Filed by NetScout Systems, Inc.
Pursuant to Rule 425 under the Securities Act of 1933, as amended
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934, as amended
Subject Company: NetScout Systems, Inc.
(Commission File No. 000-26251)
The following is a copy of a presentation posted to the website of NetScout Systems, Inc. on February 10, 2015.
 NetScout Systems, Inc.
February 2015
Investor Presentation |
 2
NetScout
Systems
Overview
|
February
2015
|
©
1992-2015
NetScout
Systems,
Inc.
All
rights
reserved.
Additional Information and Where You Can Find It
NetScout’s Registration Statement on Form S-4, Proxy Statement and other
documents concerning the proposed acquisition of Danaher’s
Communications business have been filed with the Securities and Exchange
Commission (the “SEC”). Investors are urged to read the S-4
Registration Statement and Proxy Statement, along with other relevant
documents filed with the SEC as well any amendments or supplements to those
documents because they will contain important information. Security holders
may obtain a free copy of the Registration Statement and Proxy Statement
(when it is available) and other documents filed by NetScout with the SEC at
the SEC’s website at www.sec.gov. The Registration Statement and Proxy
Statement, along with other documents, may also be obtained for
free
by
contacting
Andrew
Kramer,
Vice
President
of
Investor
Relations,
by
telephone at 978-614-4000, by email at ir@netscout.com, or by mail at
Investor Relations, NetScout Systems, Inc., 310 Littleton Road,
Westford, MA 01886.
This communication is not a solicitation of a proxy from any security holder of
NetScout. However, NetScout, Danaher and certain of their respective
directors and executive officers may be deemed to be participants in the
solicitation of proxies from NetScout’s stockholders in connection with
the proposed transaction. Information about NetScout’s directors and
executive officers and their beneficial ownership of NetScout’s common
stock may be found in its preliminary proxy statement filed with the SEC on
January 9, 2015 as amended. This document can be
obtained
free
of
charge
from
the
SEC
website
at
www.sec.gov. |
 3
NetScout
Systems
Overview
|
February
2015
|
©
1992-2015
NetScout
Systems,
Inc.
All
rights
reserved.
Safe Harbor & Non-GAAP Financial Metrics
Forward Looking Statements:
Forward-looking statements in this communication are made pursuant to the safe
harbor provisions of Section 21E of the Securities
Exchange
Act
of
1934
and
other
federal
securities
laws.
Investors
are
cautioned
that
statements
in
this
presentation,
which
are
not
strictly
historical
statements,
including
without
limitation,
the
statements
related
to
the
timing
associated
with
completing
the
merger
with
Danaher’s
communication
business
and
the
financial
guidance
for
NetScout’s
fourth
fiscal
quarter
and
other
financial
guidance,
constitute
forward-looking
statements
which
involve
risks
and
uncertainties.
Actual
results
could
differ
materially
from
the
forward-looking
statements
due
to
known
and
unknown
risk,
uncertainties,
assumptions
and
other
factors.
Such factors
include slowdowns or downturns in economic conditions generally and in the market
for advanced network and service assurance solutions specifically, the
Company’s relationships with strategic partners, dependence upon
broad-based acceptance of the Company’s network performance management solutions, the
presence of competitors with greater financial resources than ours and their
strategic response to our products, our ability to retain key executives and employees, the
failure to obtain, delays in obtaining or adverse conditions related to obtaining
shareholder or regulatory approvals; the anticipated tax treatment of the transaction and
related transactions; risks relating to any unforeseen changes to or the effects on
liabilities, future capital expenditures, revenue, expenses, synergies, indebtedness,
financial condition, losses and future prospects; failure to consummate or delay in
consummating the transaction for other reasons; and the ability of NetScout to
successfully
integrate
the
merged
assets
and
the
associated
technology
and
achieve
operational
efficiencies.
For
a
more
detailed
description
of
the
risk
factors
associated with the Company, please refer to the Company’s Registration
Statement on Form S-4, Annual Report on Form 10-K for the fiscal year ended March 31,
2014 and Quarterly Reports on Form 10-Q for the quarters ended June 30, 2014,
September 30, 2014 and December 31, 2014, all of which are on file with the
Securities and Exchange Commission. NetScout assumes no obligation to update
any forward-looking information contained in this communication or with respect to
the announcements described herein.
