management does and use this information in their assessment of our
business and the valuation of our Company.

Use and Economic Substance of Non-GAAP Financial Measures used by Ubiquiti
Networks

We compute non-GAAP net income and non-GAAP diluted earnings per share by
adjusting GAAP net income and GAAP earnings per diluted share to remove the
impact of recurring stock-based compensation expense and the tax effect of
these adjustments.In addition, our non-GAAP diluted earnings per share is
calculated using weighted-average shares outstanding as if Series A preferred
stock outstanding had been converted to common stock throughout the periods
presented.Examples of items excluded from net income are:

  *Recurring charges and gains, including:

    *Stock-based compensation expense is recognized in accordance with FASB
      Accounting Standards Codification, Topic 718, Stock Compensation.

  *Tax effect of non-GAAP adjustments.After adjusting to exclude the items
    described above, we apply the principles of ASC 740, Income Taxes, to
    estimate the non-GAAP income tax provision.

Usefulness of Non-GAAP Financial Information to Investors

These non-GAAP measures are not in accordance with or an alternative to GAAP
and may be materially different from other non-GAAP measures, including
similarly titled non-GAAP measures, used by other companies.The presentation
of this additional information should not be considered in isolation from, as
a substitute for, or superior to, net income or earnings per diluted share
prepared in accordance with GAAP.Non-GAAP financial measures have limitations
in that they do not reflect certain items that may have a material impact upon
our reported financial results.We expect to continue to incur expenses of a
nature similar to the non-GAAP adjustments described above, and exclusion of
these items from our non-GAAP net income and non-GAAP earnings per diluted
share should not be construed as an inference that these costs are unusual,
infrequent or non-recurring.

For more information on the non-GAAP adjustments, please see the tables
captioned "Reconciliation of GAAP Net Income to non-GAAP Net Income" and
"Reconciliation of Weighted-Average Shares Used in Computing Net Income (Loss)
Per Share of Common Stock-Diluted to Weighted-Average Shares Used In Computing
Non-GAAP Diluted EPS" included in this press release.

CONTACT: The Abernathy MacGregor Group
         Amy Feng / asf@abmac.com / 213-630-6550

Ubiquiti Networks, Inc.
 
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