SUNNYVALE, Calif. -- Juniper Networks (NYSE: JNPR):
Juniper Networks (NYSE: JNPR) today announced its new, integrated operating plan (IOP) to refocus the Company on innovation that matters most to service providers and enterprises where demand for High-IQ Networks and best-in-class cloud environments are driving growth. As noted in the Company's fourth quarter and fiscal year 2013 financial results call, Juniper has undertaken a comprehensive and ongoing review of the Company's business and customer needs to provide a more focused R&D and go-to-market program, to drive efficiencies and a significantly increased operating margin profile, and to aggressively return capital to shareholders and create substantial shareholder value.
"The cornerstone of our IOP is the belief that our customers, which include some of the world's largest service providers, financial services companies and government agencies, are increasingly building hyper-scale, resilient, secure, highly intelligent, open and virtualized networks," stated Shaygan Kheradpir, chief executive officer of Juniper Networks. "As a pure-play, high-performance networking company with engineering and organic innovation at its core, I believe Juniper is uniquely positioned to help these customers address their rapidly evolving networking needs. Our new, sharpened focus will bring us closer to our customers as we innovate together to address the opportunities ahead, and will enable us to operate much more efficiently as One-Juniper."
The IOP includes four key elements:
To ensure that costs are removed in an accountable and efficient manner, Juniper established a Cost Control Committee led by Kheradpir and tasked with implementing efficiencies throughout the organization. Juniper has also retained McKinsey Technology Cost Structure Team, a nationally recognized cost consultant, who will work with the Cost Control Committee on the plan's effective implementation. Finally, to demonstrate the Company's accountability for achieving the IOP's cost reduction objectives and 2015 operating margin goal, Juniper will provide updates on the Company's progress on a quarterly basis.
"I joined this phenomenal company as an agent of change to enable Juniper to realize its potential through a more focused, agile, connected, and execution-oriented structure optimized to capture the significant and growing opportunity we see before us," added Kheradpir. "Our new integrated operating plan combines Juniper's heritage of innovation with an outside-in customer imperative, ensuring that we are best positioned to meet customer demands for integrated and use-case driven technology solutions.
"The initiatives announced today are based on a comprehensive review of our business and customer needs, and we are confident that they will drive long-term, profitable growth by capturing greater share in the most meaningful market segments. In the near-term, we will align our cost structure around this new strategy and expect to deliver improved performance for our shareholders through operating margin expansion and a more aggressive capital return plan that preserves our ability to invest in innovation," concluded Kheradpir.
Further, as part of its ongoing assessment of the composition of its board of directors, Juniper also announced today that the board will nominate for election at the 2014 Annual Meeting of Stockholders Kevin DeNuccio and Gary Daichendt as new independent directors. Daichendt previously served in several senior operating executive positions at Cisco, retiring from the Company in December 2000. He currently serves on the boards of NCR, Emulex and ShoreTel. DeNuccio has over 25 years of executive and public board experience, primarily in the networking industry. DeNuccio is the former president and CEO of Redback Networks.
In addition, having completed the transition with Kheradpir, Kevin Johnson will retire from the Juniper Board at the end of February 2014.
"On behalf of the entire board, and everyone at Juniper, I would like to thank Kevin for his numerous contributions to the Company," said Scott Kriens, chairman of the board of Juniper Networks. "I have known both Gary Daichendt and Kevin DeNuccio since the early days of Juniper. Both of these future directors have deep experience and great instincts in building and operating successful network technology companies, and we look forward to them bringing more of the same to the future of Juniper."
In developing the IOP, Juniper considered the views of its stakeholders, and engaged in constructive discussions with shareholders including Elliott Management. Juniper has reached an agreement with Elliott whereby Elliott has agreed among various customary terms, to support the Company's changes announced today and to vote in favor of Juniper's nominees at its 2014 Annual Meeting of Stockholders.
"Today's announcement is an incredibly positive development for Juniper and its shareholders," stated Jesse Cohn, portfolio manager at Elliott Management. "Shaygan and his team have developed a thoughtful and highly value-accretive plan to invest for growth, significantly streamline and target the operations, and meaningfully return capital to shareholders. Further, Shaygan and the Board, which will be adding two leading operations-focused executives, have impressed us with a focused commitment to accountability and execution of the plan. Elliott is highly optimistic about the Company's future and looks forward to supporting Juniper in its continued focus on creating shareholder value."
Juniper Networks Inc. (NYSE: JNPR)