& cplSiteName &

Ixia Files 2013 Results

Light Reading
News Wire Feed
Light Reading
6/23/2014
50%
50%

CALABASAS, Calif. -- Ixia (Nasdaq: XXIA) today reported its financial results for the fourth quarter and fiscal year ended December 31, 2013. Ixia has also made substantial progress toward becoming current with its Securities and Exchange Commission (the “SEC”) reports by filing today reports that include its Annual Report on Form 10-K for the year ended December 31, 2013, its Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, and the amendments to its quarterly reports necessary to complete the company’s previously announced restatement of its financial statements for the first and second quarters of 2013.

Management Commentary by Errol Ginsberg, Chairman and Acting CEO “We are pleased to bring our 2013 audit to a close and file our 2013 financial statements with the SEC. While the past eight months have been challenging on several fronts, we have continued to focus on innovation and on executing and moving the business forward. Our total fourth quarter bookings were within our expectations and we exited the quarter with a book-to-bill greater than one. Revenue came in at $120.6 million (includes $4.8 million of post-acquisition Net Optics sales). Revenue was slightly below the low-end of guidance principally due to a mix of orders that included a larger proportion of orders for our warranty and Application Threat Intelligence (ATI) subscription offerings for which revenue is recognized ratably over the related service periods. Notably, deferred revenue grew by $15 million sequentially in the fourth quarter.

"In early December 2013, we completed the acquisition of Net Optics and quickly began integrating the teams, systems and product families. I am pleased to report that this integration is now substantially complete. A significant part of the integration included a major collaborative restructuring of the sales team, coupled with many new hires in key roles. We now have one unified Network Visibility Solutions (NVS) team with senior leaders across sales, marketing, operations and product development. Although the integration of the sales teams was completed in less than two months, this negatively impacted our first quarter NVS bookings as our leaders and field resources settled into their new territories. Today, our integrated sales force is set and cross-trained on the combined NVS portfolio with an enhanced level of support and responsiveness on a global level. From a product perspective, we are already seeing the benefits of our combined product portfolio in the competitive landscape.

"Overall, the market trends in the test market have remained essentially unchanged. In switching and routing, demand for high-speed Ethernet solutions is increasing on a port count basis, while the demand for 1G and 10G Ethernet solutions continues to gradually decline. We were first to market with 40G and 100G Ethernet test platforms, and with our recent introduction of the industry’s first 400G Ethernet test platform, we continue to lead the industry in creating cutting edge solutions that enable our customers to develop, test and validate the networking technologies of the future. The applications and security test market continues to show solid growth, and we are pleased with our recent performance and momentum in this market. In the fourth quarter, we launched our PerfectStorm solution that integrates our IxLoad and BreakingPoint software on one platform. PerfectStorm is one of the most successful new product launches in our history.

"While we are still in the early stages of closing our first quarter financials, we currently expect first quarter revenue to be in the range of $109 million to $113 million. While we exited the first quarter with a book-to-bill greater than one, first quarter revenue was negatively impacted by lighter NVS bookings due to the impact of the sales integration activities discussed above, a larger than expected mix of warranty and ATI subscription bookings as part of our total bookings, continued market trends in the test market, as well as normal seasonal patterns. We expect non-GAAP gross margin to increase sequentially and non-GAAP operating margin to be in the mid to high single digits due to the lower topline, higher seasonal expense levels and litigation costs, and the Net Optics acquisition. We expect our effective tax rate for the 2014 first quarter to increase on a sequential basis as a result of the expiration of the federal R&D tax credit.

"We are focused on completing our 10-Q for 2014 first quarter, which we expect to file in July. Lastly, on the leadership front, our goal is to name a permanent CEO and CFO by the end of the third quarter.”

Fourth Quarter Financial Summary

Total revenue was $120.6 million, compared with $113.2 million reported in the 2013 third quarter and $125.5 million reported for the 2012 fourth quarter. The 2013 fourth quarter includes $4.8 million in revenue attributable to Net Optics, which was acquired on December 5, 2013. Total 2013 fourth quarter revenue was below guidance previously announced for the fourth quarter primarily due to a higher than expected mix of warranty and ATI subscription bookings for which revenue is recognized ratably over the service periods.

Deferred revenue grew to $104 million, compared with $89 million in the 2013 third quarter and $75 million in the 2012 fourth quarter. GAAP gross margin was 75.4%, compared with 78.3% in the 2013 third quarter. Non-GAAP gross margin was 76.0%, compared with 78.4% in the 2013 third quarter. Gross margin was impacted by $2.5 million of inventory-related charges associated with end-of-life and older network test products. Gross margin in the 2013 fourth quarter was also negatively affected, to a lesser extent, by the addition of lower margin Net Optics sales.

