SUWANEE, Ga., Oct. 26, 2011 /PRNewswire/ -- ARRIS Group, Inc.
(NASDAQ: ARRS), today announced preliminary and unaudited financial
results for the third quarter 2011.
Revenues in the third quarter 2011 were $274.4 million as compared to third quarter 2010
revenues of $274.3 million and as
compared to second quarter 2011 revenues of $265.8 million. Through the first three
quarters of 2011 and 2010, revenues were $807.6 million and $821.3
million, respectively.
Adjusted net income (a non-GAAP measure) in the third quarter
2011 was $0.21 per diluted share,
compared to $0.19 per diluted share
for the third quarter 2010 and $0.24
per diluted share for the second quarter 2011. Year to date,
adjusted net income was $0.60 per
diluted share for 2011 as compared to $0.67 per diluted share in 2010.
GAAP net income in the third quarter 2011 was $0.11 per diluted share, as compared to third
quarter 2010 GAAP net income of $0.11
per diluted share and second quarter 2011 GAAP net income of
$0.13 per diluted share. Year to
date, GAAP net income was $0.34 per
diluted share in 2011 as compared to GAAP net income of
$0.41 per diluted share in 2010.
Significant GAAP items that have been excluded in computing
adjusted net income and adjusted net income per diluted share
include amortization of intangible assets, equity compensation,
non-cash interest expense, restructuring charges and acquisition
costs, and certain discrete tax items. A reconciliation of adjusted
net income to GAAP net income per share is attached to this release
and also can be found on the Company's website
(www.arrisi.com).
Gross margin for the third quarter 2011 was 36.5%, which
compares to the third quarter 2010 gross margin of 37.2% and the
second quarter 2011 gross margin of 40.2%.
The Company ended the third quarter 2011 with $590.6 million of cash resources, which includes
$575.0 million of cash, cash
equivalents and short-term investments, and $15.6 million of long-term marketable security
investments, as compared to $591.5
million, in the aggregate, at the end of the second quarter
2011. During the third quarter 2011, the Company repurchased
approximately 1.6 million shares of ARRIS common stock for
$17.1 million and also repurchased
$5.0 million face amount of
Convertible Debt. Year to date, the Company has repurchased
6.7 million shares for $74.7 million,
and $5.0 million face amount of
Convertible Debt. The Company generated $24.5 million of cash from operating activities
during the third quarter 2011 and $52.3
million through the first nine months of 2011, which
compares to $12.5 million and
$95.9 million generated during the
same periods in 2010, respectively.
Order backlog at the end of the third quarter 2011 was
$155.3 million as compared to
$119.6 million and $154.2 million at the end of the third quarter
2010 and the second quarter 2011, respectively. The Company's
book-to-bill ratio in the third quarter 2011 was 1.00 as compared
to the third quarter 2010 of 0.80 and the second quarter 2011 of
0.91.
"Our third quarter results were within previous guidance and
reflect continuing demand for our market leading products," said
Bob Stanzione, ARRIS Chairman &
CEO. "We now look forward to completing the acquisition of BigBand
Networks and growing our current business to include a strong video
product suite. The BigBand portfolio joins a host of new ARRIS
products gaining traction in the industry and we believe that we
are positioned well for the future."
On October 11, 2011, the Company
announced its intention to purchase BigBand Networks and launched a
Tender Offer on October 21. The
Company anticipates closing the transaction in late November 2011.
The Company will present its Whole Home Solution Media Gateway
and Media Player, its Multi-screen On Demand and Advertising
solutions and industry-leading family of DOCSIS® 3.0 high density
products at the SCTE show in Atlanta in November. These new products enable
MSO customers to access their information and entertainment
anywhere, anytime and across multiple screens. Also, during
the quarter the Company announced that their ServAssure™ Advanced
Performance Management Software platform now handles IPv4, IPv6 and
dual-stack devices for data collection as well as real-time
requests. ARRIS ServAssure currently manages over 80 million
customer premises devices worldwide, or more than 30% of all
existing in-home broadband devices.
