Ruckus Wireless Reports First Quarter 2013 Financial Results PR Newswire SUNNYVALE, Calif., May 6, 2013 SUNNYVALE, Calif., May 6, 2013 /PRNewswire/ --Ruckus Wireless, Inc. (NYSE: RKUS) today announced financial results for its first quarter of 2013 ended March 31, 2013. (Logo: http://photos.prnewswire.com/prnh/20121120/MM17393LOGO) Financial Summary Revenue for the first quarter of 2013 was $57.2 million, an increase of 27% from the first quarter of 2012. GAAP net income for the first quarter of 2013 was $0.3 million, compared with net income of $3.7 million in the first quarter of 2012. Non-GAAP net income for the first quarter of 2013 was $2.9 million, compared with non-GAAP net income of $5.0 million in the first quarter of 2012. GAAP net income per diluted share was $0.00 for the first quarter of 2013 compared with $0.03 for the first quarter of 2012, based on net income attributable to common stockholders. Non-GAAP net income per diluted share was $0.03 for the first quarter of 2013 compared with $0.07 for the first quarter of 2012. 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." "While we achieved a number of important milestones since our last earnings call, we are disappointed that our Q1 revenue came in below our guidance. During the quarter, we did not experience any material change in the competitive environment. Instead, revenue was impacted by delayed deployments by several service provider customers in the Americas, as well as challenging market conditions in China," said, Selina Lo, President and Chief Executive Officer at Ruckus Wireless. "We continue to engage with customers on these delayed projects and we are encouraged by our progress. In April, we have already received orders from several of these service providers, but are finding that some other projects are taking longer to realize than we previously expected." "We believe that the fundamentals, growth drivers and long-term market opportunity for Ruckus remain intact. The company grew 27% year-over-year, with over 70% yearly growth in the Americas and Europe. Our enterprise business continues to perform well. In addition, we are pleased with our new service provider customer wins, especially amongst tier-1 operators in the U.S. and internationally. With the deployment of our SmartCell Gateway into production environments by a number of operators worldwide, I believe we have significantly bolstered our technology differentiations and strengthened our competitive advantage in the growing market for public Wi-Fi access equipment. We will continue to drive our business forward and focus on delivering value for our customers and shareholders," she said. Business & Financial Highlights o27% revenue growth over Q1 2012 ; Americas revenue grew 73.7% and EMEA revenue grew 69.9% over Q1 2012. oThe company announced today that Sprint's Custom Network Solutions (CNS) group has teamed with Ruckus to deliver enterprise, public sector and federal customers nationwide Ruckus' Smart Wi-Fi products and services as part of Sprint CNS's in-building wireless data solutions portfolio. oIn April, the company received initial orders from three new strategic tier-1 mobile operators, two of them in the U.S., including the recent Sprint CNS group customer announcement. oIn Q1, the company added ten new service provider customers, including the largest cable operator in Mexico. oThe company's SmartCell Gateway is now deployed by a number of operators, including a tier-1 cable operator in the U.S., a tier-1 cable operator in Latin America, a managed service provider in Africa, and two tier-1 mobile operators in Asia. oIn the first quarter, Ruckus Wireless added approximately 2,700 new end-customers within its enterprise business, resulting in a total of approximately 24,400 total end-customers worldwide, including Sandals Resorts International (SRI); a quick service restaurant chain with over 1,000 locations in France; an 84-site hotel chain in Europe; multiple large arenas and stadiums, and the City of San Jose, California. oIn February, we announced a partnership with Intermec targeting the distribution center and manufacturing operations sector where our solutions can improve performance and streamline workflow. Guidance We are incorporating into our forecast factors such as the current limited visibility into the China market and updated service provider deployment outlook. We expect these projects to be deployed over a longer time frame than originally anticipated. For the second quarter of 2013 ending June 30, 2013, the company expects: oTotal revenues to be in the range of $61 million to $64 million; oNon-GAAP net income per share will be between $0.03 and $0.04 using 94 million shares on a diluted basis. Conference Call Information Ruckus Wireless is hosting a conference call for analysts and investors to discuss its first quarter 2013 results and outlook for its second quarter of 2013 at 2:00 p.m. Pacific time today, May 6, 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's expectations for the second quarter of 2013 and future periods and statements regarding growth drivers for the company's business, the pace of customer orders, competitive position and future customer demand. 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 service provider customers and delays in service provider implementations, unpredictable market conditions in certain regions, 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, regulatory, economic and business conditions in the United States and internationally. 