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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 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