"With respect to the fourth quarter 2011, we now project that
revenues for the Company will be in the range of $270 to $290 million, with adjusted net income
per diluted share in the range of $0.18 to
$0.22 and GAAP net income per diluted share in the range of
$0.08 to $0.12," said David Potts, ARRIS EVP & CFO. "The
guidance excludes the impact of the BigBand acquisition, which is
expected to have approximately a $(0.01) to
$(0.03) effect in the fourth quarter on a non GAAP
basis."
ARRIS management will conduct a conference call at 5:00 pm EDT, today, Wednesday, October 26, 2011, to discuss these
results in detail. You may participate in this conference call by
dialing 888-713-4216 or 617-213-4868 for international calls prior
to the start of the call and providing the ARRIS Group, Inc. name,
conference pass code 77404552 and Jim
Bauer as the moderator. Please note that ARRIS will not
accept any calls related to this earnings release until after the
conclusion of the conference call. A replay of the conference call
can be accessed approximately two hours after the call through
October 31, 2011 by dialing
888-286-8010 or 617-801-6888 for international calls and using the
pass code 24855789. A replay also will be made available for a
period of 12 months following the conference call on ARRIS' website
at www.arrisi.com.
About ARRIS
ARRIS is a global communications technology company specializing
in the design, engineering and supply of technology supporting
triple- and quad-play broadband services for residential and
business customers around the world. The company supplies broadband
operators with the tools and platforms they need to deliver
converged IP video solutions, carrier-grade telephony, demand
driven video, next-generation advertising, network and workforce
management solutions, access and transport architectures and ultra
high-speed data services. Headquartered in Suwanee, GA, USA, ARRIS has R&D centers in
Suwanee, GA; Beaverton, OR; Lisle, IL; Kirkland,
WA; State College, PA;
Wallingford, CT; Waltham, MA; Cork,
Ireland; and Shenzhen,
China, and operates support and sales offices throughout the
world. Information about ARRIS products and services can be found
at www.arrisi.com.
Forward-looking statements:
Statements made in this press release, including those related
to:
- growth expectations and business prospects;
- revenues and net income for the fourth quarter 2011, full year
2011 and beyond;
- the impact of the BigBand Networks acquisition
- expected sales levels and acceptance of new ARRIS products;
and
- the general market outlook and industry trends
are forward-looking statements. These statements involve risks
and uncertainties that may cause actual results to differ
materially from those set forth in these statements. Among
other things,
- projected results for the fourth quarter 2011 as well as the
general outlook for 2011 and beyond are based on preliminary
estimates, assumptions and projections that management believes to
be reasonable at this time, but are beyond management's
control;
- ARRIS' customers operate in a capital intensive consumer based
industry, and the current volatility in the capital markets or
changes in customer spending may adversely impact their ability or
willingness to purchase the products that the Company
offers;
- the acquisition of BigBand is subject to a number of factors
including a minimum tender requirement, shareholder approval, the
fulfillment of closing conditions and the absence of litigation
preventing the closing; in addition, all acquisitions involve
integration and similar risks relating to their ultimate
performance; and
- because the market in which ARRIS operates is volatile, actions
taken and contemplated may not achieve the desired impact relative
to changing market conditions and the success of these strategies
will be dependent on the effective implementation of those plans
while minimizing organizational disruption.
In addition to the factors set forth elsewhere in this release,
other factors that could cause results to differ from current
expectations include: the uncertain current economic climate and
its impact on our customers' plans and access to capital; the
impact of rapidly changing technologies; the impact of competition
on product development and pricing; the ability of ARRIS to react
to changes in general industry and market conditions including
regulatory developments; rights to intellectual property, market
trends and the adoption of industry standards; and consolidations
within the telecommunications industry of both the customer and
supplier base. These factors are not intended to be an
all-encompassing list of risks and uncertainties that may affect
the Company's business. Additional information regarding these and
other factors can be found in ARRIS' reports filed with the
Securities and Exchange Commission, including its June 30, 2011 Form 10-Q. In providing
forward-looking statements, the Company expressly disclaims any
obligation to update publicly or otherwise these statements,
whether as a result of new information, future events or
otherwise.
