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Form 8-K RUCKUS WIRELESS INC For: Apr 30

April 30, 2015 4:20 PM EDT


 
UNITED STATES
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 1934
April 30, 2015
Date of Report (Date of earliest event reported)

 
Ruckus Wireless, Inc.
(Exact name of registrant as specified in its charter)
 

Delaware
 
001-35734
 
54-2072041
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)
 
 
350 West Java Drive Sunnyvale, California
 
94089
 
 
(Address of principal executive offices)
 
(Zip Code)

 
Registrant's telephone number, including area code: (650) 265-4200
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))






Item 2.02. Results of Operations and Financial Condition.
    
On April 30, 2015, Ruckus Wireless, Inc. (the “Company”) reported financial results for the three months ended March 31, 2015. A copy of the press release issued concerning the foregoing results is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
The press release is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing with the Securities and Exchange Commission made by the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No.
 
Description
99.1
 
Press Release, dated April 30, 2015, entitled “Ruckus Wireless Reports First Quarter 2015 Financial Results.”







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.

 
 
 
 
 
 
 
 
 
 
 
RUCKUS WIRELESS, INC.
Dated: April 30, 2015
 
 
 
 
 
 
 
 
 
 
 
 
By:
 
/s/ Scott Maples
 
 
 
 
 
 
Scott Maples
 
 
 
 
 
 
Vice President, General Counsel and Corporate Secretary






INDEX TO EXHIBITS

Exhibit No.
 
Description
99.1
 
Press Release, dated April 30, 2015, entitled “Ruckus Wireless Reports First Quarter 2015 Financial Results.”





Exhibit 99.1
 

Investor Relations Contact
Nicole Noutsios
NMN Advisors (for Ruckus Wireless)
1+510-315-1003
Media Contact
Mark Priscaro
Ruckus Wireless
1+408-604-8531

Ruckus Wireless Reports First Quarter 2015 Financial Results
SUNNYVALE, CA - April 30, 2015 - Ruckus Wireless, Inc. (NYSE: RKUS) today announced financial results for its first quarter of 2015 ended March 31, 2015.
Financial Summary
Revenue for the first quarter of 2015 was $82.1 million, an increase of 9.4% from the first quarter of 2014. Revenue for the quarter was impacted by large deals in our North American enterprise business taking longer to close and by continued delays in education spending in advance of the upcoming release of E-Rate funding.
GAAP net loss was $0.6 million for the first quarter of 2015, compared with GAAP net income of $0.3 million for the first quarter of 2014. GAAP operating loss was $1.5 million for the first quarter of 2015, compared with GAAP operating income of $1.0 million for the first quarter of 2014.
Non-GAAP net income was $6.5 million for the first quarter of 2015, compared with non-GAAP net income of $7.0 million for the first quarter of 2014. Non-GAAP operating income was $6.8 million for the first quarter of 2015, compared with non-GAAP operating income of $7.2 million for the first quarter of 2014.
GAAP diluted net loss per share was $0.01 for the first quarter of 2015, compared with $0.00 for the first quarter of 2014. Non-GAAP diluted net income per share was $0.07 for the first quarter of 2015 and 2014.
“While we made progress that positions us for long-term growth, our revenue for the quarter was impacted by several large enterprise deals in North America taking longer to close, and continued delays in education spending in advance of the upcoming release of E-Rate funding. Despite that, we continue to expect the upcoming E-Rate funding to be an important driver for long-term revenue growth,” said Selina Lo, president and chief executive officer, Ruckus Wireless. “We were first to announce an 802.11ac Wave 2 access point which will differentiate us in the market. We also added Ian Whiting to our team as Chief Commercial Officer to drive our go-to-market strategy and sales execution.”






Business Highlights

Introduced the ZoneFlex R710, the world’s first 802.11ac Wave 2 capable Smart Wi-Fi access point, capable of delivering aggregate data rates over 2 Gigabits per second.
Launched the ZoneFlex H500, an 802.11ac indoor wall switch access point ideal for offering converged services in hotel guest rooms, student residences, and multiple dwelling units.
Announced that Ruckus’ 802.11ac technology is being integrated into Nokia Networks' Flexi Zone small cell indoor and outdoor solutions.
Added Ian Whiting to the Ruckus team as Chief Commercial Officer who will lead our go-to-market strategy and sales execution.
Added 19 new service provider end-customers in the first quarter, bringing the total service provider end-customer base to over 220.
Added approximately 3,700 enterprise end-customers, bringing the total enterprise end-customer base to approximately 52,000.
For the fourth consecutive year, Ruckus was awarded a 5-star rating in The Channel Company's CRN 2015 Partner Program Guide.