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 annual report on Form 10-K, which was filed with the U.S. Securities and Exchange Commission on March5, 2013, 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 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 second 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 non-GAAP weighted-average diluted shares outstanding. For periods presented prior to the Company's IPO, 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. Upon completion of our IPO in November 2012, all preferred stock converted to common stock. 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. 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 approximately 24,400 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 Media Contact Mark Priscaro Ruckus Wireless firstname.lastname@example.org 1+408-604-8531 Ruckus Wireless, Inc. Condensed Consolidated Statement of Operations (in thousands, except per share data) (unaudited) Three Months Ended March 31, 2013 2012 Revenues: Product $ $ 53,311 42,547 Service 3,930 2,467 Total revenues 57,241 45,014 Cost of revenues: Product 16,571 15,636 Service 2,287 945 Total cost of revenues 18,858 16,581 Gross profit 38,383 28,433 Operating expenses: Research and development 13,778 8,749 Sales and marketing 16,851 12,203 General and administrative 7,932 2,981 Total operating expenses 38,561 23,933 Operating income (loss) (178) 4,500 Interest income (expense) 34 (228) Other expense, net (77) (243) Income (loss) before income taxes (221) 4,029 Income tax benefit (expense) 535 (284) Net income $ $ 314 3,745 Net income attributable to common $ $ stockholders 314 1,039 Net income per share attributable to common stockholders: Basic $ $ - 0.06 Diluted $ $ - 0.03 Weighted-average shares used in computing net income per share attributable to common stockholders: Basic 74,201 18,097 Diluted 94,325 29,769 Ruckus Wireless, Inc. Reconciliation of GAAP to Non-GAAP Financial Measures (in thousands, except per share data) (unaudited) Three Months Ended March 31, 2013 2012 Gross Profit Reconciliation: GAAP gross profit: $ $ 38,383 28,433 Stock-based compensation 176 23 Amortization of intangible assets 330 330 Non-GAAP gross profit: $ $ 38,889 28,786 Gross Margin Reconciliation: GAAP gross margin: 67.1% 63.2% Stock-based compensation 0.3% 0.1% Amortization of intangible assets 0.6% 0.7% Non-GAAP gross margin: 67.9% 64.0% Operating Income Reconciliation: GAAP operating income: $ $ (178) 4,500 Stock-based compensation 4,030 918 Amortization of intangible assets 330 330 Non-GAAP operating income: $ $ 4,182 5,748 Operating Margin Reconciliation: GAAP operating margin: -0.3% 10.0% Stock-based compensation 7.0% 2.0% Amortization of intangible assets 0.6% 0.7% Non-GAAP operating margin: 7.3% 12.7% Net Income Reconciliation: GAAP net income: $ $ 314 3,745 Stock-based compensation 4,030 918 Amortization of intangible assets 330 330 Change in fair value of preferred stock - 114 warrants Income tax effect of non-GAAP (1,799) (93) exclusions (1) Non-GAAP net income: $ $ 2,875 5,014 Non-GAAP diluted net income per share: $ $ 0.03 0.07 Shares used in computing Non-GAAP Net Income per share reconciliation Weighted-average shares outstanding used in calculating GAAP diluted net 94,325 29,769 income per share Additional dilutive securities for - - non-GAAP income Conversion of convertible preferred - 45,779 stock and other upon IPO Weighted-average shares outstanding used in calculating non-GAAP diluted 94,325 75,548 net income per share The Company presents income tax related to non-GAAP adjustments using the effective tax rate calculated for GAAP purposes. For the three months (1) ended March 31, 2013, however, the non-GAAP effective tax rate was modified for certain one-time items, such as the retroactive benefit related to the extension of the Federal research credit, for better comparability of effects on other periods presented. Ruckus Wireless, Inc. Condensed Consolidated Balance Sheets (in thousands, except per share data) (unaudited) March 31, December 31, 2013 2012 ASSETS Current assets: Cash and cash equivalents $ $ 128,098 133,386 Accounts receivable, net of allowance for doubtful accounts of $672 and $140 as of March 42,347 41,296 31, 2013 and December 31, 2012, respectively Inventories 18,899 19,041 Deferred costs 4,803 5,188 Deferred tax assets 9,055 9,055 Prepaid expenses and other current assets 3,188 2,722 Total current assets 206,390 210,688 Property and equipment, net 9,439 8,959 Goodwill 9,031 9,031 Intangible assets, net 4,661 4,991 Noncurrent deferred tax asset 9,657 9,214 Other assets 957 956 Total assets $ $ 240,135 243,839 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ $ 13,201 16,164 Accrued compensation 7,612 9,447 Accrued liabilities 5,170 5,371 Liabilities related to acquisitions 2,000 2,000 Deferred revenue 32,760 36,613 Total current liabilities 60,743 69,595 Noncurrent deferred revenue 4,598 3,873 Other noncurrent liabilities 146 160 Total liabilities 65,487 73,628 Stockholders' equity: Common stock, $0.001 par value; 250,000 shares authorized as of March 31, 2013 and December 31, 2012, respectively: 74,326 and 74 74 74,166 shares issued and outstanding as of March 31, 2013 and December31, 2012, respectively Additional paid–in capital 197,854 193,731 Accumulated deficit (23,280) (23,594) Total stockholders' equity 174,648 170,211 Total liabilities and stockholders' $ $ equity 240,135 243,839 SOURCE Ruckus Wireless, Inc. Website: http://www.ruckuswireless.com
Ruckus Wireless Reports First Quarter 2013 Financial Results
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