SUNNYVALE, Calif., May 2, 2016 /PRNewswire/ -- Ruckus
Wireless, Inc. (NYSE: RKUS) today announced financial results for its first quarter of 2016 ended March
31, 2016.
Financial Summary
Revenue for the first quarter of 2016 was $100.6 million, an increase of 22.5% from the first
quarter of 2015.
Non-GAAP net income was $12.2 million for the first quarter of 2016, compared with non-GAAP net
income of $6.5 million for the first quarter of 2015. Non-GAAP operating income was $12.4 million for the first quarter of 2016, compared with non-GAAP operating income of $6.8 million for the first quarter of 2015.
GAAP net loss was $0.9 million for the first quarter of 2016, compared with GAAP net loss of
$0.6 million for the first quarter of 2015. GAAP operating loss was $1.8
million for the first quarter of 2016, compared with GAAP operating loss of $1.5 million for
the first quarter of 2015.
GAAP diluted net loss per share was $0.01 for the first quarter of 2016, compared with
$0.01 for the first quarter of 2015. Non-GAAP diluted net income per share was $0.12 for the first quarter of 2016, compared with $0.07 for the first quarter of
2015.
"Our first quarter results were strong, with revenue at the high end of our updated guidance. Combining the revenue strength
with a continual focus on operational execution, non-GAAP operating margin and non-GAAP earnings exceeded our previously updated
guidance," said Selina Lo, president and chief executive officer, Ruckus Wireless. "I remain
excited about our pending acquisition by Brocade, which will enable us to jointly deliver innovative, value-added solutions to
our enterprise and service provider customers."
Business Highlights
- Announced that Brocade entered into a definitive agreement to acquire Ruckus Wireless, Inc. to create a company that
addresses critical networking requirements from the data center to the wireless network edge.
- Announced OpenG™ technology to address the challenge of in-building cellular coverage and capacity. OpenG technology
combines coordinated shared spectrum, such as 3.5 GHz in the U.S., with neutral host-capable small cells to enable
cost-effective, ubiquitous in-building LTE coverage.
- Selected by the City of Gandhinagar in Western India for India's first smart city deployment to provide high-speed Wi-Fi network across 30 sectors of the city to
support mobile applications services, closed-circuit TV surveillance systems, smart street lighting, IP-based public address
systems, and digital signage with environmental sensors throughout the city.
- Installed 802.11ac access points and virtual Smart Zone at Wifirst, an Internet Service Provider who is the leader in
offering Wi-Fi services in student housing in France, and has now expanded to address
enterprise, data center, and retail customers. Ruckus competed against our largest stand-alone competitor to win this business,
and was selected due to performance, scalability and complete range of solution and high density Wi-Fi products.
- 11ac access points in aggregate accounted for 78% of access point product sales in the first quarter of 2016. Wave 2
comprised 11% of access point product sales in the first quarter.
- The company reported 22.5% year-over-year revenue growth for the quarter; Americas revenue grew 27.5%, EMEA revenue grew
33.6% and APAC revenue decreased by 0.5% as compared to the first quarter of 2015.
Conference Call Information
In light of the pending acquisition by Brocade Communications Systems, Inc., Ruckus Wireless will not hold a conference call
to discuss its financial results.
Guidance
Due to the pending acquisition by Brocade Communications Systems, Inc., Ruckus Wireless will not be providing earnings
guidance for Q2'16.
Additional Information and Where to Find It
The exchange offer referenced in this communication has commenced. This communication is for informational purposes only
and is neither an offer to purchase nor a solicitation of an offer to sell shares, nor is it a substitute for any offer materials
that Brocade Communications Systems, Inc. ("Brocade") and its acquisition subsidiary filed with the U.S. Securities and Exchange
Commission ("SEC"). Brocade and its acquisition subsidiary have filed a tender offer statement on Schedule TO and may later file
amendments thereto, Brocade has filed a registration statement on Form S-4 and may later file amendments thereto, and Ruckus
Wireless, Inc. ("Ruckus") has filed a Solicitation/Recommendation Statement on Schedule 14D-9 and may later file amendments
thereto, in each case, with the SEC with respect to the exchange offer. Brocade and Ruckus may also file other documents with the
SEC regarding the transaction. THE EXCHANGE OFFER MATERIALS (INCLUDING AN OFFER TO EXCHANGE, A RELATED LETTER OF TRANSMITTAL AND
CERTAIN OTHER EXCHANGE OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION STATEMENT CONTAIN IMPORTANT INFORMATION. RUCKUS
STOCKHOLDERS ARE URGED TO READ THESE DOCUMENTS CAREFULLY BECAUSE THEY CONTAIN IMPORTANT INFORMATION THAT HOLDERS OF RUCKUS
SECURITIES SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING EXCHANGING THEIR SECURITIES. The Offer to Exchange, the related
Letter of Transmittal and certain other exchange offer documents, as well as the Solicitation/Recommendation Statement, are
available to all holders of Ruckus stock at no expense to them. The exchange offer materials and
the Solicitation/Recommendation Statement are available for free at the SEC's website at www.sec.gov. Additional copies may be obtained for free by
contacting Brocade's Investor Relations department at (408) 333-0233 or at IR@Brocade.com. Additional copies of the Solicitation/Recommendation Statement may be
obtained for free by contacting Ruckus' Investor Relations department at 408-469-4659 or at ir@ruckuswireless.com.
