Aruba Networks, Inc. (NASDAQ: ARUN) today released financial results for
its second quarter of fiscal year 2013 ended January 31, 2013.
Revenue for Q2'13 of $155.4 million grew 23 percent from the $126.3
million reported in Q2'12. GAAP net income for Q2'13 was $5.0 million,
or $0.04 per share, compared with GAAP net loss of $11.4 million, or
$0.11 per share, in Q2'12.
Non-GAAP net income for Q2'13 was $27.3 million, or $0.22 per share,
compared with Q2'12 non-GAAP net income of $19.4 million, or $0.16 per
share. GAAP and Non-GAAP earnings per share included a $0.02 per share
benefit related to the reinstatement of the U.S. federal research and
development (R&D) tax credit on January 2, 2013. A reconciliation
between GAAP and non-GAAP information is contained in the tables below.
"We delivered another strong topline quarter and achieved our fifteenth
consecutive quarter of record revenue," said Dominic Orr, Aruba's
president and chief executive officer. "Our differentiated approach and
value proposition continue to resonate with customers. A number of our
new products contributed to our growth as our industry leading product
portfolio is helping organizations around the globe securely manage the
proliferation of mobile devices and applications accessing their
networks. Aruba's application-aware MOVE architecture delivers the
security, reliability and scalability that our customers need at the
mobile edge as well as the needed visibility into all aspects of the
Commenting on the company's financial results, Michael Galvin, Aruba's
chief financial officer, added, "In the second quarter we delivered
strong financial and operating results with record operating margin.
Additionally, we generated a record $45.7 million in cash flow from
operations, purchased 1.0 million shares of common stock under the
repurchase program and ended the quarter with $402.3 million in cash,
cash equivalents and short-term investments."
Conference Call Information
Aruba will host a conference call for analysts and investors to discuss
its second quarter of fiscal year 2013 results today at 4:30 p.m.
Eastern time (1:30 p.m. Pacific time). Open to the public, investors may
access the call by dialing +1-480-629-9760. A live webcast of the
conference call will also be accessible from the "Investor Relations"
section of the company's website at www.arubanetworks.com.
Following the webcast, an archived version will be available on the
website for twelve months. To hear the replay, parties in the United
States and Canada should call 1-800-406-7325 and enter passcode 4591677.
International parties can access the replay at +1-303-590-3030 and
should enter passcode 4591677.
This press release may be deemed to contain forward-looking statements
regarding our expected strategies, markets and product positions,
performance and results.
These forward-looking statements involve risks and uncertainties, as
well as assumptions, which if they do not fully materialize or prove
incorrect, could cause our results to differ materially from those
expressed or implied by such forward-looking statements. The risks and
uncertainties that could cause our results to differ materially from
those expressed or implied by such forward-looking statements include,
among others: business and economic conditions and growth trends in the
networking industry, our vertical markets and various geographic
regions; changes in overall information technology spending; and those
risks and uncertainties included under the captions "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and Results
of Operations," in our most recent reports on Forms 10-K and 10-Q filed
with the U.S. Securities and Exchange Commission, or SEC, on October 11,
2012 and December 7, 2012, respectively, and available on the investor
relations portion of our website at www.arubanetworks.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 us as of the date of this release, and we do
not assume any obligation to update these forward-looking statements to
reflect events that occur or circumstances that exist after the date on
which they were made.
The financial statements that follow should be read in conjunction with
the notes set forth in our Quarterly Report on Form 10-Q when filed with
Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in accordance with
U.S. generally accepted accounting principles (GAAP), this press release
and the accompanying tables contain the following non-GAAP financial
measures: non-GAAP net income and non-GAAP earnings per share (EPS). The
presentation of this financial information is not intended to be
considered in isolation or as a substitute for, or superior to, the
financial information prepared and presented in accordance with GAAP. In
addition, these measures may be different from non-GAAP measures used by
other companies, limiting their usefulness for comparison purposes.