ARRIS GROUP,
INC.
|
|
PRELIMINARY
CONSOLIDATED BALANCE SHEETS
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
|
|
2011
|
|
2011
|
|
2011
|
|
2010
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
354,659
|
|
$
360,281
|
|
$
358,747
|
|
$
353,121
|
|
$
351,894
|
|
Short-term investments, at
fair value
|
220,318
|
|
231,254
|
|
260,862
|
|
266,981
|
|
288,463
|
|
Total cash, cash
equivalents and short term investments
|
574,977
|
|
591,535
|
|
619,609
|
|
620,102
|
|
640,357
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted cash
|
3,647
|
|
3,646
|
|
4,176
|
|
4,937
|
|
4,480
|
|
Accounts receivable,
net
|
165,821
|
|
152,436
|
|
149,976
|
|
125,933
|
|
133,915
|
|
Other
receivables
|
5,296
|
|
406
|
|
5,275
|
|
6,528
|
|
2,654
|
|
Inventories,
net
|
116,769
|
|
113,020
|
|
105,787
|
|
101,763
|
|
89,203
|
|
Prepaids
|
10,692
|
|
10,272
|
|
12,115
|
|
9,237
|
|
8,934
|
|
Current deferred income
tax assets
|
24,239
|
|
22,681
|
|
20,450
|
|
19,819
|
|
28,585
|
|
Other current
assets
|
21,695
|
|
25,216
|
|
33,535
|
|
33,054
|
|
28,347
|
|
Total current
assets
|
923,136
|
|
919,212
|
|
950,923
|
|
921,373
|
|
936,475
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment,
net
|
57,619
|
|
57,100
|
|
56,617
|
|
56,306
|
|
56,816
|
|
Goodwill
|
233,430
|
|
233,440
|
|
233,471
|
|
234,964
|
|
235,109
|
|
Intangible assets,
net
|
141,784
|
|
150,728
|
|
159,672
|
|
168,616
|
|
177,560
|
|
Investments
|
47,221
|
|
34,237
|
|
32,787
|
|
31,015
|
|
29,591
|
|
Noncurrent deferred income tax
assets
|
9,637
|
|
9,839
|
|
10,183
|
|
6,293
|
|
6,560
|
|
Other assets
|
5,400
|
|
5,878
|
|
5,798
|
|
5,520
|
|
6,129
|
|
|
$
1,418,227
|
|
$ 1,410,434
|
|
$ 1,449,451
|
|
$
1,424,087
|
|
$
1,448,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
$
38,918
|
|
$
27,825
|
|
$
35,796
|
|
$
50,736
|
|
$
52,011
|
|
Accrued compensation,
benefits and related taxes
|
25,320
|
|
20,832
|
|
26,278
|
|
28,778
|
|
25,913
|
|
Accrued
warranty
|
2,933
|
|
3,300
|
|
2,931
|
|
2,945
|
|
3,504
|
|
Deferred
revenue
|
39,094
|
|
47,166
|
|
43,019
|
|
31,625
|
|
36,029
|
|
Current portion of
long-term debt
|
-
|
|
-
|
|
-
|
|
-
|
|
12
|
|
Other accrued
liabilities
|
19,653
|
|
17,805
|
|
17,594
|
|
18,847
|
|
25,891
|
|
Total current
liabilities
|
125,918
|
|
116,928
|
|
125,618
|
|
132,931
|
|
143,360
|
|
Long-term debt, net of current
portion
|
206,825
|
|
208,336
|
|
205,447
|
|
202,615
|
|
204,053
|
|
Accrued pension
|
17,989
|
|
17,730
|
|
17,472
|
|
17,213
|
|
17,383
|
|
Noncurrent income taxes
payable
|
22,471
|
|
21,844
|
|
21,844
|
|
17,702
|
|
16,509
|
|
Noncurrent deferred income tax
liabilities
|
21,117
|
|
24,808
|
|
25,827
|
|
29,151
|
|
32,193
|
|
Other noncurrent
liabilities
|
16,253
|
|
17,367
|
|
18,271
|
|
15,406
|
|
14,926
|
|
Total
liabilities
|
410,573
|
|
407,013
|
|
414,479
|
|
415,018
|
|
428,424
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
