Juniper Networks, Inc. Reports Q2 '02 Financial Results Net Revenue $117.0M; Pro forma EPS $0.00

Juniper Networks, Inc. Reports Q2 '02 Financial Results Net Revenue $117.0M; Pro forma EPS $0.00

Sunnyvale, CA - July 11, 2002 — Juniper Networks, Inc. (Nasdaq: JNPR), a leading provider of trusted IP infrastructures for the New Public Network, today reported its second quarter results for the period ending June 30, 2002.

Net revenues for the second quarter were $117.0 million, compared with $202.2 million for the same period last year, a decrease of 42%. Pro forma net income was $421,000 or $0.00 per share, compared with pro forma net income of $29.3 million or $0.09 per share for the second quarter of 2001.

Actual net income for the second quarter, which includes amortization of purchased intangibles of $1.6 million and a deferred compensation credit of $8.0 million, was $6.2 million or $0.02 per share, compared with a net loss of $37.1 million or $0.12 per share in the second quarter of 2001.

Net revenues for the first six months of 2002 were $239.3 million, compared with $534.3 million for the same six-month period in 2001. Pro forma net income for the first six months of 2002 was $844,000 or $0.00 per share, compared with pro forma net income of $121.5 million or $0.35 per share during the same six-month period in 2001. Actual net loss for the first six months of 2002 was $39.8 million or $0.12 per share, compared with actual net income of $21.4 million or $0.06 per share during the same six-month period in 2001.

As announced on July 2, 2002, Juniper Networks completed the acquisition of Unisphere Networks and has begun integration of the new organization, which will be completed within two weeks and will result in cost savings of approximately $7 million per quarter, including headcount reductions of approximately 10% of the combined company.

"We enjoyed a healthy balance of revenue contribution last quarter, across both new and existing products, in many different sectors of the networking market," said Scott Kriens, Chairman and CEO of Juniper Networks. "We have continued to execute on our plan to build a portfolio of comprehensive solutions to reach many different types of service providers and carriers around the world, while maintaining our focus on financial fundamentals."

About Juniper Networks, Inc.

Juniper Networks leads the industry in turning network innovation into the reliable delivery of core, edge, mobile and cable Internet services at scale for the New Public Network. Headquartered in Sunnyvale, California, Juniper Networks offers additional information on its product and service offerings at www.juniper.net.

Juniper Networks is registered in the U.S. Patent and Trademark Office and in other countries as a trademark of Juniper Networks, Inc. Broadband Cable Processor, ERX, ESP, G10, Internet Processor, JUNOS, JUNOScript, M5, M10, M20, M40, M40e, M160, MRX, M-series, NMC-RX, SDX, ServiceGuard, T640, T-series, UMC, and Unison are trademarks of Juniper Networks, Inc. All other trademarks, service marks, registered trademarks, or registered service marks are the property of their respective owners.

Actual results could differ materially from those anticipated in forward-looking statements in this release as a result of certain factors, including those set forth in the risk factors described in the Company's SEC filings, including its recent Form 10K.

JUNIPER NETWORKS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
		June 30, 2002		December 31, 2001
Assets		(unaudited)		(1)
Current assets:
Cash and cash equivalents		$ 589,826		$ 606,845
Short-term investments		374,476		382,797
Accounts receivable, net		62,264		103,524
Prepaid expenses and other current assets		27,549		32,882
Total current assets		1,054,115		1,126,048
Property and equipment, net		258,442		251,811
Long-term investments		750,277		708,232
Other long-term assets		274,274		303,497
Total Assets		$ 2,337,108		$ 2,389,588
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$ 55,534	$ 76,417
Other accrued liabilities	127,139	128,960
Deferred revenue	32,476	36,842
Total current liabilities	215,149	242,219
Convertible subordinated notes	1,150,000	1,150,000
Common stock and additional paid-in capital	952,778	959,684
Deferred stock compensation	(30,984)	(63,065)
Accumulated other comprehensive income	7,605	18,418
Retained earnings	42,560	82,332
Total Liabilities and Stockholders' Equity	$ 2,337,108	$ 2,389,588
(1)  Derived from audited financial statements

JUNIPER NETWORKS, INC. PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (a) (In thousands, except per share amounts)
		Three Months Ended June 30,				Six Months Ended June 30,
		2002		2001		2002		2001
		(unaudited)				(unaudited)
Revenues:
Product revenues		$ 99,012		$ 187,870	$ 203,558		$ 511,715
Service revenues		18,024		14,311	35,697		22,571
Net revenues		117,036	202,181	239,255	534,286
Cost of revenues	48,155	80,480	98,151	194,221
Gross profit	68,881	121,701	141,104	340,065
Operating expenses:
Research and development	33,770	42,077	68,839	85,068
Sales and marketing	25,894	35,963	53,472	77,285
General and administrative	9,104	9,439	18,653	19,907
Total operating expenses	68,768	87,479	140,964	182,260
Operating income	113	34,222	140	157,805
Other income, net	617	9,916	2,237	21,908
Equity in joint venture	(111)	(1,085)	(1,136)	(1,085)
Income before income taxes	619	43,053	1,241	178,628
Provision for income taxes	198	13,777	397	57,161
Net income	$ 421	$ 29,276	$ 844	$ 121,467
Basic net income per share	$ 0.00	$ 0.09	$ 0.00	$ 0.38
Shares used in computing basic net income per share	330,957	318,196	330,162	316,883
Diluted net income per share	$ 0.00	$ 0.09	$ 0.00	$ 0.35
Shares used in computing diluted net income per share	342,172	342,208	342,502	343,563
(a) The pro forma statements exclude the impact of the amortization of purchased intangibles, deferred stock compensation, restructuring costs and minority investment write-downs charges in all applicable periods.

JUNIPER NETWORKS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts)
		Three Months Ended June 30,				Six Months Ended June 30,
		2002		2001		2002		2001
		(unaudited)				(unaudited)
Revenues:
Product revenues		$ 99,012		$ 187,870	$ 203,558		$ 511,715
Service revenues		18,024		14,311	35,697		22,571
Net revenues		117,036	202,181	239,255	534,286
Cost of revenues	48,155	80,480	98,151	194,221
Gross profit	68,881	121,701	141,104	340,065
Operating expenses:
Research and development	33,770	42,077	68,839	85,068
Sales and marketing	25,894	35,963	53,472	77,285
General and administrative	9,104	9,439	18,653	19,907
Amortization of purchased intangibles and deferred stock compensation	(6,362)	31,117	8,913	67,700
Restructuring costs	-	12,340	-	12,340
Total operating expenses	62,406	130,936	149,877	262,300
Operating income/(loss)	6,475	(9,235)	(8,773)	77,765
Other income, net	617	9,916	2,237	21,908
Losses realized on minority investments	-	(32,620)	(30,600)	(42,620)
Equity in joint venture	(111)	(1,085)	(1,136)	(1,085)
Income/(loss) before income taxes	6,981	(33,024)	(38,272)	55,968
Provision for income taxes	750	4,107	1,500	34,533
Net income/(loss)	$ 6,231	$ (37,131)	$ (39,772)	$ 21,435
Basic net income/(loss) per share	$ 0.02	$ (0.12)	$ (0.12)	$ 0.07
Shares used in computing basic net income/(loss) per share	330,957	318,196	330,162	316,883
Diluted net income/(loss) per share	$ 0.02	$ (0.12)	$ (0.12)	$ 0.06
Shares used in computing diluted net income/(loss) per share	342,172	318,196	330,162	343,563