Regulation G Disclosure:
This presentation makes reference to certain non-GAAP measures such as
non-GAAP revenue and non-GAAP earnings per share. These
non-GAAP measures are not in accordance with GAAP, should not be considered an alternative for measures prepared in accordance with GAAP (revenue,
net income and diluted net income per share), and may have limitations in that they
do not reflect all of NetScout’s results of operations as determined in accordance
with GAAP. These non-GAAP measures should only be used to evaluate
NetScout’s results of operations in conjunction with the corresponding GAAP measures.
The presentation of non-GAAP information is not meant to be considered superior
to, in isolation from or as a substitute for results prepared in accordance with
GAAP. NetScout believes these non-GAAP financial measures will enhance the
reader’s overall understanding of NetScout’s current financial performance and
NetScout's prospects for the future by providing a higher degree
of transparency for certain financial measures and providing a level of disclosure
that helps investors understand
how
the
Company
plans
and
measures
its
own
business.
NetScout
believes
that
providing
these
non-GAAP
measures
affords
investors
a
view
of
NetScout’s operating results that may be more easily compared to peer
companies and also enables investors to consider NetScout’s operating results on both a
GAAP and non-GAAP basis during and following the integration period of
NetScout’s acquisitions. Presenting the GAAP measures on their own would not be
indicative of NetScout’s core operating results. Furthermore,
NetScout believes that the presentation of non-GAAP measures when shown in conjunction with the
corresponding GAAP measures provide useful information to management and investors
regarding present and future business trends relating to its financial
condition and results of operations. NetScout management regularly uses
supplemental non-GAAP financial measures internally to understand, manage and evaluate
its
business
and
to
make
operating
decisions.
These
non-GAAP
measures
are
among
the
primary
factors
that
management
uses
in
planning
and
forecasting.
The
reconciliation
of
these
non-GAAP
metrics
to
the
comparable
GAAP
metrics
are
set
forth
in
the
accompanying
tables
in
the
index
of
this
presentation
and
are
available
on
our
website
at
http://ir.netscout.com. |
 4
NetScout
Systems
Overview
|
February
2015
|
©
1992-2015
NetScout
Systems,
Inc.
All
rights
reserved.
NetScout Today
NASDAQ: NTCT
Market Cap: $1.5B (as of 2/6/15)
* non-GAAP
•
Market leader in performance management
and analytics
•
Expertise and scale to serve two markets:
Enterprise and Service Provider
•
30 years of focus and experience in IP-
based networks
•
International footprint with sales, support,
and services in over 30 countries
•
1,000+ employees worldwide
•
FY ’14 results:
Revenue: $397M
EPS: $1.53
FCF: $95M+ |
 5
NetScout
Systems
Overview
|
February
2015
|
©
1992-2015
NetScout
Systems,
Inc.
All
rights
reserved.
NetScout Investment Highlights
•
Market leader
in network and application
performance management
•
Award-winning solutions based on proprietary
software:
“ASI”
enabling
real-time
intelligence
and analytics
•
Working with leading service provider and
enterprise
customers
to
achieve
ROI
and
manage
risk
through
operational
intelligence
gained from NetScout analytics
•
Financial strength
built on profitability and cash
flow arising from increasing revenue within
scalable infrastructure
•
Capitalizing on attractive growth opportunities
being
shaped
by
today’s
IT
trends
•
Announced
transformational
acquisition
of
Danaher’s Communications Business
Total
Revenue
(non-GAAP, $ in millions)
Earnings
Per Share
(non-GAAP)
Free
Cash
Flow
(non-GAAP, $ in
millions) |
 6
NetScout
Systems
Overview
|
February
2015
|
©
1992-2015
NetScout
Systems,
Inc.
All
rights
reserved.
Powerful Long-Term Technology Trends
Mobility
Cloud &
Virtualization
Cyber Security
Big Data
Requires real-time, reliable, scalable analytics and intelligence
|
 7
NetScout
Systems
Overview
|
February
2015
|
©
1992-2015
NetScout
Systems,
Inc.
All
rights
reserved.
