[February 26, 2015] |
|
Aruba Networks Reports Fiscal Second Quarter 2015 Financial Results
Aruba Networks, Inc. (NASDAQ: ARUN) today released financial results for
its second quarter of fiscal year 2015 ended January 31, 2015.
Record revenue of $212.9 million grew 21 percent from the $176.4 million
reported in Q2'14. GAAP net income for Q2'15 was $5.7 million, or $0.05
per diluted share, compared with a GAAP net loss of $10.7 million, or a
loss of $0.10 per share, in Q2'14.
Non-GAAP net income for Q2'15 was $33.8 million, or $0.30 per diluted
share, compared with non-GAAP net income of $21.4 million, or $0.18 per
diluted share in Q2'14. A reconciliation between GAAP and non-GAAP
information is contained in the tables below and can also be found in
the supplementary tables located in the investor section of the
company's website at http://www.arubanetworks.com.
"We are pleased to report solid results for the second quarter,
reflecting continued execution on our strategic plan," said Dominic Orr,
president and chief executive officer, Aruba Networks. "Our results were
supported by continued growth in our key geographies, strong
year-over-year performance in our Federal vertical, further success in
penetrating the Global 2000, and increasing traction in our SME
business. We believe we are well positioned to capitalize on the
continued growth in WLAN, the potential opportunities from increased
E-Rate funding later this year, and the continued 802.11ac refresh
cycle."
Commenting on the company's financial results, Michael Galvin, chief
financial officer, Aruba Networks, added, "We delivered a strong
financial quarter on many fronts. Strong revenue growth and gross margin
expansion coupled with prudent management of operating expenses led to a
record quarter for non-GAAP operating margin. While the impact of E-Rate
is uncertain in our fiscal third quarter, we are well positioned to
capture this great opportunity in our fiscal fourth quarter and beyond."
Recent Business Highlights
-
Aruba and its ClearPass Access Management System was once again
positioned in the leaders quadrant of Gartner Inc.'s latest "Magic
Quadrant for Network Access Control" report, demonstrating its
continued leadership in access management.
-
The company was selected by the Wanda Group, the owners of China's
largest commercial properties for deployment in 59 malls and plazas
showing further penetration in the Public Facing Enterprise (PFE).
This mobile engagement will allow customers that visit Wanda's retail
establishments to access high-performance Wi-Fi for personal web
browsing, as well as interactive and personalized shopping.
-
The company recently announced it had been selected by Nebraska
Crossing Outlets (NEX), a large scale outdoor mall based in Gretna,
Nebraska. This engagement, which features Aruba's 802.11ac solution,
will enable wireless mobility for the four million people the center
serves. Aruba was selected based on its ability to deliver world class
solutions in an environment where the wireless network is critical to
the success of the center for essential business transactions, mobile
Point of Sale (PoS), and shoppers using the complimentary Wi-Fi to
stay connected.
Conference Call Information
Aruba will host a conference call for analysts and investors to discuss
its second quarter of fiscal year 2015 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 +1-844-858-9856. 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 at least 90 days. To hear an audio replay of the call,
parties in the United States and Canada should call +1-855-859-2056 and
enter passcode 80845684. International parties can access the replay at
+1-404-537-3406 and should enter passcode 80845684.
Forward-Looking Statements
This press release contains forward-looking statements, including
statements about anticipated business opportunities from increased
E-Rate funding and timing thereof, the rate of adoption of 802.11ac
technology, and the demand for wireless networks. These forward-looking
statements involve risks and uncertainties, as well as assumptions,
which if they do not fully materialize or prove incorrect, could cause
Aruba's 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: (1) business, economic and
competitive conditions and growth trends in the wireless networking
industry, our vertical markets and various geographic regions; (2)
changes in overall information technology spending, particularly in the
education vertical; (3) the rate at which our customers elect to upgrade
their networks to the latest 802.11ac technology and (4) those risks and
uncertainties included under the captions "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and Results
of Operations," in Aruba's Annual Report on Forms 10-K and 10-Q which
were filed with the Securities and Exchange Commission (SEC) on
September 24, 2014 and December 4, 2014, and are available on Aruba's
investor relations 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 hereof, and we assume no
obligation to update these forward-looking statements to reflect events
that occur or circumstances that exist after the date on which they were
made.
Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in accordance with
U.S. generally accepted accounting principles (GAAP), the Form 8-K and
the accompanying tables contain the following non-GAAP financial
measures: non-GAAP net income, non-GAAP earnings per share (EPS),
non-GAAP gross margins and non-GAAP operating margins. 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 Aruba's GAAP financial measures reflect the
exclusion of items that are recurring and will be reflected in its
financial results for the foreseeable future.
Non-GAAP net income and EPS. Aruba defines non-GAAP net income as
net income plus stock-based compensation expenses and related payroll
taxes, amortization expense of acquired intangible assets and other
acquisition-related expenses and restructuring charges and other
one-time charges related to restructuring actions. In addition, Aruba
provides for non-GAAP income tax expense by applying generally accepted
accounting principles to non-GAAP income, including direct and indirect
tax effects of the pre-tax non-GAAP adjustments above, excluding tax
related to the internal transfer of intellectual property. 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 compensation 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 compensation 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, non-recurring
patent-infringement settlements 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
financial measures versus the corresponding GAAP financial
measures. First, these non-GAAP financial measures exclude some costs,
namely stock-based compensation expenses and related payroll taxes, that
are recurring. Stock-based compensation 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, as well as
the supplementary materials located on the IR landing page of the Aruba
web site, provide reconciliations between these financial measures and
their most directly comparable GAAP equivalents.
About Aruba Networks, Inc.
Aruba Networks is a leading provider of next-generation network access
solutions for the mobile enterprise. The company designs and delivers
Mobility-Defined Networks that empower IT departments and #GenMobile, a
new generation of tech-savvy users who rely on their mobile devices for
every aspect of work and personal communication. To create a mobility
experience that #GenMobile and IT can rely upon, Aruba Mobility-Defined
Networks™ automate infrastructure-wide performance optimization and
trigger security actions that used to require manual IT intervention.
The results are dramatically improved productivity and lower operational
costs.
Listed on the NASDAQ and Russell 2000® Index, Aruba is based in
Sunnyvale, California, and has operations throughout the Americas,
Europe, Middle East, Africa and Asia Pacific regions. To learn more,
visit Aruba at http://www.arubanetworks.com.
For real-time news updates follow Aruba on Twitter
and Facebook,
and for the latest technical discussions on mobility and Aruba products
visit Airheads Social at http://community.arubanetworks.com.
© 2015 Aruba Networks, Inc. Aruba Networks' trademarks include Aruba
Networks®, Aruba The Mobile Edge Company® (stylized), Aruba
Mobility-Defined Networks™, Aruba Mobility Management System®, People
Move Networks Must Follow®, Mobile Edge Architecture®, RFProtect®, Green
Island®, ETips®, ClientMatchTM, Virtual
Intranet AccessTM, ClearPass Access Management
SystemsTM, Aruba InstantTM,
ArubaOSTM, xSecTM,
ServiceEdgeTM, Aruba ClearPass Access
Management SystemTM, AirmeshTM,
AirWaveTM, Aruba CentralTM,
and ARUBA@WORKTM. All rights reserved. All
other trademarks are the property of their respective owners.
