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Juniper Networks, Inc. Reports Q2' 01 Financial Results Net Revenue $202.2M, up 79%; Pro forma EPS $0.09

Sunnyvale, CA - July 12, 2001 - Juniper Networks, Inc. (Nasdaq: JNPR), a leading provider of next-generation IP infrastructure systems, today reported its second quarter results for the period ending June 30, 2001.

Net revenues for the second quarter were $202.2 million, compared with $113.0 million for the same period last year, an increase of 79%. Pro forma net income was $29.3 million or $0.09 per share, compared with pro forma net income of $28.6 million or $0.08 per share for the second quarter of 2000.

Actual net loss for the second quarter, which includes amortization of goodwill and other purchased intangibles of $12.3 million, amortization of deferred compensation of $18.8 million, a restructuring charge of $12.3 million and write-downs in equity investments totaling $32.6 million, was $37.1 million or $0.12 per share, compared with net income of $19.6 million or $0.06 per share in the second quarter of 2000.

Net revenues for the first six months of 2001 were $534.3 million, compared with $176.9 million for the same six month period in 2000. Pro forma net income for the first six months of 2001 was $121.5 million or $0.35 per share, compared with pro forma net income of $39.1 million or $0.11 per share during the same six month period in 2000. Actual net income for the first six months of 2001 was $21.4 million or $0.06 per share, compared with actual net income of $27.7 million or $0.08 per share during the same six month period in 2000.

"The second quarter represents an example of our priorities during these times - customer growth, financial discipline, and continued investment in innovation," said Scott Kriens, Chairman and CEO of Juniper Networks. "We will continue to use our proven abilities in focus and execution to protect these principles," 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 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 Sunnyvale, California. For more information, please visit the Web site at https://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. Internet Processor, Internet Processor II, JUNOS, JUNOScript, M5, M10, M20, M40, and M160 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,
2001
  December 31,
2000
     
Assets (unaudited) (1)
Current assets:    
  Cash and cash equivalents
$ 512,415
$ 563,005
   Short-term investments 494,953 581,738
   Accounts receivable, net 137,121 176,535
   Prepaid expenses and other current assets 31,486 27,269
     
     Total current assets 1,175,975 1,348,547
Property and equipment, net 252,215 36,440
Long-term investments 618,760 450,568
Other long-term assets 204,789 267,574
     
   Total Assets
$ 2,251,739
$ 2,103,129
     
 
Liabilities and Stockholders' Equity    
Current liabilities:    
  Accounts payable
$ 62,947
$ 72,347
  Other accrued liabilities 166,966 109,436
  Deferred revenue 29,830 34,625
     
    Total current liabilities 259,743 216,408
Convertible subordinated notes and other long-term liabilities 1,150,000 1,156,719
 
Common stock and additional paid-in capital 777,531 735,103
Deferred stock compensation (68,773) (111,813)
Accumulated other comprehensive income 16,054 10,963
Retained earnings 117,184 95,749
     
   Total Liabilities and Stockholders' Equity
$ 2,251,739
$ 2,103,129
     
 
(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,
     
  2001   2000 2001   2000
     
  (unaudited) (unaudited)
 
Net revenues
$ 202,181
 
$ 113,028
$ 534,286
 
$ 176,914
 
Cost of revenues 80,480 40,752 194,221 65,853
     
 
Gross profit 121,701 72,276 340,065 111,061
 
Operating expenses:  
   Research and development 42,077 18,000 85,068 33,990
   Sales and marketing 35,963 17,247 77,285 28,752
   General and administrative 9,439 4,171 19,907 7,185
     
     Total operating expenses 87,479 39,418 182,260 69,927
     
 
Operating income 34,222 32,858 157,805 41,134
 
Interest income, net 9,916 9,876 21,908 16,512
Equity in joint venture (1,085) - (1,085) -
     
 
Income before income taxes 43,053 42,734 178,628 57,646
 
Provision for income taxes 13,777 14,102 57,161 18,552
     
 
Net income
$ 29,276
$ 28,632
$ 121,467
$ 39,094
     
 
Basic net income per share
$ 0.09
$ 0.09
$ 0.38
$ 0.13
     
Shares used in computing basic
net income per share
318,196 301,879 316,883 298,712
     
 
Diluted net income per share
$ 0.09
$ 0.08
$ 0.35
$ 0.11
     
Shares used in computing diluted
net income per share
342,208 346,411 343,563 346,102
     
 
(a) The pro forma statements exclude the impact of the amortization of goodwill, deferred stock compensation, restructuring costs, minority investment write-downs and charitable contribution charges in all 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,
     
  2001   2000 2001   2000
     
  (unaudited) (unaudited)
 
Net revenues
$ 202,181
 
$ 113,028
$ 534,286
 
$ 176,914
 
Cost of revenues 80,480 40,752 194,221 65,853
     
 
Gross profit 121,701 72,276 340,065 111,061
 
Operating expenses:
   Research and development 42,077 18,000 85,068 33,990
   Sales and marketing 35,963 17,247 77,285 28,752
   General and administrative 9,439 4,171 19,907 7,185
Goodwill and deferred stock compensation 31,117 2,315 67,700 4,706
   Restructuring costs 12,340 - 12,340 -
   Charitable contribution - 10,000 - 10,000
     
     Total operating expenses 130,936 51,733 262,300 84,633
     
 
Operating income/(loss) (9,235) 20,543 77,765 26,428
 
Interest income, net 9,916 9,876 21,908 16,512
Losses realized on minority investments (32,620) - (42,620) -
Equity in joint venture (1,085) - (1,085) -
     
 
Income/(loss) before income taxes (33,024) 30,419 55,968 42,940
 
Provision for income taxes 4,107 10,802 34,533 15,252
     
 
Net income/(loss)
$ (37,131)
$ 19,617
$ 21,435
$ 27,688
     
 
Basic net income/(loss) per share
$ (0.12)
$ 0.06
$ 0.07
$ 0.09
     
Shares used in computing basic
net income/(loss) per share
318,196 301,879 316,883 298,712
     
 
Diluted net income/(loss) per share
$ (0.12)
$ 0.06
$ 0.06
$ 0.08
     
Shares used in computing diluted
net income/(loss) per share
318,196 346,411 343,563 346,102