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Foundry Networks Posts Third Quarter Results

Foundry Networks Inc, reported financial results for its third quarter ended Sept. 30.

Revenues for the third quarter of 2003 increased to $101.7 million, compared to $95.7 million in the previous quarter, and $76.6 million in the same period last year. Foundry earned net income of $20.8 million, or 15 cents per diluted share in the third quarter, compared to net income of $16.8 million, or 13 cents per diluted share, in the prior quarter, and net income of $7.0 million, or 6 cents per diluted share, for the same period in 2002.

Revenues for the first nine months of 2003 were $288.5 million, as compared to $214.0 million for the same period last year, an increase of 35 percent. Net income for the first nine months of 2003 was $51.0 million or 38 cents per diluted share, compared to net income of $12.1 million or 10 cents per diluted share for the same period in 2002.

"Revenue strength was balanced across diverse verticals and geographies during the period," stated Bobby Johnson, president and CEO of Foundry Networks. "Revenue from the Federal Government remained strong, representing about 30 percent of Foundry's revenues during the quarter. Capital spending from customers in Japan and Korea also demonstrated resiliency and rebounded from prior quarter levels. In contrast to historical trends, European sales remained level during the seasonally slow summer months."

Johnson continued, "We also recorded revenue from an increasing span of products. We shipped and recognized revenue on our third generation 10 Gigabit Ethernet platform, the BigIron MG8 router, commonly referred to as 'Mucho Grande.' We introduced new ServerIron products that include a new version of the TrafficWorks IronWare operating system and our ServerIron Link Balancer. Additionally, we announced our wireless LAN strategy which integrates wireless technology into Foundry's existing enterprise network infrastructure products.

"Through continued manufacturing cost controls and a stable pricing environment, we attained gross margins of 67 percent, our highest level ever. Additionally, our cash position continued to grow. We added $44 million to our cash balance and now have more than $455 million in cash and investments and we remain debt-free."

"Our entire organization continues to focus on reaching operational and financial milestones, increasing the company's efficiency, and in general, executing on our plan," concluded Johnson.