Source: Ericsson Mobility Report, May 2014
Carrier Trends Driving Future Growth
Service Providers:
Monetize their investment and retain customers |
 8
NetScout
Systems
Overview
|
February
2015
|
©
1992-2015
NetScout
Systems,
Inc.
All
rights
reserved.
Enterprise Trends Driving Future Growth
Enterprises:
“Uptime”
and
user
experience
with
cost-effective
delivery |
   9
NetScout
Systems
Overview
|
February
2015
|
©
1992-2015
NetScout
Systems,
Inc.
All
rights
reserved.
With a loyal customer base and partnership focused
on solving today’s complexities
With a loyal customer base and partnership focused
on solving today’s complexities
Powered by NetScout SoftwareTechnology:
Structured Data (ASI), Analytics (nGeniusONE)… |
 10
NetScout
Systems
Overview
|
February
2015
|
©
1992-2015
NetScout
Systems,
Inc.
All
rights
reserved.
Revenue and EPS Performance
Strong operating leverage drives EPS growth
Non-GAAP, in millions except EPS
Non-GAAP, in millions except EPS |
 11
NetScout
Systems
Overview
|
February
2015
|
©
1992-2015
NetScout
Systems,
Inc.
All
rights
reserved.
Cumulative Free Cash Flow Generation
Non-GAAP, in millions
Non-GAAP, in millions
Investing in product development while
generating strong free cash flow |
 12
NetScout
Systems
Overview
|
February
2015
|
©
1992-2015
NetScout
Systems,
Inc.
All
rights
reserved.
Proven
Track
Record
for
Successful
Integration |
 13
NetScout
Systems
Overview
|
February
2015
|
©
1992-2015
NetScout
Systems,
Inc.
All
rights
reserved.
Increase Total Addressable Market:
Cyber Intelligence, Customer Experience and
Business Intelligence
Expand Go-to-Market Activities:
Geography coverage and product specialist
Create Platform and Scale:
Trusted partner for innovation and reliability
generating increasing returns
NTCT Strategy: Unified Platform for SP’s and Enterprise
Extend leadership in Performance Analytics and Operational
Intelligence |
 14
NetScout
Systems
Overview
|
February
2015
|
©
1992-2015
NetScout
Systems,
Inc.
All
rights
reserved.
Increased Total Addressable Market:
Solutions for Cyber (Arbor), Customer
Experience (Newfield Wireless), Business
Intelligence, (Arantech)
Expanded Go-to-Market Activities:
Cross sell opportunities and increased
international presence
Platform and Scale Creation:
Strategically positioned for increased innovation
within Service Providers and Enterprise
Acquiring DHR Communications Business Accelerates …
NetScout: at the heart of the major computing trends of the
next decade |
 15
NetScout
Systems
Overview
|
February
2015
|
©
1992-2015
NetScout
Systems,
Inc.
All
rights
reserved.
Go-to-Market
More global and diverse
Broader sales and
channel presence
worldwide
More customers and
more touch points within
the customer
Increased customer
mindshare
Best-In-Class
Solutions
Broader portfolio for
service providers
Extends reach into the
mid-tier enterprise
market
Jump-starts our entry
into Cyber Intelligence,
RAN optimization, BI
Next-Gen platform and
software
Financially Compelling
$1.2B+ revenue base*
positioned for growth
Accretive to non-GAAP
earnings¹
Year 2 run-rate cost
synergies of ~5% of total
combined cost base*
Continued prudent cost
control
*
Non-GAAP
1
First full year of combined operations
Doubles our total
addressable market to
$8B+
Furthering our strategic
capabilities to our
customers
Increasing operating
margins and cash flow
Strategic Rationale for the Transaction |
 16
NetScout
Systems
Overview
|
February
2015
|
©
1992-2015
NetScout
Systems,
Inc.
All
rights
reserved.
•
Revenue growth
-
Larger and more accessible TAM
-
Expanded sales presence
-
Attractive cross-selling opportunities
•
Scalable infrastructure
-
Synergies (above and below the line)
-
Continued prudent cost controls
-
Tax efficiencies from international operations
•
Capital investment efficiencies
-
Product development
-
Capital allocation (share repatriation)
Compelling Financial Opportunity
Scale produces earnings and cash flow along with continuing
revenue growth |
 17
NetScout
Systems
Overview
|
February
2015
|
©
1992-2015
NetScout
Systems,
Inc.
