Enterasys Networks Continues Profitable Revenue Growth in Q4 2006
Company adds 150 new customers, posts positive net income and achieves third consecutive quarter of revenue growth
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Andover, MA — Feb 5, 2007
Enterasys Networks, Inc., the Secure Networks Company™, today announced that its financial results once again met Company expectations for the fiscal fourth quarter ended December 30, 2006. Enterasys achieved positive net income in Q4 and posted its third consecutive quarter of revenue growth. For the full year, revenue increased in 2006 compared to 2005.
Gross margins increased over the prior quarter, remaining strong at more than 50 percent. Enterasys has now posted six consecutive quarters of pro-forma operating profitability. These results do not reflect any purchase accounting adjustments that may be applied related to the Company’s acquisition in March 2006 by a group of private investors led by The Gores Group, LLC, and Tennenbaum Capital Partners, LLC.
“Enterasys had another strong quarter to wrap up 2006, continuing the momentum we established when the new management team joined the company,” said Mike Fabiaschi, president and CEO of Enterasys Networks. “These results clearly reflect the success of our efforts to forge and strengthen our relationships with customers and partners. The unique capabilities of our Secure Networks™ hardware, software and services to secure any network, coupled with our customer-centric culture, are driving profitable revenue growth and an expanding roster of new customers worldwide.”
Highlights for the fourth quarter of 2006 include:
- More than 150 new customers, bringing the total for the past three quarters to nearly 500.
- New customers in North America included:
- Securities America, Inc.
- ViroPharma, Inc.
- The Vancouver Public Library
- Monongahela Valley Hospital
- Dillard University
- New customers in the EMEA region included:
- KPMG in Spain
- Consejera de Sanidad y Consumo in Spain
- Communaute Urbaine de Lille in France
- Hillel Yaffe Hospital in Israel
- New customers in Latin America included:
- Assembleia Legislativa da Bahia in Brazil
- Banco do Estado de Sergipe in Brazil
- Instituto Mineiro de Gestao das Aguas in Brazil
- Dedini S/A Industrias de Base in Brazil
- Hostarica in Costa Rica
- New customers in Asia-Pacific included:
- Republic of Korea Marine Corps
- The Japan Research Institute
- Republic of Korea Joint Chiefs of Staff
- International Pacific University in Japan
- Total port shipments rose approximately 7 percent sequentially in Q4 2006 and 25 percent compared to Q4 2005.
- Matrix X secure core router revenue grew more than 50 percent and 10 Gbps Ethernet port shipments nearly tripled over Q3 2006.
- Layer 2 switching, led by the SecureStack A2 , B2 and B3 edge switches, posted another sequential quarter of revenue growth and 50 percent growth over 2005. Port shipments rose more than 40 percent over Q4 2005.
- Matrix N-Series modular Layer 3 switches revenue and port shipments increased over Q3 2006 and over the full year 2005.
- The SecureStack C2 and C3 fixed Layer 3 switches posted sequential revenue growth and more than 50 percent growth in port shipments over Q3 2006.
- License shipments of Enterasys Dragon® , NetSight® and Sentinel software solutions for security, visibility and control grew sequentially over Q3 2006 as well as over FY2005.
About Enterasys Networks
Enterasys Networks—the Secure Networks Company—is owned by a private investor group led by The Gores Group, LLC and Tennenbaum Capital Partners, LLC. Enterasys’ unique Secure Networks solutions secure any network from any vendor and ensure the integrity and performance of IT services and the business users that rely on them. Thousands of leading companies, government agencies and educational institutions in more than 70 countries rely on Secure Networks solutions to maintain business continuity and protect vital information. The company's culture is centered on the principle "There is nothing more important than our customers." Delivering on that commitment, Secure Networks provides granular, policy-based command and control of individual user, application, device, port and flow performance, and security. Enterasys’ architectural approach to network security offers a long technology lifecycle and significant operational and business benefits, while reducing total cost of ownership. Information about Enterasys’ award-winning policy-enabled switches, routers, wireless products, security software, and services is available at www.enterasys.com.
About The Gores Group
Founded in 1987, The Gores Group is a private equity firm focused on acquiring controlling interests in mature and growing businesses which can benefit from the firm's operating experience and flexible capital base. The firm combines the operational expertise and detailed due diligence capabilities of a strategic buyer with the seasoned M&A team of a traditional financial buyer. The Gores Group has become a leading investor, primarily in the technology and telecommunications sectors, having demonstrated over time a reliable track record of creating substantial value in its portfolio companies alongside management. Headquartered in Los Angeles, California, The Gores Group maintains offices in Boulder, Colorado and London. For more information, please visit www.gores.com.
About Tennenbaum Capital Partners, LLC
Tennenbaum Capital Partners is a Santa Monica, California-based private investment firm managing over .8 billion in assets through private funds. The firm's investment strategy is grounded in a long-term, value approach, and it assists—both financially and operationally— transitional middle-market companies in such industries as technology, healthcare, energy, aerospace, business services, retail and general manufacturing. Tennenbaum's core strengths include its in-depth knowledge of equity and debt-financing vehicles in the public and private markets, as well as a thorough understanding of special situations. For more information, please visit www.tennenbaumcapital.com.
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