F5 Networks Announces Results of Fiscal
Fourth Quarter and Year 2001
SEATTLE--Oct. 25, 2001--In line with management's October 9
guidance, F5 Networks (Nasdaq:FFIV) today announced a pro forma net
loss of $2.5 million ($0.10 per share diluted) on revenue of $26.6
million for the fourth quarter of fiscal 2001, ended September 30. In
the fourth quarter of fiscal 2000, the company earned $3.7 million
($0.16 per share diluted) on a comparable (pro forma) basis. For
fiscal 2001, the company reported a pro forma net loss of $13.9
million ($0.62 per share diluted) on revenue of $107.4 million,
compared to pro forma net income of $16.0 million ($0.69 per share
diluted) on revenue of $108.6 million in fiscal 2000.
"In the context of the uncertainty caused by the deteriorating
global economy and more recently by geopolitical events related to
September 11, F5 fared reasonably well during fiscal 2001 and the
quarter just ended," said John McAdam, F5 president and chief
executive officer. "Despite the business disruption following the
terrorist attacks on the Pentagon and the World Trade Center, we
achieved more than 90 percent of our revenue goal for the quarter, and
we continued to make progress on several operational fronts. For the
third quarter in a row, we saw improvement in our gross margin, which
came in nearly a full percentage point above the high end of our
target range. In addition, we managed to bring inventory levels down
for the third consecutive quarter, helping to generate $2.2 million in
positive cash flow from operations and increase our cash balance to
$69.3 million."
McAdam said the company's success in managing down inventories
enabled it to reduce its inventory reserves by $1.7 million. Other
non-recurring adjustments during the quarter included a $2.0 million
charge to the company's bad-debt expense in response to the filing of
Exodus Communications for Chapter 11 bankruptcy protection; and a
non-operating charge to income tax expense of $8.7 million to fully
reserve against deferred income tax assets on the balance sheet.
Including non-recurring items, the company reported a net loss of
$11.5 million ($0.46 per share diluted) for the fourth quarter of 2001
and a net loss of $30.8 million ($1.36 per share diluted) for fiscal
2001. In fiscal 2000, the company reported net income of $1.4 million
($0.06 per share diluted) for the fourth quarter and $13.7 million
($0.59 per share diluted) for the year.
Reflecting the ongoing success of F5's year-long focus on
enterprise customers and the appeal of its iControl architecture for
enterprise solutions, McAdam said the company won more than two dozen
new enterprise accounts in North America during the fourth quarter,
including General Electric, Symantec and CNA Insurance. Target, a
major win for the company's OEM partner Dell, was the company's
biggest OEM win to date.
McAdam said the company's visibility in large enterprises got a
boost during the fourth quarter when the latest Dell'Oro report showed
that F5 had displaced Nortel as the number two vendor in the Layer 4/7
server load balancing switch and appliance market. According to a
separate IDC report, also released during the fourth quarter, F5 is
the market share leader in Japan, with 22.5 percent of the Layer 4/7
server load balancing switch and appliance market.
Looking ahead, McAdam said the company's prospects for future
growth and profitability are clearly tied to the health of the economy
in general and the technology sector in particular. However, he added,
combined with its improved operational focus, the company's new
products and OEM partnerships have the potential to generate solid
growth and drive further gains in market share even in the current
economic climate. "During the past two quarters, we have signed up two
new OEM partners--Enterasys and Nokia--who could begin to have a
significant impact on our business beginning in calendar 2002. In
addition, our recently introduced BIG-IP 5000 switch appliance is
being well received by customers and we expect to see demand build
steadily throughout the year."
"If, as some have suggested, business conditions improve in the
first half of calendar 2002, I believe F5 is well-positioned and
well-equipped to benefit from any upturn in corporate spending. In the
meantime, I believe we are equally well-equipped to compete
successfully in the current environment and win a growing share of the
Layer 4/7 market," McAdam said.
Because of the uncertain outlook for the economy, McAdam said
management has set conservative targets for the current quarter and
the remainder of fiscal 2002. For the first quarter of fiscal 2002,
the company's current target is revenue of $27 million, with a loss of
$0.09 to $0.11 per share. For fiscal year 2002, McAdam said he
believes the company can grow revenue 20 percent to 25 percent and
return to profitability in the third quarter.
About F5 Networks
F5 Networks is the leader in Internet Traffic and Content
Management (iTCM), and delivers application aware networks through its
open Internet Control Architecture. F5 features the industry's leading
set of integrated products and services that manage, control and
optimize Internet traffic and content. Our solutions automatically and
intelligently deliver the best possible Internet performance,
availability and content distribution for service providers,
enterprises and e-businesses. Our products remove bandwidth congestion
and optimize the availability and speed of mission-critical Internet
servers and applications, including web publishing, content delivery,
e-commerce, caching, firewalls and more. Our solutions are widely
deployed in large enterprises, the top service providers, financial
institutions, government agencies, healthcare, and portals throughout
the world. The company is headquartered in Seattle, Washington, and
has offices throughout North America, Europe and Asia Pacific. F5
Networks is located on the web at f5.com. |