All
rights
reserved.
Network Performance
Management
Application Performance
Management
Cyber Security & Intelligence
SECTORS
FORECAST
Advanced Analytics
(Business Intelligence)
Total Addressable Market
Market Forecast Sources: IDC, 2014, see appendix for specific report citations
REVENUE SYNERGIES
Generating 10%+ Annual Revenue
•
Positioned to offer service
provider customers best-in-
class service assurance
solutions (troubleshooting plus
monitoring)
•
Complementary offerings for
the service provider market in
adjacent areas
•
Enterprise cross-selling arising
from a larger, more diverse
and global customer base
along with a broader range of
offerings
•
Accelerate adoption of Arbor’s
cyber security solutions in the
enterprise while leveraging
Arbor’s existing footprint for
new NetScout security offering
that is expected to be brought
to market in 2015 |
 18
NetScout
Systems
Overview
|
February
2015
|
©
1992-2015
NetScout
Systems,
Inc.
All
rights
reserved.
•
Operating leverage and strong free cash flow growth:
–
Return non-GAAP gross margin to prior levels in the high-70%
–
Drive additional synergies across a range of functional areas
–
Continue fiscal discipline across a scalable infrastructure
•
Potential for incremental EPS gains:
–
Tax efficiencies
–
Capital deployment strategies
Generating Earnings and Cash Flow
Operating targets attained
assuming ~10% annual revenue
growth
Current Operating
Targets
Post-Acquisition
5-Year Operating
Targets
Gross Margin
78 –
81%
75 –
78%+
Operating Margin
24 –
27%
26% –
31%+ |
 19
NetScout
Systems
Overview
|
February
2015
|
©
1992-2015
NetScout
Systems,
Inc.
All
rights
reserved.
Confidential Business Information
•
Announced on October 13, 2014
•
NetScout to acquire most of Danaher’s Communications business*
•
Structured as Reverse Morris Trust
•
DHR shareholders receive 62.5 million NetScout shares, valued at
approximately $2.3 billion
1
•
DHR shareholders will own approximately 59.5% of NetScout, NTCT
shareholders will own approximately 40.5% on a fully diluted basis
•
NetScout senior management team to lead combined company; NetScout board
of directors to include DHR EVP Jim Lico
•
Expected to close during the first half of NetScout’s FY16, subject to
approval by NetScout shareholders, regulatory approvals and other
conditions *
Includes
TekComms,
Arbor
Networks,
VSS
Monitoring
and
Enterprise
Network
Solutions
(“ENS”)
of
FNET,
excludes
Data
Communications
Installer
(“DCI”)
and
Communications
Service
Providers (“CSP”) portfolios of FNET
1
Based on NTCT closing stock price of $37.35 on 2/6/15
Transaction Structure
–
Danaher to spin-off or split-off (to be determined at later date) its Communications
business to DHR Shareholders
–
The separation is immediately followed by a merger with NetScout
|
 20
NetScout
Systems
Overview
|
February
2015
|
©
1992-2015
NetScout
Systems,
Inc.
All
rights
reserved.
Strategy:
Continued leadership in the major computing trends over the next
decade
Helping our customers achieve ROI and manage risk through the
operational intelligence gained from our analytics
Fundamentals:
Visionary leadership
Cutting edge technology: ASI and nGeniusONE
Brand recognition through market leadership
Scalable infrastructure requiring limited future investment
Solid cash flow and investment position
Proven track record of leadership and financial strength. |
 Thank
You |
 Appendix: Non-GAAP Measure Reconciliation |
 23
NetScout
Systems
Overview
|
February
2015
|
©
1992-2015
NetScout
Systems,
Inc.
All
rights
reserved.
