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Enterasys Achieves Profitable Revenue Growth in Q2 2008

Company adds more than 150 new customers

Andover, MA, 04 Aug 2008

Enterasys Networks, the Secure Networks Company, today announced financial results for the fiscal second quarter ended 28 June 2008. Revenues grew more than 12% sequentially and more than 10% over the same period in 2007. Gross margins remained strong at greater than 50% with EBITDA more than doubling over the year ago period.

"We are pleased with the solid results achieved in the first half of 2008 as we continue to focus on customer satisfaction, profitable revenue growth, new product delivery and new customer acquisition," said Mike Fabiaschi, President and CEO of Enterasys Networks. "Our outlook for the second half of the year remains optimistic as we continue our strong execution by leveraging the significant operating improvements and controls we have implemented over the past two years."

New customers in APAC included:

* Energy - Glencore Singapore
* Government - Guangdong Museum
* Retail - Quiksilver
* Transportation - KumHo-Asiana Ltd.

New customers in the CALA region included:

* Finance - MAFRE
* Government - Minist'erio da Defesa
* Government - Prodaub - Processamento de Dados de Uberl^andia
* Transportation - Aeropuerto Internacional La Aurora
* Transportation - TRENSURB

New customers in the EMEA region included:

* Entertainment - TV CABO
* Finance - Rahn & Bodmer
* Government - Landeskriminalamt Sachsen-Anhalt
* Retail - WALA Heilmittel GmbH
* Transportation - Grupo Talgo

New customers in North America included:

* Education - Moore County Schools
* Education - Tennessee Technological University
* Technology - Intuit
* Transportation - Allegiant Air

Highlights for the first half of 2008 include:

* Fixed Layer 2 switching revenue, led by the Enterasys(R) SecureStackTM A-Series and Enterasys(R) SecureStackTM B-Series edge switches, was up more than 20 % in 1H08 compared to the year ago period.

* Fixed Layer 3 switching revenues for the Enterasys(R) SecureStackTM C3 Gigabit Ethernet stackable switch increased nearly 90 %, while power Ethernet (PoE) port shipments more than doubled from 1H07.

* Port shipments for the new Enterasys(R) I-Series industrial Ethernet offering were up 45% sequentially in Q2 2008, and more than six-fold compared to the year ago quarter.

* The new Enterasys(R) G-Series policy-based edge switch continued to gain traction, with revenues and port shipments growing more than 300% sequentially in Q2 2008.

* Diamond and Platinum Distributed Forwarding Engines (DFEs) for the Enterasys Matrix(R) N-Series flow-based switches continued to show strong growth, with revenues increasing 12% and ports up 16% sequentially in Q2 2008.

* Enterasys' Enterasys Matrix(R) X-Series secure data center/core routers also had strong growth in Q2 2008, with revenues up more than 40% sequentially and 60% compared to the year ago quarter, while port shipments grew 44% sequentially and 26% on a year-over-year basis.

* 10 Gigabit Ethernet port shipments for the Matrix X-Series and Matrix N-Series more than doubled in 1H 2008, compared to 1H 2007. Triple-speed PoE shipments increased more than 75% in the first half of 2008 compared to the year ago period as Enterasys continues to be deployed in conjunction with IP telephony (VoIP) solutions from Avaya, Cisco, Mitel, NEC, Nortel, Panasonic, ShoreTel, and Siemens.

* RoamAbout(R) wireless revenue increased nearly 50% in Q2 2008 compared to the year ago quarter.

* Revenues of the Enterasys Dragon(R) Security Command Console (DSCC) security information and event management (SIEM) solution increased more than 65% in 1H 2008 compared to the year ago period, while overall Dragon software revenues were up nearly 16%.

* License shipments of the Enterasys Network Access Control (NAC) solution were up nearly 20% in the first half of 2008.

* Enterasys delivered new solutions for 10 Gigabit Ethernet connectivity, Distributed Intrusion Prevention, Dragon(R) Multi-Gigabit IDP, Enterasys(R) D-Series workgroup switching, third-generation Enterasys(R) Network Access Control, and ShoreTel certification.

* New customer success stories were published for Bahia State House of Representatives, Caixa Seguros, Dedini, InfoJobs, InteropNet, Scottish Police College, Securities America, Turkish Ministry of Justice, University of Bern, University of Florida Foundation and VeloPark.

* Enterasys was positioned in the Visionaries Quadrant in a leading analyst firm's Campus LAN Magic Quadrant.

* Enterasys received a 2007 Product of the Year Award from Communications Solutions magazine for Outstanding Innovation and Quality of the Enterasys Secure Networks for VoIP Solution

* Increased demand generation through a new North American channel program with incentives designed to enhance competitiveness in new business opportunities.

* The addition of more than 300 new customers, bringing the total for the past nine quarters to more than 1 500.

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Enterasys Networks

Enterasys is owned by a private investor group led by The Gores Group, LLC and Tennenbaum Capital Partners, LLC. Enterasys delivers Secure NetworksTM that ensure the confidentiality, integrity, and availability of IT services and the business users that rely on them - without sacrificing performance. Thousands of enterprises, government agencies and educational institutions in more than 70 countries worldwide rely on our convergence, compliance and connectivity solutions to deliver business-oriented, identity-based visibility and control of individual user and application priority and security. The company's culture is centered on the principle, "There is nothing more important than our customers." Enterasys' standards-based, open-architecture 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. The Gores Group

Founded in 1987, The Gores Group, LLC 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, LLC has become a leading investor having demonstrated over time a reliable track record of creating substantial value in its portfolio companies alongside management. The firm's current private equity fund has committed equity capital of $1.3 billion. Headquartered in Los Angeles, California, The Gores Group, LLC maintains offices in Boulder, Colorado and London. For more information, please visit www.gores.com. Tennenbaum Capital Partners, LLC

Tennenbaum Capital Partners is a Santa Monica, California-based private investment firm managing over $7.5 billion in committed capital in 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 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.

Editorial contacts

Trent Waterhouse
Extreme Networks
(+1) 978 684 1506