Ixia Announces Record Results for the Second Quarter of 2005 Second Quarter Revenues Increase 54% and Net Income Increases 175% Year-over-Year.CALABASAS, Calif. -- Ixia Ix´i`a n. 1. (Bot.) A South African bulbous plant of the Iris family, remarkable for the brilliancy of its flowers. Noun 1. (Nasdaq:XXIA) today reported financial results for the second quarter ended June June: see month. 30, 2005. Net revenues for the second quarter of 2005 were a record $41.3 million, which represents a year-over-year increase of 54% from the second quarter of last year and a sequential One after the other in some consecutive order such as by name or number. increase of 8% from the immediately preceding first quarter. Net income on a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis for the second quarter of 2005 was $9.8 million, or $0.14 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, a 175% increase when compared to net income of $3.5 million, or $0.06 per diluted share, for the second quarter of 2004. Ixia's second quarter of 2005 GAAP results included $1.2 million of non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. related to the amortization of acquired intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. and income tax benefits of $1.2 million related to the tax effects of the amortization of the acquired intangible assets noted above and tax benefits related to previously recognized stock-based compensation. Excluding the effects of these items, non-GAAP net income for the second quarter of 2005 was $9.8 million, or $0.14 per diluted share, compared to $4.2 million, or $0.07 per diluted share, for the same period last year after excluding the effects of similar items. "The second quarter represented our 11th consecutive quarter of increasing sequential revenues and our 29th consecutive quarter of profitability," commented Errol Ginsberg Gins·berg , Allen 1926-1997. American poet and a leading figure of the Beat Generation. Known for his long incantatory works, his books include Howl (1956) and Kaddish (1961). Noun 1. , President and Chief Executive Officer of Ixia. "Demand for our testing solutions continues to grow, as revenues from our Ethernet Ethernet Telecommunications networking protocol introduced by Xerox Corp. in 1979. It was developed as an inexpensive way of sending information quickly between office machines connected together in a single room or building, but it rapidly became a standard computer TXS TXS Teleperm XS TXS Telephone eXchange Strowger TXS Transfer from Index to Stack Pointer product lines set new records during the period. While sales to network equipment manufacturers and our largest customer, Cisco Systems “Cisco” redirects here. For other uses, see Cisco (disambiguation). Cisco System,Inc. (NASDAQ: CSCO, HKSE: 4333 ) is an American multinational corporation with 54,000 employees and annual revenue of US $28.48 billion as of 2006. , were especially strong, we had more than ten customers ordering over $500,000 in equipment, pointing to broader underlying demand for our products. This growth has been fueled by the adoption of new technologies, like 10 Gigabit Ethernet An Ethernet standard that transmits at 1 Gbps. Used mostly to connect high-end workstations and servers as well as for network backbones, Gigabit Ethernet transmits full duplex from point to point using switches and half duplex in a shared environment (CSMA/CD) using a hub. and IPv6, and the roll-out of new services, like Voice and Video over IP. All of these technologies and services require extensive testing with equipment that can generate wire speed traffic along with a sophisticated mix of real world traffic to adequately test these new complex advanced networks." "Most of our larger sales involve a combination of both hardware and software," added Mr. Ginsberg. "Encouragingly, our IxChariot and IxLoad software product offerings had record sales in the second quarter and continue to pull in additional hardware sales. Additionally, we continue to seek targeted acquisitions that enable us to extend the capabilities of our single platform solution and gain access to new customer segments. In mid-July n. 1. the middle part of July. Noun 1. mid-July - the middle part of July period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue period" we entered into the fast growing 802.11 Wi-Fi (WIreless-FIdelity) A logo from the Wi-Fi Alliance that certifies network devices comply with the IEEE 802.11 wireless Ethernet standards. In the early 2000s, Wi-Fi/802.11 became widely used (initially 802.11b, then 802. market with the introduction of our IxWLAN product and completed the acquisition of Wi-Fi testing innovator Communication Machinery Corporation for approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $4 million. Complementing our top line growth, we are focused on improving our bottom line by maintaining strong gross margins and decreasing operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. as a percentage of revenues." During the second quarter ended June 30, 2005, Ixia increased cash, cash equivalents and investments by $23 million to approximately $186 million. This increase included nearly $12 million of proceeds from employee stock option exercises. Ixia will host a conference call today for analysts and investors to discuss its quarterly results at 5:00 p.m. Eastern Time. Open to the public, a live Web cast of the conference call will be accessible from the "Investors" section of Ixia's Web site (www.ixiacom.com). Following the live Web cast, an archived version will be available in the "Investors" section on the Ixia Web site for 90 days. Non-GAAP Information Certain non-GAAP financial measures are included in this press release. These non-GAAP financial measures are provided to enhance the user's overall understanding of our financial performance. By excluding certain non-cash charges, as well as the related tax effects, our non-GAAP results provide information to both management and investors that is useful in assessing Ixia's core operating performance and in evaluating and comparing our results of operations on a consistent basis from period to period. These non-GAAP financial measures are also used by management to evaluate financial results and to plan and forecast future periods. The presentation of this additional information is not meant to be considered a substitute for the corresponding financial measures prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . Investors are encouraged to review the reconciliations of GAAP to non-GAAP financial measures which are included below. About Ixia Ixia is a leading, global provider of high performance IP network testing solutions. Its highly scalable solutions generate, capture, characterize, and emulate em·u·late tr.v. em·u·lat·ed, em·u·lat·ing, em·u·lates 1. To strive to equal or excel, especially through imitation: an older pupil whose accomplishments and style I emulated. 2. network and application traffic, establishing definitive performance and conformance con·for·mance n. Conformity. Noun 1. conformance - correspondence in form or appearance conformity agreement, correspondence - compatibility of observations; "there was no agreement between theory and metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. of network devices or systems under test. Ixia's testing solutions are used by network and telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. equipment manufacturers, semiconductor manufacturers, service providers, governments, and large enterprises to validate To prove something to be sound or logical. Also to certify conformance to a standard. Contrast with "verify," which means to prove something to be correct. For example, data entry validity checking determines whether the data make sense (numbers fall within a range, numeric data the functionality, and reliability of complex IP networks, devices, and applications. Ixia's Real World Traffic(TM) Suite addresses the growing need to test applications and networks prior to deployment Installing, setting up, testing and running. This military term, which means the placement of troops and equipment in the field, is widely used with computers as an alternate to the word "implementation. under realistic load conditions. Ixia's analysis solutions utilize a wide range of industry-standard interfaces and are distinguished by their performance, accuracy, reliability, and adaptability a·dapt·a·ble adj. Capable of adapting or of being adapted. a·dapt  a·bil to the