Non-GAAP Measure Reconciliation:
Revenue, EPS and Free Cash Flow
Free Cash Flow
($ in millions)
YTD Q3 FY'15
Operating Cash Flow
57.3
$
Purchase of Fixed Assets & Intangible Assets
(8.8)
$
Free Cash Flow
48.5
$
(in thousands, except per share data)
For the Fiscal Years Ended
March 31,
2011
2012
2013
2014
GAAP Revenue
290,540
$
308,679
$
350,550
$
396,647
$
Deferred revenue fair value adjustment / Impact of accounting change
(797)
312
1,215
558
Non-GAAP Revenue
289,743
$
308,991
$
351,765
$
397,205
$
GAAP Gross profit
229,179
$
243,007
$
276,542
$
312,134
$
Deferred revenue fair value adjustment
132
312
1,215
558
Inventory fair value adjustment
-
-
453
-
Share-based compensation expense (1)
352
419
577
969
Amortization of acquired intangible assets (2)
3,980
4,651
4,547
3,333
Compensation for post combination services (4)
-
10
14
34
Non-GAAP Gross profit
232,714
$
248,399
$
283,348
$
317,028
$
GAAP Income from operations
58,065
$
53,683
$
64,529
$
78,014
$
Deferred revenue fair value adjustment
132
312
1,215
558
Inventory fair value adjustment
-
-
453
-
Share-based compensation expense (1)
6,439
8,702
9,580
12,930
Amortization of acquired intangible assets (2)
5,887
6,782
7,424
6,765
Business development and integration expense (3)
755
4,347
1,618
523
Compensation for post combination services (4)
-
438
2,721
2,215
Restructuring charges
-
603
1,065
-
Non-GAAP Income from operations
70,349
$
74,867
$
88,605
$
101,005
$
GAAP Net income
37,265
$
32,428
$
40,609
$
49,106
$
Deferred revenue fair value adjustment / Impact of accounting change
(797)
312
1,215
558
Inventory fair value adjustment
-
-
453
-
Share-based compensation expense (1)
6,439
8,702
9,580
12,930
Amortization of acquired intangible assets (2)
5,887
6,782
7,424
6,765
Business development and integration expense (3)
755
4,715
1,618
523
Compensation for post combination services (4)
-
438
2,721
2,215
Loss on extinguishment of debt (5)
-
603
-
-
Income tax adjustments (6)
(4,668)
(7,700)
(8,671)
(7,879)
Restructuring charges
-
690
1,065
-
Non-GAAP Net income
44,881
$
46,970
$
56,014
$
64,218
$
GAAP Diluted Net income per share
0.87
$
0.76
$
0.96
$
1.17
$
Share impact of non-GAAP adjustments identified above
0.17
0.34
0.36
0.36
Non-GAAP Diluted net income per share
1.04
$
1.10
$
1.32
$
1.53
$
Shares used in computing non-GAAP diluted net income per share
42,973
42,750
42,322
41,955
(1) Share-based compensation expense included in these amounts is as follows:
Cost of product revenue
134
$
192
$
235
$
228
$
Cost of service revenue
218
227
342
741
Research and development
1,651
2,486
2,944
4,361
Sales and marketing
2,527
3,052
3,035
3,791
General and administrative
1,909
2,745
3,024
3,809
Total share-based compensation expense
6,439
$
8,702
$
9,580
$
12,930
$
(2) Amortization expense related to acquired software and product technology included in these
amounts is as follows: Cost of product revenue
3,980
$
4,651
$
4,547
$
3,333
$
Operating expenses
1,907
2,131
2,877
3,432
Total amortization expense
5,887
$
6,782
$
7,424
$
6,765
$
(3) Business development and integration expense included in these amounts is as follows:
Cost of service revenue
-
10
-
-
Research and development
-
1,545
15
-
Sales and marketing
-
346
10
-
General and administrative
755
2,446
1,593
523
Other income (expense), net
-
368
-
-
Total business development and integration expense
755
$
4,715
$
1,618
$
523
$
(4) Compensation for post combination services included in these amounts is as follows:
Cost of product revenue
-
-
10
23
Cost of service revenue
-
-
4
11
Research and development
-
438
1,670
902
Sales and marketing
-
-
64
153
General and administrative
-
-
973
1,126
Total compensation for post combination services
-
$
438
$
2,721
$
2,215
$
Loss on extinguishment of debt included in this amount is as follows:
Interest and other income (expense), net
-
$
690
$
-
$
-
$
(6) Total income tax adjustment is as follows:
Tax effect of non-GAAP adjustments above at 38%
(5,021)
(8,452)
(9,149)
(8,737)
Tax impact of non-GAAP reconciling items in loss jurisdictions
-
752
478
858
Total income tax adjustments
(5,021)
$
(7,700)
$
(8,671)
$
(7,879)
$
NetScout Systems, Inc.
