EXTR » Topics » A Number of Factors Could Cause Our Quarterly Financial Results to Be Worse Than Expected, Resulting in a Decline in Our Stock Price

This excerpt taken from the EXTR 10-Q filed May 12, 2008.

A Number of Factors Could Cause Our Quarterly Financial Results to Be Worse Than Expected, Resulting in a Decline in Our Stock Price.

Our ability to control our operating expenses at a level that is consistent with anticipated revenue is significant to our financial results. A high percentage of our expenses are fixed in the short term, so any delay in generating or recognizing revenue could cause our quarterly operating results to fall below the expectations of public market analysts or investors, which could cause the price of our stock to fall.

Orders in our backlog at the beginning of each quarter do not equal expected revenues for that quarter and are generally cancelable at any time. Accordingly, we are dependent upon obtaining orders during a quarter and shipping those orders in the same quarter to achieve our revenue objectives. In addition, the timing of product releases and purchase orders, and product availability, often results in a majority of our product shipments being scheduled near the end of a quarter. Failure to ship these products by the end of a quarter may adversely affect our operating results. Our customer agreements generally allow customers to delay scheduled delivery dates or to cancel orders within specified timeframes without significant charges to the customers. Furthermore, some of our customers require that we provide installation or inspection services that may delay the recognition of revenue for both products and services, and some of our customer agreements include acceptance provisions that prevent our ability to recognize revenue upon shipment.

We may experience a delay in generating or recognizing revenue for a number of reasons and our quarterly revenue and operating results have varied significantly in the past and may vary significantly in the future due to a number of factors, including, but not limited to, the following:

 

   

changes in general and/or specific economic conditions in the networking industry;

 

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seasonal fluctuations in demand for our products and services, particularly in Asia-Pacific and Europe;

 

   

the level of attrition of our employees, and of our sales force in particular;

 

   

a disproportionate percentage of our sales occurring in the last month of the quarter;

 

   

reduced visibility into the implementation cycles for our products and our customers’ spending plans;

 

   

our ability to forecast demand for our products, which in the case of lower-than-expected sales, may result in excess or obsolete inventory in addition to non-cancelable purchase commitments for component parts;

 

   

product returns or the cancellation or rescheduling of orders;

 

   

our ability to develop, introduce, ship and support new products and product enhancements and manage product transitions;

 

   

announcements and new product introductions by our competitors;

 

   

our ability to develop and support relationships with enterprise customers, service providers and other potential large customers;

 

   

our ability to achieve targeted cost reductions;

 

   

fluctuations in warranty or other service expenses actually incurred;

 

   

our ability to obtain sufficient supplies of sole- or limited-source components for our products on a timely basis;

 

   

increases in the prices of the components that we purchase;

 

   

decreases in the prices of the products that we sell;

 

   

our ability to achieve and maintain desired production volumes and quality levels for our products;

 

   

the mix of products sold and the mix of distribution channels through which products are sold;

 

   

impairment charges associated with long-lived assets;

 

   

restructuring costs associated with adjustments to the size of our operations;

 

   

costs relating to possible acquisitions and the integration of technologies or businesses;

 

   

the effect of amortization of purchased intangibles resulting from new transactions; and

 

   

costs relating to the recognition of share-based payments.

 

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Due to the foregoing factors, we believe that period-to-period comparisons of our operating results should not be relied upon as an indicator of our future performance.

This excerpt taken from the EXTR 10-Q filed Feb 13, 2008.

A Number of Factors Could Cause Our Quarterly Financial Results to Be Worse Than Expected, Resulting in a Decline in Our Stock Price.

Our ability to control our operating expenses at a level that is consistent with anticipated revenue is significant to our financial results. A high percentage of our expenses are fixed in the short term, so any delay in generating or recognizing revenue could cause our quarterly operating results to fall below the expectations of public market analysts or investors, which could cause the price of our stock to fall.

