RUCKUS WIRELESS INC SUNNYVALE, Calif., Feb. 9, 2016 /PRNewswire/ -- Ruckus Wireless, Inc. (NYSE: RKUS) today announced financial results for its fourth quarter and fiscal year ended December 31, 2015.
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Financial Summary
Revenue for the fourth quarter of 2015 was $100.1 million, an increase of 16.6% from the fourth quarter of 2014.
GAAP net income was $2.8 million for the fourth quarter of 2015, compared with GAAP net income of $2.9 million for the fourth quarter of 2014. GAAP operating income was $3.5 million for the fourth quarter of 2015, compared with GAAP operating income of $3.2 million for the fourth quarter of 2014.
Non-GAAP net income was $13.4 million for the fourth quarter of 2015, compared with non-GAAP net income of $11.5 million for the fourth quarter of 2014. Non-GAAP operating income was $14.1 million for the fourth quarter of 2015, compared with non-GAAP operating income of $11.8 million for the fourth quarter of 2014.
GAAP diluted net income per share was $0.03 for the fourth quarter of 2015, compared with $0.03 for the fourth quarter of 2014. Non-GAAP diluted net income per share was $0.13 for the fourth quarter of 2015, compared with $0.12 for the fourth quarter of 2014.
Revenue for 2015 was $373.4 million, an increase of 14.2% from 2014. GAAP net income was $4.7 million for 2015, compared with $8.2 million for 2014. GAAP operating income was $7.4 million for 2015, compared with $14.4 million for 2014.
Non-GAAP net income for 2015 was $42.4 million, compared with $42.0 million for 2014. Non-GAAP operating income for 2015 was $44.0 million, compared with $43.3 million for 2014.
GAAP diluted net income per share was $0.05 for 2015, compared with $0.09 for 2014. Non-GAAP diluted net income per share was $0.43 for 2015 compared with $0.44 for 2014.
"Our fourth quarter revenue was impacted by a multi-million dollar E-rate opportunity that was postponed late in the quarter. Nevertheless, we achieved non-GAAP operating margin at the high-end of guidance, demonstrating strong operating execution," said Selina Lo, president and chief executive officer, Ruckus Wireless. "I believe our strategy remains sound and our product portfolio differentiated, keeping Ruckus in a position to outgrow the market again in 2016. We are equally focused on driving bottom-line growth in 2016, and we are committed to grow earnings faster than revenue, driving operating margin expansion throughout the year."
Business & Financial Highlights
-- Shipped the industry's first virtual data plane for Wi-Fi that
segregates data traffic from control traffic on large wireless networks,
called Virtual SmartZone Data Plane (vSZ-D). vSZ-D works with Ruckus'
Virtual SmartZone controllers, which provide a software-based system for
managing wireless networks.
-- Shipped 802.11ac wave 2 access points for Golden 1 Center, the future
home of the Sacramento Kings, and the adjacent public plaza and
surrounding mixed-use development.
-- Selected by Western Sydney University to roll out a next generation
high-capacity, high-speed Wi-Fi network using 802.11ac wave 2 access
points across the multi-campus university serving more than 40,000
students.
-- Installed 802.11ac access points at UNINOVE - Universidade Nove de Julho
- one of the largest higher education institutions in Brazil. Ruckus
access points were deployed across five campuses serving 150,000
students.
-- 11ac access points in aggregate accounted for 79% of access point
product sales in the fourth quarter of 2015, up from 74% in the third
quarter of 2015. Wave 2 comprised 11% of access point product sales in
the fourth quarter.
-- The company reported 16.6% year-over-year revenue growth for the
quarter; Americas revenue grew 17.3%, EMEA revenue grew 25.4% and APAC
revenue grew 5.9% as compared to the fourth quarter of 2014.
-- Non-GAAP operating margin was 14.0%, an increase compared with 13.9% in
the third quarter of 2015 and 13.8% in the fourth quarter of 2014.
-- Added 11 new service provider end-customers in the fourth quarter of
2015, bringing the total service provider end-customer base to over 260.
-- Added approximately 4,300 enterprise end-customers in the fourth quarter
of 2015, bringing the total enterprise end-customer base to over 65,000.
-- For the second year in a row, Ruckus was named a "Leader" in the IDC
MarketScape: Worldwide Enterprise WLAN 2015-2016 Vendor Assessment.
Ruckus is the only pure-play wireless vendor in the leaders category.
IDC MarketScape credits Ruckus for "best-in-class RF innovation" and
cited "portfolio enhancements to expand both upmarket and downmarket" in
its assessment.
Guidance
For the first quarter of 2016 ending March 31, 2016, the company expects:
-- Total revenue in the range of $96 million to $101 million;
-- Operating margin in the range of 8.5% to 11% and;
-- Non-GAAP diluted net income per share of $0.08 to $0.10 using
approximately 100 to 101 million shares.