Reconciliation of Current GAAP to Current and Historical Non-GAAP Financial
Measures (In thousands, except per share data)
Three Months Ended
September 30,
2014
2013
2014
2014
2013
GAAP Revenue
122,833
$
110,428
$
103,599
$
334,284
$
284,330
$
Deferred revenue fair value adjustment
-
140
-
18
419
Non-GAAP Revenue
122,833
$
110,568
$
103,599
$
334,302
$
284,749
$
GAAP Gross profit
95,851
$
86,826
$
82,004
$
263,111
$
224,102
$
Deferred revenue fair value adjustment
-
140
-
18
419
Share-based compensation expense (1)
379
256
407
1,074
740
Amortization of acquired intangible assets (2)
905
837
923
2,762
2,480
Compensation for post combination services (4)
2
8
9
19
25
Non-GAAP Gross profit
97,137
$
88,067
$
83,343
$
266,984
$
227,766
$
GAAP Income from operations
27,939
$
27,264
$
18,644
$
66,185
$
52,029
$
Deferred revenue fair value adjustment
-
140
-
18
419
Share-based compensation expense (1)
4,150
3,217
4,495
11,947
9,959
Amortization of acquired intangible assets (2)
1,726
1,697
1,779
5,301
5,051
Business development and integration expense (3)
4,698
78
1,477
6,175
482
Compensation for post combination services (4)
312
530
545
1,393
1,685
Non-GAAP Income from operations
38,825
$
32,926
$
26,940
$
91,019
$
69,625
$
GAAP Net income
17,629
$
17,294
$
11,233
$
40,338
$
32,430
$
Deferred revenue fair value adjustment
-
140
-
18
419
Share-based compensation expense (1)
4,150
3,217
4,495
11,947
9,959
Amortization of acquired intangible assets (2)
1,726
1,697
1,779
5,301
5,051
Business development and integration expense (3)
4,698
78
1,477
6,175
482
Compensation for post combination services (4)
312
530
545
1,393
1,685
Income tax adjustments (5)
(3,909)
(1,941)
(2,908)
(8,727)
(6,034)
Non-GAAP Net income
24,606
$
21,015
$
16,621
$
56,445
$
43,992
$
GAAP Diluted Net income per share
0.42
$
0.41
$
0.27
$
0.97
$
0.77
$
Share impact of non-GAAP adjustments
identified above 0.17
0.09
0.13
0.38
0.28
Non-GAAP Diluted net income per share
0.59
$
0.50
$
0.40
$
1.35
$
1.05
$
Shares used in computing non-GAAP
diluted net income per share 41,536
41,884
41,652
41,679
41,969
(1)
Share-based compensation expense included in these amounts
is as follows:
Cost of product revenue
85
$
62
$
93
$
238
$
174
$
Cost of service revenue
294
194
314
836
566
Research and development
1,455
1,157
1,490
3,971
3,316
Sales and marketing
1,221
944
1,235
3,419
2,952
General and administrative
1,095
860
1,363
3,483
2,951
Total share-based compensation expense
4,150
$
3,217
$
4,495
$
11,947
$
9,959
$
(2)
Amortization expense related to acquired software and product
technology included in these amounts is as follows:
Cost of product revenue
905
$
837
$
923
$
2,762
$
2,480
$
Operating expenses
821
860
856
2,539
2,571
Total amortization expense
1,726
$
1,697
$
1,779
$
5,301
$
5,051
$
(3)
Business development and integration expense included in
these amounts is as follows:
General and administrative
4,698
78
1,477
6,175
482
Total business development and integration expense
4,698
$
78
$
1,477
$
6,175
$
482
$
(4)
Compensation for post combination services included in these
amounts is as follows:
Cost of product revenue
1
5
6
13
17
Cost of service revenue
1
3
3
6
8
Research and development
211
209
215
631
703
Sales and marketing
14
39
37
90
115
General and administrative
85
274
284
653
842
Total compensation for post combination services
312
$
530
$
545
$
1,393
$
1,685
$
(5)
Total income tax adjustment is as follows:
Tax effect of non-GAAP adjustments above at 38%
(4,136)
$
(2,149)
$
(3,153)
$
(9,437)
$
(6,685)
$
Tax impact of non-GAAP reconciling items in loss
jurisdictions 227
208
245
710
651
Total income tax adjustments
(3,909)
$
(1,941)
$
(2,908)
$
(8,727)
$
(6,034)
$
Three Months Ended
Nine Months Ended
December 31,
December 31, |
 24
NetScout
Systems
Overview
|
February
2015
|
©
1992-2015
NetScout
Systems,
Inc.