Guidance
For the second quarter of 2015 ending June 30, 2015, the company expects:
Total revenue in the range of $86 million to $91 million; and
Non-GAAP diluted net income per share of $0.07 to $0.10 using 98 to 99 million shares.
 
Conference Call Information
Ruckus Wireless is hosting a conference call for analysts and investors to discuss its first quarter 2015 results and outlook for its second quarter of 2015 at 2:00 p.m. Pacific Daylight Time today, April 30, 2015. A live audio webcast of the conference call along with supplemental financial information will also be accessible from the “Investors” section of the Company’s website at http://investors.ruckuswireless.com. A replay will be available following the call on the Ruckus Wireless Investor Relations website or for one week at the following numbers: (855) 859-2056 (domestic), (404) 537-3406 (international) using ID# 22781422. An archived version of the audio from the call will be available for at least thirty days on the Company’s website at http://investors.ruckuswireless.com.

Safe Harbor Statement
This press release contains forward-looking statements, including statements regarding Ruckus Wireless’ financial expectations for the second quarter of 2015 and future periods and statements regarding growth drivers to the Company’s business, E-Rate funding, and future product offerings. These statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those anticipated, including, but not limited to, risks and uncertainties related to: growth of the market for Ruckus Wireless products and services, delays in education spending and changes or other developments associated with government funding programs for education, unpredictable market conditions, deployment and adoption of new products and services, Ruckus Wireless’ rapid growth, competition, technological change, product development delays, reliance on third parties, and general market, political, regulatory, economic and business conditions in the United States and internationally.
Additional risks and uncertainties that could affect Ruckus Wireless’s financial results are included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in the company’s annual report on Form 10-K, which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 25, 2015. Ruckus Wireless’s SEC filings are available on the company’s investor relations website at http://investors.ruckuswireless.com and on the SEC’s website at www.sec.gov. All forward-looking statements in this press release are based on information available to the company as of the date hereof, and Ruckus Wireless does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law.








Non-GAAP Financial Measures
To supplement our financial results presented in accordance with Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables and the related earnings conference call contain certain non-GAAP financial measures, including non-GAAP gross profit and gross margin, non-GAAP operating income and operating margin, non-GAAP net income, non-GAAP dilutive net income per share and non-GAAP weighted-average diluted shares. We also provide projected second quarter 2015 non-GAAP dilutive net income per share and non-GAAP weighted-average diluted shares. We believe these non-GAAP financial measures are helpful in understanding our past financial performance and future results. Our non-GAAP financial measures should not be considered in isolation or as a substitute for comparable GAAP measures and should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand and manage our business and forecast future periods. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies.
Our non-GAAP financial measures include adjustments based on the following items:
Stock-based compensation expense: We have excluded the effect of stock-based compensation expense. Although stock-based compensation is a key incentive offered to our employees, we continue to evaluate our business performance excluding stock-based compensation expense. Stock-based compensation will recur in future periods.
Employer payroll tax expense associated with stock-based compensation: We have excluded the employer payroll tax expense associated with stock option exercises and restricted stock releases, in order to provide a complete picture of the Company’s recurring core business operating results. Stock-based compensation will continue to be used as a method to compensate certain employees for the foreseeable future.
Amortization of intangible assets: We have excluded the effect of amortization of intangible assets. Amortization of intangible assets is a non-cash expense and it is not part of our core operations. Investors should note that the use of intangible assets contributed to revenue earned during the periods presented and will contribute to future period revenue as well.
Legal settlement benefit, net: We have excluded non-recurring patent infringement settlements. We will continue to be party to litigation and subject to claims related to intellectual property infringement arising in the ordinary course of business.
Non-cash income tax expense (benefit): We have excluded non-cash income taxes, as the Company does not expect to pay any material federal or state income taxes in 2015.
Our non-GAAP financial measures are described as follows:
Non-GAAP gross profit and gross margin. Non-GAAP gross profit is gross profit as reported on our condensed consolidated statements of operations, excluding the impact of stock-based compensation expense, employer payroll tax expense associated with stock-based compensation and amortization of intangible assets. Non-GAAP gross margin is non-GAAP gross profit divided by revenue.
Non-GAAP operating income and operating margin. Non-GAAP operating income is income (loss) from operations as reported on our condensed consolidated statements of operations, excluding the impact of stock-based compensation expense, employer payroll tax expense associated with stock-based compensation, amortization of intangible assets and legal settlement benefit, net. Non-GAAP operating margin is non-GAAP operating income divided by revenue.
Non-GAAP net income and diluted net income per share. Non-GAAP net income is net income (loss) as reported on our condensed consolidated statements of operations, excluding the impact of stock-based compensation expense, employer payroll tax expense associated with stock-based compensation, amortization of intangible assets, legal settlement benefit, net and non-cash income tax expense (benefit). Non-GAAP diluted net income per share is non-GAAP net income divided by non-GAAP weighted-average diluted shares.
For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, “Reconciliation of GAAP to Non-GAAP Financial Measures.”







