MERU (MM)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): January 2, 2015

 

 

MERU NETWORKS, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

 

Delaware		001-34659		26-0049840
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

894 Ross Drive Sunnyvale, California		94089
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (408) 215-5300

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation 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))

 

 

 

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Item 2.02

Results of Operations and Financial Condition.

On January 6, 2015, Meru Networks, Inc. (the “Company”) issued a press release reporting its preliminary financial results for the quarter ended December 31, 2014. A copy of the press release is furnished herewith as Exhibit 99.1.

The information in Item 2.02 of this Current Report, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information in this Item 2.02 and the accompanying exhibit shall not be incorporated by reference in any registration statement or other document filed by the Company with the Securities and Exchange Commission, whether made before or after the date of this Current Report, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such a filing.

 

Item 2.05

Costs Associated with Exit or Disposal Activities.

On January 2, 2015, the Company’s Board of Directors (the “Board”) approved a plan of reorganization pursuant to which, among other things, employees will be terminated under a plan of termination described in FASB ASC 420 Exit or Disposal Cost Obligations (the “Restructuring”). Charges will be incurred under generally accepted accounting principles.

The Company currently estimates recording restructuring charges of approximately $1.5 million to $2.0 million in the first quarter of 2015 in connection with the Restructuring relating to one-time employee termination benefits, including severance benefits and other employee termination expenses, write down of inventory, and other one-time items. In order to further preserve existing cash, a portion of the severance benefits may be paid with stock in the form of accelerated vesting of outstanding restricted stock units. In connection with the efforts to streamline its business structure with the Restructuring, the Company expects to reduce worldwide headcount by approximately 10%. The majority of these reductions will be effective by January 9, 2015.

The Company intends to discuss in greater detail the implementation of the Restructuring on the next quarterly financial results conference call scheduled for February 9, 2015. The actions associated with the Restructuring are a significant step towards achieving a more streamlined and profitable company.

Information contained in this Current Report on Form 8-K that relates to the Company’s anticipated expense reductions, restructuring charges, financial performance, business prospects and plans, and similar matters are “forward-looking statements” within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. These statements involve risks and uncertainties that could cause our actual results to differ materially from the future results expressed or implied by the forward-looking statements. All information set forth herein is current as of the date of this Current Report on Form 8-K. The Company undertakes no duty to update any statement in light of new information or future events except as required by applicable law. For further information regarding risks and uncertainties associated with the Company’s business, please refer to the “Risk Factors” section of the Company’s filings with the Securities and Exchange Commission, including, but not limited to, its latest Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q.

 

Item 9.01

Financial Statements and Exhibits.

 

(d)

Exhibits

 

Exhibit No.		Exhibit Title or Description
99.1		Press release dated January 6, 2015.

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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.

 

		MERU NETWORKS, INC.
Date: January 6, 2015		By:		/s/ Mark Liu
				Name: Mark Liu
				Title: General Counsel

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EXHIBIT INDEX

 

Exhibit No.		Exhibit Title or Description
99.1		Press Release dated January 6, 2015.

Exhibit 99.1

 

Meru Networks Reports Preliminary Q4 2014 Financial Results

Company announces restructuring and cost reduction program

Deutsche Bank retained to explore strategic options

SUNNYVALE, CA — (PRNewswire) — 1/6/15 — Meru Networks, Inc. (NASDAQ: MERU), a leader in intelligent networking and the only wireless LAN vendor to have received OpenFlow™ conformance, today announced preliminary results for the fourth quarter of 2014. Based on preliminary financial information, Meru anticipates fourth quarter revenues of approximately $21.0 million to $22.0 million, which is below the previously announced guidance range of $23.0 million to $27.0 million.

In addition, Meru announced a restructuring of the company designed to reduce breakeven from approximately $27.0 million quarterly revenues to approximately $21.5 million to $22.5 million by the end of the first quarter of 2015, with target gross margins at 62.5%. Meru expects to incur restructuring and one-time charges of approximately $1.5 million to $2.0 million in the first quarter of 2015. The restructuring is expected to impact every department across all geographies, and is expected to reduce headcount by more than 10% of the full-time employees along with approximately 20 contractors in the first quarter of 2015. The restructuring consolidates certain functions and flattens the organization while reducing operating expenses and cash burn, and accelerates a return to profitability.

