EX-99.1 2 exhibit99112q3earningsrele.htm PRESS RELEASE Exhibit 99.1 12Q3 Earnings Release








NETGEAR® REPORTS THIRD QUARTER 2012 RESULTS

•
Third quarter 2012 net revenue of $315.2 million, as compared to $301.8 million in the comparable prior year quarter, 4.4% year-over-year growth
•
Third quarter 2012 non-GAAP net income of $25.3 million, as compared to $29.9 million in the comparable prior year quarter, decrease of 15.4% year-over-year
•
Third quarter 2012 non-GAAP diluted earnings per share of $0.65, as compared to $0.79 in the comparable prior year quarter, decrease of 17.7% year-over-year
•
Company expects fourth quarter 2012 net revenue to be in the range of $300 million to $315 million, with non-GAAP operating margin in the range of 11% to 12%

SAN JOSE, California - October 25, 2012 - NETGEAR, Inc. (NASDAQGM: NTGR), a global networking company that delivers innovative products to consumers, businesses and service providers, today reported financial results for the third quarter ended September 30, 2012.

Net revenue for the third quarter ended September 30, 2012 was $315.2 million, as compared to $301.8 million for the third quarter ended October 2, 2011, and $320.7 million in the second quarter ended July 1, 2012. Net income, computed in accordance with GAAP, for the third quarter of 2012 was $23.8 million, or $0.61 per diluted share. This compared to GAAP net income of $26.7 million, or $0.70 per diluted share, for the third quarter of 2011, and GAAP net income of $21.5 million, or $0.56 per diluted share, in the second quarter of 2012.

Gross margin on a non-GAAP basis in the third quarter of 2012 was 31.6%, as compared to 32.4% in the year ago comparable quarter, and 29.9% in the second quarter of 2012. Non-GAAP operating margin was 11.5% in the third quarter of 2012, as compared to 12.5% in the third quarter of 2011, and 11.0% in the second quarter of 2012. Non-GAAP net income was $0.65 per diluted share in the third quarter of 2012, as compared to non-GAAP net income of $0.79 per diluted share in the third quarter of 2011, and non-GAAP net income of $0.64 per diluted share in the second quarter of 2012. Our tax rate in the third quarter 2012 reflects a one-time benefit which accounts for an incremental $0.05 per diluted share of earnings. This compares to a one-time tax rate benefit in the third quarter 2011, which accounted for an incremental $0.09 per diluted share of earnings.

The differences between GAAP and non-GAAP financial measures include adjustments, net of any tax effect, for amortization of purchased intangibles, stock-based compensation, restructuring and other charges, acquisition related compensation, impact to cost of sales from acquisition accounting adjustments to inventory, litigation reserves, and gain on sale of cost method investment. The accompanying schedules provide a reconciliation of financial measures computed on a GAAP basis to financial measures computed on a non-GAAP basis.

Patrick Lo, Chairman and Chief Executive Officer of NETGEAR commented, “NETGEAR's financial results for the third quarter of 2012 are a reflection of the current difficult economic climate. The uncertainty in the European and Australian markets has affected consumer, small business, and service provider sales for the quarter.”

“Our Retail Business Unit revenue for the quarter ended September 30, 2012 was up 9% quarter-on-quarter, driven by back-to-school seasonal demand and market share gains in North America. On a year-over-year basis, Retail was down 3% as a result of the challenging European market. Commercial was down 2% on a sequential basis and down 13% year-over-year. This reflects the tightened spending of European and Australian businesses facing widespread

Page 1


economic uncertainty. Our Service Provider Business Unit revenues were up 34% on a year-over-year basis, and down 11% quarter-over-quarter as service providers reduced their purchases in Q3.”