In addition to the Offer to Exchange, the related Letter of Transmittal and certain other exchange offer documents, as well as
the Solicitation/Recommendation Statement, Brocade and Ruckus file annual, quarterly and current reports and other information
with the SEC. You may read and copy any reports or other information filed by Brocade and Ruckus at the SEC public reference room
at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference room. Brocade's and Ruckus' filings with the SEC are also available to the public from
commercial document-retrieval services and at the website maintained by the SEC at http://www.sec.gov.
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 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
weighted-average diluted shares. 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 expense: We have excluded the effect of stock-based compensation expense. Although stock-based
compensation is a key incentive offered to our employees, we continue to evaluate our business performance excluding stock-based
compensation expense. Stock-based compensation will recur in future periods.
Employer payroll tax expense associated with stock-based compensation: We have excluded the employer payroll tax
expense associated with stock option exercises and restricted stock releases, in order to provide a complete picture of the
Company's recurring core business operating results. Stock-based compensation will continue to be used as a method to compensate
certain employees for the foreseeable future.
Amortization of intangible assets: We have excluded the effect of amortization of intangible assets. 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.
Workforce reorganization expense: We have excluded costs related to a workforce reorganization plan, including costs
related to involuntary employee termination and contract termination.
Post-acquisition expenses: We have excluded costs in connection with our recent acquisition of Cloudpath Networks, Inc.
("Cloudpath"), which we would not have otherwise incurred as part of our continuing operations. Post-acquisition expenses consist
primarily of incentives provided to retain former Cloudpath employees who became employees of Ruckus.
Pre-merger legal and accounting expenses: We have excluded costs incurred in connection with the planned merger with
Brocade Communications System, Inc. ("Brocade"), which we would not have otherwise incurred as part of our continuing
operations.
Non-cash income tax benefit: We have excluded non-cash income taxes, as the Company does not expect to pay any material
federal or state income taxes in 2016.
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 expense, employer payroll tax expense associated with
stock-based compensation, amortization of intangible assets and post-acquisition expenses. Non-GAAP gross margin is non-GAAP
gross profit divided by revenue.
Non-GAAP operating income and operating margin. Non-GAAP operating income is loss from operations as reported on our
condensed consolidated statements of operations, excluding the impact of stock-based compensation expense, employer payroll tax
expense associated with stock-based compensation, amortization of intangible assets, workforce reorganization expense,
post-acquisition expenses and pre-merger legal and accounting expenses. Non-GAAP operating margin is non-GAAP operating income
divided by revenue.
Non-GAAP net income and diluted net income per share. Non-GAAP net income is net loss as reported on our condensed
consolidated statements of operations, excluding the impact of stock-based compensation expense, employer payroll tax expense
associated with stock-based compensation, amortization of intangible assets, workforce reorganization expense, post-acquisition
expenses, pre-merger legal and accounting expenses and non-cash income tax benefit. Non-GAAP diluted net income per share is
non-GAAP net income divided by non-GAAP weighted-average diluted shares.
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
approximately 70,000 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 and SmartCell are trademarks of Ruckus Wireless, Inc. in
the United States and other countries.
