UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 17, 2001
EXTREME NETWORKS, INC.
(Exact name of registrant as specified in its charter)
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Delaware 000-25711 77-0430270
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(State or other jurisdiction of (Commission File Number) (IRS Employer Identification No.)
incorporation)
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3585 Monroe Street
Santa Clara, California 95051
(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code: (408) 579-2800
Not Applicable
(Former name or former address, if changed since last report)
Item 5. Other Matters.
On October 17, 2001, Extreme Networks, Inc. ("Extreme") issued a press
release announcing its first quarter financial results for the period ending
September 30, 2001, which press release included forward-looking statements
relating to 2002. A copy of the press release issued by Extreme regarding the
foregoing first quarter financial results, together with forward-looking
statements relating to 2002, is filed herewith as Exhibit 99.1 and is
incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
Exhibits.
Exhibit No. Description
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99.1 Press Release dated October 17, 2001 regarding financial
information for Extreme for the fiscal quarter ended September
30, 2001 and forward-looking statements relating to 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
EXTREME NETWORKS, INC.
Date: October 23, 2001 By: /s/ Harold L. Covert
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Harold L. Covert
Chief Financial Officer
EXHIBIT INDEX
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Exhibit No. Description
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99.1 Press Release dated October 17, 2001 regarding financial
information for Extreme for the fiscal quarter ended September
30, 2001 and forward-looking statements relating to 2002.
Exhibit 99.1
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FOR IMMEDIATE RELEASE
For more information, contact:
Extreme Networks:
John Carvell Valerie Bellofatto
Director of Investor Relations Sr. Director of Public Relations
408/579-3030 408/579-2963
investor_relations@extremenetworks.com vbellofatto@extremenetworks.com
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EXTREME NETWORKS REPORTS FIRST QUARTER RESULTS
Company met analysts revenue expectations, achieved breakeven performance
and positive cash flow
SANTA CLARA, Calif., Oct. 17, 2001 - Extreme Networks, Inc., (Nasdaq: EXTR), a
leader in Ethernet networking, today reported its first quarter results for the
period ending September 30, 2001.
Net revenue for the first quarter of fiscal 2002 was $108.3 million, compared to
$119.3 million for the same period last year. On a pro-forma basis Extreme
Networks broke even for the first quarter of fiscal 2002, compared with
pro-forma net income of $9.0 million, or $0.08 per share for the first quarter
of fiscal 2001.
Actual net loss for the first quarter, which includes a charge of $40.1 million,
amortization of goodwill and intangible assets, and deferred compensation of
$14.7 million, was $36.0 million or $0.32 per share, compared with net income of
$4.5 million or $0.04 per share for the same period last year.
"Although we were faced with the national tragedies of Sept. 11 at the most
critical time during our quarter, we effectively managed all key aspects of our
business," said Gordon Stitt, CEO and president of Extreme Networks. "We
continue to gain new customers and increase our presence
in existing installations, demonstrating that even during these difficult
economic times our Ethernet switching systems remain very attractive to
companies around the world. Our customer roster shows the strong inroads we made
during the quarter in the regions that are actively building communications
infrastructures, such as Japan and China.
"We have a strong product introduction schedule that strengthens our unique
position to offer networking solutions that are simpler to manage, offer higher
performance, provide a better return on investment and makes us well poised for
growth when the sector returns to a more stable state. And, while our strategy
makes us feel optimistic about the future, we are closely monitoring economic
conditions and our operations to ensure that we continue to provide value to our
shareholders."
Conference Call
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Extreme Networks will host a conference call to discuss these results at 2 p.m.
PT; for more information visit www.extremenetworks.com.
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About Extreme Networks
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Extreme Networks, Inc., delivers the most effective applications infrastructure
by creating networks that are faster, simpler and more cost-effective.
Headquartered in Santa Clara, Calif., Extreme Networks markets its network
switching solutions in more than 50 countries. For more information, visit
www.extremenetworks.com.