Aruba Networks, Inc.
|
Condensed Consolidated Balance Sheets
|
(In thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
|
|
July 31,
|
|
|
2015
|
|
2014
|
Assets
|
|
|
|
|
Current assets
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
151,949
|
|
|
$
|
118,594
|
|
Short-term investments
|
|
|
139,049
|
|
|
|
166,359
|
|
Accounts receivable, net
|
|
|
114,109
|
|
|
|
102,256
|
|
Inventory
|
|
|
45,273
|
|
|
|
39,836
|
|
Deferred costs of revenue
|
|
|
12,113
|
|
|
|
12,721
|
|
Prepaids and other current assets
|
|
|
17,372
|
|
|
|
18,063
|
|
Deferred income tax assets, current
|
|
|
14,840
|
|
|
|
25,676
|
|
|
|
|
|
|
Total current assets
|
|
|
494,705
|
|
|
|
483,505
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
30,360
|
|
|
|
27,261
|
|
Goodwill
|
|
|
67,242
|
|
|
|
67,242
|
|
Intangible assets, net
|
|
|
18,079
|
|
|
|
19,505
|
|
Deferred income tax assets, non-current
|
|
|
22,698
|
|
|
|
23,962
|
|
Other non-current assets
|
|
|
8,779
|
|
|
|
8,185
|
|
|
|
|
|
|
Total non-current assets
|
|
|
147,158
|
|
|
|
146,155
|
|
|
|
|
|
|
Total assets
|
|
$
|
641,863
|
|
|
$
|
629,660
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
Accounts payable
|
|
$
|
19,615
|
|
|
$
|
23,763
|
|
Accrued liabilities
|
|
|
95,221
|
|
|
|
80,578
|
|
Deferred revenue, current
|
|
|
153,510
|
|
|
|
135,160
|
|
|
|
|
|
|
Total current liabilities
|
|
|
268,346
|
|
|
|
239,501
|
|
|
|
|
|
|
Deferred revenue, non-current
|
|
|
47,225
|
|
|
|
44,977
|
|
Other non-current liabilities
|
|
|
14,229
|
|
|
|
12,686
|
|
|
|
|
|
|
Total non-current liabilities
|
|
|
61,454
|
|
|
|
57,663
|
|
|
|
|
|
|
Total liabilities
|
|
|
329,800
|
|
|
|
297,164
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
11
|
|
|
|
11
|
|
Additional paid-in capital
|
|
|
479,510
|
|
|
|
508,374
|
|
Accumulated other comprehensive loss
|
|
|
(1,518
|
)
|
|
|
(1,523
|
)
|
Accumulated deficit
|
|
|
(165,940
|
)
|
|
|
(174,366
|
)
|
|
|
|
|
|
Total stockholders' equity
|
|
|
312,063
|
|
|
|
332,496
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
641,863
|
|
|
$
|
629,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aruba Networks, Inc.
|
Condensed Consolidated Statements of Operations
|
(In thousands, except per share amount)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
January 31,
|
|
January 31,
|
|
January 31,
|
|
January 31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
Product
|
|
$
|
173,721
|
|
|
$
|
141,755
|
|
|
$
|
342,191
|
|
|
$
|
272,586
|
|
Support and professional services
|
|
|
39,210
|
|
|
|
34,601
|
|
|
|
78,561
|
|
|
|
64,697
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
212,931
|
|
|
|
176,356
|
|
|
|
420,752
|
|
|
|
337,283
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
|
|
|
|
|
|
Product
|
|
|
51,536
|
|
|
|
43,303
|
|
|
|
103,166
|
|
|
|
83,421
|
|
Support and professional services
|
|
|
8,820
|
|
|
|
10,050
|
|
|
|