Orders in our backlog at the beginning of each quarter do not equal expected revenues for that quarter and are generally cancelable at any time. Accordingly, we are dependent upon obtaining orders during a quarter and shipping those orders in the same quarter to achieve our revenue objectives. In addition, the timing of product releases and purchase orders, and product

 

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availability, often results in a majority of our product shipments being scheduled near the end of a quarter. Failure to ship these products by the end of a quarter may adversely affect our operating results. Our customer agreements generally allow customers to delay scheduled delivery dates or to cancel orders within specified timeframes without significant charges to the customers. Furthermore, some of our customers require that we provide installation or inspection services that may delay the recognition of revenue for both products and services, and some of our customer agreements include acceptance provisions that prevent our ability to recognize revenue upon shipment.

We may experience a delay in generating or recognizing revenue for a number of reasons and our quarterly revenue and operating results have varied significantly in the past and may vary significantly in the future due to a number of factors, including, but not limited to, the following:

 

   

changes in general and/or specific economic conditions in the networking industry;

 

   

seasonal fluctuations in demand for our products and services, particularly in Asia-Pacific and Europe;

 

   

the level of attrition of our employees, and of our sales force in particular;

 

   

a disproportionate percentage of our sales occurring in the last month of the quarter;

 

   

reduced visibility into the implementation cycles for our products and our customers’ spending plans;

 

   

our ability to forecast demand for our products, which in the case of lower-than-expected sales, may result in excess or obsolete inventory in addition to non-cancelable purchase commitments for component parts;

 

   

product returns or the cancellation or rescheduling of orders;

 

   

our ability to develop, introduce, ship and support new products and product enhancements and manage product transitions;

 

   

announcements and new product introductions by our competitors;

 

   

our ability to develop and support relationships with enterprise customers, service providers and other potential large customers;

 

   

our ability to achieve targeted cost reductions;

 

   

fluctuations in warranty or other service expenses actually incurred;

 

   

our ability to obtain sufficient supplies of sole- or limited-source components for our products on a timely basis;

 

   

increases in the prices of the components that we purchase;

 

   

decreases in the prices of the products that we sell;

 

   

our ability to achieve and maintain desired production volumes and quality levels for our products;

 

   

the mix of products sold and the mix of distribution channels through which products are sold;

 

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impairment charges associated with long-lived assets;

 

   

restructuring costs associated with adjustments to the size of our operations;

 

   

costs relating to possible acquisitions and the integration of technologies or businesses;

 

   

the effect of amortization of purchased intangibles resulting from new transactions; and

 

   

costs relating to the recognition of share-based payments.

Due to the foregoing factors, we believe that period-to-period comparisons of our operating results should not be relied upon as an indicator of our future performance.

This excerpt taken from the EXTR 10-Q filed Nov 9, 2007.

A Number of Factors Could Cause Our Quarterly Financial Results to Be Worse Than Expected, Resulting in a Decline in Our Stock Price.

Our ability to control our operating expenses at a level that is consistent with anticipated revenue is significant to our financial results. A high percentage of our expenses are fixed in the short term, so any delay in generating or recognizing revenue could cause our quarterly operating results to fall below the expectations of public market analysts or investors, which could cause the price of our stock to fall.

Orders in our backlog at the beginning of each quarter do not equal expected revenues for that quarter and are generally cancelable at any time. Accordingly, we are dependent upon obtaining orders during a quarter and shipping those orders in the same quarter to achieve our revenue objectives. In addition, the timing of product releases and purchase orders, and product availability, often results in a majority of our product shipments being scheduled near the end of a quarter. Failure to ship these products by the end of a quarter may adversely affect our operating results. Our customer agreements generally allow customers to delay scheduled delivery dates or to cancel orders within specified timeframes without significant charges to the customers. Furthermore, some of our customers require that we provide installation or inspection services that may delay the recognition of revenue for both products and services, and some of our customer agreements include acceptance provisions that prevent our ability to recognize revenue upon shipment.

