UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 24, 2003
EXTREME NETWORKS, INC.
(Exact name of registrant as specified in its charter)
| Delaware |
000-25711 |
77-0430270 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
3585 Monroe Street
Santa Clara, California 95051
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (408) 579-2800
Not Applicable
(Former name or former address, if changed since last report)
Item 7. Financial Statements and Exhibits.
| (c) | Exhibits. |
| Exhibit No. |
Description | |
| 99.1 |
Press Release dated October 24, 2003 regarding Extreme Networks’ financial results for the quarter ended September 28, 2003. |
Item 12. Results of Operations and Financial Condition.
The information in this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, nor be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. On October 24, 2003, Extreme Networks, Inc. issued a press release announcing its financial results for the fiscal quarter ended September 28, 2003. The press release relating to the financial results for the fiscal quarter ended September 28, 2003 is attached hereto as Exhibit 99.1.
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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 24, 2003 |
By: | /s/ GORDON L. STITT | |||||
| Gordon L. Stitt President and Chief Executive Officer | ||||||||
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EXHIBIT INDEX
| Exhibit No. |
Description | |
| 99.1 |
Press Release dated October 24, 2003 regarding Extreme Networks’ financial results for the quarter ended September 28, 2003. |
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
For more information, contact:
Extreme Networks
| Investor Relations 408/579-3030 investor_relations@extremenetworks.com |
Public Relations 408/579-2963 vbellofatto@extremenetworks.com |
EXTREME NETWORKS REPORTS RETURN TO PROFITABILITY
SANTA CLARA, Calif., Oct. 24, 2003 – Extreme Networks, Inc. (Nasdaq: EXTR), a leader in Ethernet broadband networking solutions, today announced financial results for the fiscal first quarter ended Sept. 28, 2003.
Net revenue for the quarter was $87.4 million compared to $87.3 million in the fourth quarter of fiscal 2003. Operating income was $1.2 million and earnings per share was $0.02 compared to an operating loss of $14.0 million and a loss per share of $1.44 in the fourth quarter of fiscal 2003. Loss per share in the fourth quarter included a non-cash charge of $154 million to establish a valuation allowance against deferred tax assets.
“We are all very pleased with our return to profitability this quarter, which is a result of our efforts in executing the cost cutting and productivity improvement programs we began implementing over the past few quarters,” said Gordon Stitt, president and CEO. “Our new Unified Access and scalable core solutions are being well received as they provide customers with high performance and resiliency, all at a lower total cost of ownership compared to other market offerings.”
Conference Call
Extreme Networks will host a conference call to discuss these results at 8:30 a.m. EDT (5:30 a.m. PDT), for more information visit http://www.extremenetworks.com/aboutus/investor/. Financial and statistical information to be discussed during the conference call are posted on the Investor Relations section of the Company’s web-site (www.extremenetworks.com).
Extreme Networks, Inc.
Extreme Networks delivers the most effective applications and services 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.
# # #
Extreme Networks is a registered trademark of Extreme Networks, Inc., in the United States and other countries.
