Extreme Networks Q1 2011 Earnings Call Transcript

Extreme Networks (EXTR)

Q1 2011 Earnings Call

November 01, 2010 5:00 pm ET

Executives

Bob Corey - Chief Financial Officer, Principal Accounting Officer and Executive Vice President

Oscar Rodriguez - Chief Executive Officer, President and Director

Analysts

Sanjit Singh - Wedbush Morgan

Presentation

Operator

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Welcome to the Extreme Networks 2011 First Quarter Conference Call. [Operator Instructions] On the call today, from Extreme Networks, are Oscar Rodriguez, President and CEO; Bob L. Corey, CFO. As a reminder, this conference is being recorded today, November 1, 2010. This afternoon, Extreme Networks issued a press release announcing the company's financial results for the first fiscal quarter of 2011. A copy of this release and slide presentation of the supporting financial materials are available in the Investor Relations section of the company's website at www.extremenetworks.com. This call is being broadcast live over the Internet and will be posted on the Extreme Networks' website for replay shortly after the conclusion of the call.

The company has asked me to remind you that this conference call contains forward-looking statements that involve risks and uncertainties, including statements regarding the company's expectations, regarding its financial performance, strategies, growth of customers' bandwidth demand, development of new product, customer acceptance of the company's product, customer buying and spending and economic conditions in the company's market.

Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors including, but not limited to: a challenging macroeconomic environment worldwide; fluctuations in demands for the company's products and services; a highly competitive business environment for network switching equipment; the company's effectiveness in controlling expenses; the possibility that the company might experience delays in the development of new technology and products; customer response to its new technology and products; the timing of any recovery in the global economy; risks related to pending or future litigation and the dependency on third parties for certain components; and for the manufacturing of the company's products.

The company undertakes no obligation to update this information on the conference call. More information about potential factors that affect our business and financial results is included in the company's filings with the Securities and Exchange Commission. Throughout the conference call, the company will reference both GAAP and non-GAAP financial results. The company has provided a reconciliation table of GAAP to non-GAAP and the information in the tables that accompany the press release on its website. Please go to the Investor Relations section of the company's website at www.extremenetworks.com. In addition, all announced results are preliminary and may be subject to change when the review of the fiscal quarter and the audit of the fiscal year is concluded and/or Form 10-K is filed.

I would now like to turn the call over to Mr. Bob L. Corey, Executive Vice President and CFO of Extreme Networks.

Bob Corey

Okay, thank you, Tyrone, and welcome to the Extreme Networks Q1 fiscal 2011 earnings conference call. As I mentioned, I'm joined today by Oscar Rodriguez, our new President and Chief Executive Officer. I'm delighted to have Oscar on board, and I'll turn the call over to Oscar for his comments regarding our focus and strategy and market dynamics. And then I'll follow up brief comments on the quarter and summarize and provide guidance for Q2 of fiscal 2011. We'll then open up for Q&A. So Oscar, welcome, and take it away.

Oscar Rodriguez

Thank you, Bob. Let me start the call today by first, thanking Bob for his leadership over the course of the last 9 months and by thanking him for his work in driving efficiency, stability within the organization. Under Bob's leadership, Extreme has delivered a series of improving results with greater predictability while also establishing clear guidance. Working together with Bob, I intend to continue these trends and to build upon the momentum that we have established.

By way of a brief introduction, I have now been with Extreme for just over two months, and I'm very pleased to be a part of this team. Prior to Extreme, I had spent all of my 25-year career designing, building, marketing, selling, networking and communications products to both enterprise and carrier markets worldwide. I've held senior Executive positions as part of Alcatel-Lucent's Carrier Ethernet and Enterprise business units. I've held two divisional president positions in Nortel's Data and Enterprise Networking divisions, and I've held president and CEO positions in innovative pure-play communications companies such as Arris Interactive and Riverstone Networks. During my time with these firms, I had the opportunity to build a clear understanding of customer needs in all our core markets, specifically the campus enterprise, data center and Carrier Ethernet markets. Since joining Extreme, I have been conducting a deep and thorough evaluation of the core competencies of the company to better understand our capabilities and to assess any unrealized potential that we may have within the organization. In the next few weeks, we will be finalizing a renewed mission and strategy for the company. I will talk more about the specifics of this strategy on the next call.

Prior to joining Extreme, it was clear to me that the company is operating in a growing and exciting market and that the company has had a very positive reputation for delivering leading-edge technologies at a great price performance. While my evaluation of the company's competencies is not yet complete, I now believe that we have the innovative capacity to create leading-edge products and services that can deliver real customer value, that we have a solid team who are focused on serving our customers well, that our people have the passion and skills needed for the company to succeed. I also have found that in some cases, the company can sharpen its focus on the market it serves, and we can improve our ability to invest in the right products and in the right channels to market to maximize the company's geographic and demographic reach.

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