18,429
|
|
|
|
18,483
|
|
|
|
|
|
|
|
|
|
|
Total cost of revenue
|
|
|
60,356
|
|
|
|
53,353
|
|
|
|
121,595
|
|
|
|
101,904
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
152,575
|
|
|
|
123,003
|
|
|
|
299,157
|
|
|
|
235,379
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
43,179
|
|
|
|
42,585
|
|
|
|
85,413
|
|
|
|
83,030
|
|
Sales and marketing
|
|
|
72,280
|
|
|
|
69,569
|
|
|
|
144,255
|
|
|
|
132,613
|
|
General and administrative
|
|
|
15,674
|
|
|
|
14,468
|
|
|
|
31,289
|
|
|
|
28,983
|
|
Restructuring charges
|
|
|
(482
|
)
|
|
|
-
|
|
|
|
6,072
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
130,651
|
|
|
|
126,622
|
|
|
|
267,029
|
|
|
|
244,626
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
21,924
|
|
|
|
(3,619
|
)
|
|
|
32,128
|
|
|
|
(9,247
|
)
|
|
|
|
|
|
|
|
|
|
Other income (expense), net
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
192
|
|
|
|
217
|
|
|
|
391
|
|
|
|
478
|
|
Other income (expense), net
|
|
|
(1,266
|
)
|
|
|
(80
|
)
|
|
|
(2,018
|
)
|
|
|
190
|
|
|
|
|
|
|
|
|
|
|
Total other income (expense), net
|
|
|
(1,074
|
)
|
|
|
137
|
|
|
|
(1,627
|
)
|
|
|
668
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
20,850
|
|
|
|
(3,482
|
)
|
|
|
30,501
|
|
|
|
(8,579
|
)
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
15,167
|
|
|
|
7,219
|
|
|
|
22,075
|
|
|
|
9,949
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
5,683
|
|
|
$
|
(10,701
|
)
|
|
$
|
8,426
|
|
|
$
|
(18,528
|
)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share - basic
|
|
$
|
0.05
|
|
|
$
|
(0.10
|
)
|
|
$
|
0.08
|
|
|
$
|
(0.17
|
)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share - diluted
|
|
$
|
0.05
|
|
|
$
|
(0.10
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.17
|
)
|
|
|
|
|
|
|
|
|
|
Shares used in per share calculation - basic
|
|
|
107,891
|
|
|
|
107,153
|
|
|
|
108,132
|
|
|
|
109,608
|
|
|
|
|
|
|
|
|
|
|
Shares used in per share calculation - diluted
|
|
|
113,393
|
|
|
|
107,153
|
|
|
|
114,711
|
|
|
|
109,608
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aruba Networks, Inc.
|
Reconciliation between GAAP and Non-GAAP Measures
|
Non-GAAP Net Income and Non-GAAP Earnings per Share
|
(In thousands, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
January 31,
|
|
January 31,
|
|
January 31,
|
|
January 31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
|
|
$
|
5,683
|
|
|
$
|
(10,701
|
)
|
|
$
|
8,426
|
|
|
$
|
(18,528
|
)
|
|
|
|
|
|
|
|
|
|
Plus:
|
|
|
|
|
|
|
|
|
a) Stock-based compensation expense (*)
|
|
|
23,468
|
|
|
|
28,744
|
|
|
|
48,021
|
|
|
|
56,163
|
|
b) Payroll taxes on stock-based compensation expense
|
|
|
618
|
|
|
|
902
|
|
|
|
1,167
|
|
|
|
1,590
|
|
c) Amortization expense of acquired intangible assets and other
acquisition-related expenses
|
|
|
2,932
|
|
|
|
3,393
|
|
|
|
5,919
|
|
|
|
6,999
|
|
d) Restructuring charges
|
|
|
(482
|
