Ruckus Wireless Reports Fourth Quarter and 2012 Financial Results

      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)
ir@ruckuswireless.com
+1-510-315-1003

Investor Relations Contact

Mark Priscaro
Ruckus Wireless
mark.priscaro@ruckuswireless.com
+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
 
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