We may experience a delay in generating or recognizing revenue for a number of reasons and our quarterly revenue and operating results have varied significantly in the past and may vary significantly in the future due to a number of factors, including, but not limited to, the following:

 

   

changes in general and/or specific economic conditions in the networking industry;

 

   

seasonal fluctuations in demand for our products and services, particularly in Asia-Pacific and Europe;

 

   

the level of attrition of our employees, and of our sales force in particular;

 

   

a disproportionate percentage of our sales occurring in the last month of the quarter;

 

   

reduced visibility into the implementation cycles for our products and our customers’ spending plans;

 

   

our ability to forecast demand for our products, which in the case of lower-than-expected sales, may result in excess or obsolete inventory in addition to non-cancelable purchase commitments for component parts;

 

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product returns or the cancellation or rescheduling of orders;

 

   

our ability to develop, introduce, ship and support new products and product enhancements and manage product transitions;

 

   

announcements and new product introductions by our competitors;

 

   

our ability to develop and support relationships with enterprise customers, service providers and other potential large customers;

 

   

our ability to achieve targeted cost reductions;

 

   

fluctuations in warranty or other service expenses actually incurred;

 

   

our ability to obtain sufficient supplies of sole- or limited-source components for our products on a timely basis;

 

   

increases in the prices of the components that we purchase;

 

   

decreases in the prices of the products that we sell;

 

   

our ability to achieve and maintain desired production volumes and quality levels for our products;

 

   

the mix of products sold and the mix of distribution channels through which products are sold;

 

   

impairment charges associated with long-lived assets;

 

   

restructuring costs associated with adjustments to the size of our operations;

 

   

costs relating to possible acquisitions and the integration of technologies or businesses;

 

   

the effect of amortization of purchased intangibles resulting from new transactions; and

 

   

costs relating to the recognition of share-based payments.

Due to the foregoing factors, we believe that period-to-period comparisons of our operating results should not be relied upon as an indicator of our future performance.

This excerpt taken from the EXTR 10-K filed Aug 30, 2007.

A Number of Factors Could Cause Our Quarterly Financial Results to Be Worse Than Expected, Resulting in a Decline in Our Stock Price.

 

Our ability to control our operating expenses at a level that is consistent with anticipated revenue is significant to our financial results. A high percentage of our expenses are fixed in the short term, so any delay in generating or recognizing revenue could cause our quarterly operating results to fall below the expectations of public market analysts or investors, which could cause the price of our stock to fall.

 

Orders in our backlog at the beginning of each quarter do not equal expected revenues for that quarter and are generally cancelable at any time. Accordingly, we are dependent upon obtaining orders during a quarter and shipping those orders in the same quarter to achieve our revenue objectives. In addition, the timing of product releases and purchase orders, and product availability, often results in a majority of our product shipments being scheduled near the end of a quarter. Failure to ship these products by the end of a quarter may adversely affect our operating results. Our customer agreements generally allow customers to delay scheduled delivery dates or to cancel orders within specified timeframes without significant charges to the customers. Furthermore, some of our customers require that we provide installation or inspection services that may delay the recognition of revenue for both products and services, and some of our customer agreements include acceptance provisions that prevent our ability to recognize revenue upon shipment.

 

We may experience a delay in generating or recognizing revenue for a number of reasons and our quarterly revenue and operating results have varied significantly in the past and may vary significantly in the future due to a number of factors, including, but not limited to, the following:

 

   

changes in general and/or specific economic conditions in the networking industry;

 

   

seasonal fluctuations in demand for our products and services, particularly in Asia-Pacific and Europe;

 

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the level of attrition of our employees, and of our sales force in particular;

 

   

a disproportionate percentage of our sales occurring in the last month of the quarter;

 

   

reduced visibility into the implementation cycles for our products and our customers’ spending plans;

 

   

our ability to forecast demand for our products, which in the case of lower-than-expected sales, may result in excess or obsolete inventory in addition to non-cancelable purchase commitments for component parts;

 

   

product returns or the cancellation or rescheduling of orders;

 

   

our ability to develop, introduce, ship and support new products and product enhancements and manage product transitions;

 

   

announcements and new product introductions by our competitors;

 

   

our ability to develop and support relationships with enterprise customers, service providers and other potential large customers;

