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Juniper Networks, Inc. Reports Q4'99 Financial Results Net Revenue $45.4M; Split-adjusted Pro forma EPS $0.03

Mountain View, CA - January 18, 2000 - Juniper Networks, Inc. (Nasdaq:JNPR), a leading provider of next-generation IP infrastructure systems, today reported its fourth quarter results for the period ending December 31, 1999.

Net revenues for the fourth quarter were $45.4 million, compared with $29.6 million for the third quarter, an increase of 53%. Pro forma net income, which excludes the amortization of goodwill of $1.0 million for the Layer 5 acquisition and the deferred compensation charge of $668,000, was $4.8 million or $0.03 per share, compared with a pro forma loss of $785,000 or $(0.01) per share in the third quarter of 1999.

Actual net income for the fourth quarter, including the above-mentioned amortization of goodwill and deferred compensation charge, was $3.1 million or $0.02 per share, compared with a loss of $1.6 million or $(0.01) per share in the third quarter of 1999.

Net revenues for 1999 were $102.6 million, compared with $3.8 million for 1998. Pro forma net loss for 1999 was $4.7 million or $(0.04) per share, compared with pro forma net loss of $29.7 million or $(0.27) per share during 1998. Actual net loss for 1999 was $9.0 million or $(0.07) per share, compared with actual net loss of $31.0 million or $(0.28) per share during 1998.

The net income per share and number of shares used in the per-share calculation for all periods presented reflect the three-for-one stock split that was effective January 18, 2000.

"The fourth quarter continues a pattern of consistent execution and expansion of the company's prospects," said Scott Kriens, Chairman and CEO of Juniper Networks. "Our new platform, the M20 Internet backbone router, and JUNOS 3.4, our fifth major software release, are complemented by expansion of our development talent and sales presence through the acquisition of Layer 5 and Pacific Advantage, Limited. New wins such as iaxis and PSINet affirm our acceptance as a leading vendor of IP infrastructure," Kriens said.

About Juniper Networks, Inc.

Juniper Networks, Inc. is a leading provider of purpose-built systems that meet the scalability, performance, density, and compatibility requirements of rapidly evolving, optically-enabled IP networks. The company's purpose-built systems provide new IP infrastructure solutions for the world's leading service providers. Juniper Networks service, manufacturing teams, and IP engineers work closely with customers to build and support customer networks. The company is headquartered in Mountain View, California. For more information, please visit our Web site at https://www.juniper.net.

Juniper Networks is a registered trademark of Juniper Networks, Inc. JUNOS, M20, and M40 are trademarks of Juniper Networks, Inc. All other trademarks, service marks, registered trademarks, or registered service marks may be 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 S-1 Registration Statement.

JUNIPER NETWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
 
  December 31, 1999   December 31, 1998*
       
Assets
Current Assets:
  Cash and cash equivalents   $    158,043   $    20,098
  Short-term investments   187,915   -
  Accounts receivable   23,950   8,056
  Prepaid expenses and other current assets   7,925   680
       
    Total current assets   377,833   28,834
Property and equipment, net   12,416   7,702
Long-term investments and other long-term assets   123,129   135
   Total Assets   $    513,378   $    36,671
       
 
Liabilities and Stockholders' Equity
Current liabilities:
  Accounts payable   $    15,368   $    4,745
  Other accrued liabilities   21,025   1,798
  Deferred revenue   19,270   5,639
  Current portion of obligations under capital leases   -   2,220
       
    Total current liabilities   55,663   14,402
Long-term liabilities   -   5,204
 
Preferred stock, common stock and additional paid-in capital   512,883   65,351
Deferred stock compensation   (3,001)   (5,153)
Accumulated deficit   (52,167)   (43,133)
       