Total operating expense was $94.5 million, compared with $84.4 million in the 2013 third quarter. Non-GAAP operating expenses were in line with expectations at $73.2 million, compared with $68.3 million in the 2013 third quarter. The increase in non-GAAP operating expenses was primarily related to the addition of Net Optics and higher year-end commission expenses.

Operating loss was $3.5 million or (2.9%) of revenue, compared with operating income of $4.2 million or 3.7% of revenue in the 2013 third quarter. Non-GAAP operating income was $18.5 million or 15.4% of revenue, compared with $20.5 million or 18.1% of revenue in the 2013 third quarter.

Net loss was $3.1 million, or ($0.04) per share, compared with net income of $4.1 million, or $0.05 per diluted share, for the 2013 third quarter and $3.7 million, or $0.05 per diluted share, for the 2012 fourth quarter.

Non-GAAP net income was $11.9 million, or $0.15 per diluted share, compared with non- GAAP net income of $13.0 million, or $0.16 per diluted share, for the 2013 third quarter and $20.1 million, or $0.25 per diluted share, for the 2012 fourth quarter.

Fiscal Year 2013 Summary

Total revenue was a record $467.3 million, an increase of 13% compared with $413.4 million reported for fiscal year 2012. Fiscal year 2013 revenue includes $4.8 million attributable to the acquisition of Net Optics completed on December 5, 2013. Total revenue for fiscal years 2013 and 2012 included $138.2 million and $54.9 million, respectively, related to our 2012 acquisitions of Anue and BreakingPoint.

Gross margin was 78.0%, compared with 80.1% in 2012. Non-GAAP gross margin was 78.2%, compared with 80.5% in 2012.

Operating income was $12.3 million or 2.6% of revenue, compared with $24.3 million or 5.9% of revenue in 2012. Non-GAAP operating income was $84.6 million or 18.1% of revenue, compared with $92.9 million or 22.5% of revenue in 2012.

Net income was $11.9 million, or $0.15 per diluted share, compared with $45.5 million, or $0.59 per diluted share, in 2012. Non-GAAP net income was $56.5 million, or $0.69 per diluted share, compared with $61.7 million, or $0.78 per diluted share, in 2012.

Ixia ended 2013 with $85.7 million in cash, cash equivalents and investments, compared with $177.5 million at December 31, 2012. The decrease was primarily attributable to the payment of approximately $192 million in net cash consideration for Net Optics. This decrease was partially offset by cash flow from operations of $87 million for the year ended 2013.

Ixia (Nasdaq: XXIA)

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
From The Founder
Download our complete guide to de-risking NFV deployment in 2016, including:
  • An eight-step strategy to deploying NFV safely, based on input from the companies that have already started virtualizing their production networks.
  • Interviews with leading executives at Colt, AT&T, Deutsche Telekom, Cisco, Nokia, ZTE, Ericsson and Heavy Reading.
  • Flash Poll
    Live Streaming Video
    Prepping for the Future: Upskill U Explained
    During this short kick-off video, Doug Webster, Vice President of Service Provider Marketing, Cisco, and Light Reading’s CEO & Founder Steve Saunders give an overview of Upskill U.
    LRTV Interviews
    AT&T Expert on the Key Pillars of UC

    4|29|16   |   03:58   |   (0) comments


    Vishy Gopalakrishnan, AVP of product marketing at AT&T, talks about the three developments that are making unified communications and collaboration secure and reliable for enterprise users.
    LRTV Documentaries
    LRTV Report: Mobile Core Innovation

    4|28|16   |   25:32   |   (0) comments


    Hear from multiple industry experts from Deutsche Telekom, SK Telecom, Heavy Reading, Huawei, Cisco, Ericsson, Nokia, NEC and many more about developments in the mobile core as operators virtualize their IMS and evolved packet core systems and prepare for a 5G world.
    LRTV Huawei Video Resource Center
    NFV World Congress Highlight

    4|26|16   |     |   (0) comments


    The highlight of the NFV World Congress contains exciting telecom news. Join us for an inside look at Huawei's ICT 2020 plan and its latest collaboration with industry leaders.
    LRTV Interviews
    Unified Comms Finds Its Voice

    4|25|16   |   03:44   |   (0) comments


    Peter Quinlan, VP of UCC Product Management at Tata Communications, talks about the evolution of the unified communications and collaboration services sector and how voice is now a big part of current developments.
    LRTV Documentaries
    So... What Do We Do Now?

