Ruckus Wireless Reports Fourth Quarter and 2012 Financial Results - Company achieves record quarterly revenue; fourth quarter revenue grows 51% year-over-year to $62.2 million - 2012 revenue grows 79% year-over-year to $214.7 million - Adds over 2,900 new end-customers in the fourth quarter, reaching over 21,700 total end-customers - $28.1 million of cash provided by operating activities for 2012 PR Newswire SUNNYVALE, Calif., Feb. 12, 2013 SUNNYVALE, Calif., Feb. 12, 2013 /PRNewswire/ -- Ruckus Wireless, Inc. (NYSE: RKUS) today announced financial results for its fourth quarter and year-ended December 31, 2012. (Logo: http://photos.prnewswire.com/prnh/20121120/MM17393LOGO) Financial Summary Revenue for the fourth quarter was $62.2 million, an increase of 51% when compared to $41.0 million reported in the fourth quarter of 2011. GAAP net income for the fourth quarter was $1.9 million, compared with a net income of $3.2 million in the fourth quarter of 2011. Non-GAAP net income for the fourth quarter was $6.1 million, compared with non-GAAP net income of $4.9 million in the fourth quarter of 2011. GAAP net income per diluted share was $0.03 for the fourth quarter of 2012 compared to $0.02 for the fourth quarter of 2011 based on net income attributable to common stockholders. Non-GAAP net income per diluted share was $0.07 for the fourth quarter of 2012 compared to $0.07 for the fourth quarter of 2011. 2012 revenue was $214.7 million, an increase of 79% when compared to $120.0 million reported in 2011. GAAP net income for 2012 was $31.7 million, compared with net income of $4.2 million in 2011. Non-GAAP net income for 2012 was $42.9 million, compared with $7.4 million in 2011. GAAP net income per diluted share was $0.24 for 2012 compared to $0.02 for 2011 based on net income attributable to common stockholders. Non-GAAP net income per diluted share was $0.54 for 2012 compared to $0.11 for 2011. 2012 included a tax benefit of $17.2 million primarily related to the release of the valuation allowance on our net deferred tax assets. A description of the non-GAAP calculations and reconciliation to comparable GAAP measures is provided in the accompanying table entitled "Reconciliation of GAAP to Non-GAAP Financial Measures." "2012 was an exciting year for Ruckus Wireless. In addition to completing our IPO, we continued to make progress on our business objectives while growing our revenue 79% and significantly increasing profitability over the prior year," said, Selina Lo, President and Chief Executive Officer at Ruckus Wireless. "Our differentiated, carrier-class Wi-Fi technology has positioned us as a leader in the nascent service provider Wi-Fi market; we also had the highest revenue growth rate, year-over-year and sequentially, among the top five revenue producers in enterprise Wi-Fi, according to the most recent Gartner Enterprise WLAN Equipment Market Shares report. A major beneficiary of the mobile internet movement, Wi-Fi is a secular growth opportunity and Ruckus is well positioned to capitalize on it in 2013 and beyond." Guidance For the first quarter of 2013 ending March 31, 2013, the Company expects: oTotal revenues in the range of $62 million to $64 million; oNon-GAAP net income per share will be between $0.03 and $0.04 using 95 million shares on a diluted basis. Conference Call Information Ruckus Wireless will host a conference call for analysts and investors to discuss its fourth quarter and 2012 results and outlook for its first quarter of 2013 at 2:00 p.m. Pacific time on February 12, 2013. A live audio webcast of the conference call along with supplemental financial information will also be accessible from the "Investors" section of the company's website at http://investors.ruckuswireless.com. A replay will be available following the call for one week at the following numbers: (888) 286-8010 (domestic) or (617) 801-6888 (international) with ID# 73170206. An archived version of the audio from the call will be available for at least thirty days on the company's website at http://investors.ruckuswireless.com. Safe Harbor Statement This press release contains forward-looking statements, including statements regarding