Ruckus Wireless Reports First Quarter 2013 Financial Results

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

Media Contact
Mark Priscaro
Ruckus Wireless
mark.priscaro@ruckuswireless.com
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
 
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