UNITED STATES
FORM 8-K
CURRENT REPORT
Date of Report (Date of earliest event reported):
F5 Networks, Inc.
SECURITIES AND EXCHANGE COMMISSION
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
July 23, 2003
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
Former name or former address, if changed since last report: N/A
| Item 7. Financial Statements and Exhibits | ||||||||
| Item 9. Regulation FD Disclosure | ||||||||
| SIGNATURES | ||||||||
| INDEX TO EXHIBITS | ||||||||
| EXHIBIT 99.1 | ||||||||
Item 7. Financial Statements and Exhibits
(c) Exhibits:
| 99.1 | Press release of F5 Networks, Inc. announcing quarterly earnings dated July 23, 2003 |
Item 9. Regulation FD Disclosure
The following information is disclosed pursuant to Item 12—Results of Operations and Financial Condition. It is being furnished under Item 9 of this Form 8-K in accordance with the interim guidance issued by the Securities and Exchange Commission in Release No. 33-8216.
On July 23, 2003, F5 Networks issued a press release containing quarterly earnings results for the third quarter ended June 30, 2003. The press release is attached hereto as Exhibit 99.1.
The information furnished pursuant to Item 12 in this Item 9, shall not be deemed to be incorporated by reference into F5’s filings with the Securities and Exchange Commission under the Securities Act of 1933.
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.
| Dated: July 23, 2003 | ||||
| F5 NETWORKS, INC. | ||||
| By: | /s/ JOHN MCADAM | |||
|
|
||||
| John McAdam | ||||
| Chief Executive Officer & President | ||||
INDEX TO EXHIBITS
Exhibit Number
Description
99.1
Press release of F5 Networks, Inc. announcing
quarterly earnings dated July 23, 2003
Exhibit 99.1
FOR IMMEDIATE RELEASE
| CONTACT: | Investor Relations | |
| John Eldridge | ||
| (206) 272-6571 | ||
| j.eldridge@f5.com | ||
| Public Relations | ||
| Amber McCollom | ||
| (206) 272-6850 | ||
| a.mccollom@f5.com |
F5 Networks Announces Third Quarter Earnings
Revenue and earnings up sequentially on strong sales in North America and Asia-Pacific
SEATTLE, WA—July 23, 2003 —F5 Networks, Inc. (NASDAQ: FFIV) today announced net income of $1.4 million ($0.05 per share) on revenue of $29.2 million for the third quarter of fiscal 2003, up from $0.8 million ($0.03 per share) on revenue of $28.0 million in the prior quarter. Both results exceeded the target ranges ($0.02 to $0.04 per share on revenue of $27.5 million to $29.0 million) set by management in the company’s April 23rd earnings release. In the third quarter of fiscal 2002 the company reported revenue of $27.1 million and a net loss of $4.3 million ($0.17 per share), including non-recurring expenses related to the discontinuation of its EDGE-FX™ cache business and the consolidation of operations.
F5 president and chief executive officer John McAdam said the company’s sequential revenue growth resulted from strong sales in North America and Asia-Pacific, up sharply from the prior quarter. “The growth of sales in North America was stronger in the third quarter than we had anticipated, with product sales up 12 percent from the second quarter,” McAdam said. “Internationally, sales in Asia-Pacific grew even faster, helping to offset seasonal slowness in Japan. From a product perspective, revenue increased sequentially across all product categories, with system sales representing 68 percent of total revenue and software sales accounting for 5 percent. We also saw sequential growth in service revenue, which represented 27 percent of total revenue.”
According to McAdam, the growth of North American revenue was fueled primarily by increased channel sales and a number of large enterprise wins. “As we continued to forge new relationships with some of the region’s largest resellers, we saw meaningful contributions from several of the new partners we signed up in prior quarters. In addition, we continued to build momentum in sales to global strategic accounts, which included four large wins totaling more than $2.5 million,” McAdam said.
Operationally, the company turned in a solid performance, reflected in several key metrics. Gross margin and operating expenses for the quarter were within the company’s target ranges. Days sales outstanding (DSO) fell to 63 days, and operating cash flow of $3.4 million helped boost cash, cash equivalents and investments to $96.8 million at June 30.