Ruckus Wireless' expectations for the first quarter of 2013 and statements regarding momentum in the company's business. These statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those anticipated, including, but not limited to, risks and uncertainties related to: growth of the market for Ruckus Wireless products, the lengthy sales cycle for some products, risks associated with Ruckus Wireless's rapid growth, competition, reliance on third parties, international operations, intellectual property, Ruckus Wireless's limited operating history, particularly as a new public company; and general market, political, economic and business conditions. Additional risks and uncertainties that could affect Ruckus Wireless's financial results are included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," in the company's final prospectus for its initial public offering, which was filed with the U.S. Securities and Exchange Commission on November 16, 2012, and is available on the company's investor relations website at investors.ruckuswireless.com and on the SEC's website at www.sec.gov. Additional information will also be set forth in Ruckus Wireless's annual report on Form 10-K and other filings that the company makes with the SEC from time to time. All forward-looking statements in this press release are based on information available to the company as of the date hereof, and Ruckus Wireless does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law. Non-GAAP Financial Measures To supplement our financial results presented in accordance with Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables and the related earnings conference call contain certain non-GAAP financial measures, including non-GAAP gross profit and gross margin, non-GAAP operating income and operating margin, non-GAAP net income, non-GAAP dilutive net income per share and non-GAAP diluted weighted average shares outstanding. We also provide first quarter 2013 non-GAAP dilutive net income per share and non-GAAP diluted weighted average shares outstanding. We believe these non-GAAP financial measures are helpful in understanding our past financial performance and future results. Our non-GAAP financial measures should not be considered in isolation or as a substitute for comparable GAAP measures and should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand and manage our business and forecast future periods. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. Our non-GAAP financial measures include adjustments based on the following items: Stock-based compensation expenses: We have excluded the effect of stock-based compensation from our non-GAAP operating results. Although stock-based compensation is a key incentive offered to our employees, we continue to evaluate our business performance excluding stock-based compensation expenses. Stock-based compensation expenses will recur in future periods. Amortization of intangible assets: We have excluded the effect of amortization of intangible assets from our non-GAAP operating results. Amortization of intangible assets is a non-cash expense, and it is not part of our core operations. Investors should note that the use of intangible assets contributed to revenues earned during the periods presented and will contribute to future period revenues as well. Change in fair value of preferred stock warrants: We have excluded the effect of the expense resulting from the change in fair value of preferred stock warrants from our non-GAAP operating results. The change in fair value is a non-cash expense, and it is not part of our core operations. Upon completion of our IPO in November 2012, all preferred stock warrants converted to common stock warrants. Our non-GAAP Financial Measures are described as follows: Non-GAAP gross profit and gross margin - Non-GAAP gross profit is gross profit as reported on our consolidated statements of operations, excluding the impact of stock-based compensation and intangible asset amortization expense. Non-GAAP gross margin is non-GAAP gross profit divided by net revenue. Non-GAAP operating income and operating margin - Non-GAAP operating income is income from operations as reported on