-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WsVcO0bVeUv75Z7/37c3wWQXyhULH+pNEgnFj+/D2ixoI6qTvah7jFeJNpWKCuBw lOPgUUSL0ip9L/0cV3cNWg== 0000891618-03-004783.txt : 20030912 0000891618-03-004783.hdr.sgml : 20030912 20030912171901 ACCESSION NUMBER: 0000891618-03-004783 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030912 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030912 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NETGEAR INC CENTRAL INDEX KEY: 0001122904 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 770419172 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-50350 FILM NUMBER: 03894511 BUSINESS ADDRESS: STREET 1: 4401 GREAT AMERICAN PARKWAY CITY: SANTA CLARA STATE: CA ZIP: 95052 BUSINESS PHONE: 4084955316 MAIL ADDRESS: STREET 1: 4401 GREAT AMERICAN PARKWAY CITY: SANTA CLARA STATE: CA ZIP: 95052 8-K 1 f93046e8vk.htm FORM 8-K Netgear, Inc. Form 8-K Dated 9/12/2003
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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1933

September 12, 2003

Date of Report (date of earliest event reported)

NETGEAR, Inc.

(Exact name of Registrant as specified in its charter)
         
Delaware 000-50350   77-0419172
(State or other jurisdiction of
incorporation or organization)		   (Commission File Number)
 		  (I.R.S. Employer
Identification Number)

4500 Great America Parkway
Santa Clara, California 95054

(Address of principal executive offices)

(408) 907-8000

(Registrant’s telephone number, including area code)

 

ITEM 7. Financial Statements and Exhibits.
ITEM 12. Results of Operations and Financial Condition.
SIGNATURE
EXHIBIT 99.1

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ITEM 7. Financial Statements and Exhibits.

     (c)  Exhibits

     The following exhibit is furnished herewith:

  99.1   Press Release, dated September 12, 2003, of NETGEAR, Inc. announcing its financial results for the fiscal quarter ended June 29, 2003

ITEM 12. Results of Operations and Financial Condition.

     The following information (including any exhibits attached to this Current Report) is being furnished pursuant to Item 12, “Results of Operations and Financial Condition.” This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

     On September 12, 2003, the Board of Directors of NETGEAR, Inc. issued a press release announcing its financial results for its first fiscal quarter ended June 29, 2003. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

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SIGNATURE

     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: September 12, 2003        
    NETGEAR, Inc.
 		    
    By:   /s/ Jonathan Mather
       
        Jonathan Mather
Vice President and
Chief Financial Officer

 

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Exhibit
Number		   Description
 
99.1   Press Release, dated September 12, 2003, of NETGEAR, Inc. announcing its financial results for the fiscal quarter ended June 29, 2003

