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Foundry Networks Reports First Quarter 2006 Financial Results

San Jose, CA – April 20, 2006 - Foundry Networks™, Inc. (Nasdaq: FDRY), today reported financial results for its first quarter ended March 31, 2006. 

Foundry's revenue for the first quarter of 2006 was $114.0 million, up 35% from $84.6 million in the first quarter of 2005, and slightly lower compared to $116.1 million in the fourth quarter of 2005.  Net income was $11.4 million or $0.08 per diluted share, compared to net income of $9.9 million, or $0.07 per diluted share in the first quarter of 2005, and net income of $20.6 million, or $0.14 per diluted share in the fourth quarter of 2005.

Included in Foundry's results for the first quarter of 2006 was $9.0 million of non-cash stock-based compensation expense as a result of our adoption of SFAS 123R on January 1, 2006.  Net income in the first quarter and fourth quarter of 2005 did not include stock-based compensation expense.  Excluding this non-cash stock-based compensation expense and the related tax effect, non-GAAP net income in the first quarter of 2006 was $17.4 million and earnings per diluted share were $0.12 per share. Please refer to the table below for a reconciliation of GAAP to non-GAAP net income.

Foundry's first quarter results reflect typical seasonal patterns.  Activity from Foundry's Japanese and European customers increased modestly from the fourth quarter while the U.S. Federal Government vertical market declined slightly, representing approximately 19% of Foundry's total net revenue in the first quarter of 2006. 

"We are excited about our strong start in 2006," said Bobby Johnson, President and CEO of Foundry Networks.  "The seasonally slow business trend we typically experience in the first quarter was mitigated by increased sales of our newly introduced products, as well as improved productivity of our recent sales force additions.

"Sales of our XMR MPLS router, having completed a full quarter of revenue shipments in the March period, as well as our newest Metro router, the MLX which began shipping for revenue in February 2006, had good initial demand from service providers and large enterprise customers.  In addition, our BigIron RX family of Layer 2/3 switches continued to increase in both the enterprise and service provider markets and we began revenue shipments of our Layer 4-7 traffic management SSL and security products.

Outlook
"Looking ahead, we plan to introduce several significant new platforms addressing both enterprise and service provider markets in the second quarter of 2006.  Given current capital expenditure trends that we have seen within large enterprise and service provider accounts, we believe that as our product portfolio continues to expand, Foundry will be well positioned for continued growth in 2006," 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 release includes non-GAAP measures which are not in accordance with generally accepted accounting principles. In the first quarter of 2006, Foundry adopted Financial Accounting Standards Board Statement No. 123R,or SFAS 123R, which requires companies to recognize the compensation cost associated with stock-based awards in their financial statements. As a result, our financial statements for the first quarter of 2006 include stock-based compensation expense, but our financial results for the first quarter of 2005 do not include stock-based compensation expense because periods prior to January 1, 2006 are not required to be restated. Foundry has provided the non-GAAP financial information, which is adjusted to exclude stock-based compensation expense, as well as a reconciliation of GAAP net income to non-GAAP net income. As Foundry begins to apply SFAS 123R, it believes that it is useful to investors to understand how the expenses associated with the application of SFAS 123R are reflected on its statements of operations. For its internal budgets, Foundry's management uses financial statements that do not include stock-based compensation expense related to its stock-based awards. Foundry's management also uses the non-GAAP measures, in addition to the corresponding GAAP measures, in reviewing the financial results of Foundry. The non-GAAP information should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

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, without limitation, the statement that our new products will enable continued growth.  Other forward-looking statements include statements by Mr. Johnson regarding upcoming new products, capital expenditure trends, and Foundry's positioning for continued growth as a result of its expanding product portfolio. The forward-looking statements in this press release are only predictions and 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, acceptance of Foundry's current and future products, and other factors listed in Foundry's most recent reports on Form 10-K, 10-Q, and 8-K.  Actual results could differ materially from those projected in our forward-looking statements. Foundry's results of operations for the three months ended March 31, 2006 are not necessarily indicative of Foundry's operating results for any future periods.  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. Any projections in this release are based on limited information currently available to Foundry. 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.

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