our consolidated statements of operations, excluding the impact of stock-based compensation and intangible asset amortization expense. Non-GAAP operating margin is non-GAAP operating income divided by net revenue. Non-GAAP net income and diluted income per share - Non-GAAP net income is net income as reported on our consolidated statements of operations, excluding the impact of stock-based compensation, intangible asset amortization expense, and the change in fair value of preferred stock warrants. Non-GAAP diluted income per share is non-GAAP net income divided by the weighted average diluted shares outstanding. Non-GAAP diluted weighted average shares outstanding was computed to give effect to the conversion of all redeemable convertible preferred stock, as if conversion had occurred at the beginning of the period. For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, "Reconciliation of GAAP to Non-GAAP Financial Measures." ABOUT RUCKUS WIRELESS Headquartered in Sunnyvale, CA, Ruckus Wireless (NYSE: RKUS) is a global supplier of advanced wireless systems for the rapidly expanding mobile internet infrastructure market. With 2012 revenues of $214.7 million, the company offers a wide range of indoor and outdoor "Smart Wi-Fi" products to mobile carriers, broadband service providers, and corporate enterprises, and has more than 21,700 end-customers worldwide. Ruckus technology addresses Wi-Fi capacity and coverage challenges caused by the ever-increasing amount of traffic on wireless networks due to accelerated adoption of mobile devices such as smartphones and tablets. Ruckus invented and has patented state-of-the-art wireless voice, video, and data technology innovations, such as adaptive antenna arrays that extend signal range, increase client data rates, and avoid interference, ensuring consistent and reliable distribution of delay-sensitive multimedia content and services over standard 802.11 Wi-Fi. For more information, visit http://www.ruckuswireless.com. Investor Relations Contact Nicole Noutsios NMN Advisors (for Ruckus Wireless) email@example.com +1-510-315-1003 Investor Relations Contact Mark Priscaro Ruckus Wireless firstname.lastname@example.org +1-408-604-8531 Ruckus Wireless, Inc. Consolidated Statement of Operations – GAAP Basis (In thousands, except per share data) (Unaudited) Quarter Ended December Year Ended December 31, 31, 2012 2011 2012 2011 Revenues: Product $ 57,953 $ 39,197 $ 201,913 $ 114,684 Service 4,211 1,839 12,740 5,339 Total revenues 62,164 41,036 214,653 120,023 Cost of revenues: Product 19,528 14,322 70,478 44,705 Service 1,923 735 5,306 2,502 Total cost of revenues 21,451 15,057 75,784 47,207 Gross profit 40,713 25,979 138,869 72,816 Operating expenses: Research and development 13,343 7,698 43,821 24,892 Sales and marketing 16,427 11,161 56,209 32,659 General and administrative 6,444 2,653 20,237 8,524 Total operating expenses 36,214 21,512 120,267 66,075 Operating income 4,499 4,467 18,602 6,741 Interest expense - (372) (472) (1,025) Other expense, net (2,096) (788) (3,664) (1,215) Income before income taxes 2,403 3,307 14,466 4,501 Income tax benefit (531) (109) 17,238 (315) (expense) Net income $ $ $ $ 1,872 3,198 31,704 4,186 Net income attributable to $ $ $ $ common stockholders 1,676 659 9,036 379 Net income per share attributable to common stockholders: Basic $ $ $ $ 0.04 0.04 0.36 0.02 Diluted $ $ $ $ 0.03 0.02 0.24 0.02 Weighted average shares used in computing net income per share attributable to common stockholders: Basic 44,360 17,122 24,847 15,584 Diluted 60,931 26,662 37,775 23,269 Ruckus Wireless, Inc. Reconciliation of GAAP to Non-GAAP Financial Measures (In thousands, except per share data) (Unaudited) Quarter Ended December 31, Year Ended December 31, 2012 2011 2012 2011 Gross Profit Reconciliation: GAAP gross profit: $ 40,713 $ 25,979 $ 138,869 $ 72,816 Stock-based compensation 106 50 243 148 Amortization of intangible 330 289 1,320 289 assets Non-GAAP gross profit: $ 41,149 $ 26,318 $ 140,432 $ 73,253 Gross Margin Reconciliation: GAAP gross margin: 65.5% 63.3% 64.7% 60.7% Stock-based compensation 0.2% 0.1% 0.1% 0.1% Amortization of intangible 0.5% 0.7% 0.6% 0.2% assets