Extreme Networks Reports Fiscal Q3 Results

SANTA CLARA, Calif., April 28, 2011 /PRNewswire/ -- Extreme Networks, Inc. (Nasdaq: EXTR) today announced financial results for its 2011 fiscal third quarter ended March 27, 2011.  For the quarter, total net revenue was $75.7 million, as compared to $78.2 million in the third quarter of fiscal 2010.  Previously updated guidance to investors was for net revenue of $75.5-76.5 million.

“We’ve made good progress as we continue to reposition the company to address high-growth verticals within the broader Enterprise, Service Provider, and Data Center markets,” said Oscar Rodriguez, President & CEO of Extreme Networks.  “We have focused our product portfolio and investments to target those key market verticals to accelerate future growth and investor returns.  Our strategy is on track and already showing results in the targeted vertical markets.”

In the third quarter the Company reported a non-GAAP net loss of $4.6 million or a loss of $0.05 per diluted share.  That compares to a non-GAAP net income of $5.4 million or $0.06 per diluted share in the third quarter of last year, and to non-GAAP net income of $5.1 million or $0.06 per diluted share in the 2011 fiscal second quarter.  Non-GAAP financial results exclude the impact of stock-based compensation, restructuring charges and litigation settlements.  A reconciliation of GAAP to non-GAAP financial measures is included in the accompanying financial tables.

Net loss on a GAAP basis for the quarter was $6.8 million or $0.07 per diluted share, including the impact of a $5.4 million charge to discontinue a product.  That compares to GAAP net income of $3.7 million or $0.04 per diluted share a year ago, and GAAP net income of $8.9 million or $0.10 per diluted share in the fiscal 2011 second quarter.

For the quarter, total net revenue in North America was $26.1 million, revenue in EMEA was $32.7 million, and revenue in APAC was $16.9 million.  That compares to revenue in North America of $32.6 million, revenue in EMEA of $31.1 million, and revenue in APAC of $14.6 million a year-ago.

Total cash and investments increased $5.0 million from the fiscal 2011 second quarter to $146.7 million and the Company has no long-term debt.

2011 Fiscal Fourth Quarter non-GAAP Financial Guidance

For its 2011 fiscal fourth quarter ending July 3, 2011, the Company currently expects net revenue to be in a range of $80-$85 million and non-GAAP net income of $0.03 to $0.05 per diluted share.

Conference Call and Slide Presentation

Extreme Networks will host a conference call to discuss these results today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time).  The conference call may be heard by dialing 1-877-303-9826 (international callers dial 1-224-357-2194).  A 7-day replay will be available following the call by dialing 1-800-642-1687 (international callers dial 1-706-645-9291).  The conference call passcode is 58473013.  In addition, a live webcast and replay of the call will be available at http://investor.extremenetworks.com.  Financial information to be discussed during the conference call will be posted in the Investor Relations section of the company’s website www.extremenetworks.com.

Non-GAAP Financial Measures

Extreme Networks provides all financial information required in accordance with generally accepted accounting principles (GAAP).  To supplement our consolidated financial statements presented in accordance with GAAP, we are also providing with this press release non-GAAP net income/(loss), non-GAAP operating income/(loss) and non-GAAP earnings/(loss) per diluted share.  In preparing our non-GAAP information, we have excluded, where applicable, the impact of restructuring charges, share-based compensation and litigation settlements.  We believe that excluding these items provides both management and investors with additional insight into our current operations, the trends affecting the Company and the Company’s marketplace performance.  In particular, management finds it useful to exclude these items in order to more readily correlate the Company’s operating activities with the Company’s ability to generate cash from operations.  Accordingly, management uses these non-GAAP measures, along with the comparable GAAP information, in evaluating our historical performance and in planning our future business activities.  Please note that our non-GAAP measures may be different than those used by other companies.  The additional non-GAAP financial information we present should be considered in conjunction with, and not as a substitute for, our financial information presented in accordance with GAAP.  We have provided a non-GAAP reconciliation of the Condensed Consolidated Statement of Operations for the periods presented in this release, which are adjusted to exclude restructuring charges, share-based compensation expense and litigation settlements for these periods.  These measures should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures for comparable financial information and understanding of the Company’s ongoing performance as a business.  Extreme Networks uses both GAAP and non-GAAP measures to evaluate and manage its operations.

Extreme Networks, Inc.

Extreme Networks delivers networks for the mobile world. The company's open network solutions enable a quality user experience, providing a platform for improved business agility. From the converged mobile edge of enterprises to virtualized clouds, and from data centers to global carrier networks that backhaul mobile traffic, Extreme Networks' extensible services architecture helps set a foundation for mobility, user awareness and faster performance to empower people and machines to connect and move seamlessly. Extreme Networks is headquartered in Santa Clara, California, with offices in more than 50 countries worldwide. For more information, visit: www.extremenetworks.com

Extreme Networks is either a trademark or registered trademark of Extreme Networks, Inc. in the United States and/or other countries.

This announcement contains forward-looking statements, including our guidance regarding future results, that involve risks and uncertainties, including statements regarding the Company’s expectations regarding financial performance and product introduction.  Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including, but not limited to: a challenging macro-economic environment both in the United States and overseas; fluctuations in demand for the Company’s products and services; a highly competitive business environment for network switching equipment; the Company’s effectiveness in controlling expenses, the possibility that the Company might experience delays in the development of new technology and products; customer response to its new technology and products; the timing of any recovery in the global economy; risks related to pending or future litigation, and a dependency on third parties for certain components and for the manufacturing of the Company’s products.  The Company undertakes no obligation to update the forward-looking information in this release.  More information about potential factors that could affect the Company’s business and financial results is included in its filings with the Securities and Exchange Commission, including, without limitation, under the captions: “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Risk Factors,” which are on file with the Securities and Exchange Commission.”

SOURCE Extreme Networks, Inc.