industry's constant evolution.For more information, contact Ixia at 26601 W. Agoura Road, Calabasas, CA 91302; (818) 871-1800, Fax: (818) 871-1805; Email: info@ixiacom.com or visit our Web Site at http://www.ixiacom.com. Ixia, the Ixia four petal logo, IxLoad, IxChariot, IxWLAN, TXS, and Real World Traffic are either registered trademarks or trademarks of Ixia in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. other countries. Other trademarks used in this release are the trademarks or registered trademarks of their respective owners. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: Certain statements made in this press release are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , including, without limitation, statements regarding possible future revenues, growth and profitability and future business and market share. In some cases, such forward-looking statements can be identified by terms such as "may," "will," "expect," "plan," "believe," "estimate," "predict" or the like. Such statements reflect the Company's current intent, belief and expectations and are subject to risks and uncertainties that could cause the Company's actual results to differ materially from those expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. in the forward-looking statements. Factors that may cause future results to differ materially from the Company's current expectations include, among other things: consistency Consistency can refer to:
A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December December: see month. 31, 2004. Ixia undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
IXIA
Condensed Consolidated Balance Sheets
(in thousands)
June 30, December 31,
2005 2004
------------ ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 10,821 $ 16,383
Short-term investments in marketable
securities 135,224 81,757
Accounts receivable, net 27,325 22,069
Inventories 7,264 6,669
Deferred income taxes 3,672 3,756
Income taxes receivable 560 1,696
Prepaid expenses and other current assets 3,342 2,878
---------- ----------
Total current assets 188,208 135,208
Investments in marketable securities 39,885 49,015
Property and equipment, net 15,385 12,268
Deferred income taxes 14,172 4,798
Goodwill 11,377 11,377
Other intangible assets, net 20,580 23,031
Other assets 307 612
---------- ----------
Total assets $ 289,914 $ 236,309
========== ==========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 1,770 $ 1,556
Accrued expenses 9,827 13,181
Deferred revenues 8,943 7,032
Income taxes payable 5,244 4,203
---------- ----------
Total current liabilities 25,784 25,972
Deferred income taxes 3,801 3,411
---------- ----------
Total liabilities 29,585 29,383
---------- ----------
Shareholders' equity:
Common stock, without par value; 200,000
shares authorized, 65,795 and 62,459
shares issued and outstanding as of June
30, 2005 and December 31, 2004, respectively 120,931 100,144
Additional paid-in capital 66,768 53,247
Retained earnings 72,630 53,535
---------- ----------
Total shareholders' equity 260,329 206,926
---------- ----------
Total liabilities and shareholders'
equity $ 289,914 $ 236,309
========== ==========
IXIA
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
Three months ended Six months ended
June 30, June 30,
------------------ -----------------
2005 2004 2005 2004
--------- -------- -------- --------
Net revenues $41,326 $26,811 $79,740 $51,724
Cost of revenues(1) 6,349 4,851 12,194 9,262
Amortization of purchased
technology 943 732 1,885 1,371
-------- -------- -------- --------
Gross profit 34,034 21,228 65,661 41,091
-------- -------- -------- --------
Operating expenses:
Research and development 7,974 5,519 15,520 11,182
Sales and marketing 9,950 7,695 19,425 15,352
General and administrative 3,914 2,962 7,519 5,325
Amortization of intangible
assets 286 379 628 788
Stock-based compensation(2) -- 126 -- 375
-------- -------- -------- --------
Total operating expenses 22,124 16,681 43,092 33,022
-------- -------- -------- --------
Income from operations 11,910 4,547 22,569 8,069
Interest and other, net 1,229 595 2,125 1,333
-------- -------- -------- --------
Income before income taxes 13,139 5,142 24,694 9,402
Income tax expense 3,373 1,596 5,599 2,834
-------- -------- -------- --------
Net income $ 9,766 $ 3,546 $19,095 $ 6,568
======== ======== ======== ========
Earnings per share:
Basic $ 0.15 $ 0.06 $ 0.30 $ 0.11
Diluted $ 0.14 $ 0.06 $ 0.28 $ 0.10
Weighted average number of common
and common equivalent shares
outstanding:
Basic 64,862 60,447 64,112 60,170
Diluted 69,391 64,308 68,944 64,528
----------------------------------
(1)Stock-based compensation
included in: Cost of revenues $ -- $ 6 $ -- $ 29
======== ======== ======== ========
(2)Stock-based compensation
related to:
Research and development $ -- $ 102 $ -- $ 263
Sales and marketing -- 22 -- 75
General and administrative -- 2 -- 37
-------- -------- -------- --------
$ -- $ 126 $ -- $ 375
======== ======== ======== ========
IXIA
Impact of Non-GAAP Adjustments on Net Income
(in thousands, except percentages and per share data)
(unaudited)
Three months ended June 30, 2005
--------------------------------
GAAP Adjustments Non-GAAP
--------- ----------- ---------
Net revenues $ 41,326 $ -- $41,326
Cost of revenues 6,349 -- 6,349
Amortization of purchased technology 943 (943)(1) --
--------- --------- --------
Gross profit 34,034 943 34,977
--------- --------- --------
82.4% 84.6%
Operating expenses:
Research and development 7,974 -- 7,974
Sales and marketing 9,950 -- 9,950
General and administrative 3,914 -- 3,914
Amortization of intangible assets 286 (286)(1) --
--------- --------- --------
Total operating expenses 22,124 (286) 21,838
--------- --------- --------
53.5% 52.8%
Income from operations 11,910 1,229 13,139
Interest and other, net 1,229 -- 1,229
--------- --------- --------
Income before income taxes 13,139 1,229 14,368
Income tax expense 3,373 1,244(2) 4,617
--------- --------- --------
Net income $ 9,766 $ (15) $ 9,751
========= ========= ========
Earnings per share:
Basic $ 0.15 $ -- $ 0.15
Diluted $ 0.14 $ -- $ 0.14
Weighted average number of common and
common equivalent shares outstanding:
Basic 64,862 -- 64,862
Diluted 69,391 -- 69,391
(1)The adjustment represents the amortization of intangible assets
related to the acquisition of the ANVL product line from Empirix,
Inc., the acquisition of certain rights associated with the Chariot
product line from NetIQ Corporation, and the acquisition of G3 Nova
Technologies, Inc.
(2)The adjustment represents the income tax effects of footnote (1)
and the elimination of tax benefits related to previously recognized
stock-based compensation.
IXIA
Impact of Non-GAAP Adjustments on Net Income
(in thousands, except percentages and per share data)
(unaudited)
Three months ended June 30, 2004
---------------------------------
GAAP Adjustments Non-GAAP
--------- ----------- ---------
Net revenues $ 26,811 $ -- $ 26,811
Cost of revenues 4,851 (6)(1) 4,845
Amortization of purchased technology 732 (732)(2) --
--------- --------- ---------
Gross profit 21,228 738 21,966
--------- --------- ---------
79.2% 81.9%
Operating expenses:
Research and development 5,519 -- 5,519
Sales and marketing 7,695 -- 7,695
General and administrative 2,962 -- 2,962
Amortization of intangible assets 379 (379)(2) --
Stock-based compensation 126 (126)(1) --
--------- --------- ---------
Total operating expenses 16,681 (505) 16,176
--------- --------- ---------
62.2% 60.3%
Income from operations 4,547 1,243 5,790
Interest and other, net 595 -- 595
--------- --------- ---------
Income before income taxes 5,142 1,243 6,385
Income tax expense 1,596 545(3) 2,141
--------- --------- ---------
Net income $ 3,546 $ 698 $ 4,244
========= ========= =========
Earnings per share:
Basic $ 0.06 $ 0.01(4) $ 0.07
Diluted $ 0.06 $ 0.01(4) $ 0.07
Weighted average number of common
and common equivalent shares
outstanding:
Basic 60,447 -- 60,447
Diluted 64,308 -- 64,308
(1)The adjustment represents stock-based compensation related to stock
options granted prior to our IPO in October 2000.
(2)The adjustment represents the amortization of intangible assets
related to the acquisition of the ANVL product line from Empirix,
Inc., the acquisition of certain rights associated with the Chariot
product line from NetIQ Corporation, and the acquisition of G3 Nova
Technologies, Inc.
(3)The adjustment represents the income tax effects of footnotes (1)
and (2), and the elimination of tax benefits related to previously
recognized stock-based compensation.
(4)The adjustment represents the earnings per share effect of the
adjustments noted in footnotes (1), (2) and (3).
