RUCKUS WIRELESS INC SUNNYVALE, Calif., May 2, 2016 /PRNewswire/ -- Ruckus Wireless, Inc. (NYSE: RKUS) today announced financial results for its first quarter of 2016 ended March 31, 2016.
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Financial Summary
Revenue for the first quarter of 2016 was $100.6 million, an increase of 22.5% from the first quarter of 2015.
Non-GAAP net income was $12.2 million for the first quarter of 2016, compared with non-GAAP net income of $6.5 million for the first quarter of 2015. Non-GAAP operating income was $12.4 million for the first quarter of 2016, compared with non-GAAP operating income of $6.8 million for the first quarter of 2015.
GAAP net loss was $0.9 million for the first quarter of 2016, compared with GAAP net loss of $0.6 million for the first quarter of 2015. GAAP operating loss was $1.8 million for the first quarter of 2016, compared with GAAP operating loss of $1.5 million for the first quarter of 2015.
GAAP diluted net loss per share was $0.01 for the first quarter of 2016, compared with $0.01 for the first quarter of 2015. Non-GAAP diluted net income per share was $0.12 for the first quarter of 2016, compared with $0.07 for the first quarter of 2015.
"Our first quarter results were strong, with revenue at the high end of our updated guidance. Combining the revenue strength with a continual focus on operational execution, non-GAAP operating margin and non-GAAP earnings exceeded our previously updated guidance," said Selina Lo, president and chief executive officer, Ruckus Wireless. "I remain excited about our pending acquisition by Brocade, which will enable us to jointly deliver innovative, value-added solutions to our enterprise and service provider customers."
Business Highlights
-- Announced that Brocade entered into a definitive agreement to acquire
Ruckus Wireless, Inc. to create a company that addresses critical
networking requirements from the data center to the wireless network
edge.
-- Announced OpenG(TM) technology to address the challenge of in-building
cellular coverage and capacity. OpenG technology combines coordinated
shared spectrum, such as 3.5 GHz in the U.S., with neutral host-capable
small cells to enable cost-effective, ubiquitous in-building LTE
coverage.
-- Selected by the City of Gandhinagar in Western India for India's first
smart city deployment to provide high-speed Wi-Fi network across 30
sectors of the city to support mobile applications services,
closed-circuit TV surveillance systems, smart street lighting, IP-based
public address systems, and digital signage with environmental sensors
throughout the city.
-- Installed 802.11ac access points and virtual Smart Zone at Wifirst, an
Internet Service Provider who is the leader in offering Wi-Fi services
in student housing in France, and has now expanded to address
enterprise, data center, and retail customers. Ruckus competed against
our largest stand-alone competitor to win this business, and was
selected due to performance, scalability and complete range of solution
and high density Wi-Fi products.
-- 11ac access points in aggregate accounted for 78% of access point
product sales in the first quarter of 2016. Wave 2 comprised 11% of
access point product sales in the first quarter.
-- The company reported 22.5% year-over-year revenue growth for the
quarter; Americas revenue grew 27.5%, EMEA revenue grew 33.6% and APAC
revenue decreased by 0.5% as compared to the first quarter of 2015.
Conference Call Information
In light of the pending acquisition by Brocade Communications Systems, Inc., Ruckus Wireless will not hold a conference call to discuss its financial results.
Guidance
Due to the pending acquisition by Brocade Communications Systems, Inc., Ruckus Wireless will not be providing earnings guidance for Q2'16.
Additional Information and Where to Find It
The exchange offer referenced in this communication has commenced. This communication is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell shares, nor is it a substitute for any offer materials that Brocade Communications Systems, Inc. ("Brocade") and its acquisition subsidiary filed with the U.S. Securities and Exchange Commission ("SEC"). Brocade and its acquisition subsidiary have filed a tender offer statement on Schedule TO and may later file amendments thereto, Brocade has filed a registration statement on Form S-4 and may later file amendments thereto, and Ruckus Wireless, Inc. ("Ruckus") has filed a Solicitation/Recommendation Statement on Schedule 14D-9 and may later file amendments thereto, in each case, with the SEC with respect to the exchange offer. Brocade and Ruckus may also file other documents with the SEC regarding the transaction. THE EXCHANGE OFFER MATERIALS (INCLUDING AN OFFER TO EXCHANGE, A RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER EXCHANGE OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION STATEMENT CONTAIN IMPORTANT INFORMATION. RUCKUS STOCKHOLDERS ARE URGED TO READ THESE DOCUMENTS CAREFULLY BECAUSE THEY CONTAIN IMPORTANT INFORMATION THAT HOLDERS OF RUCKUS SECURITIES SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING EXCHANGING THEIR SECURITIES. The Offer to Exchange, the related Letter of Transmittal and certain other exchange offer documents, as well as the Solicitation/Recommendation Statement, are available to all holders of Ruckus stock at no expense to them. The exchange offer materials and the Solicitation/Recommendation Statement are available for free at the SEC's website at www.sec.gov. Additional copies may be obtained for free by contacting Brocade's Investor Relations department at (408) 333-0233 or at IR@Brocade.com. Additional copies of the Solicitation/Recommendation Statement may be obtained for free by contacting Ruckus' Investor Relations department at 408-469-4659 or at ir@ruckuswireless.com.