  EX-99.1 3 f93046exv99w1.txt EXHIBIT 99.1 EXHIBIT 99.1 NETGEAR REPORTS SECOND QUARTER 2003 RESULTS - 24% Revenue growth year over year - Net income increases to $11.5 million, including $9.8 million one time deferred tax reversal - EPS of $0.48 including one time deferred tax reversal of $0.41 per share SANTA CLARA, Calif. - September 12, 2003 - NETGEAR, Inc. (Nasdaq: NTGR), a worldwide provider of technologically advanced, branded networking products, today reported financial results for the second quarter ended June 29, 2003. Net revenue for the second quarter ended June 29, 2003 increased 24% or $13.5 million to $69.0 million, compared to $55.5 million for the quarter ended June 30, 2002. This was due to an increase in demand primarily for broadband and wireless products. Revenue in all global markets increased on a year over year basis. Net income for the second quarter ended June 29, 2003 increased 528% or $9.7 million to $11.5 million, compared to $1.8 million for the quarter ended June 30, 2002. Included in the net income for the second quarter was a reversal of a deferred tax valuation allowance of $9.8 million. On a per share basis, net income was $0.57 per basic share and $0.48 per diluted share in the second quarter of 2003, including $0.48 and $0.41 respectively relating to the one time reversal. This compares to $0.09 per basic and diluted share in the second quarter of 2002. Net revenue for the six-month period ended June 29, 2003 increased 35% or $35.6 million to $136.7 million, compared to $101.1 million for the six months ended June 30, 2002. Net income for the six-month period ended June 29, 2003 increased 453% or $10.7 million to $13.1 million, from $2.4 million for the six months ended June 30, 2002. On a per share basis, net income was $0.65 per basic share and $0.55 per diluted share for the six-month period ended June 29, 2003, including $0.48 and $0.41 respectively relating to the one time reversal, compared to a net loss attributable to common shareholders of $(0.70) per basic and diluted share for the six months ended June 30, 2002. The 2002 period includes a deemed non-cash preferred dividend of $17.9 million. Patrick Lo, Chairman and Chief Executive Officer of NETGEAR, commented, "We are pleased with the second quarter. This was another strong quarter for us as our customer focused strategy of serving the networking needs of the small business and home-networking markets is driving record growth in revenue and operating profit. Importantly, the needs and demand levels of the small business and home networking markets remain robust and give us confidence in our prospects." "We completed our Initial Public Offering on July 31. The IPO represents a major milestone in the history of NETGEAR and further strengthens the company's financial position, which will allow us to address new business and technology opportunities as we continue to expand the breadth of our product offerings and geographic reach," continued Lo. "I would like to thank our employees and early investors for their dedication and support through our IPO process. We also would like to thank our public investors for their show of confidence in our business and our management." Through its initial public offering, NETGEAR raised approximately $102 million net of expenses. The Company used $20.0 million of the proceeds to repay an outstanding note to Nortel Networks and $17.0 million to repay amounts drawn on its bank line of credit. The repayment of debt is expected to result in a pre-tax charge of approximately $6.0 million in the third quarter 2003 due to the acceleration of interest expense equal to the unamortized discount balance at the date of payment. Jonathan Mather, Chief Financial Officer of NETGEAR, said, "During the second quarter, we saw strength across all product categories and geographies. The higher revenues, combined with a more favorable product mix and ongoing operating efficiency improvement, led to an expansion in our gross margin to 27.6% compared to 27.3% in the first quarter and 25.6% in the year ago second quarter." During the quarter, NETGEAR announced further enhancements to its already comprehensive set of small business and home networking solutions by expanding its line of 802.11g wireless networking products for homes and launching the industry's first dual band 802.11a+g VPN firewall for small business. In addition, NETGEAR introduced a new category of business-class wireless solutions, including an access point and antennae line that deliver higher security and expanded wireless range to small business. Looking forward, Mr. Lo added, "We are entering the seasonally strong second half with confidence in our outlook. Our retail channel is experiencing good back-to-school demand. We are also benefiting from strength in our small businesses channels such as Value Added Re-sellers (VARs), and Direct Marketing Re-sellers (DMRs), as more and more business customers seek the improved performance and mobility offered by our high speed wired and wireless solutions." ABOUT NETGEAR INC. NETGEAR (Nasdaq: NTGR) designs technologically advanced, branded networking products that address the specific needs of small business and home users. The Company's suite of approximately 100 products enables users to share Internet access, peripherals, files, digital multimedia content and applications among multiple personal computers and other Internet-enabled devices. NETGEAR is headquartered in Santa Clara, Calif. For more information, visit the company's Web site at www.netgear.com or call (408) 907-8000. NETGEAR is a registered trademark of NETGEAR, Inc. in the United States and other countries. CONTACTS: Doug Hagan David Pasquale Senior Manager, Public Relations Senior Vice President, Investor Relations NETGEAR, Inc. The Ruth Group (408) 907-8053 (646) 536-7006 doug.hagan@netgear.com dpasquale@theruthgroup.com SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 FOR NETGEAR, INC.: This release contains forward-looking statements. The forward-looking statements represent NETGEAR, Inc.'s expectations or beliefs concerning future events and include statements, among other, regarding the expected performance, market acceptance, market growth, market position of NETGEAR, and its products and technology. NETGEAR undertakes no duty to update these forward-looking statements. These statements are subject to risks and uncertainties, including without limitation, the price/performance requirements of customers, the ability of NETGEAR to sell products incorporating the technology, the impact and pricing of competing technologies, the introduction of alternative technological solutions, the inability of NETGEAR's new products to gain wide market acceptance and other risks detailed from time-to-time in NETGEAR's SEC filings and reports. - Tables Attached - NETGEAR, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data)