Investor Relations Contact
Kim Watkins, CFA
Ruckus Wireless
kim.watkins@ruckuswireless.com
408-469-4659
Media & Analyst Relations Contact
Laurie Falconer
Ruckus Wireless
laurie.falconer@ruckuswireless.com
408-636-1223
|
RUCKUS WIRELESS, INC.
|
|
Condensed Consolidated Statements of Operations
|
|
(unaudited, in thousands, except per share amounts)
|
|
|
|
|
|
Three Months Ended
|
|
March 31,
|
|
2016
|
|
2015
|
|
Revenue:
|
|
|
|
|
Product
|
$ 91,285
|
|
$ 75,297
|
|
Service
|
9,288
|
|
6,781
|
|
Total revenue
|
100,573
|
|
82,078
|
|
Cost of revenue:
|
|
|
|
|
Product
|
28,188
|
|
23,231
|
|
Service
|
3,973
|
|
3,542
|
|
Total cost of revenue
|
32,161
|
|
26,773
|
|
Gross profit
|
68,412
|
|
55,305
|
|
Operating expenses:
|
|
|
|
|
Research and development
|
26,235
|
|
21,296
|
|
Sales and marketing
|
30,140
|
|
26,078
|
|
General and administrative
|
13,807
|
|
9,434
|
|
Total operating expenses
|
70,182
|
|
56,808
|
|
Operating loss
|
(1,770)
|
|
(1,503)
|
|
Interest income
|
312
|
|
141
|
|
Other expense, net
|
-
|
|
(78)
|
|
Loss before income taxes
|
(1,458)
|
|
(1,440)
|
|
Income tax benefit
|
(533)
|
|
(867)
|
|
Net loss
|
$ (925)
|
|
$ (573)
|
|
|
|
|
|
Net loss per share, basic and diluted:
|
$ (0.01)
|
|
$ (0.01)
|
|
|
|
|
|
Weighted average shares used in computing net loss per share, basic and
diluted:
|
89,741
|
|
85,637
|
|
RUCKUS WIRELESS, INC.
|
|
Reconciliation of GAAP to Non-GAAP Financial Measures
|
|
(unaudited, in thousands, except percentages and per share
amounts)
|
|
|
|
|
|
Three Months Ended
|
|
March 31,
|
|
2016
|
|
2015
|
|
Gross Profit Reconciliation:
|
|
|
|
|
GAAP gross profit:
|
$ 68,412
|
|
$ 55,305
|
|
Stock-based compensation
|
325
|
|
316
|
|
Employer payroll tax associated with stock-based compensation
|
3
|
|
11
|
|
Amortization of intangible assets
|
820
|
|
705
|
|
Post-acquisition expenses
|
16
|
|
-
|
|
Non-GAAP gross profit:
|
$ 69,576
|
|
$ 56,337
|
|
Gross Margin Reconciliation:
|
|
|
|
|
GAAP gross margin:
|
68.0%
|
|
67.4%
|
|
Stock-based compensation
|
0.4%
|
|
0.4%
|
|
Employer payroll tax associated with stock-based compensation
|
—%
|
|
—%
|
|
Amortization of intangible assets
|
0.8%
|
|
0.8%
|
|
Post-acquisition expenses
|
—%
|
|
—%
|
|
Non-GAAP gross margin:
|
69.2%
|
|
68.6%
|
|
Operating Income Reconciliation:
|
|
|
|
|
GAAP operating loss:
|
$ (1,770)
|
|
$ (1,503)
|
|
Stock-based compensation
|
8,085
|
|
7,322
|
|
Employer payroll tax associated with stock-based compensation
|
126
|
|
267
|
|
Amortization of intangible assets
|
918
|
|
705
|
|
Workforce reorganization expense
|
21
|
|
-
|
|
Post-acquisition expenses
|
1,366
|
|
-
|
|
Pre-merger legal and accounting expenses
|
3,635
|
|
|
|
Non-GAAP operating income:
|
$ 12,381
|
|
$ 6,791
|
|
Operating Margin Reconciliation:
|
|
|
|
|
GAAP operating margin:
|
(1.8)%
|
|
(1.8)%
|
|
Stock-based compensation
|
8.0%
|
|
8.9%
|
|
Employer payroll tax associated with stock-based compensation
|
0.1%
|
|
0.3%
|
|
Amortization of intangible assets
|
1.0%
|
|
0.9%
|
|
Workforce reorganization expense
|
—%
|
|
—%
|
|
Post-acquisition expenses
|
1.4%
|
|
—%
|
|
Pre-merger legal and accounting expenses
|
3.6%
|
|
—%
|
|
Non-GAAP operating margin:
|
12.3%
|
|
8.3%
|
|
Net Income Reconciliation:
|
|
|
|
|
GAAP net loss:
|
$ (925)
|
|
$ (573)
|
|
Stock-based compensation
|
8,085
|
|
7,322
|
|
Employer payroll tax associated with stock-based compensation
|
126
|
|
267
|
|
Amortization of intangible assets
|
918
|
|
705
|
|
Workforce reorganization expense
|
21
|
|
-
|
|
Post-acquisition expense
|
1,366
|
|
-
|
|
Pre-merger legal and accounting expenses
|
3,635
|
|
-
|
|
Non-cash income tax benefit
|
(1,043)
|
|
(1,213)
|
|
Non-GAAP net income:
|
$ 12,183
|
|
$ 6,508
|
|
Non-GAAP diluted net income per share:
|
$ 0.12
|
|
$ 0.07
|
|
Shares used in computing non-GAAP diluted Net Income per share
Reconciliation:
|
|
|
|
|
Weighted-average shares outstanding used in calculating GAAP diluted net
loss per share
|
89,741
|
|
85,637
|
|
Additional dilutive securities for non-GAAP income
|
10,678
|
|
12,121
|
|
Weighted-average shares outstanding used in calculating non-GAAP diluted
net income per share
|
100,419
|
|
97,758
|
|
RUCKUS WIRELESS, INC.
