F5 Networks, Inc. Consolidated Balance Sheets (in thousands)
September 30, 2004 Assets Current assets Cash and cash equivalents ....................................................................................... Investments.............................................................................................................. Accounts receivable, net of allowances of $3,161 and $3,049................................. Inventories ............................................................................................................... Deferred tax assets ................................................................................................... Other current assets.................................................................................................. Total current assets .............................................................................................. Restricted cash ............................................................................................................. Property and equipment, net ........................................................................................ Long-term investments ................................................................................................ Deferred tax assets....................................................................................................... Goodwill ...................................................................................................................... Other assets, net ........................................................................................................... Total assets...........................................................................................................
$
$
September 30, 2003
24,901 $ 115,600 22,665 1,696 4,494 5,776 175,132
10,351 34,527 19,325 762 ― 4,779 69,744
6,243 11,954 81,792 29,392 50,067 8,279 362,859 $
6,000 10,079 34,132 ― 24,188 4,030 148,173
4,840 $ 17,668 28,064 50,572
3,714 13,148 19,147 36,009
Liabilities and Shareholders’ Equity Current liabilities Accounts payable..................................................................................................... Accrued liabilities.................................................................................................... Deferred revenue ..................................................................................................... Total current liabilities.........................................................................................
$
Other long-term liabilities............................................................................................
2,136
Deferred tax liability....................................................................................................
2,506
Total long-term liabilities ....................................................................................
4,642
1,584 151 1,735
Commitments and contingencies Shareholders’ equity Preferred stock, no par value; 10,000 shares authorized, no shares outstanding...... Common stock, no par value; 100,000 shares authorized 34,772 and 27,403 shares issued and outstanding ......................................................................................... Unearned compensation............................................................................................... Accumulated other comprehensive (loss) income........................................................ Retained earnings (deficit)........................................................................................... Total shareholders’ equity ....................................................................................... Total liabilities and shareholders’ equity ................................................................
―
$
306,655 ― (498) 1,488 307,645 362,859 $
― 141,709 (10) 195 (31,465) 110,429 148,173
F5 Networks, Inc. Consolidated Statements of Operations (in thousands, except per share amounts)
Three months ended September 30, 2004 2003
Twelve months ended September 30, 2004 2003
Net revenues: Product ..............................................................$ Service............................................................... Total net revenues......................................
34,536 12,683 50,219
Cost of net revenues: Product .............................................................. Service............................................................... Total cost of net revenues .......................... Gross profit........................................................
8,489 3,055 11,544 38,675
5,086 2,342 7,428 24,205
28,404 10,975 39,379 131,811
17,837 9,068 26,905 88,990
Operating expenses: Sales and marketing........................................... Research and development ................................ General and administrative................................ Amortization of unearned compensation........... Total operating expenses ..........................
17,597 6,764 4,463 ― 28,824
14,045 5,155 2,964 6 22,170
65,378 24,361 15,734 10 105,483
53,458 19,246 12,014 83 84,801
2,035 (375) 1,660 307 1,353
26,328 2,731 29,059 (3,894) $ 32,953
$
4,189 751 4,940 853 4,087
0.05 27,125 0.05 29,521
$
0.99 33,221 0.92 35,992
$
1,353 ―
$
32,953 1,731
$
$
Income from operations............................................. Other income, net ...................................................... Income before income taxes...................................... Provision for income taxes ........................................ Net income ........................................................$
9,851 891 10,742 (5,039) 15,781
Net income per share – basic.....................................$ Weighted average shares – basic ............................... Net income per share – diluted .................................$ Weighted average shares – diluted ............................
0.46 34,593 0.43 36,779
$
Net income as reported..............................................$ Incremental U.S. income tax expense (1) ..................
15,781 1,731
$
Reversal of valuation allowance (1) .......................... Net income excluding net U.S. tax benefit $
(7,254) 10,258
$
$
$
23,048 8,585 31,633
― 1,353
$
$
$
126,169 45,021 171,190
(7,254) 27,430
$
$
$
84,197 31,698 115,895
0.15 26,453 0.14 28,220 4,087 ― ― 4,087
Pro forma: Net income excluding net U.S. tax benefit ................$ Net income per share – basic.....................................$ Weighted average shares – basic ............................... Net income per share – diluted .................................$ Weighted average shares – diluted ............................
10,258 0.30 34,593 0.28 36,779
$ $ $
1,353 0.05 27,125 0.05 29,521
$ $ $
27,430 0.83 33,221 0.76 35,992
$ $ $
4,087 0.15 26,453 0.14 28,220
(1) During the fourth quarter of fiscal 2004, the Company became subject to income taxes on U.S. income and reversed the valuation allowance on U.S. deferred tax assets. The pro forma adjustments remove the impact of incremental U.S. income taxes and the benefit from the reversal of the valuation allowance to present the results in a manner that is comparable to prior periods.