Skip to content

Foundry Networks Reports Fourth Quarter and Full Year 2004 Results

San Jose, CA – January 27, 2005 - Foundry Networks®, Inc. (Nasdaq: FDRY), today reported financial results for its fourth quarter and full year ended December 31, 2004.

Revenues for the fourth quarter of 2004 were $104.8 million, compared to $102.5 million for the third quarter of 2004, and $111.1 million for the fourth quarter of 2003. Net income was $16.7 million, or $0.12 per diluted share, in the fourth quarter of 2004, compared to a net loss of $(3.6) million, or $(0.03) per share, in the third quarter of 2004, and net income of $24.1 million, or $0.17 per diluted share, in the fourth quarter of 2003. Excluding a non-recurring expense associated with a litigation settlement and patent cross-license agreement, net income was $14.9 million, or $0.11 per diluted share, in the third quarter of 2004.

Revenues for the year ended December 31, 2004 were $409.1 million, compared to $399.6 million for 2003. Net income for 2004 was $48.0 million, or $0.34 per diluted share, compared to net income of $75.1 million, or $0.55 per diluted share, for 2003. Excluding a non-recurring expense associated with a litigation settlement and patent cross-license agreement, net income for 2004 was $66.7 million, or $0.47 per diluted share. Foundry's cash position increased $112 million from 2003.

In the fourth quarter, Foundry's U.S. enterprise business delivered its highest level of revenue ever. The U.S. Federal government business, which represented approximately 28% of Foundry's revenue during the past several quarters, declined to 23% of revenue in the fourth quarter as government IT procurement slowed.

"We are delighted to conclude 2004 having achieved record revenues for the year," stated Bobby Johnson, President and CEO of Foundry Networks. "We are also pleased with the number of new products introduced in 2004, including the ServerIron® GT E-series family of application and traffic management switches, the NetIron 40G Internet Router, the Company's fourth generation of 10-GbE chassis and stackable switches, and new families of SSL accelerators and enterprise WAN access routers.

"During the past year we continued to focus on the Company's core fundamentals of profitable growth, product leadership, high-quality customer service, and intelligent investment in building future opportunities. Looking ahead, we will continue to broaden our enterprise and service provider offerings to create a comprehensive single-vendor solution set. We intend to continue the expansion of our sales and support organization while investing in more research and development to address current and future market opportunities. By capitalizing on our reputation for delivering high-performance products and our leadership position in Layer 3 10-Gigabit Ethernet, we believe we can continue to deliver long-term growth," continued Johnson.

Outlook
"Based on current business trends and normal seasonality, we expect first quarter revenues to be in the range of $100 - $110 million and diluted EPS to be in the range of $0.08 - $0.12 per share," concluded Johnson.

Conference Call
Foundry Networks will host a conference call today to further discuss these results at 2:00 p.m. Pacific Time. The call can be accessed via a webcast at www.foundrynetworks.com. A Web replay will also be available for approximately 90 days at this same Web address.

Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, and is subject to the safe harbor created by that section. These forward-looking statements include statements by Mr. Johnson regarding new product introductions, expansion of the sales and support organization, additional investment in research and development, current and future market opportunities, delivery of long-term growth, and expectations for future revenues and earnings per share. The forward-looking statements in this press release are subject to a number of risks and uncertainties which could cause actual results to differ materially, including, without limitation, the difficulty of predicting quarterly financial results, our dependence on large purchases of products from certain customers/resellers, the staging and amounts of U.S. government contract awards, risks associated with international sales, results of ongoing litigation, the strength of the overall economy and the high-technology market in particular, competition, product development efforts, and acceptance of Foundry's current and future products. Actual results could differ materially from those projected in our forward-looking statements. Investors should review the risk factors described in more detail in our most recent Annual Report on Form 10-K, 10-Q and other SEC reports available free of charge from Foundry at www.foundrynetworks.com or from the SEC at www.sec.gov. Foundry assumes no obligation to update the forward-looking statements contained in this press release.

About Foundry Networks

Foundry Networks, Inc. (NASDAQ: FDRY) is a leading provider of high-performance enterprise and service provider switching, routing, security and Web traffic management solutions, including Layer 2/3 LAN switches, Layer 3 Backbone switches, Layer 4-7 application switches, wireless LAN and access points, metro routers and core routers. Foundry's customers include the world's premier ISPs, metro service providers, and enterprises, including e-commerce sites, universities, entertainment, health and wellness, government, financial and manufacturing companies. For more information about the company and its products, call 1.888.TURBOLAN or visit www.foundrynet.com.

Contacts