|
|
Condensed Consolidated Balance Sheets
|
|
(unaudited, in thousands, except par value)
|
|
|
March 31,
|
|
December 31,
|
|
2016
|
|
2015
|
|
ASSETS
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
$ 59,714
|
|
$ 69,687
|
|
Short-term investments
|
166,934
|
|
160,791
|
|
Accounts receivable, net of allowance for doubtful accounts of $800 as of
March 31, 2016 and December 31, 2015
|
80,256
|
|
70,649
|
|
Inventories
|
25,711
|
|
26,591
|
|
Deferred costs
|
1,951
|
|
3,669
|
|
Restricted cash
|
5,000
|
|
5,000
|
|
Prepaid expenses and other current assets
|
7,234
|
|
6,168
|
|
Total current assets
|
346,800
|
|
342,555
|
|
Property and equipment, net
|
18,666
|
|
19,411
|
|
Goodwill
|
16,390
|
|
16,390
|
|
Intangible assets, net
|
7,707
|
|
8,625
|
|
Non-current deferred tax asset
|
31,883
|
|
30,217
|
|
Other assets
|
1,767
|
|
1,623
|
|
Total assets
|
$ 423,213
|
|
$ 418,821
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
$ 23,074
|
|
$ 30,360
|
|
Accrued liabilities
|
11,209
|
|
7,748
|
|
Accrued compensation
|
17,100
|
|
14,902
|
|
Deferred revenue
|
32,086
|
|
36,602
|
|
Total current liabilities
|
83,469
|
|
89,612
|
|
Non-current deferred revenue
|
14,957
|
|
14,524
|
|
Other non-current liabilities
|
3,274
|
|
3,152
|
|
Total liabilities
|
101,700
|
|
107,288
|
|
Stockholders' equity:
|
|
|
|
|
Common stock, $0.001 par value; 250,000 shares authorized as of March 31,
2016 and December 31, 2015; 90,063 and 89,345 shares issued and outstanding at March 31, 2016 and December 31, 2015,
respectively
|
90
|
|
89
|
|
Additional paid-in capital
|
331,145
|
|
320,561
|
|
Accumulated other comprehensive income (loss)
|
128
|
|
(192)
|
|
Accumulated deficit
|
(9,850)
|
|
(8,925)
|
|
Total stockholders' equity
|
321,513
|
|
311,533
|
|
Total liabilities and stockholders' equity
|
$ 423,213
|
|
$ 418,821
|
|
|
|
|
RUCKUS WIRELESS, INC.
|
|
Summary of Cash Flows
|
|
(unaudited, in thousands)
|
|
|
|
|
|
Three Months Ended
|
|
March 31,
|
|
2016
|
|
2015
|
|
Net cash used in operating activities
|
$ (2,899)
|
|
$ (5,312)
|
|
Net cash used in investing activities
|
(9,574)
|
|
(8,531)
|
|
Net cash provided by financing activities
|
2,500
|
|
4,027
|
|
Net decrease in cash and cash equivalents
|
$ (9,973)
|
|
$ (9,816)
|
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SOURCE Ruckus Wireless, Inc.