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# # #
This announcement contains forward-looking statements that involve risks and
uncertainties, including statements about future events or trends, and steps
that we plan to take with respect to the financial results or financial
condition of our company. 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: (i) our rapid growth and potential risks
associated with this growth, and a limited operating history and limited history
of profitability that make it more difficult to predict results; (ii) current
economic trends in worldwide geographic markets; (iii) fluctuations in demand
for our products and services; (iv) a highly competitive business environment
for network switching equipment; and (v) the possibility that we might
experience delays in the development of new technology and products. More
information about potential factors that could affect our business and financial
results is included in our Annual Report on Form 10-K for the year ended June
30, 2001, 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
(http://www.sec.gov).
EXTREME NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per-share amounts)
(Unaudited)
Three Months Ended
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September 30, September 30,
2001 2000
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Net revenue $ 108,289 $ 119,342
Cost and expenses:
Cost of revenue 83,312 58,090
Research and development 16,411 11,743
Sales and marketing 36,985 35,115
General and administrative 8,113 4,279
Goodwill and deferred stock compensation 14,726 6,850
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Total costs and expenses 159,547 116,077
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Operating income (loss) (51,258) 3,265
Other income (expense), net (3,578) 3,709
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Income (loss) before income taxes (54,836) 6,974
Provision (benefit) for income taxes (18,828) 2,441
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Net income (loss) $ (36,008) $ 4,533
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Net income (loss) per share - basic $ (0.32) $ 0.04
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Net income (loss) per share - diluted $ (0.32) $ 0.04
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Shares used in per share calculation - basic 111,953 105,990
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Shares used in per share calculation - diluted 111,953 118,892
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EXTREME NETWORKS, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (i)
(In thousands, except per-share amounts)
(Unaudited)
Three Months Ended
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September 30, September 30,
2001 2000
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Net revenue $ 108,289 $ 119,342
Cost and expenses:
Cost of revenue 51,862 58,090
Research and development 16,411 11,743
Sales and marketing 36,985 35,115
General and administrative 5,413 4,279
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Total costs and expenses 110,671 109,227
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Operating income (loss) (2,382) 10,115
Other income, net 2,422 3,709
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Income before income taxes 40 13,824
Provision for income taxes 14 4,838
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Net income $ 26 $ 8,986
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Net income per share - basic $ 0.00 $ 0.09
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Net income per share - diluted $ 0.00 $ 0.08
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Shares used in per share calculation - basic 111,953 105,990
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Shares used in per share calculation - diluted 118,416 118,892
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(i) The pro forma statements exclude the impact of charges relating to
contract manufacturers of $12.5 million in Q1 of 2002, other costs
associated with the carrying value of inventory of $19.0 million in Q1
of 2002, the amortization of goodwill, intangibles and deferred stock
compensation in all periods, a provision for bad debts of $2.7 million
in Q1 of 2002 and minority investment write-downs in Q1 of 2002 of $6.0
million.
EXTREME NETWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
September 30, June 30,
2001 2001
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Assets
Current assets:
Cash, cash equivalents and investments $ 160,265 $ 157,096
Accounts receivable, net 52,077 63,211
Inventories, net 51,584 60,529
Deferred tax assets 25,883 35,855
Other current assets 414 2,235
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Total current assets 290,223 318,926
Property and equipment, net 57,966 57,251
Restricted investments 80,000 80,000
Investments 45,145 34,406
Goodwill and intangibles 102,034 113,886
Deferred tax assets 69,857 40,028
Other long-term assets 6,243 12,025
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Total assets $ 651,468 $ 656,522
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 50,230 $ 35,890
Deferred revenue 30,860 25,537
Accrued liabilities 49,556 46,067
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Total current liabilities 130,646 107,494
Long term deposit 266 266
Total stockholders' equity 520,556 548,762
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Total liabilities and stockholders' equity $ 651,468 $ 656,522
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