In addition to the Offer to Exchange, the related Letter of Transmittal and certain other exchange offer documents, as well as the Solicitation/Recommendation Statement, Brocade and Ruckus file annual, quarterly and current reports and other information with the SEC. You may read and copy any reports or other information filed by Brocade and Ruckus at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Brocade's and Ruckus' filings with the SEC are also available to the public from commercial document-retrieval services and at the website maintained by the SEC at http://www.sec.gov.
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 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 weighted-average diluted shares. 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 expense: We have excluded the effect of stock-based compensation expense. Although stock-based compensation is a key incentive offered to our employees, we continue to evaluate our business performance excluding stock-based compensation expense. Stock-based compensation will recur in future periods.
Employer payroll tax expense associated with stock-based compensation: We have excluded the employer payroll tax expense associated with stock option exercises and restricted stock releases, in order to provide a complete picture of the Company's recurring core business operating results. Stock-based compensation will continue to be used as a method to compensate certain employees for the foreseeable future.
Amortization of intangible assets: We have excluded the effect of amortization of intangible assets. 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 revenue earned during the periods presented and will contribute to future period revenue as well.
Workforce reorganization expense: We have excluded costs related to a workforce reorganization plan, including costs related to involuntary employee termination and contract termination.
Post-acquisition expenses: We have excluded costs in connection with our recent acquisition of Cloudpath Networks, Inc. ("Cloudpath"), which we would not have otherwise incurred as part of our continuing operations. Post-acquisition expenses consist primarily of incentives provided to retain former Cloudpath employees who became employees of Ruckus.
Pre-merger legal and accounting expenses: We have excluded costs incurred in connection with the planned merger with Brocade Communications System, Inc. ("Brocade"), which we would not have otherwise incurred as part of our continuing operations.
Non-cash income tax benefit: We have excluded non-cash income taxes, as the Company does not expect to pay any material federal or state income taxes in 2016.
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 condensed consolidated statements of operations, excluding the impact of stock-based compensation expense, employer payroll tax expense associated with stock-based compensation, amortization of intangible assets and post-acquisition expenses. Non-GAAP gross margin is non-GAAP gross profit divided by revenue.
Non-GAAP operating income and operating margin. Non-GAAP operating income is loss from operations as reported on our condensed consolidated statements of operations, excluding the impact of stock-based compensation expense, employer payroll tax expense associated with stock-based compensation, amortization of intangible assets, workforce reorganization expense, post-acquisition expenses and pre-merger legal and accounting expenses. Non-GAAP operating margin is non-GAAP operating income divided by revenue.
Non-GAAP net income and diluted net income per share. Non-GAAP net income is net loss as reported on our condensed consolidated statements of operations, excluding the impact of stock-based compensation expense, employer payroll tax expense associated with stock-based compensation, amortization of intangible assets, workforce reorganization expense, post-acquisition expenses, pre-merger legal and accounting expenses and non-cash income tax benefit. Non-GAAP diluted net income per share is non-GAAP net income divided by non-GAAP weighted-average diluted shares.
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, Inc. (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 70,000 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, providing 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. Ruckus, Ruckus Wireless and SmartCell are trademarks of Ruckus Wireless, Inc. in the United States and other countries.
Investor Relations Contact
Kim Watkins, CFA
Ruckus Wireless
kim.watkins@ruckuswireless.com
408-469-4659
Media & Analyst Relations Contact
Laurie Falconer
Ruckus Wireless
laurie.falconer@ruckuswireless.com
408-636-1223
RUCKUS WIRELESS, INC.