Conference Call Information
Ruckus Wireless is hosting a conference call for analysts and investors to discuss its fourth quarter and fiscal 2015 results and outlook for its first quarter of 2016 at 2:00 p.m. Pacific Daylight Time today, February 9, 2016. 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 on the Ruckus Wireless Investor Relations website or for one week at the following numbers: (855) 859-2056 (domestic), (404) 537-3406 (international) using ID# 21480814. 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' financial expectations for the first quarter of 2016 and the 2016 fiscal year. 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, competitive market position, growth in customer base, the relative success of Ruckus Wireless' chosen strategic priorities, timing and pace of E-rate funded opportunities, unpredictable market conditions, adoption of new products and services, technological change and differentiators, the pace and timing of new product introductions, the pace and timing of customer deployments, Ruckus Wireless' ability to decrease expenses, currency fluctuations 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 (the "SEC") on February 25, 2015 and our quarterly report on Form 10-Q for the third quarter of 2015 which was filed with the SEC on October 30, 2015. Ruckus Wireless' SEC filings are available on the company's investor relations website at http://investors.ruckuswireless.com and on the SEC's website at www.sec.gov. 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 weighted-average diluted shares. We also provide projected first quarter 2016 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.
Legal settlement expense (benefit): We have excluded non-recurring patent infringement settlements. We will continue to be party to litigation and subject to claims related to intellectual property infringement arising in the ordinary course of business.
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.
Non-cash income tax expense: We have excluded non-cash income taxes, as the Company does not expect to pay any material federal or state income taxes in 2015 or 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 income 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, legal settlement expense (benefit), net, and post-acquisition 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 income 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, legal settlement expense (benefit), net, post-acquisition expenses and non-cash income tax expense. 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 65,300 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 Years Ended
December 31, December 31,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
Revenue:
Product $91,896 $79,209 $343,659 $303,446
Service 8,220 6,657 29,717 23,473
Total revenue 100,116 85,866 373,376 326,919
------- ------ ------- -------
Cost of revenue:
Product 27,872 23,753 105,314 90,651
Service 3,958 3,384 14,741 12,454
Total cost of revenue 31,830 27,137 120,055 103,105
Gross profit 68,286 58,729 253,321 223,814
------ ------ ------- -------
Operating expenses:
Research and development 25,851 20,457 94,234 77,164
Sales and marketing 28,657 26,232 109,864 98,634
General and
administrative 10,232 8,810 41,799 33,622
Total operating expenses 64,740 55,499 245,897 209,420
------ ------ ------- -------
Operating income 3,546 3,230 7,424 14,394
Interest income 223 66 701 199
Other expense, net (180) (153) (524) (463)
---- ---- ---- ----
Income before income
taxes 3,589 3,143 7,601 14,130
Income tax expense 769 219 2,911 5,940
--- --- ----- -----
Net income $2,820 $2,924 $4,690 $8,190
====== ====== ====== ======
Net income per share:
Basic $0.03 $0.03 $0.05 $0.10
===== ===== ===== =====
Diluted $0.03 $0.03 $0.05 $0.09
===== ===== ===== =====
Weighted average shares used in computing
net income per share:
Basic 88,974 84,611 87,418 82,908
====== ====== ====== ======
Diluted 96,878 94,316 95,851 93,668
====== ====== ====== ======
RUCKUS WIRELESS, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures
(unaudited, in thousands, except percentages and per share data)
Three Months Ended Years Ended
December 31, December 31,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
Gross Profit Reconciliation:
----------------------------
GAAP gross profit: $68,286 $58,729 $253,321 $223,814
Stock-based compensation 285 328 1,097 1,092
Employer payroll tax
associated with stock-
based compensation 5 2 34 36
Amortization of
intangible assets 871 705 2,986 2,320
Post-acquisition
expenses 60 - 60 -
--- --- --- ---
Non-GAAP gross profit: $69,507 $59,764 $257,498 $227,262
------- ------- -------- --------
Gross Margin Reconciliation:
----------------------------
GAAP gross margin: 68.2% 68.4% 67.8% 68.5%