Christine Gorjanc, Chief Financial Officer of NETGEAR, said, “Despite the current challenges we are facing in Europe and Australia, we are continuing our increased investment in research and development. This increased investment positions us for the long term success we believe we can achieve in all geographies, especially when the economic environment improves. We expect that the continuous flow of innovative new products from our R&D team will enable us to gain market share worldwide now and in the future. However, facing the current weakened market demand in Europe, we are shifting our sales and marketing resources to the emerging markets where we believe there is growth to achieve and market share to be gained. We will continue to spend wisely and streamline our operations to achieve more efficiency. As always, we are very focused on managing expenses, inventory levels, and cash.”

Mr. Lo added, “Looking forward, we expect to continue to face a challenging economic climate in Europe. We are also seeing a further reduction in capital expenditures budget for broadband gateways in Q4 among our service provider customers in Europe and Australia. Despite the difficult market situation, we continue to innovate and expect to release approximately 25 new products in Q4, setting us up for growth in 2013. Specifically, for the fourth quarter of 2012, we expect net revenue to be in the range of approximately $300 million to $315 million, with non-GAAP operating margin to be in the range of 11% to 12%.”

Investor Conference Call / Webcast Details
NETGEAR will review the third quarter 2012 results and discuss management's expectations for the third quarter of 2012 today, Thursday, October 25, 2012 at 5 p.m. EDT (2 p.m. PDT). The dial-in number for the live audio call is (201) 689-8471. A live webcast of the conference call will be available on NETGEAR's website at http://investor.netgear.com. A replay of the call will be available 2 hours following the call through midnight EDT (9 p.m. PDT) on Thursday, November 1, 2012 by telephone at (858) 384-5517 and via the web at http://investor.netgear.com. The account number to access the phone replay is 401042.

About NETGEAR, Inc.
NETGEAR (NASDAQGM: NTGR) is a global networking company that delivers innovative products to consumers, businesses and service providers. For consumers, the company makes high performance, dependable and easy to use home networking, storage and digital media products to connect people with the Internet and their content and devices. For businesses, NETGEAR provides networking, storage and security solutions without the cost and complexity of Big IT. The company also supplies top service providers with retail proven, whole home solutions for their customers. NETGEAR products are built on a variety of proven technologies such as wireless, Ethernet and powerline, with a focus on reliability and ease-of-use. NETGEAR products are sold in approximately 32,000 retail locations around the globe, and through approximately 40,000 value-added resellers. The company's headquarters are in San Jose, Calif., with additional offices in over 25 countries. NETGEAR is an ENERGY STAR partner. More information is available at http://investor.netgear.com or by calling (408) 907-8000. Connect with NETGEAR at http://twitter.com/NETGEAR and http://www.facebook.com/NETGEAR.

© 2012 NETGEAR, Inc. NETGEAR, and the NETGEAR logo are trademarks or registered trademarks of NETGEAR, Inc. and its affiliates in the United States and/or other countries. Other brand and product names are trademarks or registered trademarks of their respective holders. The information contained herein is subject to change without notice. NETGEAR shall not be liable for technical or editorial errors or omissions contained herein. All rights reserved.

Contact:
NETGEAR Investor Relations
Christopher Genualdi
netgearIR@netgear.com
(408) 890-3520