   Total Liabilities and Stockholders' Equity   $    513,378   $    36,671
       
 
*   Derived from audited financial statements


JUNIPER NETWORKS, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
 
  Three Months Ended
December 31
  Year Ended
December 31
       
  1999 1998   1999 1998
       
  (unaudited)  
Net revenues   $ 45,442   $ 3,807   $ 102,606   $ 3,807
 
Cost of revenues   18,390 3,815   45,272 4,416
       
 
Gross profit (loss)   27,052 (8)   57,334 (609)
 
Operating expenses:
  Research and development   15,819 6,145   41,502 23,987
  Sales and marketing   8,869 1,718   20,931 4,216
  General and administrative   1,781 882   5,235 2,223
       
    Total operating expenses   26,469 8,745   67,668 30,426
       
 
Operating income/(loss)   583 (8,753)   (10,334) (31,035)
 
Interest income, net   6,086 117   8,011 1,301
       
 
Income/(loss) before income taxes   6,669 (8,636)   (2,323) (29,734)
 
Provision for income taxes   1,900 -   2,425 2
       
 
Net income/(loss)   $ 4,769   $ (8,636)   $ (4,748)   $ (29,736)
       
 
Basic net income/(loss) per share   $ 0.03   $ (0.21)   $ (0.05)   $ (0.76)
       
Shares used in computing basic net income/(loss) per share   143,905 41,886   94,661 38,871
       
 
Diluted net income/(loss) per share   $ 0.03   $ (0.21)   $ (0.05)   $ (0.76)
       
Shares used in computing diluted net income/(loss) per share   171,815 41,886   94,661 38,871
       
Pro forma basic and diluted net income/(loss) per share**     $ (0.08)   $ (0.04)   $ (0.27)
       
Shares used in computing pro forma basic and
diluted net income/(loss) per share**
  114,225   131,480 111,210
       
 
**   Pro forma basic and diluted shares outstanding include convertible preferred stock using the if-converted method from the original date of issuance. The calculation excludes common stock equivalents, as their effect would be anti-dilutive.


JUNIPER NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
 
  Three Months Ended
December 31
  Year Ended
December 31
   
  1999 1998   1999 1998
   
  (unaudited)  
Net revenues   $ 45,442   $ 3,807   $ 102,606   $ 3,807
 
Cost of revenues   18,390 3,815   45,272 4,416
   
 
Gross profit (loss)   27,052 (8)   57,334 (609)
 
Operating expenses:
  Research and development   15,819 6,145   41,502 23,987
  Sales and marketing   8,869 1,718   20,931 4,216
  General and administrative   1,781 882   5,235 2,223
  Goodwill and deferred stock compensation   1,689 648   4,286 1,235
   
    Total operating expenses   28,158 9,393   71,954 31,661
   
 
Operating income/(loss)   (1,106) (9,401)   (14,620) (32,270)
 
Interest income, net   6,086 117   8,011 1,301
   
 
Income/(loss) before income taxes   4,980 (9,284)   (6,609) (30,969)
 
Provision for income taxes   1,900 -   2,425 2
   
 
Net income/(loss)   $ 3,080   $ (9,284)   $ (9,034)   $ (30,971)
       
 
Basic net income/(loss) per share   $ 0.02   $ (0.22)   $ (0.10)   $ (0.80)
       
Shares used in computing basic net income/(loss) per share   143,905 41,886   94,661 38,871
       
 
Diluted net income/(loss) per share   $ 0.02   $ (0.22)   $ (0.10)   $ (0.80)
       
Shares used in computing diluted net income/(loss) per share   171,815 41,886   94,661 38,871
       
Pro forma basic and diluted net income/(loss) per share***     $ (0.08)   $ (0.07)   $ (0.28)
       
Shares used in computing pro forma basic and
diluted net income/(loss) per share***
  114,225   131,480 111,210
       
 
***   Pro forma basic and diluted shares outstanding include convertible preferred stock using the if-converted method from the original date of issuance. The calculation excludes common stock equivalents, as their effect would be anti-dilutive.