Enterasys Achieves Profitable Revenue Growth in Q1 2007
Revenues rise year over year as company achieves seventh consecutive quarter of profitability while adding more than 150 new customers
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Andover, MA — May 7, 2007
Enterasys Networks®, Inc., the Secure Networks Company™, today announced that financial results once again met expectations for the fiscal first quarter ended March 31, 2007. First-quarter revenue increased on a year-over-year basis while gross margins remained strong at greater than 50 percent.
Enterasys has now posted seven 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.
“Our goal for the first quarter was to continue building the company’s momentum from 2006, and that’s exactly what we did,” said Mike Fabiaschi, president and CEO of Enterasys Networks. “These results demonstrate that existing and new customers and partners around the world are benefiting from the unique value delivered by our Secure Networks™ hardware, software and services. Every day we work to become our customers’ and partners’ favorite vendor. That effort is making Enterasys an ever-stronger competitor in the enterprise network infrastructure industry.”
Highlights for the first quarter of 2007 include:
About Enterasys Networks
- Delivering four new Diamond Distributed Forwarding Engines (DFEs), the latest innovation for the industry-leading Enterasys Matrix® N-Series flow-based switches. The new DFEs deliver increased security, routing and policy scalability for backbone roles in the core and distribution layers of enterprise networks.
- Introducing the Enterasys® I-Series industrial switch, the first Ethernet switch with Enterasys’ industry-leading policy architecture in a hardened design that can withstand the extreme environmental conditions of the typical manufacturing plant or energy industry facility.
- The addition of more than 150 new customers, bringing the total for the past four quarters to more than 650.
- New customers in North America included:
- Advertising – MARC USA
- Construction – Weston Solutions, Inc.
- Government – LCBO
- Government – Ware County (Georgia)
- Media – Houston Chronicle Publishing Corp.
- New customers in the EMEA region included:
- Financial Services – Nürnberger Versicherung in Germany
- Healthcare – Santry Sports Clinic in Ireland
- Government – INAIL in Italy
- Defense – ESAT in France
- Technology – Softline in South Africa
- New customers in Brazil included:
- Education – CIEE
- Government – Receita Federal
- Manufacturing – Klin
- Manufacturing – Usina Santa Adélia
- Manufacturing – FOXCONN
- New customers in Asia-Pacific included:
- Financial Services – Daewoo Capital in Korea
- Government – Kobe Fukushi Shinko Kyokai in Japan
- Government – Office of the Prime Minister in Singapore
- Manufacturing – Westek Co. in Korea
- Total port shipments rose approximately 9 percent in Q1 compared to the year-ago quarter.
- LAN switching revenue rose 14 percent from Q1 of last year.
- Matrix X secure core router revenue grew more than 90 percent and 10 Gbps Ethernet port shipments increased more than six-fold over Q1 2006.
- Shipments of 10 Gbps Ethernet ports for the Matrix N-Series modular Layer 3 switches grew six-fold and 10/100/1000 Mbps Power-over-Ethernet ports rose 90 percent year over year.
- Fixed Layer 2 switching revenue, led by the SecureStack A2, B2 and B3 edge switches, increased more than 25 percent while port shipments rose 18 percent over the year-ago quarter.
- Fixed Layer 3 switch revenue – SecureStack C2 and C3 – rose 16 percent and port shipments increased nearly 10 percent over Q1 of last year.
- License shipments of Enterasys NetSight® and Enterasys Network Access Control software solutions for security, visibility and control posted strong double-digit increases year over year.
- RoamAbout® wireless product revenue increased nearly 20 percent over the prior year.
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 $3.8 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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