 

   

our ability to achieve targeted cost reductions;

 

   

fluctuations in warranty or other service expenses actually incurred;

 

   

our ability to obtain sufficient supplies of sole- or limited-source components for our products on a timely basis;

 

   

increases in the prices of the components that we purchase;

 

   

decreases in the prices of the products that we sell;

 

   

our ability to achieve and maintain desired production volumes and quality levels for our products;

 

   

the mix of products sold and the mix of distribution channels through which products are sold;

 

   

impairment charges associated with long-lived assets;

 

   

restructuring costs associated with adjustments to the size of our operations;

 

   

costs relating to possible acquisitions and the integration of technologies or businesses;

 

   

the effect of amortization of purchased intangibles resulting from new transactions; and

 

   

costs relating to the recognition of share-based payments.

 

In fiscal 2007 and fiscal 2006, we reported revenues below our expectations. Our results were particularly impacted by lower sales in most regions in fiscal 2007. We believe that revenues will increase in coming quarters; however, our future results could be adversely affected if longer term economic or industry trends are unfavorable.

 

Due to the foregoing factors, we believe that period-to-period comparisons of our operating results should not be relied upon as an indicator of our future performance.

 

This excerpt taken from the EXTR 10-Q filed Jun 28, 2007.

A Number of Factors Could Cause Our Quarterly Financial Results to Be Worse Than Expected, Resulting in a Decline in Our Stock Price.

 

Our ability to control our operating expenses at a level that is consistent with anticipated revenue is significant to our financial results. A high percentage of our expenses are fixed in the short term, so any delay in generating or recognizing revenue could cause our quarterly operating results to fall below the expectations of public market analysts or investors, which could cause the price of our stock to fall.

 

Orders in our backlog at the beginning of each quarter do not equal expected revenues for that quarter and are generally cancelable at any time. Accordingly, we are dependent upon obtaining orders during a quarter and shipping those orders in the same quarter to achieve our revenue objectives. In addition, the timing of product releases and purchase orders, and product availability, often results in a majority of our product shipments being scheduled near the end of a quarter. Failure to ship these products by the end of a quarter may adversely affect our operating results. Our customer agreements generally allow customers to delay scheduled delivery dates or to cancel orders within specified timeframes without significant charges to the customers. Furthermore, some of our customers require that we provide installation or inspection services that may delay the recognition of revenue for both products and services, and some of our customer agreements include acceptance provisions that prevent our ability to recognize revenue upon shipment.

 

We may experience a delay in generating or recognizing revenue for a number of reasons and our quarterly revenue and operating results have varied significantly in the past and may vary significantly in the future due to a number of factors, including, but not limited to, the following:

 

   

changes in general and/or specific economic conditions in the networking industry;

 

   

seasonal fluctuations in demand for our products and services, particularly in Asia-Pacific and Europe;

 

   

the level of attrition of our employees, and of our sales force in particular;

 

   

a disproportionate percentage of our sales occurring in the last month of the quarter;

 

   

reduced visibility into the implementation cycles for our products and our customers’ spending plans;

 

   

our ability to forecast demand for our products, which in the case of lower-than-expected sales, may result in excess or obsolete inventory in addition to non-cancelable purchase commitments for component parts;

 

   

product returns or the cancellation or rescheduling of orders;

 

   

our ability to develop, introduce, ship and support new products and product enhancements and manage product transitions;

 

   

announcements and new product introductions by our competitors;

 

   

our ability to develop and support relationships with enterprise customers, service providers and other potential large customers;

 

   

our ability to achieve targeted cost reductions;

 

   

fluctuations in warranty or other service expenses actually incurred;

 

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our ability to obtain sufficient supplies of sole- or limited-source components for our products on a timely basis;

 

   

increases in the prices of the components that we purchase;

 

   

decreases in the prices of the products that we sell;

 

   

our ability to achieve and maintain desired production volumes and quality levels for our products;

 

   

the mix of products sold and the mix of distribution channels through which products are sold;

 

   

impairment charges associated with long-lived assets;

 

   

restructuring costs associated with adjustments to the size of our operations;

 

   

costs relating to possible acquisitions and the integration of technologies or businesses;

 

   

the effect of amortization of purchased intangibles resulting from new transactions; and

 

   

costs relating to the recognition of share-based payments.