Preferred stock
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Common stock
|
1,446
|
|
1,443
|
|
1,438
|
|
1,409
|
|
1,406
|
|
Capital in excess of par
value
|
1,237,852
|
|
1,228,729
|
|
1,219,615
|
|
1,206,157
|
|
1,199,184
|
|
Treasury stock at
cost
|
(220,034)
|
|
(202,933)
|
|
(145,286)
|
|
(145,286)
|
|
(115,248)
|
|
Unrealized gain (loss) on
marketable securities
|
26
|
|
1,530
|
|
1,244
|
|
392
|
|
(374)
|
|
Unfunded pension
liability
|
(5,813)
|
|
(5,813)
|
|
(5,813)
|
|
(5,813)
|
|
(6,041)
|
|
Accumulated
deficit
|
(5,639)
|
|
(19,351)
|
|
(36,042)
|
|
(47,606)
|
|
(58,927)
|
|
Cumulative translation
adjustments
|
(184)
|
|
(184)
|
|
(184)
|
|
(184)
|
|
(184)
|
|
Total stockholders'
equity
|
1,007,654
|
|
1,003,421
|
|
1,034,972
|
|
1,009,069
|
|
1,019,816
|
|
|
$
1,418,227
|
|
$ 1,410,434
|
|
$ 1,449,451
|
|
$
1,424,087
|
|
$
1,448,240
|
|
|
|
|
|
|
|
|
|
|
|
ARRIS GROUP,
INC.
|
|
PRELIMINARY
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(in
thousands, except per share data)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months
|
|
For the Nine
Months
|
|
|
Ended
September 30,
|
|
Ended
September 30,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$ 274,374
|
|
$ 274,286
|
|
$ 807,609
|
|
$ 821,338
|
|
Cost of sales
|
174,250
|
|
172,299
|
|
503,641
|
|
493,562
|
|
Gross margin
|
100,124
|
|
101,987
|
|
303,968
|
|
327,776
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative expenses
|
35,695
|
|
33,913
|
|
108,401
|
|
103,489
|
|
Research and development
expenses
|
36,065
|
|
35,138
|
|
108,734
|
|
105,041
|
|
Restructuring
charges
|
969
|
|
-
|
|
969
|
|
73
|
|
Amortization of intangible
assets
|
8,944
|
|
8,970
|
|
26,832
|
|
27,013
|
|
|
81,673
|
|
78,021
|
|
244,936
|
|
235,616
|
|
Operating income
|
18,451
|
|
23,966
|
|
59,032
|
|
92,160
|
|
Other expense
(income):
|
|
|
|
|
|
|
|
|
Interest
expense
|
4,277
|
|
4,533
|
|
12,682
|
|
13,728
|
|
Loss (gain) on
investments
|
253
|
|
(369)
|
|
(504)
|
|
(401)
|
|
Loss (gain) on foreign
currency
|
(841)
|
|
94
|
|
126
|
|
283
|
|
Interest income
|
(775)
|
|
(399)
|
|
(2,439)
|
|
(1,468)
|
|
Loss (gain) on debt
redemption
|
19
|
|
(263)
|
|
19
|
|
(378)
|
|
Other (income) expense,
net
|
(150)
|
|
280
|
|
(682)
|
|
107
|
|
Income from continuing
operations before income taxes
|
15,668
|
|
20,090
|
|
49,830
|
|
80,289
|
|
Income tax
expense
|
1,955
|
|
6,048
|
|
7,863
|
|
27,482
|
|
Net income
|
$ 13,713
|
|
$ 14,042
|
|
$ 41,967
|
|
$ 52,807
|
|
|
|
|
|
|
|
|
|
|
Net income per common
share:
|
|
|
|
|
|
|
|
|
Basic
|
$
0.11
|
|
$
0.11
|
|
$
0.35
|
|
$
0.42
|
|
Diluted
|
$
0.11
|
|
$
0.11
|
|
$
0.34
|
|
$
0.41
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares:
|
|
|
|
|
|
|
|
|
Basic
|
119,283
|
|
125,237
|
|
121,115
|
|
125,927
|
|
Diluted
|
121,237
|
|
127,638
|
|
123,549
|
|
129,103
|
|
|
|
|
|
|
|
|
|
ARRIS GROUP,
INC.