Page 2


Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 for NETGEAR, Inc.:
This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. The words "anticipate", "expect", "believe", "will", "may", "should", "estimate", "project", "outlook", "forecast" or other similar words are used to identify such forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. The forward-looking statements represent NETGEAR, Inc.'s expectations or beliefs concerning future events based on information available at the time such statements were made and include statements, among others, regarding NETGEAR's expected revenue and operating margin, investment in research and development, expectations of the economic environment especially in Europe and Australia, expectations on growth and market share gains, expectations on emerging markets, our intent to continue to spend wisely and streamline operations, reductions in capital expenditures budget for broadband gateways in Q4 for service provider customers in Europe and Australia, and the number of new products to be introduced in the fourth quarter. These statements are based on management's current expectations and are subject to certain risks and uncertainties, including, without limitation, the following: future demand for the Company's products may be lower than anticipated; consumers may choose not to adopt the Company's new product offerings or adopt competing products; product performance may be adversely affected by real world operating conditions; the Company may be unsuccessful or experience delays in manufacturing and distributing its new and existing products; telecommunications service providers may choose to slow their deployment of the Company's products or utilize competing products; the Company may be unable to collect receivables as they become due; the Company may fail to manage costs, including the cost of developing new products and manufacturing and distribution of its existing offerings; the Company may fail to successfully continue to effect operating expense savings; channel inventory information reported is estimated based on the average number of weeks of inventory on hand on the last Saturday of the quarter, as reported by certain of NETGEAR's customers; changes in the level of NETGEAR's cash resources and the Company's planned usage of such resources; changes in the Company's stock price and developments in the business that could increase the Company's cash needs, fluctuations in foreign exchange rates, and the actions and financial health of the Company's customers. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Further information on potential risk factors that could affect NETGEAR and its business are detailed in the Company's periodic filings with the Securities and Exchange Commission, including, but not limited to, those risks and uncertainties listed in the section entitled “Part II - Item 1A. Risk Factors,” pages 45 through 63, in the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 1, 2012, filed with the Securities and Exchange Commission on August 8, 2012. NETGEAR undertakes no obligation to release publicly any revisions to any forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Use of Non-GAAP Financial Information:
To supplement our consolidated financial statements presented on a GAAP basis, NETGEAR uses non-GAAP financial measures, which are adjusted to exclude certain expenses and tax benefits, where applicable. We believe non-GAAP financial measures are appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our current period GAAP results are made with the intent of providing both management and investors a more complete understanding of NETGEAR's underlying operational results and trends and our marketplace performance. For example, the non-GAAP results are an indication of our baseline performance before charges that are considered by management to be outside of our core operating results. In addition, these adjusted non-GAAP results are among the primary indicators management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial measures prepared in accordance with generally accepted accounting principles in the United States.    

-Financial Tables Attached-


Page 3



NETGEAR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

 
September 30,
2012
 
December 31,
2011
 
 
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
134,601

 
$
208,898

Short-term investments
227,819

 
144,797

Accounts receivable, net
248,862

 
261,307

Inventories
178,916

 
163,724

Deferred income taxes
22,705

 
23,088

Prepaid expenses and other current assets
38,173

 
32,415

Total current assets
851,076

 
834,229

Property and equipment, net
18,927

 
15,884

Intangibles, net
27,701

 
20,956

Goodwill
100,880

 
85,944

Other non-current assets
20,053

 
14,357

Total assets
$
1,018,637

 
$
971,370

 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
91,070

 
$
117,285

Accrued employee compensation
21,116

 
26,896

Other accrued liabilities
120,829

 
120,480

Deferred revenue
28,205

 
40,093

Income taxes payable
1,829

 
4,207

Total current liabilities
263,049

 
308,961

Non-current income taxes payable
17,525

 
18,657

Other non-current liabilities
5,286

 
4,995

Total liabilities
285,860

 
332,613

Stockholders' equity:
 
 
 
Common stock
38

 
38

Additional paid-in capital
388,812

 
364,243

Cumulative other comprehensive (loss) income
(171
)
 
23

Retained earnings
344,098

 
274,453

Total stockholders' equity
732,777

 
638,757

Total liabilities and stockholders' equity
$
1,018,637

 
$
971,370



Page 4



NETGEAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

 
Three Months Ended
 
Nine Months Ended
 
September 30,
2012
 
July 1,
2012
 
October 2,
2011
 
September 30,
2012
 
October 2,
2011
 
 
 
 
 
 
 
 
 
 
Net revenue
$
315,210

 
$
320,655

 
$
301,800

 
$
961,485

 
$
871,863

Cost of revenue
217,522

 
226,017

 
205,490

 
669,310

 
597,390

Gross profit
97,688

 
94,638

 
96,310

 
292,175

 
274,473

Operating expenses:
 
 
 
 
 
 
 
 
 