 

In fiscal 2006 and the first nine months of fiscal 2007, we reported revenues below expectations. Our results were particularly impacted by lower sales in the United States and Japan in fiscal 2006 and the first nine months of fiscal 2007, offset in part by increased service revenue and increased product revenue in the Asia Pacific region. We believe that revenues will increase in coming quarters; however, our future results could be adversely affected if longer term economic or industry trends are unfavorable.

 

Due to the foregoing factors, we believe that period-to-period comparisons of our operating results should not be relied upon as an indicator of our future performance.

 

This excerpt taken from the EXTR 10-Q filed Jun 28, 2007.

A Number of Factors Could Cause Our Quarterly Financial Results to Be Worse Than Expected, Resulting in a Decline in Our Stock Price.

Our ability to control our operating expenses at a level that is consistent with anticipated revenue is significant to our financial results. A high percentage of our expenses are fixed in the short term, so any delay in generating or recognizing revenue could cause our quarterly operating results to fall below the expectations of public market analysts or investors, which could cause the price of our stock to fall.

Orders in our backlog at the beginning of each quarter do not equal expected revenues for that quarter and are generally cancelable at any time. Accordingly, we are dependent upon obtaining orders during a quarter and shipping those orders in the same quarter to achieve our revenue objectives. In addition, the timing of product releases and purchase orders, and product availability, often results in a majority of our product shipments being scheduled near the end of a quarter. Failure to ship these products by the end of a quarter may adversely affect our operating results. Our customer agreements generally allow customers to delay scheduled delivery dates or to cancel orders within specified timeframes without significant charges to the

 

27


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customers. Furthermore, some of our customers require that we provide installation or inspection services that may delay the recognition of revenue for both products and services, and some of our customer agreements include acceptance provisions that prevent our ability to recognize revenue upon shipment.

We may experience a delay in generating or recognizing revenue for a number of reasons and our quarterly revenue and operating results have varied significantly in the past and may vary significantly in the future due to a number of factors, including, but not limited to, the following:

 

   

changes in general and/or specific economic conditions in the networking industry;

 

   

seasonal fluctuations in demand for our products and services, particularly in Asia-Pacific and Europe;

 

   

the level of attrition of our employees, and of our sales force in particular;

 

   

a disproportionate percentage of our sales occurring in the last month of the quarter;

 

   

reduced visibility into the implementation cycles for our products and our customers’ spending plans;

 

   

our ability to forecast demand for our products, which in the case of lower-than-expected sales, may result in excess or obsolete inventory in addition to non-cancelable purchase commitments for component parts;

 

   

product returns or the cancellation or rescheduling of orders;

 

   

our ability to develop, introduce, ship and support new products and product enhancements and manage product transitions;

 

   

announcements and new product introductions by our competitors;

 

   

our ability to develop and support relationships with enterprise customers, service providers and other potential large customers;

 

   

our ability to achieve targeted cost reductions;

 

   

fluctuations in warranty or other service expenses actually incurred;

 

   

our ability to obtain sufficient supplies of sole- or limited-source components for our products on a timely basis;

 

   

increases in the prices of the components that we purchase;

 

   

decreases in the prices of the products that we sell;

 

   

our ability to achieve and maintain desired production volumes and quality levels for our products;

 

   

the mix of products sold and the mix of distribution channels through which products are sold;

 

   

impairment charges associated with long-lived assets;

 

   

restructuring costs associated with adjustments to the size of our operations;

 

   

costs relating to possible acquisitions and the integration of technologies or businesses;

 

   

the effect of amortization of purchased intangibles resulting from new transactions; and

 

   

costs relating to the recognition of share-based payments.