|
|
PRELIMINARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(in
thousands)
|
|
(unaudited)
|
|
|
|
|
|
For the
Three Months
|
|
For the Nine
Months
|
|
|
|
|
|
Ended
September 30,
|
|
Ended
September 30,
|
|
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Activities:
|
|
|
|
|
|
|
|
|
|
Net income
|
$ 13,713
|
|
$ 14,042
|
|
$ 41,967
|
|
$ 52,807
|
|
|
|
Depreciation
|
5,882
|
|
5,837
|
|
17,550
|
|
16,893
|
|
|
|
Amortization of intangible
assets
|
8,944
|
|
8,969
|
|
26,832
|
|
27,013
|
|
|
|
Amortization of deferred finance
fees
|
161
|
|
170
|
|
487
|
|
527
|
|
|
|
Non-cash interest
expense
|
2,883
|
|
2,781
|
|
8,604
|
|
8,548
|
|
|
|
Deferred income tax provision
(benefit)
|
(4,084)
|
|
4,939
|
|
(15,487)
|
|
2,598
|
|
|
|
Stock compensation
expense
|
5,738
|
|
5,785
|
|
16,947
|
|
16,058
|
|
|
|
Provision for doubtful
accounts
|
(1)
|
|
(209)
|
|
(1)
|
|
83
|
|
|
|
Loss (gain) on debt
retirement
|
19
|
|
(263)
|
|
19
|
|
(378)
|
|
|
|
Loss (gain) on disposal of fixed
assets
|
(27)
|
|
337
|
|
6
|
|
369
|
|
|
|
Loss (gain) on
investments
|
253
|
|
(370)
|
|
(504)
|
|
(401)
|
|
|
|
Excess tax benefits from
stock-based compensation plans
|
258
|
|
(36)
|
|
(2,989)
|
|
(2,683)
|
|
|
Changes in operating assets
& liabilities, net of effects of acquisitions and
disposals:
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
(13,384)
|
|
5,967
|
|
(39,887)
|
|
9,710
|
|
|
|
Other receivables
|
(6,134)
|
|
3,930
|
|
(17)
|
|
2,760
|
|
|
|
Inventory
|
(3,749)
|
|
(10,373)
|
|
(15,006)
|
|
6,648
|
|
|
|
Income taxes
payable/recoverable
|
5,362
|
|
(11,165)
|
|
17,953
|
|
(14,173)
|
|
|
|
Accounts payable and accrued
liabilities
|
9,148
|
|
(22,603)
|
|
(6,332)
|
|
(42,226)
|
|
|
|
Other, net
|
(520)
|
|
4,796
|
|
2,129
|
|
11,788
|
|
|
|
|
Net cash provided by operating
activities
|
24,462
|
|
12,534
|
|
52,271
|
|
95,941
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities:
|
|
|
|
|
|
|
|
|
|
Purchases of
investments
|
(85,263)
|
|
(100,461)
|
|
(228,104)
|
|
(331,547)
|
|
|
Disposals of
investments
|
80,796
|
|
104,760
|
|
260,227
|
|
159,914
|
|
|
Purchases of property &
equipment, net
|
(6,401)
|
|
(6,862)
|
|
(18,948)
|
|
(17,127)
|
|
|
Cash proceeds from sale of
property & equipment
|
27
|
|
-
|
|
70
|
|
243
|
|
|
|
|
Net cash provided by (used in)
investing activities
|
(10,841)
|
|
(2,563)
|
|
13,245
|
|
(188,517)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities:
|
|
|
|
|
|
|
|
|
|
Payment of debt
obligations
|
-
|
|
(38)
|
|
-
|
|
(112)
|
|
|
Early redemption of long-term
debt
|
(4,984)
|
|
(13,531)
|
|
(4,984)
|
|
(18,331)
|
|
|
Repurchase of common
stock
|
(17,101)
|
|
(15,603)
|
|
(74,748)
|
|
(39,288)
|
|
|
Excess income tax benefits from
stock-based compensation plans
|
(258)
|
|
36
|
|
2,989
|
|
2,683
|
|
|
Repurchase of shares to satisfy
employee tax withholdings
|
(15)
|
|
3
|
|
(8,260)
|
|
(6,422)
|
|
|
Fees and proceeds from issuance
of common stock, net
|
3,115
|
|
124
|
|
21,025
|
|
5,375
|
|
|
|
|
Net cash used in financing
activities
|
(19,243)
|
|
(29,009)
|
|
(63,978)
|
|
(56,095)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
and cash equivalents
|
(5,622)
|
|