Condensed Consolidated Statements of Operations
(unaudited, in thousands, except per share amounts)
Three Months Ended
March 31,
---------
2016 2015
---- ----
Revenue:
Product $91,285 $75,297
Service 9,288 6,781
Total revenue 100,573 82,078
------- ------
Cost of revenue:
Product 28,188 23,231
Service 3,973 3,542
Total cost of revenue 32,161 26,773
------ ------
Gross profit 68,412 55,305
Operating expenses:
Research and development 26,235 21,296
Sales and marketing 30,140 26,078
General and administrative 13,807 9,434
Total operating expenses 70,182 56,808
------ ------
Operating loss (1,770) (1,503)
Interest income 312 141
Other expense, net - (78)
--- ---
Loss before income taxes (1,458) (1,440)
Income tax benefit (533) (867)
Net loss $(925) $(573)
===== =====
Net loss per share, basic and
diluted: $(0.01) $(0.01)
====== ======
Weighted average shares used in
computing net loss per share, basic
and diluted: 89,741 85,637
====== ======
RUCKUS WIRELESS, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures
(unaudited, in thousands, except percentages and per share amounts)
Three Months Ended
March 31,
---------
2016 2015
---- ----
Gross Profit Reconciliation:
----------------------------
GAAP
gross
profit: $68,412 $55,305
Stock-
based
compensation 325 316
Employer
payroll
tax
associated
with
stock-
based
compensation 3 11
Amortization
of
intangible
assets 820 705
Post-
acquisition
expenses 16 -
Non-
GAAP
gross
profit: $69,576 $56,337
------- -------
Gross Margin Reconciliation:
----------------------------
GAAP
gross
margin: 68.0% 67.4%
Stock-
based
compensation 0.4% 0.4%
Employer
payroll
tax
associated
with
stock-
based
compensation -% -%
Amortization
of
intangible
assets 0.8% 0.8%
Post-
acquisition
expenses -% -%
Non-
GAAP
gross
margin: 69.2% 68.6%
---- ----
Operating Income Reconciliation:
--------------------------------
GAAP
operating
loss: $(1,770) $(1,503)
Stock-
based
compensation 8,085 7,322
Employer
payroll
tax
associated
with
stock-
based
compensation 126 267
Amortization
of
intangible
assets 918 705
Workforce
reorganization
expense 21 -
Post-
acquisition
expenses 1,366 -
Pre-
merger
legal
and
accounting
expenses 3,635
Non-
GAAP
operating
income: $12,381 $6,791
------- ------
Operating Margin Reconciliation:
--------------------------------
GAAP
operating
margin: (1.8)% (1.8)%
Stock-
based
compensation 8.0% 8.9%
Employer
payroll
tax
associated
with
stock-
based
compensation 0.1% 0.3%
Amortization
of
intangible
assets 1.0% 0.9%
Workforce
reorganization
expense -% -%
Post-
acquisition
expenses 1.4% -%
Pre-
merger
legal
and
accounting
expenses 3.6% -%
Non-
GAAP
operating
margin: 12.3% 8.3%
---- ---
Net Income Reconciliation:
--------------------------
GAAP net
loss: $(925) $(573)
Stock-
based
compensation 8,085 7,322
Employer
payroll
tax
associated
with
stock-
based
compensation 126 267
Amortization
of
intangible
assets 918 705
Workforce
reorganization
expense 21 -
Post-
acquisition
expense 1,366 -
Pre-
merger
legal
and
accounting
expenses 3,635 -
Non-
cash
income
tax
benefit (1,043) (1,213)
Non-
GAAP
net
income: $12,183 $6,508
------- ------
Non-
GAAP
diluted
net
income
per
share: $0.12 $0.07
Shares used in computing non-GAAP
diluted Net Income per share
Reconciliation:
---------------------------------
Weighted-
average share
shares
outstanding
used in
calculating
GAAP
diluted
net
loss
per 89,741 85,637
Additional
dilutive
securities
for
non-
GAAP
income 10,678 12,121
Weighted-
average per
shares share
outstanding
used in
calculating
non-
GAAP
diluted
net
income 100,419 97,758
------- ------
RUCKUS WIRELESS, INC.
Condensed Consolidated Balance Sheets
(unaudited, in thousands, except par value)
March 31, December 31,
--------- ------------
2016 2015
---- ----
ASSETS
Current assets:
Cash and cash equivalents $59,714 $69,687
Short-term investments 166,934 160,791
Accounts receivable, net
of allowance for doubtful
accounts of $800 as of
March 31, 2016 and
December 31, 2015 80,256 70,649
Inventories 25,711 26,591
Deferred costs 1,951 3,669
Restricted cash 5,000 5,000
Prepaid expenses and other
current assets 7,234 6,168
----- -----
Total current assets 346,800 342,555
Property and equipment,
net 18,666 19,411
Goodwill 16,390 16,390
Intangible assets, net 7,707 8,625
Non-current deferred tax
asset 31,883 30,217
Other assets 1,767 1,623
Total assets $423,213 $418,821
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $23,074 $30,360
Accrued liabilities 11,209 7,748
Accrued compensation 17,100 14,902
Deferred revenue 32,086 36,602
------ ------
Total current liabilities 83,469 89,612
Non-current deferred
revenue 14,957 14,524
Other non-current
liabilities 3,274 3,152
----- -----
Total liabilities 101,700 107,288
Stockholders' equity:
Common stock, $0.001 par
value; 250,000 shares
authorized as of March
31, 2016 and December 31,
2015; 90,063 and 89,345
shares issued and
outstanding at March 31,
2016 and December 31,
2015, respectively 90 89
Additional paid-in capital 331,145 320,561
Accumulated other
comprehensive income
(loss) 128 (192)
Accumulated deficit (9,850) (8,925)
Total stockholders' equity 321,513 311,533
------- -------
Total liabilities and
stockholders' equity $423,213 $418,821
======== ========
RUCKUS WIRELESS, INC.
Summary of Cash Flows
(unaudited, in thousands)
Three Months Ended
March 31,
---------
2016 2015
---- ----
Net cash used in operating
activities $(2,899) $(5,312)
Net cash used in investing
activities (9,574) (8,531)
Net cash provided by
financing activities 2,500 4,027
Net decrease in cash and
cash equivalents $(9,973) $(9,816)
======= =======
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SOURCE Ruckus Wireless, Inc.