Research and development
17,399

 
14,757

 
12,738

 
46,277

 
35,102

Sales and marketing
37,600

 
37,677

 
39,600

 
114,247

 
115,284

General and administrative
11,888

 
11,219

 
10,851

 
33,520

 
31,044

Restructuring and other charges
—

 
—

 
—

 
—

 
2,094

Litigation reserves, net
269

 
—

 
44

 
420

 
(234
)
Total operating expenses
67,156

 
63,653

 
63,233

 
194,464

 
183,290

Income from operations
30,532

 
30,985

 
33,077

 
97,711

 
91,183

Interest income
109

 
116

 
115

 
344

 
350

Other income (expense), net
3,070

 
354

 
(267
)
 
2,823

 
(938
)
Income before income taxes
33,711

 
31,455

 
32,925

 
100,878

 
90,595

Provision for income taxes
9,920

 
9,933

 
6,178

 
30,418

 
22,062

Net income
$
23,791

 
$
21,522

 
$
26,747

 
$
70,460

 
$
68,533

 
 
 
 
 
 
 
 
 
 
Net income per share:
 
 
 
 
 
 
 
 
 
Basic
$
0.62

 
$
0.57

 
$
0.71

 
$
1.86

 
$
1.85

Diluted
$
0.61

 
$
0.56

 
$
0.70

 
$
1.82

 
$
1.81

 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding used to compute net income per share:
 
 
 
 
 
 
 
 
 
Basic
38,162

 
37,978

 
37,483

 
37,978

 
36,967

Diluted
38,802

 
38,595

 
38,080

 
38,682

 
37,812

 
 
 
 
 
 
 
 
 
 
Stock-based compensation expense was allocated as follows:
 
 
 
 
 
 
 
 
 
Cost of revenue
$
473

 
$
278

 
$
259

 
$
1,021

 
$
737

Research and development
778

 
677

 
606

 
2,066

 
1,873

Sales and marketing
1,238

 
1,191

 
1,264

 
3,623

 
3,949

General and administrative
1,530

 
1,249

 
1,325

 
4,096

 
3,775



Page 5





NETGEAR, INC.
NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Excluding amortization of purchased intangibles, stock-based compensation, restructuring and other charges, acquisition related compensation, impact to cost of sales from acquisition accounting adjustments to inventory, litigation reserves, net of tax, and gain on sale of cost method investment.
(In thousands, except per share data)
(Unaudited)

 
Three Months Ended
 
Nine Months Ended
 
September 30,
2012
 
July 1,
2012
 
October 2,
2011
 
September 30,
2012
 
October 2,
2011
 
 
 
 
 
 
 
 
 
 
Net revenue
$
315,210

 
$
320,655

 
$
301,800

 
$
961,485

 
$
871,863

Cost of revenue
215,695

 
224,723

 
204,167

 
664,972

 
592,434

Gross profit
99,515

 
95,932

 
97,633

 
296,513

 
279,429

 
 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
 
Research and development
16,621

 
14,080

 
12,132

 
44,211

 
33,189

Sales and marketing
36,362

 
36,486

 
38,336

 
110,624

 
111,335

General and administrative
10,358

 
9,970

 
9,526

 
29,424

 
27,269

Total operating expenses
63,341

 
60,536

 
59,994

 
184,259

 
171,793

Income from operations
36,174

 
35,396

 
37,639

 
112,254

 
107,636

Interest income
109

 
116

 
115

 
344

 
350

Other income (expense), net
(56
)
 
354

 
(267
)
 
(303
)
 
(938
)
Income before income taxes
36,227

 
35,866

 
37,487

 
112,295

 
107,048

Provision for income taxes
10,959

 
11,262

 
7,561

 
34,315

 
28,300

Net income
$
25,268

 
$
24,604

 
$
29,926

 
$
77,980

 
$
78,748

 
 
 
 
 
 
 
 
 
 
Net income per share:
 
 
 
 
 
 
 
 
 