Non-GAAP gross margin: 66.2% 64.1% 65.4% 61.0% Operating Income Reconciliation: GAAP operating income: $ 4,499 $ 4,467 $ 18,602 $ 6,741 Stock-based compensation 3,171 798 8,451 2,268 Amortization of intangible 330 289 1,320 289 assets Non-GAAP operating income: $ 8,000 $ 5,554 $ 28,373 $9,298 Operating Margin Reconciliation: GAAP operating margin: 7.3% 10.9% 8.7% 5.6% Stock-based compensation 5.1% 1.9% 3.9% 1.9% Amortization of intangible 0.5% 0.7% 0.6% 0.2% assets Non-GAAP operating margin: 12.9% 13.5% 13.2% 7.7% Net Income Reconciliation: GAAP net income: $ 1,872 $ 3,198 $ 31,704 $ 4,186 Stock-based compensation 3,171 798 8,451 2,268 Amortization of intangible 330 289 1,320 289 assets Change in fair value of 1,889 670 2,843 867 preferred stock warrants Income tax effect of (1,191) (58) (1,369) (175) non-GAAP exclusions^(1) Non-GAAP net income: $ 6,071 $ 4,897 $ 42,949 $ 7,435 Non-GAAP diluted net $ 0.07 $ 0.07 $ 0.54 $ 0.11 income per share: The Company presents income tax related to non-GAAP adjustments using the effective tax rate calculated for GAAP purposes. For the year ended (1) December 31, 2012, however, the non-GAAP effective tax rate was modified for certain one-time items such as the release of the valuation allowance for better comparability of effects on other periods presented. Quarter Ended December 31, Year Ended December 31, 2012 2011 2012 2011 Shares used in computing non-GAAP net income per share reconciliation Weighted-average shares outstanding used in 60,931 26,662 37,775 23,269 calculating GAAP diluted net income per share Additional dilutive securities for non-GAAP 26,118 - 42,000 - income Conversion of convertible - 43,285 - 43,285 preferred stock upon IPO Weighted-average shares outstanding used in calculating non-GAAP 87,049 69,947 79,775 66,554 diluted net income per share Ruckus Wireless, Inc. Consolidated Balance Sheets (In thousands) (Unaudited) December 31, 2012 2011 ASSETS Current assets: Cash and cash equivalents $ 133,386 $ 11,200 Accounts receivable, net of allowance for doubtful accounts of $140 and $117 as of December 31, 2012 and 41,296 20,402 2011, respectively Inventories 19,041 10,925 Deferred costs 5,188 1,489 Deferred tax assets 9,055 231 Prepaid expenses and other current assets 2,722 1,409 Total current assets 210,688 45,656 Property and equipment, net 8,959 4,555 Goodwill 9,031 9,031 Intangible assets, net 4,991 6,311 Noncurrent deferred tax asset 9,214 - Other assets 956 137 Total assets $ 243,839 $ 65,690 LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable $ 16,164 $ 11,319 Short-term credit facility - 5,000 Accrued compensation 9,447 4,874 Accrued liabilities 5,371 4,269 Liabilities related to acquisitions 2,000 4,600 Current portion of loans payable - 3,262 Deferred revenue 36,613 15,259 Total current liabilities 69,595 48,583 Noncurrent portion of loans payable - 5,207 Noncurrent deferred revenue 3,873 1,922 Noncurrent deferred tax liabilities - 268 Preferred stock warrant liability - 1,050 Other noncurrent liabilities 160 2,146 Total liabilities 73,628 59,176 Redeemable convertible preferred stock, $0.001 par value per share; zero and 43,609 shares authorized as of December 31, 2012 and 2011, respectively; zero and - 51,257 43,285 shares issued and outstanding as of December 31, 2012 and 2011, respectively Stockholders' equity (deficit): Preferred stock, $0.001 par value per share; 10,000 and zero shares authorized as of December 31, 2012 and 2011, - - respectively; no shares issued and outstanding as of December 31, 2012 and 2011 Common stock, $0.001 par value; 250,000 and 95,000 shares authorized as of December 31, 2012 and 2011, 74 18 respectively: 74,166 and 18,273 shares issued and outstanding at December31, 2012 and 2011, respectively Additional paid–in capital 193,731 10,537 Accumulated Deficit (23,594) (55,298) Total stockholders' equity (deficit) 170,211 (44,743) Total liabilities, redeemable convertible preferred $ 243,839 $ 65,690 stock and stockholders' equity (deficit) SOURCE Ruckus Wireless, Inc. Website: http://www.ruckuswireless.com
Ruckus Wireless Reports Fourth Quarter and 2012 Financial Results
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