Sunday, January 30, 2011

Extreme Networks Posts Revenue of $85.1 Million

Extreme Networks reported revenue of $85.1 million for its second quarter of fiscal 2011, up 7% as compared to $79.4 million in the second quarter last year. Previously issued guidance to investors was for net revenue of $85-$88 million. Second quarter non-GAAP operating income was $5.3 million or 6.2% percent of net revenue, representing a significant improvement as compared to operating income of $4.2 million or 5.3% of net revenue in the second quarter last year. Non-GAAP operating income in the 2011 fiscal first quarter was $4.6 million or 5.5 percent of net revenue.

"Both EMEA and APAC posted solid performance, again this quarter," said Oscar Rodriguez, President & CEO of Extreme Networks. "Product revenue in North America increased about 8 percent over Q2 last year, but did not improve from Q1 as we had expected. We have just appointed a new vice president of NA Sales and have reorganized North America to provide improved customer focus."

Rodriguez continued, "We have completed a review of our Company strategy. While we will continue to serve the broader Enterprise Campus, Data Center and Service Provider markets, we will specifically focus our efforts and resources on identified high-growth verticals within those broader markets. As a result, we believe this will enable us to grow revenue in high-growth vertical markets. Further, aimed at continuing to improve financial performance, during mid January, we took actions to reduce headcount by approximately 35 employees or roughly 5% of worldwide headcount. This action will result in a restructuring charge in Q3 between $1.0 million to $1.5 million. Additionally, we have initiated cost reduction programs aimed at driving additional efficiencies throughout the Company. We believe these actions are targeted to expand gross margins and accelerate our ability to reach our stated target of double-digit operating income. Going forward, we believe these actions will lower our operating expense by up to $2 million per quarter and $8 million annually."

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