In a separate release issued today (http://www.f5.com/f5/news/press/), F5 also announced that it has acquired the assets of uRoam, Inc., a provider of Web-based remote access solutions, for $25 million in cash. Steve Coburn, F5’s senior vice president of finance and CFO, said he expects early sales of uRoam’s products in September but does not expect revenue from those sales to be material in the current quarter, ending September 30, 2003. For fiscal 2004, he said uRoam’s products could generate revenue in the range of $8 million to $12 million.
Including the effect of the acquisition, F5 has set a fourth quarter revenue target of $29.5 million to $30.5 million with earnings of $0.02 to $0.03 per diluted share.
Further details about third quarter results, the uRoam acquisition, and company guidance for the fourth quarter will be discussed in the company’s regularly scheduled conference call today at 1:30 p.m. PDT. The call in numbers: 800-547-2439 (US & Canada) and 706-634-1209 (International). The conference ID is: 1222474. To listen to the webcast, go to http://www.f5.com/f5/ir/calendar.html and click on the webcast image.
About F5 Networks
F5 Networks is the industry leader in Application Traffic Management, enabling enterprises and service providers to optimize any mission-critical application or web service, providing secure and predictable delivery of application traffic in an unpredictable environment. Through F5’s unique open iControl™ API, third party applications and network devices can take an active role in shaping network traffic, delivering application aware networks that allow customers to direct traffic based on their exact business requirements. Our solutions optimize the availability, security and speed of mission-critical servers and applications, including enterprise applications, web services, mobile IP applications, web publishing, content delivery, e-commerce, caching, firewalls and more. F5’s solutions are widely deployed in large enterprises, the top service providers, financial institutions, government agencies, healthcare, and portals throughout the world. The company is headquartered in Seattle, Washington, and has offices throughout North America, Europe, Japan and Asia Pacific. F5 Networks is located on the web at www.f5.com.
Forward Looking Statements
Statements in this press release concerning the contribution of uRoam’s products to revenue in the current quarter and fiscal 2004, the revenue, earnings and net income targets for the fourth quarter of fiscal 2003 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: the successful integration of uRoam’s products with F5’s products, 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 or develop 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 the international markets and the unpredictability of F5’s sales cycle. F5 has no duty to update any guidance provided. 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, 2002, and other public filings with the Securities and Exchange Commission.
# # # #
F5 NETWORKS, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
JUNE 30,
SEPTEMBER 30,
2003
2002
$
18,998
$
20,801
45,166
59,532
20,372
20,404
667
349
4,373
4,713
89,576
105,799
6,000
6,000
10,495
12,211
32,680
1,346
1,033
933
$
139,784
$
126,289
$
3,896
$
3,685
12,728
13,546
17,423
14,058
34,047
31,289
1,506
1,315
—
—
137,647
128,876
(582
)
454
(16
)
(93
)
(32,818
)
(35,552
)
104,231
93,685
$
139,784
$
126,289
F5 NETWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share amounts)
THREE MONTHS ENDED
NINE MONTHS ENDED
JUNE 30,
JUNE 30,
2003
2002
2003
2002
$
21,310
$
20,750
$
61,149
$
62,190
7,879
6,315
23,113
19,001
29,189
27,065
84,262
81,191
4,491
5,081
12,751
16,195
2,290
2,504
6,726
7,878
6,781
7,585
19,477
24,073
22,408
19,480
64,785
57,118
13,593
13,256
39,413
37,519
4,810
4,785
14,091
13,673
2,800
3,049
9,050
11,618
—
2,771
—
2,771
6
106
77
353
21,209
23,967
62,631
65,934
1,199
(4,487
)
2,154
(8,816
)
352
287
1,126
1,065
1,551
(4,200
)
3,280
(7,751
)
152
146
546
436
$
1,399
$
(4,346
)
$
2,734
$
(8,187
)
$
0.05
$
(0.17
)
$
0.10
$
(0.32
)
26,638
25,537
26,227
25,206
$
0.05
$
(0.17
)
$
0.10
$
(0.32
)
28,467
25,537
27,525
25,206