(19,038)
|
-
|
1,538
|
|
(148,671)
|
|
Cash and cash equivalents at
beginning of period
|
360,281
|
|
370,932
|
|
353,121
|
|
500,565
|
|
Cash and cash equivalents at end
of period
|
$ 354,659
|
|
$ 351,894
|
|
$ 354,659
|
|
$ 351,894
|
|
|
|
|
|
|
|
|
|
|
|
|
ARRIS
GROUP, INC.
|
|
PRELIMINARY
SUPPLEMENTAL NET INCOME RECONCILIATION
|
|
(in
thousands, except per share data) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except per share
data)
|
Q1
2011
|
|
Q2
2011
|
|
Q3
2011
|
|
YTD
2011
|
|
|
|
|
Per
Diluted
|
|
|
|
Per
Diluted
|
|
|
|
Per
Diluted
|
|
|
|
Per
Diluted
|
|
|
Amount
|
|
Share
|
|
Amount
|
|
Share
|
|
Amount
|
|
Share
|
|
Amount
|
|
Share
|
|
Net income
|
$ 11,564
|
|
$
0.09
|
|
$ 16,690
|
|
$
0.13
|
|
$ 13,713
|
|
$
0.11
|
|
$ 41,967
|
|
$
0.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Highlighted items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impacting
gross margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock compensation
expense
|
437
|
|
-
|
|
557
|
|
-
|
|
525
|
|
-
|
|
1,519
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impacting
operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition costs,
restructuring and other
|
-
|
|
-
|
|
|
|
-
|
|
1,444
|
|
0.01
|
|
1,444
|
|
0.01
|
|
Amortization of intangible
assets
|
8,944
|
|
0.07
|
|
8,944
|
|
0.07
|
|
8,944
|
|
0.07
|
|
26,832
|
|
0.22
|
|
Stock compensation
expense
|
4,847
|
|
0.04
|
|
5,368
|
|
0.04
|
|
5,213
|
|
0.04
|
|
15,428
|
|
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impacting
other (income) / expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash interest
expense
|
2,832
|
|
0.02
|
|
2,889
|
|
0.02
|
|
2,883
|
|
0.02
|
|
8,604
|
|
0.07
|
|
Loss (gain) on retirement
of debt
|
-
|
|
-
|
|
|
|
-
|
|
19
|
|
-
|
|
19
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impacting
income tax expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments of income tax
valuation allowances, research & development credits and
other
|
(3,583)
|
|
(0.03)
|
|
-
|
|
-
|
|
(2,335)
|
|
(0.02)
|
|
(5,918)
|
|
(0.05)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax related
to highlighted items above
|
(5,024)
|
|
(0.04)
|
|
(4,915)
|
|
(0.04)
|
|
(5,265)
|
|
(0.04)
|
|
(15,204)
|
|
(0.12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total highlighted
items
|
8,453
|
|
0.07
|
|
12,843
|
|
0.10
|
|
11,428
|
|
0.09
|
|
32,724
|
|
0.26
|
|
Net income excluding highlighted
items
|
$ 20,017
|
|
$
0.16
|
|
$ 29,533
|
|
$
0.24
|
|
$ 25,141
|
|
$
0.21
|
|
$ 74,691
|
|
$
0.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares -
diluted
|
|
|
125,732
|
|
|
|
123,711
|
|
|
|
121,237
|
|
|
|
123,549
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1
2010
|
|
Q2
2010
|
|
Q3
2010
|
|
YTD
2010
|
|
|
|
|
Per
Diluted
|
|
|
|
Per
Diluted
|
|
|
|
Per
Diluted
|
|
|
|
Per
Diluted
|
|
|
Amount
|
|
Share
|
|
Amount
|
|
Share
|
|
Amount
|
|
Share
|
|
Amount
|
|
Share
|
|
Net income
|
$ 18,991
|
|
$
0.15
|
|
$ 19,774
|
|
$
0.15
|
|
$ 14,042
|
|
$
0.11
|
|
$ 52,807
|
|
$
0.41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Highlighted items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impacting