Basic
$
0.66

 
$
0.65

 
$
0.80

 
$
2.05

 
$
2.13

Diluted
$
0.65

 
$
0.64

 
$
0.79

 
$
2.02

 
$
2.08

 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding used to compute net income per share:
 
 
 
 
 
 
 
 
 
Basic
38,162

 
37,978

 
37,483

 
37,978

 
36,967

Diluted
38,802

 
38,595

 
38,080

 
38,682

 
37,812



Page 6



NETGEAR, INC.
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES
(In thousands, except per share data)
(Unaudited)

STATEMENT OF OPERATIONS DATA:
 
Three Months Ended
 
Nine Months Ended
 
September 30,
2012
 
July 1,
2012
 
October 2,
2011
 
September 30,
2012
 
October 2,
2011
 
 
 
 
 
 
 
 
 
 
GAAP gross profit
$
97,688

 
$
94,638

 
$
96,310

 
$
292,175

 
$
274,473

Amortization of intangible assets
1,354

 
1,016

 
1,064

 
3,317

 
3,610

Stock-based compensation expense
473

 
278

 
259

 
1,021

 
737

Impact to cost of sales from acquisition accounting adjustments to inventory
—

 
—

 
—

 
—

 
609

Non-GAAP gross profit
$
99,515

 
$
95,932

 
$
97,633

 
$
296,513

 
$
279,429

Non-GAAP gross margin
31.6
%
 
29.9
%
 
32.4
%
 
30.8
%
 
32.0
%
 
 
 
 
 
 
 
 
 
 
GAAP research and development
$
17,399

 
$
14,757

 
$
12,738

 
$
46,277

 
$
35,102

Stock-based compensation expense
(778
)
 
(677
)
 
(606
)
 
(2,066
)
 
(1,873
)
Acquisition related compensation
—

 
—

 
—

 
—

 
(40
)
Non-GAAP research and development
$
16,621

 
$
14,080

 
$
12,132

 
$
44,211

 
$
33,189

 
 
 
 
 
 
 
 
 
 
GAAP sales and marketing
$
37,600

 
$
37,677

 
$
39,600

 
$
114,247

 
$
115,284

Stock-based compensation expense
(1,238
)
 
(1,191
)
 
(1,264
)
 
(3,623
)
 
(3,949
)
Non-GAAP sales and marketing
$
36,362

 
$
36,486

 
$
38,336

 
$
110,624

 
$
111,335

 
 
 
 
 
 
 
 
 
 
GAAP general and administrative
$
11,888

 
$
11,219

 
$
10,851

 
$
33,520

 
$
31,044

Stock-based compensation expense
(1,530
)
 
(1,249
)
 
(1,325
)
 
(4,096
)
 
(3,775
)
Non-GAAP general and administrative
$
10,358

 
$
9,970

 
$
9,526

 
$
29,424

 
$
27,269

 
 
 
 
 
 
 
 
 
 
GAAP total operating expenses
$
67,156

 
$
63,653

 
$
63,233

 
$
194,464

 
$
183,290

Stock-based compensation expense
(3,546
)
 
(3,117
)
 
(3,195
)
 
(9,785
)
 
(9,597
)
Restructuring and other charges
—

 
—

 
—

 
—

 
(2,094
)
Acquisition related compensation
—

 
—

 
—

 
—

 
(40
)
Litigation reserves, net
(269
)
 
—

 
(44
)
 
(420
)
 
234

Non-GAAP total operating expenses
$
63,341

 
$
60,536

 
$
59,994

 
$
184,259

 
$
171,793


Page 7


NETGEAR, INC.
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED)
(In thousands, except per share data)
(Unaudited)

STATEMENT OF OPERATIONS DATA (CONTINUED):

 
Three Months Ended
 
Nine Months Ended
 
September 30,
2012
 
July 1,
2012
 
October 2,
2011
 
September 30,
2012
 
October 2,
2011
 
 
 
 
 