ABOUT RUCKUS WIRELESS
Headquartered in Sunnyvale, CA, Ruckus Wireless, Inc. (NYSE: RKUS) is a global supplier of advanced wireless systems for the rapidly expanding mobile Internet infrastructure market. The company offers a wide range of indoor and outdoor “Smart Wi-Fi” products to mobile carriers, broadband service providers, and corporate enterprises, and has approximately 52,000 end-customers worldwide. Ruckus technology addresses Wi-Fi capacity and coverage challenges caused by the ever-increasing amount of traffic on wireless networks due to accelerated adoption of mobile devices such as smartphones and tablets. Ruckus invented and has patented state-of-the-art wireless voice, video, and data technology innovations, such as adaptive antenna arrays that extend signal range, increase client data rates, and avoid interference, providing consistent and reliable distribution of delay-sensitive multimedia content and services over standard 802.11 Wi-Fi.
For more information, visit http://www.ruckuswireless.com. Ruckus, Ruckus Wireless and SmartCell are trademarks of Ruckus Wireless, Inc. in the United States and other countries.






RUCKUS WIRELESS, INC.
Condensed Consolidated Statements of Operations
(unaudited, in thousands, except per share amounts)

 
Three Months Ended March 31,
 
2015
 
2014
Revenue:
 
 
 
Product
$
75,297

 
$
70,075

Service
6,781

 
4,977

Total revenue
82,078

 
75,052

Cost of revenue:
 
 
 
Product
23,231

 
21,496

Service
3,542

 
2,759

Total cost of revenue
26,773

 
24,255

Gross profit
55,305

 
50,797

Operating expenses:
 
 
 
Research and development
21,296

 
18,139

Sales and marketing
26,078

 
23,270

General and administrative
9,434

 
8,437

Total operating expenses
56,808

 
49,846

Operating income (loss)
(1,503
)
 
951

Interest income
141

 
46

Other expense, net
(78
)
 
(26
)
Income (loss) before income taxes
(1,440
)
 
971

Income tax expense (benefit)
(867
)
 
698

Net income (loss)
$
(573
)
 
$
273

Net income (loss) per share:
 
 
 
Basic
$
(0.01
)
 
$
0.00

Diluted
$
(0.01
)
 
$
0.00

Weighted average shares used in computing net income (loss) per share:
 
 
 
Basic
85,637

 
81,277

Diluted
85,637

 
93,311







RUCKUS WIRELESS, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures
(unaudited, in thousands, except per share amounts)
 
Three Months Ended March 31,
 
2015
 
2014
Gross Profit Reconciliation:
 
 
 
GAAP gross profit:
$
55,305

 
$
50,797

Stock-based compensation
316

 
245

Employer payroll tax associated with stock-based compensation
11

 
30

Amortization of intangible assets
705

 
330

Non-GAAP gross profit:
$
56,337

 
$
51,402

Gross Margin Reconciliation:
 
 
 