gross margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock compensation
expense
|
433
|
|
-
|
|
481
|
|
-
|
|
491
|
|
-
|
|
1,405
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impacting
operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition costs,
restructuring and other
|
52
|
|
-
|
|
21
|
|
-
|
|
-
|
|
-
|
|
73
|
|
-
|
|
Amortization of intangible
assets
|
9,022
|
|
0.07
|
|
9,021
|
|
0.07
|
|
8,970
|
|
0.07
|
|
27,013
|
|
0.21
|
|
Stock compensation
expense
|
4,088
|
|
0.03
|
|
5,271
|
|
0.04
|
|
5,294
|
|
0.04
|
|
14,653
|
|
0.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impacting
other (income) / expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash interest
expense
|
2,883
|
|
0.02
|
|
2,884
|
|
0.02
|
|
2,781
|
|
0.02
|
|
8,548
|
|
0.07
|
|
Loss (gain) on retirement
of debt
|
-
|
|
-
|
|
(115)
|
|
-
|
|
(263)
|
|
-
|
|
(378)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impacting
income tax expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments of income tax
valuation allowances, research & development credits and
other
|
1,222
|
|
0.01
|
|
(351)
|
|
-
|
|
(1,040)
|
|
(0.01)
|
|
(169)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax related
to highlighted items above
|
(5,505)
|
|
(0.04)
|
|
(6,170)
|
|
(0.05)
|
|
(6,133)
|
|
(0.05)
|
|
(17,808)
|
|
(0.14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total highlighted
items
|
12,195
|
|
0.09
|
|
11,044
|
|
0.09
|
|
10,100
|
|
0.08
|
|
33,337
|
|
0.26
|
|
Net income excluding highlighted
items
|
$ 31,186
|
|
$
0.24
|
|
$ 30,818
|
|
$
0.24
|
|
$ 24,142
|
|
$
0.19
|
|
$ 86,144
|
|
$
0.67
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares -
diluted
|
|
|
129,975
|
|
|
|
129,717
|
|
|
|
127,638
|
|
|
|
129,103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
With respect to stock
compensation expense, ARRIS records non-cash compensation
expense related to grants of options and restricted stock.
Depending upon the size, timing and the terms of the grants,
this non-cash compensation expense may vary significantly.
With respect to amortization of intangibles, the intangibles
being amortized relate to our acquisitions. The acquisition
costs, restructuring, and other reflect items that, although they
or similar items might recur, are of a nature and magnitude that
identifying them separately provides investors with a greater
ability to project ARRIS’ future performance.
With respect to the convertible debt non-cash interest, ARRIS
records non-cash interest expense related to the 2013 convertible
debt. Disclosing the non-cash piece provides investors with
the information regarding interest that will not be paid out in
cash. In 2011 and 2010, income tax expense
adjustments were recorded for state valuation allowances and
research and development tax credits.
In assessing operating
performance and preparing budgets and forecasts, ARRIS’ management
considers performance after making these adjustments and believes
that providing investors with the same information provides greater
transparency and insight into management’s analysis.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE ARRIS Group, Inc.