Investors are cautioned that there are material limitations associated
with the use of non-GAAP financial measures as an analytical tool. In
particular, many of the adjustments to our GAAP financial measures
reflect the exclusion of items that are recurring and will be reflected
in our financial results for the foreseeable future.
Non-GAAP net income and EPS. Aruba defines non-GAAP net income as
net income plus stock-based expenses and related payroll taxes,
amortization of acquired intangible assets and other acquisition related
expenses, and the change in the valuation of the contingent rights
liability, less the related tax effects. Aruba defines non-GAAP EPS as
non-GAAP net income divided by the weighted average diluted shares
outstanding. Aruba's management regularly uses these non-GAAP financial
measures to understand and manage its business and believes that these
non-GAAP financial measures provide meaningful supplemental information
regarding the company's performance by excluding certain expenses that
may not be indicative of Aruba's "recurring operating results," meaning
its operating performance excluding not only stock-based expenses and
related payroll taxes, but also discrete charges that are infrequent in
nature. Further, Aruba's management excludes from non-GAAP net income
the tax effects of these non-GAAP financial measures, as without
excluding these tax effects, investors would only see the gross effect
that excluding these expenses had on the company's operating results.
Because of varying available valuation methodologies, subjective
assumptions and the variety of award types that companies can use,
Aruba's management believes that providing non-GAAP financial measures
that exclude stock-based expenses allows investors to compare these
results with those of other companies, as well as providing management
with an important tool for financial and operational decision making and
for evaluating the company's operating results over different periods of
time. Similarly, by excluding amortization expense of acquired
intangible assets and other acquisition related expenses, and the change
in the valuation of the contingent rights liability, less the related
tax effects, Aruba's management believes that investors can better
understand and measure the company's recurring operating results.
There are a number of limitations related to the use of non-GAAP net
income and EPS versus net income and EPS calculated in accordance with
GAAP. First, these non-GAAP financial measures exclude some costs,
namely stock-based expenses and related payroll taxes, that are
recurring. Stock-based expenses and related payroll taxes have been and
will continue to be for the foreseeable future a significant recurring
expense in Aruba's business. Second, stock-based awards are an important
part of Aruba's employees' compensation and impact their performance.
Third, the components of the costs that Aruba excludes in its
calculation of non-GAAP net income may differ from the components that
its peer companies exclude when they report their results of operations.
Management compensates for these limitations by providing specific
information regarding the GAAP amounts excluded from these non-GAAP
financial measures and evaluates these non-GAAP financial measures
together with their most directly comparable financial measures
calculated in accordance with GAAP. The accompanying tables provide
reconciliations between these financial measures and their most directly
comparable GAAP equivalents.
A copy of this press release can be found on the investor relations page
of Aruba Networks' website at www.arubanetworks.com.
About Aruba Networks, Inc.
Aruba Networks is a leading provider of next-generation network access
solutions for the mobile enterprise. The company's Mobile Virtual
Enterprise (MOVE) architecture unifies wired and wireless network
infrastructures into one seamless access solution for corporate
headquarters, mobile business professionals, remote workers and guests.
This unified approach to access networks enables IT organizations and
users to securely address the Bring Your Own Device (BYOD) phenomenon,
dramatically improving productivity and lowering capital and operational
Listed on the NASDAQ and Russell 2000® Index, Aruba Networks is based in
Sunnyvale, California, and has operations throughout the Americas,
Europe, Middle East, Africa and Asia Pacific regions. For real-time news
updates, follow Aruba Networks on Twitter and Facebook or
read our corporate blog, Aruba
© 2013 Aruba Networks, Inc. Aruba Networks' trademarks include the
design mark for AirWave, Aruba Networks®, Aruba Wireless Networks®, the
registered Aruba the Mobile Edge Company logo, the registered AirWave
logo, Aruba Mobility Management System®, Mobile Edge Architecture®,
People Move. Networks Must Follow®, RFProtect®, Green Island®. All
rights reserved. All other trademarks are the property of their
c) Amortization expense of acquired intangible assets
and other acquisition-related expenses
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