UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
January 19, 2005
F5 Networks, Inc.
| (Exact name of registrant as specified in its charter) |
| Washington | 000-26041 | 91-1714307 | ||
|
(State or other jurisdiction
of incorporation) |
(Commission
File Number) |
(IRS Employer
Identification No.) |
||
| 401 Elliott Avenue West |
| Seattle, WA 98119 |
| (Address of principal executive offices) (Zip Code) |
|
Registrant’s telephone number, including area code
|
(206) 272-5555 |
| Not Applicable |
| Former name or former address, if changed since last report |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On January 19, 2005, F5 Networks, Inc. issued a press release regarding its financial results for the first quarter ended December 31, 2004. The press release is attached hereto as Exhibit 99.1. The information in this report shall not be treated as filed for purposes of the Securities Exchange Act of 1934, as amended.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits:
99.1 Press Release of F5 Networks, Inc. announcing quarterly earnings dated January 19, 2005.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
F5 NETWORKS, INC.
(Registrant)
Date: January 19, 2005
By:
/s/ John McAdam
John McAdam
President and Chief Executive Officer
Exhibit 99.1
FOR IMMEDIATE RELEASE
| CONTACT: |
Investor Relations
John Eldridge (206) 272-6571 j.eldridge@f5.com |
|
Public Relations
Alane Moran (206) 272-6850 a.moran@f5.com |
F5 Networks Announces Results for the First Quarter of Fiscal 2005
Continuing strength in core business drives 66 percent year-over-year revenue growth, further
improvement in profitability
SEATTLE, WA—January 19, 2005 —For the first quarter of fiscal 2005, F5 Networks announced revenue of $60.0 million, a 20 percent increase over revenue of $50.2 million in the fourth quarter of fiscal 2004 and a 66 percent increase over revenue of $36.1 million in the first quarter a year ago. The company’s operating margin for the quarter was 24 percent, compared to 20 percent in the prior quarter and 11 percent in the first quarter of fiscal 2004.
Net income for first quarter of fiscal 2005 was $10.0 million ($0.26 per diluted share).
During the fourth quarter of 2004, F5 became subject to income taxes on U.S. income and also reversed the valuation allowance on U.S. deferred tax assets, resulting in net income of $15.8 million ($0.43 per diluted share), which included a net tax benefit of $5.5 million. To present prior results on a tax-affected basis that is comparable to the current period, the company’s financial statements include pro forma earnings for the first and fourth quarters of fiscal 2004. On a pro forma basis, excluding the net tax benefit resulting from the reversal of the valuation allowance and including a 37 percent provision for income taxes, net income for the fourth quarter of fiscal 2004 would have been $6.8 million ($0.18 per diluted share).
In the first quarter of fiscal 2004 the company reported net income of $3.8 million ($0.11 per diluted share). On a pro forma basis, net income for the first quarter of fiscal 2004 would have been $2.6 million ($0.08 per diluted share) had the company recorded a 37 percent provision for income taxes.
F5 president and chief executive officer John McAdam said the company’s strong revenue growth was driven by continuing strength in its core traffic management business across all geographic regions. In addition, McAdam said he believes the recent introduction of the company’s new products (the BIG-IP 6400, 3400 and 1500 running version 9 of the BIG-IP software), will expand its growth opportunities by enabling customers to secure, optimize and deliver their applications in ways that go
F5 Networks Announces Fiscal First Quarter Results
beyond traditional definitions of application traffic management. Leveraging the full-proxy architecture of the company’s new Traffic Management Operating System (TM/OS), BIG-IP’s advanced functionality includes delivery and optimization features such as IPv6 translation, universal persistence, error response handling, connection pooling, intelligent compression, L7 rate shaping and TCP optimization, as well as a number of security features, including cookie encryption, resource cloaking, advanced client authentication and selective content encryption.
During the first full quarter of shipment, McAdam said demand for the Version 9 BIG-IP products was strong, with sales of the new platforms accounting for 30 percent of application traffic management revenue.