)
|
|
|
-
|
|
|
|
6,072
|
|
|
|
-
|
|
e) Other one-time charges related to restructuring actions (**)
|
|
|
1,111
|
|
|
|
-
|
|
|
|
1,543
|
|
|
|
-
|
|
f) Non-GAAP income tax effects
|
|
|
484
|
|
|
|
(985
|
)
|
|
|
(6,931
|
)
|
|
|
(6,004
|
)
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income
|
|
$
|
33,814
|
|
|
$
|
21,353
|
|
|
$
|
64,217
|
|
|
$
|
40,220
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) per share
|
|
$
|
0.05
|
|
|
$
|
(0.10
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.17
|
)
|
|
|
|
|
|
|
|
|
|
Plus:
|
|
|
|
|
|
|
|
|
a) Stock-based compensation expense (*)
|
|
|
0.21
|
|
|
|
0.25
|
|
|
|
0.42
|
|
|
|
0.47
|
|
b) Payroll taxes on stock-based compensation expense
|
|
|
0.01
|
|
|
|
0.01
|
|
|
|
0.01
|
|
|
|
0.01
|
|
c) Amortization expense of acquired intangible assets and other
acquisition-related expenses
|
|
|
0.03
|
|
|
|
0.03
|
|
|
|
0.05
|
|
|
|
0.06
|
|
d) Restructuring charges
|
|
|
-
|
|
|
|
-
|
|
|
|
0.05
|
|
|
|
-
|
|
e) Other one-time charges related to restructuring actions (**)
|
|
|
0.01
|
|
|
|
-
|
|
|
|
0.01
|
|
|
|
-
|
|
f) Non-GAAP income tax effects
|
|
|
-
|
|
|
|
(0.01
|
)
|
|
|
(0.06
|
)
|
|
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income per share (***)
|
|
$
|
0.30
|
|
|
$
|
0.18
|
|
|
$
|
0.56
|
|
|
$
|
0.34
|
|
|
|
|
|
|
|
|
|
|
Shares used in GAAP per share calculation - diluted
|
|
|
113,393
|
|
|
|
107,153
|
|
|
|
114,711
|
|
|
|
109,608
|
|
|
|
|
|
|
|
|
|
|
Shares used in Non-GAAP per share calculation - diluted
|
|
|
113,393
|
|
|
|
116,346
|
|
|
|
114,711
|
|
|
|
118,953
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) Stock-based compensation expense for the six months ended
January 31, 2015 excludes charges of $273,000 derived directly from
the Company's restructuring plan, which were included in the
Restructuring charges line in the three months ended October 31,
2014.
|
|
|
|
|
|
|
|
|
|
(**) Other one-time charges related to restructuring actions include
temporary redundant headcount, headcount-related and facility costs,
recruiting costs and other travel and headcount-related costs
associated with employee transitions to lower cost operating
locations. These costs are not considered exit costs under U.S.
Generally Accepted Accounting Principles, thus such costs have been
excluded from the Restructuring charges line in the consolidated
statements of operations.
|
|
|
|
|
|
|
|
|
|
(***) The sum of the EPS impacts may not total to Non-GAAP net
income per common share due to different share counts used in
calculating GAAP income (loss) per common share and Non-GAAP income
per common share and due to rounding of individual line items. The
GAAP income (loss) per common share calculation may use a lower
share count as it may exclude potentially dilutive shares which are
included in calculating non-GAAP income per common share.
|
|
|
Aruba Networks, Inc.