Stock-based compensation 0.3% 0.4% 0.3% 0.3%
Employer payroll tax
associated with stock-
based compensation - % - % - % - %
Amortization of
intangible assets 0.8% 0.8% 0.9% 0.7%
Post-acquisition
expenses 0.1% - % - % - %
--- --- ---
Non-GAAP gross margin: 69.4% 69.6% 69.0% 69.5%
---- ---- ---- ----
Operating Income Reconciliation:
--------------------------------
GAAP operating income: $3,546 $3,230 $7,424 $14,394
Stock-based compensation 7,481 7,725 28,793 26,594
Employer payroll tax
associated with stock-
based compensation 83 152 690 754
Amortization of
intangible assets 871 705 2,986 2,320
Workforce reorganization
expense 569 - 1,055 -
Legal settlement expense
(benefit), net - - 1,550 (760)
Post-acquisition
expenses 1,511 - 1,511 -
----- --- ----- ---
Non-GAAP operating
income: $14,061 $11,812 $44,009 $43,302
------- ------- ------- -------
Operating Margin Reconciliation:
--------------------------------
GAAP operating margin: 3.5% 3.8% 2.0% 4.4%
Stock-based compensation 7.5% 9.0% 7.7% 8.1%
Employer payroll tax
associated with stock-
based compensation 0.1% 0.2% 0.2% 0.2%
Amortization of
intangible assets 0.8% 0.8% 0.8% 0.7%
Workforce reorganization
expense 0.6% - % 0.3% - %
Legal settlement expense
(benefit), net - % - % 0.4% (0.2)%
Post-acquisition
expenses 1.5% - % 0.4% - %
--- --- --- --- ---
Non-GAAP operating
margin: 14.0% 13.8% 11.8% 13.2%
---- ---- ---- ----
Net Income Reconciliation:
--------------------------
GAAP net income: $2,820 $2,924 $4,690 $8,190
Stock-based compensation 7,481 7,725 28,793 26,594
Employer payroll tax
associated with stock-
based compensation 83 152 690 754
Amortization of
intangible assets 871 705 2,986 2,320
Workforce reorganization
expense 569 - 1,055 -
Legal settlement expense
(benefit), net - - 1,550 (760)
Post-acquisition
expenses 1,511 - 1,511 -
Non-cash income tax
expense 20 37 1,088 4,914
Non-GAAP net income: $13,355 $11,543 $42,363 $42,012
------- ------- ------- -------
Non-GAAP diluted net
income per share: $0.13 $0.12 $0.43 $0.44
Shares used in computing non-GAAP diluted
net income per share reconciliation:
-----------------------------------------
Weighted-average shares
outstanding used in
calculating GAAP
diluted net income per
share 96,878 94,316 95,851 93,668
Additional dilutive
securities for non-
GAAP income 3,589 3,468 3,134 2,603
Weighted-average shares
outstanding used in
calculating non-GAAP
diluted net income per
share 100,467 97,784 98,985 96,271
------- ------ ------ ------
RUCKUS WIRELESS, INC.
Condensed Consolidated Balance Sheets
(unaudited, in thousands, except par value)
December 31,
------------
2015 2014
---- ----
ASSETS
Current assets:
Cash and
cash
equivalents $69,687 $56,083
Short-term
investments 160,791 142,706
Accounts
receivable, and 2014
net of
allowance
for
doubtful
accounts
of $800 as
of
December
31, 2015 70,649 59,553
Inventories 26,591 21,064
Deferred
costs 3,669 4,414
Deferred
tax assets - 6,205
Restricted
cash 5,000 -
Prepaid
expenses
and other
current
assets 6,168 5,367
----- -----
Total
current
assets 342,555 295,392
Property
and
equipment,
net 19,411 13,636
Goodwill 16,390 9,945
Intangible
assets,
net 8,625 7,351
Non-
current
deferred
tax asset 30,217 21,166
Restricted
cash - 5,000
Other
assets 1,623 1,504
Total
assets $418,821 $353,994
======== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts
payable $30,360 $23,538
Accrued
compensation 14,902 13,765
Accrued
liabilities 7,748 5,282
Deferred
revenue 36,602 39,231
------ ------
Total
current
liabilities 89,612 81,816
Non-
current
deferred
revenue 14,524 10,554
Non-
current
deferred
tax
liabilities 111 596
Other non-
current
liabilities 3,041 1,379
----- -----
Total
liabilities 107,288 94,345
Stockholders' equity:
Common
stock, 89,345 and
$0.001 par 85,110
value; shares
250,000 issued and
shares outstanding
authorized at
as of December
December 31, 2015
31, 2015 and 2014,
and 2014; 89 85
Additional
paid-in
capital 320,561 273,276
Accumulated
other
comprehensive
loss (192) (97)
Accumulated
deficit (8,925) (13,615)
------ -------
Total
stockholders'
equity 311,533 259,649
------- -------
Total
liabilities
and
stockholders'
equity $418,821 $353,994
======== ========
RUCKUS WIRELESS, INC.
Summary of Cash Flows
(unaudited, in thousands)
Three Months Ended Years Ended
December 31, December 31,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
Net cash
provided by
operating
activities $14,380 $5,223 $35,864 $36,726
Net cash used
in investing
activities (25,495) (74,163) (40,725) (93,036)
Net cash
provided by
financing
activities 5,187 8,187 18,465 21,111
Net increase
(decrease) in
cash and cash
equivalents $(5,928) $(60,753) $13,604 $(35,199)
======= ======== ======= ========
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SOURCE Ruckus Wireless, Inc.
