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Juniper Networks, Inc. Reports Q3'01 Financial Results Net Revenue $201.7M; Pro forma EPS $0.10

Sunnyvale, CA - October 11, 2001 - Juniper Networks, Inc. (NASDAQ: JNPR), a leading provider of next-generation IP infrastructure systems, today reported its third quarter results for the period ending September 30, 2001.

Net revenues for the third quarter were $201.7 million, compared with $201.2 million for the same period last year. Pro forma net income was $32.5 million or $0.10 per share, compared with pro forma net income of $60.3 million or $0.17 per share for the third quarter of 2000.

Actual net loss for the third quarter, which includes amortization of goodwill and other purchased intangibles of $12.1 million, amortization of deferred compensation of $15.9 million, a charge to contract manufacturers of $39.9 million and impairment write-downs in equity investments totaling $11.0 million, was $29.7 million or $0.09 per share, compared with net income of $58.1 million or $0.17 per share in the third quarter of 2000.

Net revenues for the first nine months of 2001 were $736.0 million, up 95%, compared with $378.1 million for the same nine month period in 2000. Pro forma net income for the first nine months of 2001 was $154.0 million or $0.45 per share, compared with pro forma net income of $99.4 million or $0.29 per share during the same nine month period in 2000. Actual net loss for the first nine months of 2001 was $8.3 million or $0.03 per share, compared with actual net income of $85.8 million or $0.25 per share during the same nine month period in 2000.

In addition, the Board of Directors authorized a stock repurchase program of up to $200 million over the next two years, effective immediately.

"The ability to deliver a strong bottom line in difficult times is strategic," said Scott Kriens, Chairman and CEO of Juniper Networks. "Our focus on financial fundamentals enables us to fund and extend our product and technology advantages in support of our long-term vision of building the new public network," 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)
    September 30,
2001
  December 31,
2000
     
Assets (unaudited) (1)
Current assets:    
  Cash and cash equivalents
$ 666,472
$ 563,005
  Short-term investments 411,450 581,738
  Accounts receivable, net 111,905 176,535
  Prepaid expenses and other current assets 25,776 27,269
     
    Total current assets 1,215,603 1,348,547
Property and equipment, net 252,715 36,440
Long-term investments 610,760 450,568
Other long-term assets 187,698 267,574
     
   Total Assets
$ 2,266,776
$ 2,103,129
     
 
Liabilities and Stockholders' Equity    
Current liabilities:    
  Accounts payable
$ 56,484
$ 72,347
  Other accrued liabilities 204,581 109,436
  Deferred revenue 32,064 34,625
     
    Total current liabilities 293,129 216,408
Convertible subordinated notes and other long-term liabilities 1,150,000 1,156,719
 
Common stock and additional paid-in capital 772,827 735,103
Deferred stock compensation (52,904) (111,813)
Accumulated other comprehensive income 16,266 10,963
Retained earnings 87,458 95,749
     
   Total Liabilities and Stockholders' Equity
$ 2,266,776
$ 2,103,129
     
 
(1) Derived from audited financial statements


JUNIPER NETWORKS, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (i)

(In thousands, except per share amounts)

    Three Months Ended
September 30,
  Nine Months Ended
September 30,
     
  2001   2000 2001   2000
     
  (unaudited) (unaudited)
 
Net revenues
$ 201,703
 
$ 201,201
$ 735,989
 
$ 378,115
 
Cost of revenues 79,899 70,291 274,120 136,144
     
 
Gross profit 121,804 130,910 461,869 241,971
 
Operating expenses:  
  Research and development 37,897 23,600 122,965 57,590
  Sales and marketing 33,591 23,385 110,876 52,137
  General and administrative 9,185 5,446 29,092 12,631
     
    Total operating expenses 80,673 52,431 262,933 122,358
     
 
Operating income 41,131 78,479 198,936 119,613
 
Interest income, net 8,188 11,645 30,096 28,157
Equity in joint venture (1,476) - (2,561) -
     
 
Income before income taxes 47,843 90,124 226,471 147,770
 
Provision for income taxes 15,310 29,781 72,471 48,333
     
 
Net income
$ 32,533
$ 60,343
$ 154,000
$ 99,437
     
 
Basic net income per share
$ 0.10
$ 0.20
$ 0.48
$ 0.33
     
Shares used in computing basic
net income per share
320,178 307,679 317,981 301,701
     
 
Diluted net income per share
$ 0.10
$ 0.17
$ 0.45
$ 0.29
     
Shares used in computing diluted
net income per share
337,106 349,721 341,411 347,309
     
 
(i) The pro forma statements exclude the impact of a settlement charge to contract manufacturers of $39.9 million in Q3 of 2001, the amortization of goodwill and deferred stock compensation in all periods, restructuring costs in Q2 of 2001, minority investment write-downs in Q1, Q2 and Q3 of 2001 and a charitable contribution charge in Q2 of 2000.


JUNIPER NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

    Three Months Ended
September 30,
  Nine Months Ended
September 30,
     
  2001   2000 2001   2000
     
  (unaudited) (unaudited)
 
Net revenues
$ 201,703
 
$ 201,201
$ 735,989
 
$ 378,115
 
Cost of revenues 119,767 70,291 313,988 136,144
     
 
Gross profit 81,936 130,910 422,001 241,971
 
Operating expenses:
  Research and development 37,897 23,600 122,965 57,590
  Sales and marketing 33,591 23,385 110,876 52,137
  General and administrative 9,185 5,446 29,092 12,631
Goodwill and deferred stock compensation 27,966 2,272 95,666 6,977
  Restructuring costs - - 12,340 -
  Charitable contribution - - - 10,000
     
    Total operating expenses 108,639 54,703 370,939 139,335
     
 
Operating income/(loss) (26,703) 76,207 51,062 102,636
 
Interest income, net 8,188 11,645 30,096 28,157
Losses realized on minority investments (11,000) - (53,620) -
Equity in joint venture (1,476) - (2,561) -
     
 
Income/(loss) before income taxes (30,991) 87,852 24,977 130,793
 
Provision for income taxes (1,265) 29,781 33,268 45,033
     
 
Net income/(loss)
$ (29,726)
$ 58,071
$ (8,291)
$ 85,760
     
 
Basic net income/(loss) per share
$ (0.09)
$ 0.19
$ (0.03)
$ 0.28
     
Shares used in computing basic
net income/(loss) per share
320,178 307,679 317,981 301,701
     
 
Diluted net income/(loss) per share
$ (0.09)
$ 0.17
$ (0.03)
$ 0.25
     
Shares used in computing diluted
net income/(loss) per share
320,178 349,721 317,981 347,309