Extreme Networks Provides Business Update Regarding COVID-19
Extreme Networks Provides Business Update Regarding COVID-19 |
[08-April-2020] |
SAN JOSE, Calif., April 8, 2020 /PRNewswire/ -- Extreme Networks, Inc. (Nasdaq: EXTR), a cloud-driven networking company, today announced a business update on the financial impact of COVID-19 to its financial results for its third quarter ended March 31, 2020, as well as a set of actions designed to reduce operating costs and further enhance its financial flexibility. The company will review the updates in full detail on its third fiscal quarter earnings results call, set for May 6, 2020. Q3 2020 Earnings Outlook Update Because of the impact of COVID-19 on its business, Extreme now expects to report revenue for Q3 2020 of approximately $210 million, resulting in a GAAP EPS loss of ($0.36) to ($0.39), and a non-GAAP EPS loss of ($0.12) to ($0.15). The company expects GAAP gross margin to be in the range of 53% to 54% and non-GAAP gross margin to be in the range of 56% to 57%. Both GAAP and non-GAAP operating expenses will be lower than previously anticipated. The company estimates that it generated positive cash flow from operations during the quarter, driven by solid collections. Cash on hand at the end of the quarter was $196 million and net debt was $230 million. COVID-19 Related Impact to Demand and Supply Chain Revenue was impacted by a material slow-down in global demand in the last three weeks of March when most of Extreme's largest end markets enacted quarantine and social distancing protocols. Supply constraints, along with additional logistics related challenges in certain countries due to border closures, also contributed to the shortfall. Network technology remains critical and essential infrastructure for our customers and partners, however opportunities are being pushed out from a timing perspective. At this time, Extreme's manufacturing supply chain is operating at approximately 90% capacity in its Asian facilities and 70% in its non-Asian facilities, up from 40% in late February. The Company expects to be near 100% capacity by mid-May. Actions Being Taken to Reduce Operating Costs and Enhance Financial Flexibility Extreme has already implemented actions to manage and reduce operating costs and further enhance its financial flexibility in Q3, including:
Heading into Fiscal Q4 2020 and given the uncertainty around the timing of the recovery of the Enterprise Networking market, Extreme plans to take additional actions in April and May, including:
Extreme will provide more information on its third fiscal quarter earnings results and the actions announced today and will discuss its Q4 and longer-term financial outlook when it reports its third quarter results on May 6, 2020. May 6 Earnings Call The details for the webcast are:
About Extreme Networks: Forward-Looking Statements View original content to download multimedia:http://www.prnewswire.com/news-releases/extreme-networks-provides-business-update-regarding-covid-19-301037809.html SOURCE Extreme Networks, Inc. | ||||||||||||||||||||||||||||||||||||||
Company Codes: NASDAQ-NMS:EXTR |
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