ARRIS Announces Preliminary and Unaudited Second Quarter 2010 Results

ARRIS Announces Preliminary and Unaudited Second Quarter 2010 Results

PR Newswire -- July 28, 2010





SUWANEE, Ga., July 28 /PRNewswire-FirstCall/ -- ARRIS Group, Inc. (Nasdaq: ARRS),a global technology leader in the development of advanced cable telephony, next generation high-speed data, demand driven video solutions, operations software and broadband access equipment, today announced preliminary and unaudited financial results for the second quarter 2010.



Revenues in the second quarter 2010 were $280.4 million, up approximately $1.9 million as compared to second quarter 2009 revenues of $278.5 million, and up $13.7 million as compared to first quarter 2010 revenues of $266.7 million. Through the first half of 2010 and 2009, revenues were $547.1 million and $532.0 million, respectively.



Adjusted net income (a non-GAAP measure) in the second quarter 2010 was $0.24 per diluted share, compared to $0.27 per diluted share for the second quarter 2009 and $0.24 per diluted share for the first quarter of 2010. Year to date, adjusted net income was $0.48 per diluted share for 2010 as compared to $0.45 per diluted share in 2009.



GAAP net income in the second quarter 2010 was $0.15 per diluted share, as compared to second quarter 2009 GAAP net income of $0.18 per diluted share and the first quarter 2010 GAAP net income of $0.15 per diluted share. Year to date, GAAP net income was $0.30 per diluted share in 2010 as compared to GAAP net income of $0.28 per diluted share in 2009. Significant GAAP items that have been excluded in computing adjusted net income and adjusted net income per diluted share include amortization of intangible assets, equity compensation, non-cash interest expense, restructuring charges, and certain discrete tax items. A reconciliation of adjusted net income to GAAP net income per share is attached to this release and also can be found on the Company's website (www.arrisi.com).



Gross margin for the second quarter 2010 was 40.4%, which compares to the second quarter 2009 gross margin of 42.1% and the first quarter 2010 gross margin of 42.2%.



The Company ended the second quarter 2010 with $663.4 million of cash, cash equivalents and short-term investments, up in the aggregate by approximately $139.3 million from the end of the second quarter 2009 and up $2.3 million from the end of the first quarter 2010. The Company generated $35.2 million of cash from operating activities during the second quarter 2010 and $83.4 million through the first six months of 2010, which compares to $94.3 million and $108.2 million during the same periods in 2009, respectively.



Order backlog at the end of the second quarter 2010 was $174.1 million as compared to $165.7 million and $195.1 million at the end of the second quarter 2009 and the first quarter 2010, respectively. The Company's book-to-bill ratio in the second quarter 2010 was 0.92 as compared to the second quarter 2009 of 1.04 and the first quarter 2010 of 1.19.



"The second quarter closed in line with our expectations and I continue to believe that we are well positioned for long-term growth," said Bob Stanzione, ARRIS Chairman & CEO. "I am particularly encouraged by our progress related to future products that will enable hybrid and full IP video architectures that our customers are now exploring. Also of note is that during the second quarter 2010, we repurchased approximately 1.9 million shares of ARRIS common stock for $20.6 million and repurchased $5.0 million (face value) of Convertible Notes for $4.8 million."



During the quarter the Company displayed its leading edge products at the National Cable show in Los Angles. A highlight of the show was the ARRIS IP Video Architecture, which accelerates the introduction and deployment of an open, scalable, converged IP Video service offering over cable that is both capital and operational expense efficient.



"Looking forward, we now project that third quarter 2010 revenues for the Company will be in the range of $270 to $290 million, with adjusted net income per diluted share in the range of $0.16 to $0.20 and GAAP net income per diluted share, in the range of $0.07 to $0.11," said David Potts, ARRIS EVP & CFO. "We are projecting accelerating DOCSIS 3.0 EMTA deployments. At the same time we anticipate some change in mix, in particular a modest decline in our CMTS revenue."



ARRIS management will conduct a conference call at 5:00 pm EDT, today, Wednesday, July 28, 2010, to discuss these results in detail. You may participate in this conference call by dialing 888-679-8035 or 617-213-4848 for international calls prior to the start of the call and providing the ARRIS Group, Inc. name, conference pass code 73491299 and Jim Bauer as the moderator. Please note that ARRIS will not accept any calls related to this earnings release until after the conclusion of the 5:00pm EDT conference call. A replay of the conference call can be accessed approximately two hours after the call through Wednesday, August 4, 2010 by dialing 888-286-8010 or 617-801-6888 for international calls and using the pass code 47814593. A replay also will be made available for a period of 12 months following the conference call on ARRIS' website at www.arrisi.com.



About ARRIS

ARRIS is a global communications technology company specializing in the design, engineering and supply of technology supporting triple and quad-play broadband services for residential and business customers around the world. The company supplies broadband operators with the tools and platforms they need to deliver carrier-grade telephony, demand driven video, next-generation advertising, network and workforce management solutions, access and transport architectures and ultra high-speed data services. Headquartered in Suwanee, Georgia, USA, ARRIS has R&D centers in Suwanee, GA; Beaverton, OR; Chicago, IL; Kirkland, WA; State College, PA; Wallingford, CT; Waltham, MA; Cork, Ireland; and Shenzhen, China, and operates support and sales offices throughout the world. Information about ARRIS products and services can be found at www.arrisi.com.



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