    4|25|16   |   03:24   |   (0) comments


    After a long hiatus, Max Dingman, the CEO of a GeeGhiz, returns for a motivational board room pep talk.
    LRTV Documentaries
    NAB 2016 Highlights

    4|21|16   |     |   (0) comments


    Light Reading's Cable/Video Practice Leader Alan Breznick climbs down from the slots to tell us about the latest news in broadcast technology at NAB 2016 in Las Vegas.
    Between the CEOs
    CEO Chat: Deepfield's Craig Labovitz

    4|21|16   |     |   (0) comments


    In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
    Shades of Ray
    Leading Lights 2016: Shortlists Announced

    4|20|16   |   0:53   |   (0) comments


    The judging is over and the Leading Lights 2016 shortlists have been published -- you can see who made the cut by clicking on this link.
    LRTV Custom TV
    Introducing MulteFire – Qualcomm at MWC 2016

    4|18|16   |   3.29   |   (0) comments


    MulteFire is the latest option for using LTE in unlicensed spectrum. As oppose to its close 'siblings', LAA and LTE-U, MulteFire operates solely in unlicensed spectrum, which enables it to offer the best of two worlds – LTE-like performance with WiFi-like deployment simplicity. In this interview, Sanjeev Athalye, Sr. Director, Product Management at Qualcomm ...
    Between the CEOs
    CEO Chat: Grant Van Rooyen of Cologix

    4|18|16   |     |   (0) comments


    Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
    LRTV Huawei Video Resource Center
    ONS 2016 – Demonstration of Huawei's NetMatrix Multi-Vendor SDN Orchestrator

    4|15|16   |     |   (0) comments


    This demonstration shows how Huawei's NetMatrix SDN Orchestrator (SDN-O) addresses an operator's core service agility needs for services spanning multi-domain, multivendor networks: it includes a demonstration of:
    - Rapid New Service Design: using YANG to model a complex example of multi-domain, multivendor L3VPN network connectivity service that ...
    LRTV Custom TV
    AT&T Wants to Own North Carolina

    4|15|16   |     |   (1) comment


    Venessa Harrison, president of North Carolina for AT&T, tells how the company will expand its GigaPower service beyond the seven N.C. cities it already serves.

  • This blog, sponsored by AT&T, is the second part of a ten-part series examining next-generation broadband technologies titled "Behind the Speeds."
  • Upcoming Live Events
    May 23, 2016, Austin, TX
    May 23, 2016, Austin Convention Center
    May 24-25, 2016, Austin Convention Center, Austin, TX
    September 13-14, 2016, The Curtis Hotel, Denver, CO
    December 6-8, 2016,
    June 16-18, 2017, Austin Convention Center, Austin, TX
    All Upcoming Live Events
    Infographics
    A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
    Hot Topics
    Ultra-Broadband Summit, Hong Kong
    Iain Morris, News Editor, 4/27/2016
    WiCipedia: Woman Cards & Bitch Switches
    Sarah Thomas, Director, Women in Comms, 4/29/2016
    FCC Poised to Re-Regulate Wholesale Access
    Carol Wilson, Editor-at-large, 4/28/2016
    Mitel Asks: What Time of Day Do You Shower?
    Mitch Wagner, West Coast Bureau Chief, Light Reading, 4/25/2016
    GoT Fans Curse HBO (Not Right) Now
    Mari Silbey, Senior Editor, Cable/Video, 4/25/2016
    Like Us on Facebook
    Twitter Feed
    BETWEEN THE CEOs - Executive Interviews
    In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
    Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
    Animals with Phones
    Live Digital Audio

    Of all the tech companies in the Valley, Intel has made the most aggressive commitment to building a diverse and inclusive workplace culture. It's doing so by taking concrete, measurable steps, making a large financial investment and through a commitment to complete transparency about its progress. In this radio show, WiC Director Sarah Thomas will be joined by Shlomit Weiss, Intel's Vice President, Data Center Group, and General Manager of Networking Engineering, who will share with us why Intel is tackling this huge challenge, how and to what effect. She will also discuss her unique experiences leading development of Client SOC development in the past and today leading development of all of the chipmaker's silicon hardware for networking IPs and discrete devices and managing a team of 600 engineers across Israel, Europe and the US.