|
Reconciliation between GAAP and Non-GAAP Measures
|
Non-GAAP Gross Margin and Non-GAAP Operating Margin
|
(In thousands, except percentages)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
January 31,
|
|
January 31,
|
|
January 31,
|
|
January 31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
212,931
|
|
|
$
|
176,356
|
|
|
$
|
420,752
|
|
|
$
|
337,283
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Gross Margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit
|
|
$
|
152,575
|
|
|
$
|
123,003
|
|
|
$
|
299,157
|
|
|
$
|
235,379
|
|
|
|
|
|
|
|
|
|
|
Plus:
|
|
|
|
|
|
|
|
|
-
|
|
a) Stock-based compensation expense
|
|
|
1,744
|
|
|
|
2,202
|
|
|
|
3,443
|
|
|
|
4,359
|
|
b) Payroll taxes on stock-based compensation expense
|
|
|
51
|
|
|
|
99
|
|
|
|
79
|
|
|
|
164
|
|
c) Amortization expense of acquired intangible assets and other
acquisition-related expenses
|
|
|
1,896
|
|
|
|
2,026
|
|
|
|
3,846
|
|
|
|
4,033
|
|
d) Other one-time charges related to restructuring actions (*)
|
|
|
26
|
|
|
|
-
|
|
|
|
27
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross profit
|
|
$
|
156,292
|
|
|
$
|
127,330
|
|
|
$
|
306,552
|
|
|
$
|
243,935
|
|
|
|
|
|
|
|
|
|
|
GAAP gross margin
|
|
|
71.7
|
%
|
|
|
69.7
|
%
|
|
|
71.1
|
%
|
|
|
69.8
|
%
|
|
|
|
|
|
|
|
|
|
Plus:
|
|
|
|
|
|
|
|
|
a) Stock-based compensation expense
|
|
|
0.8
|
%
|
|
|
1.3
|
%
|
|
|
0.9
|
%
|
|
|
1.3
|
%
|
b) Payroll taxes on stock-based compensation expense
|
|
|
-
|
|
|
|
0.1
|
%
|
|
|
-
|
|
|
|
-
|
|
c) Amortization expense of acquired intangible assets and other
acquisition-related expenses
|
|
|
0.9
|
%
|
|
|
1.1
|
%
|
|
|
0.9
|
%
|
|
|
1.2
|
%
|
d) Other one-time charges related to restructuring actions (*)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross margin
|
|
|
73.4
|
%
|
|
|
72.2
|
%
|
|
|
72.9
|
%
|
|
|
72.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Operating Margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income (loss)
|
|
$
|
21,924
|
|
|
$
|
(3,619
|
)
|
|
$
|
32,128
|
|
|
$
|
(9,247
|
)
|
|
|
|
|
|
|
|
|
|
Plus:
|
|
|
|
|
|
|
|
|
a) Stock-based compensation expense (**)
|
|
|
23,468
|
|
|
|
28,744
|
|
|
|
48,021
|
|
|
|
56,163
|
|
b) Payroll taxes on stock-based compensation expense
|
|
|
618
|
|
|
|
902
|
|
|
|
1,167
|
|
|
|
1,590
|
|
c) Amortization expense of acquired intangible assets and other
acquisition-related expenses
|
|
|
2,932
|
|
|
|
3,393
|
|
|
|
5,919
|
|
|
|
6,999
|
|
d) Restructuring charges
|
|
|
(482
|
)
|
|
|
-
|
|
|
|
6,072
|
|
|
|
-
|
|
e) Other one-time charges related to restructuring actions (*)
|
|
|
1,111
|
|
|
|
-
|
|
|
|
1,543
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating income
|
|
$
|
49,571
|
|
|
$
|
29,420
|
|
|
$
|
94,850
|
|
|
$
|
55,505
|
|
|
|
|
|
|
|
|
|
|
GAAP operating margin
|
|
|
10.3
|
%
|
|
|
(2.1
|
%)
|
|
|
7.6
|
%
|
|
|
(2.7
|
%)
|
|
|
|
|
|
|
|
|
|
Plus:
|
|
|
|
|
|
|
|
|
a) Stock-based compensation expense (**)
|
|
|
11.0
|
%
|
|
|
16.3
|
%
|
|
|
11.4
|
%
|
|
|
16.7
|
%
|
b) Payroll taxes on stock-based compensation expense
|
|
|
0.3
|
%
|
|
|
0.5
|
%
|
|
|
0.3
|
%
|
|
|
0.4
|
%
|
c) Amortization expense of acquired intangible assets and other
acquisition-related expenses
|
|
|
1.4
|
%
|
|
|
2.0
|
%
|
|
|
1.4
|
%
|
|
|
2.1
|
%
|
d) Restructuring charges
|
|
|
(0.2
|
%)
|
|
|
-
|
|
|
|
1.4
|
%
|
|
|
-
|
|
e) Other one-time charges related to restructuring actions (*)
|
|
|
0.5
|
%
|
|
|
-
|
|
|
|
0.4
|
%
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating margin
|
|
|
23.3
|
%
|
|
|
16.7
|
%
|
|
|
22.5
|
%
|
|
|
16.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) Other one-time charges related to restructuring actions include
temporary redundant headcount, headcount-related and facility costs,
recruiting costs and other travel and headcount-related costs
associated with employee transitions to lower cost operating
locations. These costs are not considered exit costs under U.S.
