SANTA CLARA, Calif., Aug. 1, 2011 /PRNewswire/ -- Extreme Networks, Inc. (Nasdaq: EXTR) today announced financial results for its 2011 fiscal fourth quarter and fiscal year ended July 3, 2011.  For the fourth quarter of fiscal 2011, total net revenue was $89.8 million, as compared to $85.5 million in the fourth quarter of fiscal 2010.  Fourth quarter net product revenue was $73.8 million, up 4% as compared to the fourth quarter of fiscal 2010, and service revenue was $16.0 million, down 8% as compared to the fourth quarter of fiscal 2010.

For fiscal year 2011, total net revenue was $334.4 million, up 8% from fiscal 2010, with net product revenue of $274.4 million, up 10% from fiscal 2010, and $60.0 million of service revenue, which was flat as compared to fiscal 2010.

"We are pleased with our ability to achieve 10% product revenue growth for fiscal year 2011, and the progress we have made transforming the Company in the areas of sales and marketing focus and product realignment," said Oscar Rodriguez, President & CEO of Extreme Networks.  "These changes, along with the recently announced restructuring to reduce our overall cost structure, lay the foundation for continued improvements in fiscal 2012.  In FY12, the Company will focus on improving its operating income, and is expecting to significantly improve EPS over FY11.  I believe Extreme Networks is positioned well to compete in the marketplace with our new products, marketing campaigns, and cost structure.  The Company is focused on executing the new vertical market strategy to offer differentiated solutions to our customers, and improved returns to our investors."

In the fourth quarter the Company reported estimated non-GAAP net income of $2.1 million or $0.02* per diluted share.  That compares to non-GAAP net income of $6.3 million or $0.07 per diluted share in the fourth quarter of last year, and to a non-GAAP net loss of $4.6 million or a loss of $0.05 per diluted share in the 2011 fiscal third 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.

Estimated net loss on a GAAP basis for the quarter was $2.1 million or a loss of $0.02* per diluted share, including the impact of a $2.8 million charge for a previously announced restructuring, net of reversals, and $1.5 million in stock-based compensation.  That compares to year-ago GAAP net income $3.4 million or $0.04 per diluted share.  The Company's fiscal year 2011 fiscal year contained 53 weeks instead of the usual 52 weeks.  As a result, the Company is still reviewing certain expense accruals that could impact its earnings per share numbers for both the fourth quarter and full year by reducing them, which if such reduction were to occur the Company believes would most likely be by a penny per share for both the fourth quarter and full year.  However, the Company has elected to release the earnings per share (EPS) which may be revised depending on the outcome of the review.  Final EPS numbers for both the fourth quarter and full year will be made available after the financial review related to the 53 week year is complete.

For the quarter, total net revenue in North America was $40.0 million, revenue in EMEA was $34.9 million, and revenue in APAC was $14.9 million.  That compares to year-ago revenue in North America of $36.3 million, revenue in EMEA of $36.8 million, and revenue in APAC of $12.4 million.

Fiscal Year Results

Net income on a non-GAAP basis for the year was $7.5 million or $0.08* per diluted share.  That compares to non-GAAP net income of $11.7 million or $0.13 per diluted share in fiscal 2010.

Net income on a GAAP basis for the year was $2.7 million or $0.03* per diluted share, including the impact of a $3.8 million charge for a previously announced restructuring, net of reversals, $5.2 million in stock-based compensation and $4.2 million in litigation settlement gain.  That compares to year-ago GAAP net income of $0.2 million or $0.00 per diluted share, including $4.2 million in restructuring charge, net of reversal, $6.2 million in stock-based compensation and $1.0 million in litigation settlement loss.

For the year, total net revenue in North America was $123.6 million, revenue in EMEA was $144.1 million, and revenue in APAC was $66.7 million.  That compares to year-ago revenue in North America of $123.2 million, revenue in EMEA of $133.7 million, and revenue in APAC of $52.4 million.

Total cash and investments increased $0.2 million from the fiscal 2011 third quarter to $147.0 million, which is an increase of $11.6 million from the fiscal 2010 fourth quarter.  The Company has no long-term debt.

2012 Fiscal First Quarter and Year non-GAAP Financial Guidance

For its 2012 fiscal first quarter ending September 30, 2011, the Company currently expects net revenue to be in a range of $74-$80 million and non-GAAP net income in the range of $0.02 to $0.05 per diluted share.  For Fiscal 2012, the Company currently expects net revenue to be in the range of  $320-$340 million and non-GAAP net income to be in the range of $0.28- $0.35 per diluted share.

* Preliminary numbers pending accounting review of the timing of expense accruals related to the 53rd week.  Potential estimated adjustment of $0.01 downward.

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 1-855-859-2056 (international callers dial 1-404-537-3406).  The conference call passcode is 83513736.  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 and the Extreme Networks logo are either registered trademarks or trademarks 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, vertical market strategy, 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: resolution of the pending accounting review for the Company's fiscal year 2011 related to the accrual of expenses due to a 53 week year instead of a 52 week year; 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.