This announcement contains forward-looking statements that involve risks and uncertainties, including statements about customer response to new products. 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: our effectiveness in maintaining profitable operations, fluctuations in demand for our products and services; a highly competitive business environment for network switching equipment; the possibility that we might experience delays in the development of new technology and products; customer response to our new technology and product; and a dependency on third parties for certain components and for the manufacturing of our products. More information about potential factors that could affect our business and financial results is included in our 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 is 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 |
|||||||
| September 28, 2003 |
September 29, 2002 |
||||||
| Net revenue: |
|||||||
| Product |
$ | 76,756 | $ | 91,250 | |||
| Services |
10,615 | 9,319 | |||||
| Total net revenue |
87,371 | 100,569 | |||||
| Cost of revenue: |
|||||||
| Product |
33,432 | 48,386 | |||||
| Services |
9,036 | 8,894 | |||||
| Total cost of revenue |
42,468 | 57,280 | |||||
| Gross margin: |
|||||||
| Product |
43,324 | 42,864 | |||||
| Services |
1,579 | 425 | |||||
| Total gross margin |
44,903 | 43,289 | |||||
| Operating expenses: |
|||||||
| Sales and marketing |
21,825 | 27,472 | |||||
| Research and development |
13,297 | 14,509 | |||||
| General and administrative |
7,031 | 6,935 | |||||
| Amortization of deferred stock compensation |
552 | 1,303 | |||||
| Restructuring charges |
962 | — | |||||
| Total operating expenses |
43,667 | 50,219 | |||||
| Operating income (loss) |
1,236 | (6,930 | ) | ||||
| Other income, net |
2,299 | 880 | |||||
| Income (loss) before income taxes |
3,535 | (6,050 | ) | ||||
| Provision (benefit) for income taxes |
920 | (2,017 | ) | ||||
| Net income (loss) |
$ | 2,615 | $ | (4,033 | ) | ||
| Net income (loss) per share — basic |
$ | 0.02 | $ | (0.04 | ) | ||
| Net income (loss) per share — diluted |
$ | 0.02 | $ | (0.04 | ) | ||
| Shares used in per share calculation — basic |
116,621 | 114,420 | |||||
| Shares used in per share calculation — diluted |
118,822 | 114,420 | |||||
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EXTREME NETWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
| September 28, 2003 |
June 29, 2003 | |||||
| Assets | ||||||
| Current assets: |
||||||
| Cash, cash equivalents and short-term investments |
$ | 156,623 | $ | 163,617 | ||
| Accounts receivable, net |
27,358 | 26,794 | ||||
| Inventories, net |
15,971 | 18,710 | ||||
| Prepaid expenses and other current assets |
11,342 | 16,878 | ||||
| Total current assets |
211,294 | 225,999 | ||||
| Property and equipment, net |
70,639 | 73,767 | ||||
| Marketable securities |
246,672 | 238,540 | ||||
| Other assets |
10,493 | 11,951 | ||||
| Total assets |
$ | 539,098 | $ | 550,257 | ||
| Liabilities and stockholders’ equity | ||||||
| Current liabilities: |
||||||
| Accounts payable |
$ | 9,005 | $ | 19,020 | ||
| Deferred revenue |
49,213 | 48,298 | ||||
| Accrued warranty |
8,837 | 10,200 | ||||
| Other accrued liabilities |
45,876 | 52,255 | ||||
| Total current liabilities |
112,931 | 129,773 | ||||
| Other long-term liabilities |
22,681 | 21,248 | ||||
| Convertible subordinated notes |
200,000 | 200,000 | ||||
| Total stockholders’ equity |
203,486 | 199,236 | ||||
| Total liabilities and stockholders’ equity |
$ | 539,098 | $ | 550,257 | ||
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EXTREME NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Three Months Ended |
||||||||
| September 28, 2003 |
September 29, 2002 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net income (loss) |
$ | 2,615 | $ | (4,033 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||
| Depreciation |
5,301 | 8,652 | ||||||
| Provision for doubtful accounts |
(200 | ) | — | |||||
| Deferred income taxes |
— | (2,266 | ) | |||||
| Amortization of deferred stock compensation |
552 | 1,303 | ||||||
| Restructuring charges |
962 | — | ||||||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
(364 | ) | 11,589 | |||||
| Inventories |
2,739 | (9,571 | ) | |||||
| Prepaid expenses and other current and noncurrent assets |
6,994 | 2,565 | ||||||
| Accounts payable |
(10,015 | ) | 6,736 | |||||
| Deferred revenue |
915 | 4,415 | ||||||
| Accrued warranty |
(1,363 | ) | 3,049 | |||||
| Other accrued liabilities |
(5,786 | ) | (9,441 | ) | ||||
| Net cash provided by operating activities |
2,350 | 12,998 | ||||||
| Cash flows from investing activities: |
||||||||
| Capital expenditures |
(2,295 | ) | (7,008 | ) | ||||
| Purchases and maturities of investments, net |
339 | 4,347 | ||||||
| Net cash used in investing activities |
(1,956 | ) | (2,661 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Proceeds from issuance of common stock |
1,458 | 1,942 | ||||||
| Net cash provided by financing activities |
1,458 | 1,942 | ||||||
| Net increase in cash and cash equivalents |
1,852 | 12,279 | ||||||
| Cash and cash equivalents at beginning of period |
44,340 | 71,830 | ||||||
| Cash and cash equivalents at end of period |
$ | 46,192 | $ | 84,109 | ||||
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