In fiscal 2006 and the first half of fiscal 2007, we reported revenues below our expectations. Our results were particularly impacted by lower sales in the United States and Japan in fiscal 2006 and the first half of fiscal 2007, offset in part by increased service revenue and increased product revenue in the Asia Pacific region. We believe that revenues will increase in coming quarters; however, our future results could be adversely affected if longer term economic or industry trends are unfavorable.

Due to the foregoing factors, we believe that period-to-period comparisons of our operating results should not be relied upon as an indicator of our future performance.

This excerpt taken from the EXTR 10-Q filed Jun 28, 2007.

A Number of Factors Could Cause Our Quarterly Financial Results to Be Worse Than Expected, Resulting in a Decline in Our Stock Price.

Our ability to control our operating expenses at a level that is consistent with anticipated revenue is significant to our financial results. A high percentage of our expenses are fixed in the short term, so any delay in generating or recognizing revenue could cause our quarterly operating results to fall below the expectations of public market analysts or investors, which could cause the price of our stock to fall.

Orders in our backlog at the beginning of each quarter do not equal expected revenues for that quarter and are generally cancelable at any time. Accordingly, we are dependent upon obtaining orders during a quarter and shipping those orders in the same quarter to achieve our revenue objectives. In addition, the timing of product releases and purchase orders, and product availability, often results in a majority of our product shipments being scheduled near the end of a quarter. Failure to ship these products by the end of a quarter may adversely affect our operating results. Our customer agreements generally allow customers to delay scheduled delivery dates or to cancel orders within specified timeframes without significant charges to the customers. Furthermore, some of our customers require that we provide installation or inspection services that may delay the recognition of revenue for both products and services, and some of our customer agreements include acceptance provisions that prevent our ability to recognize revenue upon shipment.

We may experience a delay in generating or recognizing revenue for a number of reasons and our quarterly revenue and operating results have varied significantly in the past and may vary significantly in the future due to a number of factors, including, but not limited to, the following:

 

   

changes in general and/or specific economic conditions in the networking industry;

 

   

seasonal fluctuations in demand for our products and services, particularly in Asia-Pacific and Europe;

 

   

the level of attrition of our employees, and of our sales force in particular;

 

   

a disproportionate percentage of our sales occurring in the last month of the quarter;

 

   

reduced visibility into the implementation cycles for our products and our customers’ spending plans;

 

   

our ability to forecast demand for our products, which in the case of lower-than-expected sales, may result in excess or obsolete inventory in addition to non-cancelable purchase commitments for component parts;

 

   

product returns or the cancellation or rescheduling of orders;

 

   

our ability to develop, introduce, ship and support new products and product enhancements and manage product transitions;

 

   

announcements and new product introductions by our competitors;

 

   

our ability to develop and support relationships with enterprise customers, service providers and other potential large customers;

 

   

our ability to achieve targeted cost reductions;

 

   

fluctuations in warranty or other service expenses actually incurred;

 

   

our ability to obtain sufficient supplies of sole- or limited-source components for our products on a timely basis;

 

   

increases in the prices of the components that we purchase;

 

   

decreases in the prices of the products that we sell;

 

   

our ability to achieve and maintain desired production volumes and quality levels for our products;

 

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the mix of products sold and the mix of distribution channels through which products are sold;

 

   

impairment charges associated with long-lived assets;

 

   

restructuring costs associated with adjustments to the size of our operations;

 

   

costs relating to possible acquisitions and the integration of technologies or businesses;

 

   

the effect of amortization of purchased intangibles resulting from new transactions; and

 

   

costs relating to the recognition of share-based payments.

In fiscal 2005, fiscal 2006 and the first quarter of fiscal 2007, we reported revenues below expectations. Our results were particularly impacted by lower sales in the United States and Japan in fiscal 2006 and the first quarter of fiscal 2007, offset in part by increased service revenue and increased product revenue in the Asia Pacific region. We believe that revenues will increase in coming quarters; however, our future results could be adversely affected if longer term economic or industry trends are unfavorable.

Due to the foregoing factors, we believe that period-to-period comparisons of our operating results should not be relied upon as an indicator of our future performance.

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