 
 
 
 
 
GAAP operating income
$
30,532

 
$
30,985

 
$
33,077

 
$
97,711

 
$
91,183

Amortization of intangible assets
1,354

 
1,016

 
1,064

 
3,317

 
3,610

Stock-based compensation expense
4,019

 
3,395

 
3,454

 
10,806

 
10,334

Restructuring and other charges
—

 
—

 
—

 
—

 
2,094

Acquisition related compensation
—

 
—

 
—

 
—

 
40

Impact to cost of sales from acquisition accounting adjustments to inventory
—

 
—

 
—

 
—

 
609

Litigation reserves, net
269

 
—

 
44

 
420

 
(234
)
Non-GAAP operating income
$
36,174

 
$
35,396

 
$
37,639

 
$
112,254

 
$
107,636

Non-GAAP operating margin
11.5
%
 
11.0
%
 
12.5
%
 
11.7
%
 
12.3
%
 
 
 
 
 
 
 
 
 
 
GAAP other income (expense),net
$
3,070

 
$
354

 
$
(267
)
 
$
2,823

 
$
(938
)
Gain on sale of cost method investment
(3,126
)
 
—

 
—

 
(3,126
)
 
—

Non-GAAP other income (expense), net
$
(56
)
 
$
354

 
$
(267
)
 
$
(303
)
 
$
(938
)
 
 
 
 
 
 
 
 
 
 
GAAP net income
$
23,791

 
$
21,522

 
$
26,747

 
$
70,460

 
$
68,533

Amortization of intangible assets
1,354

 
1,016

 
1,064

 
3,317

 
3,610

Stock-based compensation expense
4,019

 
3,395

 
3,454

 
10,806

 
10,334

Restructuring and other charges
—

 
—

 
—

 
—

 
2,094

Acquisition related compensation
—

 
—

 
—

 
—

 
40

Impact to cost of sales from acquisition accounting adjustments to inventory
—

 
—

 
—

 
—

 
609

Litigation reserves, net
269

 
—

 
44

 
420

 
(234
)
Gain on sale of cost method investment
(3,126
)
 
—

 
—

 
(3,126
)
 
—

Tax effect
(1,039
)
 
(1,329
)
 
(1,383
)
 
(3,897
)
 
(6,238
)
Non-GAAP net income
$
25,268

 
$
24,604

 
$
29,926

 
$
77,980

 
$
78,748


Page 8


NETGEAR, INC.
RECONCILIATIONS OF GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED)
(In thousands, except per share data)
(Unaudited)

STATEMENT OF OPERATIONS DATA (CONTINUED):

 
Three Months Ended
 
Nine Months Ended
 
September 30,
2012
 
July 1,
2012
 
October 2,
2011
 
September 30,
2012
 
October 2,
2011
 
 
 
 
 
 
 
 
 
 
NET INCOME PER DILUTED SHARE:
 
 
 
 
 
 
 
 
GAAP net income per diluted share
$
0.61

 
$
0.56

 
$
0.70

 
$
1.82

 
$
1.81

Amortization of intangible assets
0.03

 
0.03

 
0.03

 
0.09

 
0.10

Stock-based compensation expense
0.10

 
0.09

 
0.09

 
0.28

 
0.27

Restructuring and other charges
—

 
—

 
—

 
—

 
0.06

Acquisition related compensation
—

 
—

 
—

 
—

 
0.00

Impact to cost of sales from acquisition accounting adjustments to inventory
—

 
—

 
—

 
—

 
0.02

Litigation reserves, net
0.01

 
—

 
0.00

 
0.01

 
(0.01
)
Gain on sale of cost method investment
(0.08
)
 
—

 
—

 
(0.08
)
 
—

Tax effect
(0.02
)
 
(0.04
)
 
(0.03
)
 
(0.10
)
 
