F5 Networks Inc. (FFIV, Financial) filed Quarterly Report for the period ended 2009-03-31.
F5 Networks Inc. is a leading provider of integrated Internet traffic and content management solutions designed to improve the availability and performance of mission-critical Internet-based servers and applications. The company's products monitor and manage local and geographically dispersed servers and intelligently direct traffic to the server best able to handle a user's request. The products are designed to help prevent system failure and provide timely responses to user requests and data flow. F5 Networks Inc. has a market cap of $2.24 billion; its shares were traded at around $28.25 with a P/E ratio of 26.6 and P/S ratio of 3.5. F5 Networks Inc. had an annual average earning growth of 32.7% over the past 5 years.
restructuring program. Sales and marketing expense included stock-based compensation expense of $5.4 million and $11.4 million for the three and six months ended March 31, 2009, respectively, compared to $6.2 million and $12.6 million for the same periods in the prior year.
Research and development. Research and development expenses consist of the salaries and related benefits for our product development personnel, prototype materials and other expenses related to the development of new and improved products, facilities and depreciation expenses. Research and development expenses decreased 1.7% for the three months ended March 31, 2009 from the comparable period in the prior year and increased 4.6% for the six months ended March 31, 2009 from the comparable period in the prior year. The increase in research and development expense for the first six months of fiscal 2009 was primarily due to an increase of $1.8 million in personnel costs compared to the same period in the prior year. Research and development headcount at the end of March 2009 decreased to 427 from 461 at the end of March 2008. The decrease in headcount was primarily related to the reduction in workforce that took place in the second fiscal quarter of 2009. Research and development expense included stock-based compensation expense of $4.1 million and $8.4 million for the three and six months ended March 31, 2009, compared to $4.1 million and $8.1 million for the same periods in the prior year. We expect research and development expenses to remain consistent as a percentage of net revenue in the foreseeable future.
General and administrative. General and administrative expenses consist of the salaries, benefits and related costs of our executive, finance, information technology, human resource and legal personnel, third-party professional service fees, bad debt charges, facilities and depreciation expenses. General and administrative expenses decreased 16.8% and 0.2% for the three and six months ended March 31, 2009, respectively, from the comparable periods in the prior year. The decrease in general and administrative expenses for the three months ended March 31, 2009 as compared to the same period in the prior year was primarily due to a decrease in stock-based compensation expense of $1.8 million. Stock-based compensation expense was $2.5 million and $5.9 million for the three and six months ended March 31, 2009, compared to $4.3 million and $8.2 million for the same periods in the prior year. General and administrative headcount at the end of March 2009 decreased to 184 from 191 at the end of March 2008. The decrease in headcount was primarily related to a reduction in workforce that took place in the second fiscal quarter as part of our restructuring program.
Restructuring. Beginning in the second quarter of fiscal 2009 we implemented a comprehensive restructuring program as part of an overall initiative to reduce certain operating expenses. Restructuring actions included the consolidation of facilities, accelerated depreciation on tenant improvements and a reduction in workforce. For the three months ended March 31, 2009, we recorded restructuring expenses of $4.3 million, which included a $2.1 million charge for severance and related costs and a $2.2 million charge for the exit of certain offices worldwide. We had $2.2 million of accrued restructuring cost at March 31, 2009, which we expect to offset future rent expenses through September 2012.
Cash and cash equivalents, short-term investments and long-term investments totaled $499.1 million as of March 31, 2009 compared to $451.3 million as of September 30, 2008, representing an increase of $47.8 million. The increase was primarily due to cash provided by operating activities of $97.1 million for the six months ended March 31, 2009 compared to $78.9 million for the same period in the prior year, which was partially offset by $47.4 million of additional cash required for the repurchase of outstanding common stock under our stock repurchase program. The increase in cash flow from operations for the first six months of fiscal year 2009 resulted from increased net income combined with changes in operating assets and liabilities, as adjusted for various non-cash items including stock-based compensation, depreciation and amortization charges. Based on our current operating and capital expenditure forecasts, we believe that our existing cash and investment balances, excluding auction rate securities (ARS), together with cash generated from operations should be sufficient to meet our operating requirements for the foreseeable future.
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F5 Networks Inc. is a leading provider of integrated Internet traffic and content management solutions designed to improve the availability and performance of mission-critical Internet-based servers and applications. The company's products monitor and manage local and geographically dispersed servers and intelligently direct traffic to the server best able to handle a user's request. The products are designed to help prevent system failure and provide timely responses to user requests and data flow. F5 Networks Inc. has a market cap of $2.24 billion; its shares were traded at around $28.25 with a P/E ratio of 26.6 and P/S ratio of 3.5. F5 Networks Inc. had an annual average earning growth of 32.7% over the past 5 years.