In addition to continued improvement in profitability, McAdam said, the company’s strong revenue growth and leveraged business model enabled it to further strengthen its financial position. During the quarter, collections resulting in 42 days sales outstanding (DSO) contributed to a record $13.5 million in cash from operations and total cash and investments of $254 million at quarter end.
For the second quarter of fiscal 2005, McAdam said management believes the company will continue to grow sequentially and has set a target range of $63.0 million to $65.0 million in revenue with net income of $0.28 to $0.29 per diluted share.
About F5 Networks
F5 enables organizations to successfully deliver business-critical applications and gives them the
greatest level of agility to stay ahead of growing business demands. As the pioneer and global
leader in Application Traffic Management, F5 continues to lead the industry by driving more
intelligence into the network to deliver advanced application agility. F5 products ensure the
secure and optimized delivery of applications to any user — anywhere. Through its flexible and
cohesive architecture, F5 delivers unmatched value by dramatically improving the way organizations
serve their employees, customers and constituents, while lowering operational costs. The company
is headquartered in Seattle, Washington with offices worldwide. For more information go to
www.f5.com.
Forward Looking Statements
Statements in this press release concerning sequential growth, revenue and net income targets for
the second quarter of fiscal 2005 and other statements that are not historical facts are
forward-looking statements. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance or achievements of
the company, or industry results, to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements. Such factors include,
among others: customer acceptance of our new traffic management and
security offerings; the timely development,
introduction and acceptance of additional new products and features by F5 or its competitors;
competitive pricing pressures; increased sales discounts; F5’s ability to sustain, develop and
F5 Networks Announces Fiscal First Quarter Results
effectively utilize distribution relationships; F5’s ability to attract, train and retain qualified product development, marketing, sales, professional services and customer support personnel; F5’s ability to expand in international markets and the unpredictability of F5’s sales cycle. F5 has no duty to update any guidance provided or other matters discussed in this press release. More information about potential risk factors that could affect F5’s business and financial results is included in the company’s annual report on Form 10K for the fiscal year ended September 30, 2004, and other public filings with the Securities and Exchange Commission.
# # # #
F5 Networks, Inc.
Consolidated Balance Sheets
(unaudited, in thousands)
December 31,
September 30,
2004
2004
$
23,803
$
24,901
139,909
115,600
28,101
22,665
1,728
1,696
4,619
4,494
8,495
5,776
206,655
175,132
6,221
6,243
12,969
11,954
90,657
81,792
32,966
26,886
50,067
50,067
7,954
8,279
$
407,489
$
360,353
$
7,746
$
4,840
16,537
17,668
29,046
28,064
53,329
50,572
2,298
2,136
—
—
341,318
306,655
(937
)
(498
)
11,481
1,488
351,862
307,645
$
407,489
$
360,353
F5 Networks, Inc.
Condensed Consolidated Statements of Operations
(unaudited, in thousands, except per share amounts)
Three Months Ended
December 31,
September 30,
December 31,
2004
2004
2003
$
46,397
$
37,536
$
26,376
13,612
12,683
9,705
60,009
50,219
36,081
10,528
8,489
5,849
3,386
3,055
2,462
13,914
11,544
8,311
46,095
38,675
27,770
19,640
17,597
14,954
6,974
6,764
5,444
5,006
4,463
3,347
—
—
10
31,620
28,824
23,755
14,475
9,851
4,015
1,387
891
184
15,862
10,742
4,199
5,869
(5,039
)
398
$
9,993
$
15,781
$
3,801
$
0.28
$
0.46
$
0.13
35,577
34,593
30,159
$
0.26
$
0.43
$
0.11
37,818
36,779
33,121
$
15,781
$
3,801
(5,039
)
398
10,742
4,199
3,975
1,554
$
6,767
$
2,645
$
0.18
$
0.08
36,779
33,121