Generally Accepted Accounting Principles, thus such costs have been
excluded from the Restructuring charges line in the consolidated
statements of operations.
|
|
|
|
|
|
|
|
|
|
(**) Stock-based compensation expense for the six months ended
January 31, 2015 excludes charges of $273,000 derived directly from
the Company's restructuring plan, which were included in the
Restructuring charges line in the three months ended October 31,
2014.
|
|
|
Aruba Networks, Inc.
|
Condensed Consolidated Statements of Cash Flows
|
(In thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
January 31,
|
|
January 31,
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
Cash flows from operating activities
|
|
|
|
|
Net income (loss)
|
|
$
|
8,426
|
|
|
$
|
(18,528
|
)
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
|
14,267
|
|
|
|
14,250
|
|
Change in provision for doubtful accounts
|
|
|
79
|
|
|
|
(173
|
)
|
Inventory reserves for excess, obsolescence and other
|
|
|
5,027
|
|
|
|
2,937
|
|
Stock-based compensation expense
|
|
|
48,294
|
|
|
|
56,163
|
|
Amortization of discounts and premiums on short-term investments
|
|
|
680
|
|
|
|
1,129
|
|
(Gain) loss on disposal of property and equipment, intangibles and
other
|
|
|
(712
|
)
|
|
|
232
|
|
Deferred income taxes
|
|
|
11,231
|
|
|
|
3,979
|
|
Excess tax benefit associated with stock-based compensation
|
|
|
(6,365
|
)
|
|
|
(721
|
)
|
Changes in operating assets and liabilities:
|
|
|
|
|
Accounts receivable
|
|
|
(11,932
|
)
|
|
|
11,212
|
|
Inventory
|
|
|
(9,430
|
)
|
|
|
(11,451
|
)
|
Deferred costs of revenue
|
|
|
608
|
|
|
|
(4,069
|
)
|
Prepaids and other current assets
|
|
|
211
|
|
|
|
2,373
|
|
Other non-current assets
|
|
|
606
|
|
|
|
(2,058
|
)
|
Accounts payable and other current and non-current liabilities
|
|
|
24,784
|
|
|
|
(34,700
|
)
|
Deferred revenue
|
|
|
20,598
|
|
|
|
34,028
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
106,372
|
|
|
|
54,603
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
Purchases of short-term investments
|
|
|
(65,720
|
)
|
|
|
(87,119
|
)
|
Proceeds from sales of short-term investments
|
|
|
12,799
|
|
|
|
89,240
|
|
Proceeds from maturities of short-term investments
|
|
|
79,559
|
|
|
|
99,083
|
|
Purchases of property and equipment
|
|
|
(13,031
|
)
|
|
|
(7,854
|
)
|
Purchases of intangible assets
|
|
|
(2,840
|
)
|
|
|
-
|
|
Investment in a privately-held company
|
|
|
(1,200
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Net cash provided by investing activities
|
|
|
9,567
|
|
|
|
93,350
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
Proceeds from issuance of common stock
|
|
|
16,051
|
|
|
|
10,473
|
|
Repurchases of common stock under stock repurchase program
|
|
|
(105,000
|
)
|
|
|
(193,504
|
)
|
Excess tax benefit associated with stock-based compensation
|
|
|
6,365
|
|
|
|
721
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities
|
|
|
(82,584
|
)
|
|
|
(182,310
|
)
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
33,355
|
|
|
|
(34,357
|
)
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period
|
|
|
118,594
|
|
|
|
144,919
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
151,949
|
|
|
$
|
110,562
|
|
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|