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Ixia (XXIA) Message Board

  • rchites rchites Aug 8, 2012 8:42 PM Flag

    QUARTER

    es of our Ethernet interface cards, including our 1 Gigabit Ethernet, 10 Gigabit Ethernet and 40/100 Gigabit Ethernet interface cards, continue to represent the majority of our total revenues, and we expect this trend to continue through the end of 2012. Over the longer term, while we expect the sale of our Ethernet interface cards to represent a significant amount of our revenues going forward, we expect to see some decline as a percentage of total revenues as the sales of our network visibility solutions and other appliances increase. Sales to our largest customer, Cisco Systems, accounted for approximately $15.0 million, or 16.2%, and $29.4 million, or 16.5%, of our total revenues for the three and six months ended June 30, 2012, respectively, and $10.4 million, or 15.1%, and $21.7 million, or 14.8%, of our total revenues for the three and six months ended June 30, 2011, respectively. To date, we have generated the majority of our revenues from sales to network and telecommunication equipment manufacturers. While we expect that we will continue to have some customer concentration for the foreseeable future, we continue to sell our products to a wider variety and increasing number of customers. To the extent that we develop a broader and more diverse customer base, our reliance on any one customer or customer type should diminish. From a geographic perspective, we generated revenues from shipments to international locations of $40.2 million, or 43.5%, and $82.4 million, or 46.3%, of our total revenues for the three and six months ended June 30, 2012, respectively, compared to $33.8 million, or 49.0%, and $76.5 million, or 51.9%, of our total revenues for the three and six months ended June 30, 2011, respectively. Total revenues from product shipments to Japan, were $13.0 million and $25.0 million for the three and six months ended June 30, 2012, respectively compared with $1.5 million and $13.4 million for the three and six months ended June 30, 2011, respectively. The increase in revenue from product shipments to Japan was primarily driven by NTT, our largest customer in Japan, which accounted for $9.8 million, or 10.7%, and $16.4 million, or 9.2%, of our total revenues for the three and six months ended June 30, 2012, respectively. Looking forward, we expect our international revenues to be between 50% and 55% of our total revenues on an annualized basis.

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    • Ramping Revenues. In the second quarter of 2012, total revenues increased 33.9% to $92.3 million from the $69.0 million recorded in the second quarter of 2011. As a result of our acquisition of Anue Systems, Inc. ("Anue") on June 1, 2012, the second quarter of 2012 included Anue revenue of $3.9 million. Excluding the Anue revenue of $3.9 million, revenues increased to $88.5 million in the second quarter of 2012 primarily due to a $14.7 million increase in shipments of our hardware products (primarily our 40/100 Gigabit Ethernet interface cards and IxVeriwave products) and an increase in PCS and warranty revenues that are recognized ratably.

      In the first six months of 2012, total revenues increased 20.7% to $178.0 million from $147.4 million recorded in the same period of 2011. Excluding the Anue revenue of $3.9 million, revenues increased to $174.1 million in the first six months of 2012 due to a $22.5 million increase in shipments of our hardware products (primarily our 40/100 Gigabit Ethernet interface cards and IxVeriwave products) and an increase in PCS and warranty revenues that are recognized ratably.
      BreakingPoint Systems, Inc. On June 30, 2012, we entered into an Agreement and Plan of Merger to acquire all of the outstanding shares of common stock of BreakingPoint Systems, Inc. The acquisition is expected to close during the third quarter ending September 30, 2012, subject to customary closing conditions.
      Acquisition of Anue Systems, Inc. On June 1, 2012, we completed our acquisition of all of the outstanding shares of common stock of Anue Systems, Inc. ("Anue"). The acquisition was funded from our existing cash and cash equivalents. Anue provides solutions to monitor and test complicated networks, including Anue's Net Tool Optimizer solution that efficiently aggregates and filters network traffic to help optimize network monitoring tool usage. With this acquisition, we have expanded our addressable market, broadened our product portfolio and grown our customer base. In addition, we expect to leverage Anue's existing sales channels and assembled workforce, including its experienced development team. The results of operations of Anue have been included in our consolidated statements of operations and cash flows since the date of the acquisition. See Note 3 to the Consolidated Financial Statements included in this Form 10-Q.

      Acquisition of VeriWave, Inc. On July 18, 2011, we completed our acquisition of all of the outstanding stock of VeriWave, Inc. ("VeriWave"). The acquisition was funded from our existing cash and cash equivalents. VeriWave's test solutions validate wireless networks, devices, and applications by benchmarking and measuring speed, quality, interoperability, compliance, and other pivotal aspects of mobile performance. The results of operations of VeriWave have been included in our consolidated statements of operations and cash flows since the date of the acquisition.

      Our revenues are principally derived from the sale and support of our test systems. Product revenues primarily consist of sales of our hardware and software products. Our hardware products primarily relate to our traffic generation and analysis hardware platform consisting of a multi-slot chassis and interface cards. Our primary hardware platform is enabled by our operating system software that is essential to the functionality of the hardware platform. Our software products consist of a comprehensive suite of technology-specific test applications. Our software products are typically installed on and work with our hardware products to further enhance the core functionality of the overall test system, although some of our software products can be operated independently from our hardware products.

      • 2 Replies to rchites
      • The revenue growth came in higher than the industry average of 20.7%. Since the same quarter one year prior, revenues rose by 33.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
        ■ Powered by its strong earnings growth of 3200.00% and other important driving factors, this stock has surged by 48.85% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
        ■ IXIA reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, IXIA increased its bottom line by earning $0.34 versus $0.15 in the prior year. This year, the market expects an improvement in earnings ($0.74 versus $0.34).
        ■ The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 5814.1% when compared to the same quarter one year prior, rising from $0.45 million to $26.85 million.
        ■ Despite currently having a low debt-to-equity ratio of 0.51, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that XXIA's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.21 is high and demonstrates strong liquidity.

        Ixia supplies converged network and application performance testing solutions in the United States and internationally. It designs and validates a range of Internet protocol (IP) and third generation/long-term evolution networking equipment. The company has a P/E ratio of 20.9, below the average electronics industry P/E ratio of 44.7 and above the S&P 500 P/E ratio of 17.7. Ixia has a market cap of $923.8 million and is part of the technology sector and electronics industry. Shares are up 42.3% year to date as of the close of trading on Monday.

        You can view the full Ixia Ratings Report or get investment ideas from our investment research center.

        -- Written by a member of TheStreet Ratings Staff

      • FUTURE SALES and busines. The company is ramping its sales and product lines with the three acquisition. Research and development expenses for the first six months of 2012 increased 17.1% to $43.4 million from $37.1 million in the same period of 2011. Excluding the incremental research and development costs of $893,000 related to the Anue acquisition, research and development expenses in the first six months of 2012 were $42.5 million compared to $37.1 million in the same period of 2011. This increase was primarily due to an increase in compensation and related employee costs of $5.8 million that was primarily due to (i.) additional investment in our product development teams, including the Wi-Fi development team added as part of our acquisition of VeriWave in July 2011 (with no comparable costs in the second quarter of 2011) and our teams in the United States, Romania and India, and (ii.) higher bonus expense as we expect our 2012 performance to exceed that of 2011 when compared to the applicable annual company-wide objectives. This increase was partially offset by a one-time charge of $900,000 incurred in the first quarter of 2011 to terminate and settle a product development contract.

 
XXIA
9.25+0.15(+1.65%)Oct 30 4:00 PMEDT

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