IXIA
Impact of Non-GAAP Adjustments on Net Income
(in thousands, except percentages and per share data)
(unaudited)
Six months ended June 30, 2005
-------------------------------
GAAP Adjustments Non-GAAP
-------- ------------ ---------
Net revenues $79,740 $ -- $79,740
Cost of revenues 12,194 -- 12,194
Amortization of purchased technology 1,885 (1,885)(1) --
-------- ----------- --------
Gross profit 65,661 1,885 67,546
-------- ----------- --------
82.3% 84.7%
Operating expenses:
Research and development 15,520 -- 15,520
Sales and marketing 19,425 -- 19,425
General and administrative 7,519 -- 7,519
Amortization of intangible assets 628 (628)(1) --
-------- ----------- --------
Total operating expenses 43,092 (628) 42,464
-------- ----------- --------
54.0% 53.3%
Income from operations 22,569 2,513 25,082
Interest and other, net 2,125 -- 2,125
-------- ----------- --------
Income before income taxes 24,694 2,513 27,207
Income tax expense 5,599 3,009(2) 8,608
-------- ----------- --------
Net income $19,095 $ (496) $18,599
======== =========== ========
Earnings per share:
Basic $ 0.30 $ (0.01)(3) $ 0.29
Diluted $ 0.28 $ (0.01)(3) $ 0.27
Weighted average number of common and
common equivalent shares outstanding:
Basic 64,112 -- 64,112
Diluted 68,944 -- 68,944
(1)The adjustment represents the amortization of intangible assets
related to the acquisition of the ANVL product line from Empirix,
Inc., the acquisition of certain rights associated with the Chariot
product line from NetIQ Corporation, and the acquisition of G3 Nova
Technologies, Inc.
(2)The adjustment represents the income tax effects of footnote (1)
and the elimination of tax benefits related to previously recognized
stock-based compensation.
(3)The adjustment represents the earnings per share effect of the
adjustments noted in footnotes (1) and (2).
IXIA
Impact of Non-GAAP Adjustments on Net Income
(in thousands, except percentages and per share data)
(unaudited)
Six months ended June 30, 2004
-------------------------------
GAAP Adjustments Non-GAAP
--------- ----------- --------
Net revenues $51,724 $ -- $51,724
Cost of revenues 9,262 (29)(1) 9,233
Amortization of purchased technology 1,371 (1,371)(2) --
-------- ----------- --------
Gross profit 41,091 1,400 42,491
-------- ----------- --------
79.4% 82.1%
Operating expenses:
Research and development 11,182 -- 11,182
Sales and marketing 15,352 -- 15,352
General and administrative 5,325 -- 5,325
Amortization of intangible assets 788 (788)(2) --
Stock-based compensation 375 (375)(1) --
-------- ----------- --------
Total operating expenses 33,022 (1,163) 31,859
-------- ----------- --------
63.8% 61.6%
Income from operations 8,069 2,563 10,632
Interest and other, net 1,333 -- 1,333
-------- ----------- --------
Income before income taxes 9,402 2,563 11,965
Income tax expense 2,834 1,154(3) 3,988
-------- ----------- --------
Net income $ 6,568 $ 1,409 $ 7,977
======== =========== ========
Earnings per share:
Basic $ 0.11 $ 0.02(4) $ 0.13
Diluted $ 0.10 $ 0.02(4) $ 0.12
Weighted average number of common and
common equivalent shares outstanding:
Basic 60,170 -- 60,170
Diluted 64,528 -- 64,528
(1)The adjustment represents stock-based compensation related to stock
options granted prior to our IPO in October 2000.
(2)The adjustment represents the amortization of intangible assets
related to the acquisition of the ANVL product line from Empirix,
Inc., the acquisition of certain rights associated with the Chariot
product line from NetIQ Corporation, and the acquisition of G3 Nova
Technologies, Inc.
(3)The adjustment represents the income tax effects of footnotes (1)
and (2), and the elimination of tax benefits related to previously
recognized stock-based compensation.
(4)The adjustment represents the earnings per share effect of the
adjustments noted in footnotes (1), (2) and (3).
|
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion