Re: FFIV >>>
News January 22, 16:05 Eastern Time
F5 Networks Announces Fiscal First Quarter Profit
SEATTLE, Jan 22, 2003 (BUSINESS WIRE) -- F5 Networks (Nasdaq: FFIV) today
announced net income of $520,000 ($0.02 per share) on revenue of $27.1 million
for the first quarter of fiscal 2003. In the first quarter of fiscal 2002 the
company reported a net loss of $2.1 million ($0.08 per share) on revenue of
$27.0 million.
F5 president and chief executive officer John McAdam said the company's return
to profitability was a result of continuing improvements in its business model,
reflected in several key metrics including improved gross margin and lower
operating expenses. In addition, he said, the company generated positive cash
flow from operations for the seventh consecutive quarter, increasing cash and
investments to $85.2 million.
"During the first quarter, the products we announced in late October got off to
a strong start and were well-accepted by our customer base. These new products
include the BIG-IP(R) 5100 and BIG-IP 2400 application switches, featuring
faster processors and improved SSL performance, and the BIG-IP 1000, a new line
of entry-level application switches. The BIG-IP 2400 also features our new
Packet Velocity ASIC which leads the industry in Layer 4 performance. All three
products began shipping in early December with version 4.5 of our BIG-IP
Application Traffic Management software incorporating Universal Inspection
Engine (UIE), which can identify any value in a TCP/IP header or payload, and
iRules, which can direct, persist, or filter traffic based on values identified
by UIE," McAdam said.
"In conjunction with continued successful execution of our iControl(TM)
strategy, we believe the superior performance and functionality of our new
products will be primary drivers of our revenue growth over the next three
quarters. In the first quarter, more than 20 percent of product sales were
iControl-related. On January 15, we announced our new Solution Center, designed
to demonstrate online how customers can obtain increased ROI from existing
applications by using F5 products. Accessible through the F5 Web site, the
Solution Center's Test Lab allows customers, partners and prospects to conduct
application integration and interoperability testing with third-party
applications, then try out various interoperability and integration scenarios
using our products and leading infrastructure software, such as BEA WebLogic,
Microsoft .NET, Oracle9i Application Server, and Siebel 7, as well as other
applications such as Intrusion Detection Systems," McAdam said.
Underpinned by the strength of its current product line and the unique
capabilities of its new Solution Center, McAdam added, F5 is well-positioned,
both financially and from a market perspective, to take advantage of
opportunities in the emerging markets for blade servers, Web services and
wireless Internet applications, which could begin to impact the company's
results in the second half of fiscal 2003.
For the second quarter of fiscal 2003, he said the company has set a target of
$27.0 million to $28.5 million in revenue with net income of $0.02 to $0.04 per
share.
About F5 Networks
F5 Networks is the industry leader in Application Traffic Management, enabling
enterprises and service providers to optimize any mission-critical application
or web service, providing secure and predictable delivery of application traffic
in an unpredictable environment. Through F5's unique open iControl(TM) API,
third party applications and network devices can take an active role in shaping
network traffic, delivering application aware networks that allow customers to
direct traffic based on their exact business requirements. Our solutions
optimize the availability, security and speed of mission-critical servers and
applications, including enterprise applications, web services, mobile IP
applications, web publishing, content delivery, e-commerce, caching, firewalls
and more. F5's 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, Japan and Asia
Pacific. F5 Networks is located on the web at www.f5.com.
Forward Looking Statements
Statements in this press release concerning drivers of revenue growth over the
next three quarters, positioning relative to the emerging markets for blade
servers, Web services and wireless Internet applications, whether this
positioning will impact results, the target revenue and net income for the
second quarter of fiscal 2003 and other statements that are not historical facts
are forward-looking statements. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company, or industry results, to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others: the acceptance of the new BIG-IP application traffic switch
products and the company's iControl architecture; competitive pricing pressures;
increased sales discounts; the timely development and introduction of additional
new products and features by F5 or its competitors or other factors; F5's
ability to sustain or develop distribution relationships; F5's ability to
attract, train and retain qualified marketing, sales, professional services and
customer support personnel; F5's ability to expand in the international markets
and the unpredictability of F5's sales cycle. More information about potential
risk factors that could affect F5's business and financial results is included
in the Company's annual report on Form 10K for the fiscal year ended September
30, 2002, and other public filings with the Securities and Exchange Commission.
F5 Networks, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
December 31, September 30,
2002 2002
-------------- --------------
(unaudited)
Assets
Current assets
Cash and cash equivalents $9,581 $20,801
Short-term investments 52,284 59,532
Accounts receivable, net of allowances
of $4,640 and $5,452 19,322 20,404
Inventories 253 349
Other current assets 5,223 4,713
-------------- --------------
Total current assets 86,663 105,799
-------------- --------------
Restricted cash 6,000 6,000
Property and equipment, net 11,898 12,211
Long-term investments 23,382 1,346
Other assets, net 967 933
-------------- --------------
Total assets $128,910 $126,289
============== ==============
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable $4,152 $3,685
Accrued liabilities 12,475 13,546
Deferred revenue 14,799 14,058
-------------- --------------
Total current liabilities 31,426 31,289
-------------- --------------
Long-term liabilities 1,372 1,315
Commitments and contingencies
Shareholders' equity
Preferred stock, no par value; 10,000
shares authorized, no shares
outstanding - -
Common stock, no par value; 100,000
shares authorized 26,007 and 25,730
shares
issued and outstanding 130,663 128,876
Accumulated other comprehensive income 509 454
Unearned compensation (28) (93)
Accumulated deficit (35,032) (35,552)
-------------- --------------
Total shareholders' equity 96,112 93,685
-------------- --------------
Total liabilities and shareholders'
equity $128,910 $126,289
============== ==============
F5 Networks, Inc.
Condensed Consolidated Statements of Operations
(unaudited, in thousands, except per share amounts)
Three months ended
December 31,
---------------------------
2002 2001
------------- -------------
Net revenues
Products $19,501 $20,658
Services 7,555 6,367
------------- -------------
Total 27,056 27,025
------------- -------------
Cost of net revenues
Products 4,057 5,963
Services 2,161 2,694
------------- -------------
Total 6,218 8,657
------------- -------------
Gross profit 20,838 18,368
------------- -------------
Operating expenses
Sales and marketing 12,759 12,440
Research and development 4,395 4,137
General and administrative 3,350 4,045
Amortization of unearned compensation 66 133
------------- -------------
Total 20,570 20,755
------------- -------------
Income (loss) from operations 268 (2,387)
Other income, net 462 505
------------- -------------
Income (loss) before income taxes 730 (1,882)
Provision for income taxes 210 189
------------- -------------
Net income (loss) $520 $(2,071)
============= =============
Net income (loss) per share - basic $0.02 $(0.08)
============= =============
Weighted average shares - basic 25,883 24,883
============= =============
Net income (loss) per share - diluted $0.02 $(0.08)
============= =============
Weighted average shares - diluted 26,935 24,883
============= ============= |
