WESTFORD, Mass., July 14 /PRNewswire-FirstCall/ -- NetScout Systems, Inc.
(Nasdaq: NTCT), a leading provider of network performance management
solutions, today announced financial results for its first quarter of fiscal
year 2005.
Revenue for the first quarter of fiscal year 2005 ended June 30, 2004 was
$20.1 million, compared to revenue of $19.5 million in the previous quarter
and revenue of $15.6 million in the first quarter of fiscal year 2004. Net
profit for the quarter was $297,000, or $0.01 per diluted share, compared to a
net loss of $177,000, or ($0.01) per basic and diluted share, for the previous
quarter and compared to a net loss of $552,000, or ($0.02) per basic and
diluted share, in the first quarter of fiscal year 2004.
"We are pleased to report another quarter of good results, exceeding our
initial expectations and showing strong growth over this same period a year
ago," said Anil Singhal, President and CEO of NetScout Systems. "We are
encouraged by continuing strong demand for our products as well as increased
activity in our key vertical markets, even in our seasonally slow first
quarter. We continue to focus on expanding our market share through product
innovation and broader partnerships worldwide."
Financial Highlights for the First Quarter:
* Total revenue increased 3% sequentially and increased 29% from the
first quarter of fiscal year 2004. Product revenue decreased 2%
sequentially and increased 34% from the first quarter of fiscal year
2004. Service revenue increased 11% sequentially and increased 24%
from the first quarter of fiscal year 2004. Royalty revenue decreased
7% sequentially and increased 3% from the first quarter of fiscal year
2004.
* Gross margin was 77% of total revenue, up 1 point sequentially and 2
points compared to the first quarter of fiscal year 2004.
* Cash flow from operations was positive.
* Cash and short and long-term marketable securities increased by $1
million to $76.5 million in the first quarter and increased by $3.3
million year-over-year.
* 21 new customers were added worldwide.
* 288 customers made repeat purchases.
* 49 customers placed orders over $100,000.
* Direct sales represented 50% of total revenue; indirect sales to
resellers represented 50% of total revenue.
* International business comprised approximately 14% of total revenue.
Product and Company Highlights for the First Quarter:
* NetScout released new features for monitoring the performance of
applications for enterprises using Multiprotocol Label Switching
(MPLS) in their wide area networks providing critical visibility into
the usage and activity of applications that would otherwise be
obscured in MPLS environments.
* During the quarter NetScout released a new software module called the
nGenius(R) Trace Analyzer Integrator that allows nGenius Performance
Manager and nGenius Probes to inter-operate with Network
Associates'(R) Sniffer products as well as other third party trace
analysis products.
* NetScout announced a multi-tiered channel partner program with added
incentives and increased support, including training, technical
support, marketing resources and sales promotions, aimed at improving
partners' success in selling NetScout products to enterprises and
governmental agencies.
* NetScout further expanded its sales channels in Asia by signing a new
partnership agreement with Shanghai Posts & Telecommunications
Equipment Co., Ltd. to resell its nGenius products in the Eastern
China region.
* NetScout announced a new agreement with Evident Software(R) to jointly
deliver IT demand and cost analysis solutions for major enterprises'
outsourcing, utility computing and application delivery programs.
Evident also joined NetScout's nGenius Alliance Program.
Guidance:
For the second quarter of fiscal year 2005, the Company expects revenue to
be in the range of $20 million to $21 million and net income per diluted share
to be in the range of $0.00 to $0.01. The Company expects to be cash
positive in the quarter.
CONFERENCE CALL INSTRUCTIONS:
The Company invites shareholders to listen to its conference call today at
4:30 p.m. ET, which will be webcast live through the Company's website at
http://www.netscout.com/investors. Alternatively, people can listen to the
call by dialing 800-230-1085 for U.S./Canada and 612-332-0226 for
international callers. A replay of the call will be available after 8:00 p.m.
ET on July 14 for approximately two weeks. The number for the replay is 800-
475-6701 for U.S./Canada and 320-365-3844 for international callers. The
access code is 737209.
About NetScout Systems, Inc.
NetScout Systems, Inc. (Nasdaq: NTCT) is a market leader and pioneer of
integrated network performance management products that unify performance
across the enterprise. NetScout's nGenius(R) Performance Management System is
helping more than 3,000 leading companies increase their return on
infrastructure investments by optimizing the performance of networks and
applications according to business priorities. NetScout is headquartered in
Westford, Massachusetts and has offices worldwide. Further information is
available at http://www.netscout.com.
Safe Harbor:
Forward-looking statements in this release are made pursuant to the safe
harbor provisions of Section 21E of the Securities Exchange Act of 1934.