Highlight of Business Operations:
Cost of net service revenues. Cost of net service revenues consist of the salaries and related benefits of our professional services staff, travel, facilities and depreciation expenses. For the three and six months ended March 31, 2009, cost of net service revenues as a percentage of net service revenues decreased to 19.2% and 20.1%, respectively, compared to 24.9% and 24.5% for the same periods in the prior year, respectively, primarily due to the scalability of our existing customer support infrastructure and increased revenue from maintenance contracts. Professional services headcount at the end of March 2009 decreased to 313 from 320 at the end of March 2008. In addition, cost of net service revenues includes stock compensation expense of $1.2 million and $2.3 million for the three and six months ended March 31, 2009, respectively, compared to $0.9 million and $1.9 million for the same periods in the prior year, respectively.restructuring program. Sales and marketing expense included stock-based compensation expense of $5.4 million and $11.4 million for the three and six months ended March 31, 2009, respectively, compared to $6.2 million and $12.6 million for the same periods in the prior year.
Research and development. Research and development expenses consist of the salaries and related benefits for our product development personnel, prototype materials and other expenses related to the development of new and improved products, facilities and depreciation expenses. Research and development expenses decreased 1.7% for the three months ended March 31, 2009 from the comparable period in the prior year and increased 4.6% for the six months ended March 31, 2009 from the comparable period in the prior year. The increase in research and development expense for the first six months of fiscal 2009 was primarily due to an increase of $1.8 million in personnel costs compared to the same period in the prior year. Research and development headcount at the end of March 2009 decreased to 427 from 461 at the end of March 2008. The decrease in headcount was primarily related to the reduction in workforce that took place in the second fiscal quarter of 2009. Research and development expense included stock-based compensation expense of $4.1 million and $8.4 million for the three and six months ended March 31, 2009, compared to $4.1 million and $8.1 million for the same periods in the prior year. We expect research and development expenses to remain consistent as a percentage of net revenue in the foreseeable future.
General and administrative. General and administrative expenses consist of the salaries, benefits and related costs of our executive, finance, information technology, human resource and legal personnel, third-party professional service fees, bad debt charges, facilities and depreciation expenses. General and administrative expenses decreased 16.8% and 0.2% for the three and six months ended March 31, 2009, respectively, from the comparable periods in the prior year. The decrease in general and administrative expenses for the three months ended March 31, 2009 as compared to the same period in the prior year was primarily due to a decrease in stock-based compensation expense of $1.8 million. Stock-based compensation expense was $2.5 million and $5.9 million for the three and six months ended March 31, 2009, compared to $4.3 million and $8.2 million for the same periods in the prior year. General and administrative headcount at the end of March 2009 decreased to 184 from 191 at the end of March 2008. The decrease in headcount was primarily related to a reduction in workforce that took place in the second fiscal quarter as part of our restructuring program.
Restructuring. Beginning in the second quarter of fiscal 2009 we implemented a comprehensive restructuring program as part of an overall initiative to reduce certain operating expenses. Restructuring actions included the consolidation of facilities, accelerated depreciation on tenant improvements and a reduction in workforce. For the three months ended March 31, 2009, we recorded restructuring expenses of $4.3 million, which included a $2.1 million charge for severance and related costs and a $2.2 million charge for the exit of certain offices worldwide. We had $2.2 million of accrued restructuring cost at March 31, 2009, which we expect to offset future rent expenses through September 2012.
Cash and cash equivalents, short-term investments and long-term investments totaled $499.1 million as of March 31, 2009 compared to $451.3 million as of September 30, 2008, representing an increase of $47.8 million. The increase was primarily due to cash provided by operating activities of $97.1 million for the six months ended March 31, 2009 compared to $78.9 million for the same period in the prior year, which was partially offset by $47.4 million of additional cash required for the repurchase of outstanding common stock under our stock repurchase program. The increase in cash flow from operations for the first six months of fiscal year 2009 resulted from increased net income combined with changes in operating assets and liabilities, as adjusted for various non-cash items including stock-based compensation, depreciation and amortization charges. Based on our current operating and capital expenditure forecasts, we believe that our existing cash and investment balances, excluding auction rate securities (ARS), together with cash generated from operations should be sufficient to meet our operating requirements for the foreseeable future.
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