Ruckus Wireless Reports Third Quarter 2013 Financial Results

SUNNYVALE, Calif., Oct. 30, 2013 /PRNewswire/ -- Ruckus Wireless, Inc. (NYSE: RKUS) today announced financial results for its third quarter of 2013 ended September 30, 2013.

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Financial Summary  

Revenue for the third quarter of 2013 was $68.9 million, an increase of 17.7% from the third quarter of 2012.  GAAP net income for the third quarter of 2013 was $0.1 million, compared with net income of $5.5 million in the third quarter of 2012.  Non-GAAP net income for the third quarter of 2013 was $4.5 million, compared with non-GAAP net income of $8.7 million in the third quarter of 2012.

GAAP diluted net income per share was $0.00 for the third quarter of 2013 compared with $0.04 for the third quarter of 2012, based on net income attributable to common stockholders. Non-GAAP diluted net income per share was $0.05 for the third quarter of 2013 compared with $0.11 for the third quarter of 2012.

A description of the non-GAAP calculations and reconciliation to comparable GAAP measures is provided in the accompanying table entitled "Reconciliation of GAAP to Non-GAAP Financial Measures."

"Ruckus delivered another solid quarter, reporting revenue at the top end of our guidance range and non-GAAP EPS above our expectations. Our business momentum continued to strengthen with record revenue, an expanded customer base and key industry recognition," said Selina Lo, president and chief executive officer, Ruckus Wireless. "The market continues to remain robust and we see substantial market opportunity ahead of us." 

Business & Financial Highlights

• 17.7% year-over-year Q3 revenue growth; Americas revenue grew 22.9% and EMEA revenue grew 29.7% over Q3 2012.
• Cash provided by operations in Q3 was $20.9 million.
• In the third quarter, Ruckus added over 20 new service provider end-customers and approximately 3,000 new end-customers overall, reaching over 30,000 total end-customers worldwide.
• Awarded the highest honors in the 2013 CRN Annual Report Card, which is considered the definitive benchmark for measuring excellence in the IT Channel community.
• IDC named Ruckus one of three "Leaders" in their vendor assessment of the worldwide Enterprise WLAN market for 2013 to 2014.
• The company announced in September that Ruckus ZoneFlex™ access points, its ZoneDirector™, and its SmartCell™ Gateway (SCG) 200 have been Passpoint™ certified by the Wi-Fi Alliance (WFA) based on their Hotspot 2.0 specification.

Guidance

For the fourth quarter of 2013 ending December 31, 2013, the company expects:

• Total revenue to be in the range of $70 million to $73 million;
• Non-GAAP diluted net income per share to be between $0.04 and $0.05 using 95-97 million shares.

Conference Call Information

Ruckus Wireless is hosting a conference call for analysts and investors to discuss its third quarter 2013 results and outlook for its fourth quarter of 2013 at 2:00 p.m. Pacific Daylight Time today, October 30, 2013. 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# 73911659. 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's financial expectations for the fourth quarter of 2013 and statements regarding business momentum and market opportunity. 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 for Ruckus Wireless products, the lengthy sales cycle for service provider customers and delays in service provider implementations, unpredictable market conditions in China and other regions, risks associated with Ruckus Wireless's rapid growth, competition, technological change, difficulties in integrating acquisitions, reliance on third parties, international operations, intellectual property, Ruckus Wireless's limited operating history, particularly as a new public company; 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 March 5, 2013, as updated by Ruckus Wireless's subsequent filings with the SEC, in particular its quarterly report on Form 10-Q for the quarter ended June 30, 2013 filed with the SEC on August 14, 2013. Ruckus Wireless's 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 diluted weighted-average shares outstanding. We also provide projected fourth quarter 2013 non-GAAP dilutive net income per share and non-GAAP diluted weighted-average shares outstanding. 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 expenses: We have excluded the effect of stock-based compensation from our non-GAAP operating results. Although stock-based compensation is a key incentive offered to our employees, we continue to evaluate our business performance excluding stock-based compensation expenses. Stock-based compensation expenses will recur in future periods.

Employer payroll tax expense associated with stock option exercises: We have excluded the employer payroll tax expense associated with stock option exercises in order to provide a complete picture of the company's recurring core business operating results. Stock-based compensation has been and will continue for the foreseeable future to be a significant recurring expense in the company's business.

Amortization of intangible assets: We have excluded the effect of amortization of intangible assets from our non-GAAP operating results. 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.

Change in fair value of preferred stock warrants: We have excluded the effect of the expense resulting from the change in fair value of preferred stock warrants from our non-GAAP operating results. The change in fair value is a non-cash expense, and it is not part of our core operations. Upon completion of our IPO in November 2012, all preferred stock warrants converted to common stock warrants.

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, employer payroll tax expense associated with stock option exercises and intangible asset amortization expense. Non-GAAP gross margin is non-GAAP gross profit divided by net 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, employer payroll tax expense associated with stock option exercises and intangible asset amortization expense. Non-GAAP operating margin is non-GAAP operating income divided by net revenue.

Non-GAAP net income and diluted 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, employer payroll tax expense associated with stock option exercises, intangible asset amortization expense and the change in fair value of preferred stock warrants. Non-GAAP diluted income per share is non-GAAP net income divided by the non-GAAP weighted-average diluted shares outstanding. For periods presented prior to the company's IPO, non-GAAP diluted weighted-average shares outstanding was computed to give effect to the conversion of all redeemable convertible preferred stock, as if conversion had occurred at the beginning of the period. Upon completion of our IPO in November 2012, all preferred stock converted to common stock.

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 over 30,000 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, SmartCell, ZoneDirector, and ZoneFlex are trademarks of Ruckus Wireless, Inc. in the United States and other countries. All other product or company names may be trademarks of their respective owners.

Investor Relations Contact
Nicole Noutsios
NMN Advisors (for Ruckus Wireless)
[email protected]
1+510-315-1003

Media Contact
Mark Priscaro
Ruckus Wireless
[email protected]
1+408-604-8531

SOURCE Ruckus Wireless, Inc.