Investors are cautioned that statements in this press release, which are not
strictly historical statements, including the plans, objectives and future
financial performance of NetScout, constitute forward-looking statements which
involve risks and uncertainties. Actual results could differ materially from
the forward-looking statements. Risks and uncertainties which could cause
actual results to differ include, without limitation, risks and uncertainties
associated with the Company's strategic relationships with Cisco Systems and
other partners, dependence upon broad-based acceptance of the Company's
network performance management solutions, the Company's ability to achieve and
maintain a high rate of growth, introduction and market acceptance of new
products and product enhancements such as the delivery of nGenius(R) product
platform probes and software solutions and the implementation of the Company's
CDM(TM) Technology strategy, the ability of the Company to take advantage of
service provider opportunities, competitive pricing pressures, reliance on
sole source suppliers, successful expansion and management of direct and
indirect distribution channels, and dependence on proprietary technology, as
well as risks associated with a continued climate of tight IT spending, and
risks of further slowdowns or downturns in economic conditions generally and
in the market for network performance management solutions specifically. For
a more detailed description of the risk factors associated with the Company,
please refer to the Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 2004 on file with the Securities and Exchange Commission.
NetScout assumes no obligation to update any forward-looking information
contained in this press release or with respect to the announcements described
herein.
NetScout and the NetScout logo and nGenius are registered trademarks of
NetScout Systems, Inc. CDM and the CDM logo, Universal Response Time, Power
Alarms, Workspaces and MasterCare and the MasterCare logo are trademarks of
NetScout Systems, Inc. NetScout reserves the right, at its sole discretion,
to make changes at any time in its technical information and specifications
and service and support programs.
The Company's condensed consolidated statements of operations and balance
sheets are attached.
Contact:
Catherine Taylor
Director of Investor Relations
NetScout Systems, Inc.
978-614-4286
IR@netscout.com
NetScout Systems, Inc.
Condensed Consolidated Statements
of Operations
(In thousands)
(Unaudited)
Three Months Ended
June 30,
2004 2003
Revenue:
Product $11,560 $8,628
Service 8,105 6,557
License and royalty 432 418
Total revenue 20,097 15,603
Cost of revenue:
Product(1) 3,653 2,781
Service 1,065 1,044
Total cost of revenue 4,718 3,825
Gross margin 15,379 11,778
Operating expenses:
Research and development(2) 4,319 3,009
Sales and marketing 8,783 7,944
General and administrative 1,954 1,649
Amortization of other intangible
assets - 272
Total operating expenses 15,056 12,874
Income (Loss) from operations 323 (1,096)
Interest income and other expenses,
net 179 197
Income (loss) before income tax
expense (benefit) 502 (899)
Income tax expense (benefit) 205 (347)
Net income (loss) $297 $(552)
Basic net income (loss) per share $0.01 $(0.02)
Diluted net income (loss) per share $0.01 $(0.02)
Shares used in computing:
Basic net income (loss) per
share 30,448 30,034
Diluted net income (loss) per
share 31,710 30,034
(1) Cost of product revenue includes amortization of capitalized software
of $166 for the three months ended June 30, 2004
(2) Research and development costs are net of capitalized software
development costs of $1,068 for the three months
ended June 30, 2003.
NetScout Systems, Inc.
Condensed Consolidated
Balance Sheets
(In thousands)
(Unaudited)
June 30, March 31,
2004 2004
Assets
Current assets:
Cash and cash equivalents $30,092 $19,011
Marketable securities 40,443 50,432
Accounts receivable, net 11,521 10,851
Inventories 2,985 3,366
Refundable income taxes 2,172 2,102
Deferred income taxes 1,687 1,667
Prepaids and other current assets 2,283 2,175
Total current assets 91,183 89,604
Fixed assets, net 5,686 5,415
Capitalized software development costs 718 884
Goodwill, net 28,839 28,839
Deferred income taxes 8,208 8,378
Long-term prepaid expense 36 45
Long-term marketable securities 5,968 6,016
Total assets $140,638 $139,181
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $2,435 $1,984
Accrued compensation 5,018 4,481
Accrued other 2,334 2,140
Income tax payable 490 490
Deferred revenue 15,536 15,968
Total current liabilities 25,813 25,063
Long-term liabilities:
Long-term deferred revenue 887 1,006
Total liabilities 26,700 26,069
Stockholders' equity:
Common stock 35 34
Additional paid-in capital 111,341 110,683
Accumulated other comprehensive
income (123) 7
Treasury stock (26,490) (26,490)
Retained earnings 29,175 28,878
Total stockholders' equity 113,938 113,112
Total liabilities and
stockholders' equity $140,638 $139,181
SOURCE NetScout Systems, Inc.
-0- 07/14/2004
/CONTACT: Catherine Taylor, Director of Investor Relations of NetScout
Systems, Inc., +1-978-614-4286, IR@netscout.com/
/Web site: http://www.netscout.com/
(NTCT)
CO: NetScout Systems, Inc.
ST: Massachusetts
IN: CPR NET STW
SU: ERN CCA MAV
NJ-CP
-- NEW024 --
6499 07/14/2004 16:05 EDT http://www.prnewswire.com