All
rights
reserved.
Non-GAAP Measure Reconciliation:
NetScout and DCB Historical Information
12-months
6-months
12-months
6-months
12-months
6-months
FY2014
FY2015
CY2013
CY2014
FY2014
FY2015
Revenue:
Product
234,268
$
122,319
$
623,632
$
230,271
$
857,900
$
352,590
$
Service
162,379
89,132
211,259
113,032
373,638
202,164
Total GAAP revenue
396,647
211,451
834,891
343,303
1,231,538
554,754
Non-GAAP Adjustments
558
18
558
18
Total Non-GAAP revenue
397,205
211,469
834,891
343,303
1,232,096
554,772
Cost of revenue:
Product
51,219
26,705
195,077
86,502
246,296
113,207
Service
33,294
17,486
48,043
25,551
81,337
43,037
Total GAAP cost of revenue
84,513
44,191
243,120
112,053
327,633
156,244
Non-GAAP Adjustments
(4,336)
(2,569)
(9,344)
(5,021)
(13,680)
(7,590)
Total Non-GAAP cost of revenue
80,177
41,622
233,776
107,032
313,953
148,654
Gross profit - GAAP
312,134
167,260
591,771
231,250
903,905
398,510
Non-GAAP Adjustments
4,894
2,587
9,344
5,021
14,238
7,608
Gross profit - Non-GAAP
317,028
169,847
601,115
236,271
918,143
406,118
Operating expenses:
Research and development
70,454
38,008
147,553
82,185
218,007
120,193
Sales and marketing
129,611
69,468
276,896
133,095
406,507
202,563
General and administrative
30,623
19,820
30,623
19,820
Impairment of intangible assets
31,063
31,063
-
Amortization of acquired intangible assets
3,432
1,718
19,661
8,274
23,093
9,992
Total operating expenses - GAAP
234,120
129,014
475,173
223,554
709,293
352,568
Non-GAAP Adjustments
(18,097)
(11,361)
(73,130)
(17,422)
(91,227)
(28,783)
Total operating expenses - Non-GAAP
216,023
117,653
402,043
206,132
618,066
323,785
Income from operations - GAAP
78,014
38,246
116,598
7,696
194,612
45,942
Non-GAAP Adjustments
22,991
13,948
82,474
22,443
105,465
36,391
Income from operations - Non-GAAP
101,005
52,194
199,072
30,139
300,077
82,333
Interest and other expense, net
(158)
(674)
(158)
(674)
Income before income tax expense
77,856
37,572
116,598
7,696
194,454
45,268
Income tax expense - GAAP
28,750
14,863
32,792
2,311
61,542
17,174
Non-GAAP Adjustments
(7,879)
(4,818)
(40,068)
(8,720)
(47,947)
(13,538)
Income tax expense - Non-GAAP
36,629
19,681
72,860
11,031
109,489
30,712
Net income - GAAP
49,106
$
22,709
$
83,806
$
5,385
$
132,912
$
28,094
$
Non-GAAP Adjustments
15,112
9,130
42,406
13,723
57,518
22,853
Net income - Non-GAAP
64,218
31,839
126,212
19,108
190,430
50,947
WSO - diluted
41,955
41,732
62,500
62,500
104,455
104,232
Diluted net income per share - GAAP
1.17
$
0.54
$
1.27
$
0.27
$
Diluted net income per share - Non-GAAP
1.53
$
0.76
$
1.82
$
0.49
$
DHR Communications
Combined Proforma
NTCT |
 25
NetScout
Systems
Overview
|
February
2015
|
©
1992-2015
NetScout
Systems,
Inc.
All
rights
reserved.
•
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 26
Supporting Slides
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