Meru has a number of new initiatives that are well aligned with current market interests. These include high performing 11ac products and the recently introduced 11ac wall plate solution, increased software content through Meru Center and Meru App Store, the controller-less cloud subscription model for SME, and SDN/OpenFlow unified wired-wireless capabilities. Along with the return of E-Rate funding in the second half of 2015, we believe these initiatives will act as catalysts for future growth.

“We are disappointed with this performance, yet believe that our technology advantages can be converted into greater market adoption. We are determined to optimize the mix of partners, channel distribution, and effective direct sales necessary to put the Company back on a growth track,” said Dr. Bami Bastani, President and CEO of Meru. “Today we have taken a major step in further streamlining the company structure to accelerate decision making, enhance operational efficiencies, and reduce breakeven sales to position the Company for profitability.”

Meru has also announced that Kevin Coppins, the company’s Vice President of Sales for North America, has notified the company of his resignation from the company, to be effective January 12, 2015. Tom Palomaki, the company’s Vice President of Worldwide

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Support and Services, has been appointed to serve as the company’s new Vice President of Sales for North America. “We thank Kevin for his service and wish him the best in his future endeavors,” said Dr. Bastani, President & CEO, “and we have the highest confidence that Tom will succeed in his new role. Having previously served as a senior executive in technology sales for approximately 25 years, Tom has an exceptional understanding of our customers and we expect him to drive sales and help execute our growth initiatives.”

Meru further announced that it had retained Deutsche Bank as its exclusive financial advisor to explore strategic options, including, but not limited to, strategic partnering of its technology and possible sale or merger of the company. There can be no assurance that the company’s exploration of strategic options will result in a transaction. The company has not set a timetable for the completion of this process and does not intend to disclose further developments unless and until its Board of Directors approves a specific action or otherwise concludes the review of strategic options.

Meru will report fourth quarter and full year 2014 results on Monday, February 9, 2015 after the market closes. Meru’s management will host a conference call to discuss 2014 results on the same day at 5:00 pm ET (2:00 pm PT).

Date: Monday, February 9, 2015

Time: 5:00 p.m. ET (2:00 p.m. PT)

Dial-in Number: (877) 852-2926

International Dial-in Number: (253) 237-1123

Conference ID: 62184717

The live and archived webcast of the financial results conference call will also be available at the investor relations section of Meru’s website at http://investors.merunetworks.com.

About Meru Networks

Meru Networks (NASDAQ: MERU) is a leader in intelligent 802.11ac Wi-Fi solutions delivering uninterrupted user experience for education, healthcare, hospitality and enterprise. The Meru open-standards-based architecture is designed to enable unified management of wired and wireless networks. Its end-to-end application QoS enables enforceable service-level agreements. Meru provides top performance and high capacity in high-density environments. Visit www.merunetworks.com or call (408) 215-5300 for more information.

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^©2015 Meru Networks. Meru and Meru Networks are registered trademarks and the Meru logo is a trademark of Meru Networks, Inc. in the United States. OpenFlow™ is a trademark of the Open Networking Foundation.

Investor and Press Contact:

Edward Keaney

Market Street Partners

415-445-3238

ekeaney@marketstreetpartners.com

Source: Meru Networks, Inc.

Cautionary Statement Regarding Forward Looking Statements

All statements other than statements of historical facts are statements that can be deemed forward-looking statements, including any statements of expectations or beliefs. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those in the forward looking statements. Risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include, among others: business and economic conditions and growth trends in the networking industry, our vertical markets and various geographic regions; competition in the industry; our future capital needs may change; changes in overall information technology spending; failure to develop new products; and those risks and uncertainties described in documents filed with or furnished to the Securities and Exchange Commission (“SEC”) by Meru, including under the caption “Risk Factors” in Meru’s Quarterly Report on Form 10-Q filed with the SEC on October 30, 2014, and any subsequent reports filed with the SEC. All forward-looking statements in this press release are based on information available to Meru as of the date hereof, and Meru assumes no obligation to update these forward-looking statements, except as required by law.