GAAP gross margin:
67.4
 %
 
67.7
 %
Stock-based compensation
0.4
 %
 
0.3
 %
Employer payroll tax associated with stock-based compensation
 %
 
 %
Amortization of intangible assets
0.8
 %
 
0.5
 %
Non-GAAP gross margin:
68.6
 %
 
68.5
 %
Operating Income Reconciliation:
 
 
 
GAAP operating income (loss):
$
(1,503
)
 
$
951

Stock-based compensation
7,322

 
6,346

Employer payroll tax associated with stock-based compensation
267

 
381

Amortization of intangible assets
705

 
330

Legal settlement benefit, net

 
(760
)
Non-GAAP operating income:
$
6,791

 
$
7,248

Operating Margin Reconciliation:
 
 
 
GAAP operating margin (loss):
(1.8
)%
 
1.3
 %
Stock-based compensation
8.9
 %
 
8.5
 %
Employer payroll tax associated with stock-based compensation
0.3
 %
 
0.5
 %
Amortization of intangible assets
0.9
 %
 
0.4
 %
Legal settlement benefit, net
 %
 
(1.0
)%
Non-GAAP operating margin:
8.3
 %
 
9.7
 %
Net Income Reconciliation:
 
 
 
GAAP net income (loss):
$
(573
)
 
$
273

Stock-based compensation
7,322

 
6,346

Employer payroll tax associated with stock-based compensation
267

 
381

Amortization of intangible assets
705

 
330

Legal settlement benefit, net

 
(760
)
Non-cash income tax expense (benefit)
(1,213
)
 
447

Non-GAAP net income:
$
6,508

 
$
7,017

Non-GAAP diluted net income per share:
$
0.07

 
$
0.07

Shares used in computing non-GAAP diluted Net Income per share Reconciliation:
 
 
 
Weighted-average shares outstanding used in calculating GAAP diluted net income (loss) per share
85,637

 
93,311

Additional dilutive securities for non-GAAP income
12,121

 
2,234

Weighted-average shares outstanding used in calculating non-GAAP diluted net income per share
97,758

 
95,545






RUCKUS WIRELESS, INC.
Condensed Consolidated Balance Sheets
(unaudited, in thousands, except par value)
 
March 31,
 
December 31,
 
2015
 
2014
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
46,267

 
$
56,083

Short-term investments
147,550

 
142,706

Accounts receivable, net of allowance for doubtful accounts of $800 as of March 31, 2015 and December 31, 2014
57,121

 
59,553

Inventories
25,143

 
21,064

Deferred costs
2,463

 
4,414

Deferred tax assets
6,208

 
6,205

Prepaid expenses and other current assets
6,191

 
5,367

Total current assets
290,943

 
295,392

Property and equipment, net
17,572

 
13,636

Goodwill
9,945

 
9,945

Intangible assets, net
6,646

 
7,351

Non-current deferred tax asset
23,185

 
21,166

Restricted cash
5,000

 
5,000

Other assets
1,478

 
1,504

Total assets
$
354,769

 
$
353,994

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
22,152

 
$
23,538

Accrued compensation
12,569

 
13,765

Accrued liabilities
6,740

 
5,282

Deferred revenue
30,045

 
39,231

Total current liabilities
71,506

 
81,816

Non-current deferred revenue
10,932

 
10,554

Non-current deferred tax liabilities
410

 
596

Other non-current liabilities
1,410

 
1,379

Total liabilities
84,258

 
94,345

Stockholders’ equity:
 
 
 
Common stock, $0.001 par value; 250,000 shares authorized as of March 31, 2015 and December 31, 2014; 86,349 and 85,110 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively
86

 
85

Additional paid–in capital
284,624

 
273,276

Accumulated other comprehensive loss
(11
)
 
(97
)
Accumulated deficit
(14,188
)
 
(13,615
)
Total stockholders’ equity
270,511

 
259,649

Total liabilities and stockholders’ equity
$
354,769

 
$
353,994







RUCKUS WIRELESS, INC.
Summary of Cash Flows
(unaudited, in thousands)

 
Three Months Ended March 31,
 
2015
 
2014
Net cash provided by (used in) operating activities
$
(5,312
)
 
$
3,561

Net cash used in investing activities
(8,531
)
 
(18,269
)
Net cash provided by financing activities
4,027

 
3,193

Net decrease in cash and cash equivalents
$
(9,816
)
 
$
(11,515
)




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