THREE MONTHS ENDED SIX MONTHS ENDED ------------------------- ------------------------- JUNE 29, JUNE 30, JUNE 29, JUNE 30, 2003 2002 2003 2002 --------- --------- --------- --------- Net revenue ................................................... $ 69,003 $ 55,538 $ 136,709 $ 101,066 --------- --------- --------- --------- Cost of revenue: Cost of revenue ............................................. 49,889 41,326 99,135 76,011 Amortization of deferred stock-based compensation ........... 42 20 31 86 --------- --------- --------- --------- Total Cost of revenue ............................... 49,931 41,346 99,166 76,097 --------- --------- --------- --------- Gross profit .................................................. 19,072 14,192 37,543 24,969 --------- --------- --------- --------- Operating expenses: Research and development .................................... 1,882 1,606 3,898 2,500 Sales and marketing ......................................... 11,706 7,809 22,667 14,989 General and administrative .................................. 1,779 2,024 3,681 3,552 Amortization of deferred stock-based compensation: Research and development ................................. 103 37 199 180 Sales and marketing ...................................... 179 45 288 188 General and administrative ............................... 98 167 249 367 --------- --------- --------- --------- Total operating expenses ........................... 15,747 11,688 30,982 21,776 --------- --------- --------- --------- Income from operations ........................................ 3,325 2,504 6,561 3,193 Interest income ............................................... 25 45 53 66 Interest expense .............................................. (370) (526) (731) (544) Other income, net ............................................. 128 108 50 40 --------- --------- --------- --------- Income before income taxes .................................... 3,108 2,131 5,933 2,755 Provision (benefit) for income taxes .......................... (8,395) 299 (7,182) 386 --------- --------- --------- --------- Net income .................................................... 11,503 1,832 13,115 2,369 Deemed dividend on Preferred Stock ............................ -- -- -- (17,881) --------- --------- --------- --------- Net income (loss) attributable to common stockholders ......... $ 11,503 $ 1,832 $ 13,115 $ (15,512) ========= ========= ========= ========= Net income (loss) per share attributable to common stockholders Basic ...................................................... $ 0.57 $ 0.09 $ 0.65 $ (0.70) ========= ========= ========= ========= Diluted .................................................... $ 0.48 $ 0.09 $ 0.55 $ (0.70) ========= ========= ========= ========= Pro forma net income per share Basic ...................................................... $ 0.57 $ 0.09 $ 0.65 $ 0.11 ========= ========= ========= ========= Diluted .................................................... $ 0.48 $ 0.09 $ 0.55 $ 0.11 ========= ========= ========= =========
NETGEAR, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands)
Pro forma Stockholders' Equity at June 29, June 29, December 31, 2003 2003 2002(1) --------- --------- ------------ ASSETS Current assets: Cash and cash equivalents ............................................ $ 21,376 $ 19,880 Accounts receivable, net of allowance for doubtful accounts of $869 at June 29, 2003 and $873 at December 31, 2002 .......................... 52,328 42,492 Inventories .......................................................... 40,236 24,774 Deferred income taxes ................................................ 9,772 -- Prepaid expenses and other current assets ............................ 4,128 3,003 --------- --------- Total current assets ................................................. 127,840 90,149 Property and equipment, net .......................................... 3,617 3,144 Goodwill, net ........................................................ 558 558 --------- --------- Total assets ......................................................... $ 132,015 $ 93,851 ========= ========= LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities Accounts payable ..................................................... $ 30,228 $ 10,628 Payable to related parties ........................................... 16,667 13,687 Accrued employee compensation ........................................ 2,473 3,375 Other accrued liabilities ............................................ 26,949 29,419 Deferred revenue ..................................................... 1,168 5,059 Income taxes payable ................................................. 1,171 934 Borrowings under line of credit ...................................... 8,000 -- Note payable to Nortel Networks ...................................... 14,023 13,294 --------- --------- Total current liabilities ............................................ 100,679 76,396 --------- --------- --------- Redeemable convertible preferred stock ............................... $- $ 48,039 $ 48,052 --------- --------- --------- Stockholders' equity (deficit) Common stock ......................................................... 20 Additional paid-in capital ........................................... 61,184 13,165 12,810 Deferred stock-based compensation .................................... (4,573) (4,573) (4,997) Accumulated deficit .................................................. (25,295) (25,295) (38,410) --------- --------- --------- Total stockholders' equity (deficit) ................................. $ 31,336 (16,703) (30,597) --------- --------- --------- Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit) ....................................... $ 132,015 $ 93,851 ========= =========
(1) Amounts as of December 31, 2002 are derived from audited financial statements as of that date -----END PRIVACY-ENHANCED MESSAGE-----