(0.17
)
Non-GAAP net income per diluted share
$
0.65

 
$
0.64

 
$
0.79

 
$
2.02

 
$
2.08



Page 9


SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands, except per share data, DSO, inventory turns, weeks of channel inventory and headcount)
(Unaudited)

 
Three Months Ended
 
September 30,
2012
 
July 1,
2012
 
April 1,
2012
 
December 31,
2011
 
October 2,
2011
 
 
 
 
 
 
 
 
 
 
Cash, cash equivalents and short-term investments
$
362,420

 
$
360,428

 
$
369,420

 
$
353,695

 
$
321,059

Cash, cash equivalents and short-term investments per diluted share
$
9.34

 
$
9.34

 
$
9.58

 
$
9.24

 
$
8.43

 
 
 
 
 
 
 
 
 
 
Accounts receivable, net
$
248,862

 
$
271,769

 
$
249,208

 
$
261,307

 
$
218,653

Days sales outstanding (DSO)
72

 
77

 
70

 
76

 
66

 
 
 
 
 
 
 
 
 
 
Inventories
$
178,916

 
$
152,820

 
$
134,314

 
$
163,724

 
$
135,963

Ending inventory turns
4.9

 
5.9

 
6.7

 
5.2

 
6.0

 
 
 
 
 
 
 
 
 
 
Weeks of channel inventory:
 
 
 
 
 
 
 
 
 
U.S. retail channel
9.8

 
12.3

 
9.8

 
7.3

 
10.0

U.S. distribution channel
8.4

 
8.6

 
8.6

 
9.0

 
6.6

EMEA distribution channel
4.4

 
4.1

 
5.0

 
5.4

 
4.3

APAC distribution channel
4.7

 
5.7

 
5.6

 
6.7

 
3.9

 
 
 
 
 
 
 
 
 
 
Deferred revenue
$
28,205

 
$
25,478

 
$
25,156

 
$
40,093

 
$
23,934

 
 
 
 
 
 
 
 
 
 
Headcount
854

 
818

 
810

 
791

 
756

Non-GAAP diluted shares
38,802

 
38,595

 
38,576

 
38,260

 
38,080


NET REVENUE BY GEOGRAPHY
 
Three Months Ended
 
Nine Months Ended
 
September 30,
2012
 
 
 
July 1,
2012
 
 
 
October 2,
2011
 
 
 
September 30,
2012
 
 
 
October 2,
2011
 
 
Americas
$
177,647

 
56
%
 
$
163,438

 
51
%
 
$
149,009

 
49
%
 
$
509,440

 
53
%
 
$
430,482

 
50
%
EMEA
104,368

 
33
%
 
117,815

 
37
%
 
119,735

 
40
%
 
347,264

 
36
%
 
352,686

 
40
%
APAC
33,195

 
11
%
 
39,402

 
12
%
 
33,056

 
11
%
 
104,781

 
11
%
 
88,695

 
10
%
Total
$
315,210

 
100
%
 
$
320,655

 
100
%
 
$
301,800

 
100
%
 
$
961,485

 
100
%
 
$
871,863

 
100
%

NET REVENUE BY SEGMENT
 
Three Months Ended
 
Nine Months Ended
 
September 30,
2012
 
 
 
July 1,
2012
 
 
 
October 2,
2011
 
 
 
September 30,
2012
 
 
 
October 2,
2011
 
 
Retail
$
123,457

 
39
%
 
$
113,824

 
36
%
 
$
127,082

 
42
%
 
$
366,258

 
38
%
 
$
352,076

 
41
%
Commercial
79,240

 
25
%
 
80,626

 
25
%
 
91,059

 
30
%
 
234,498

 
24
%
 
247,793

 
28
%
Service Provider
112,513

 
36
%
 
126,205

 
39
%
 
83,659

 
28
%
 
360,729

 
38
%
 
271,994

 
31
%
Total
$
315,210

 
100
%
 
$
320,655

 
100
%
 
$
301,800

 
100
%
 
$
961,485

 
100
%
 
$
871,863

 
100
%


Page 10