DAX-1,15 % EUR/USD+1,44 % Gold+1,90 % Öl (Brent)-1,49 %

NetGear(NTGR) - 500 Beiträge pro Seite


ISIN: US64111Q1040 | WKN: 578078 | Symbol: NTGR
30,70
26.07.19
Quotrix Düsseldorf
+3,86 %
+1,14 EUR

Neuigkeiten zur Netgear Aktie


Beitrag schreiben

Begriffe und/oder Benutzer

 

Profile:NetGear, Inc. is engaged in the design, development and marketing of technologically advanced, branded networking products that address the specific needs of small business and home users. The Company supplies networking products that meet the ease-of-use, quality, reliability, performance and affordability requirements of these users. Its broad suite of approximately 100 products enables users to share Internet access, peripherals, files, digital media content and applications among multiple personal computers (PCs) and other Internet-enabled devices. Its products are grouped into three major segments within the small business and home markets: Ethernet networking products, broadband products and wireless networking products.
http://www.netgear.com




NETGEAR Reports Second Quarter 2003 Results
Friday September 12, 7:30 am ET
* 24% Revenue growth year over year * Net income increases to $11.5 million, including $9.8 million one time deferred tax reversal * EPS of $0.48 including one time deferred tax reversal of $0.41 per share


SANTA CLARA, Calif., Sept. 12 /PRNewswire-FirstCall/ -- NETGEAR, Inc. (Nasdaq: NTGR - News), a worldwide provider of technologically advanced, branded networking products, today reported financial results for the second quarter ended June 29, 2003.
Net revenue for the second quarter ended June 29, 2003 increased 24% or $13.5 million to $69.0 million, compared to $55.5 million for the quarter ended June 30, 2002. This was due to an increase in demand primarily for broadband and wireless products. Revenue in all global markets increased on a year over year basis. Net income for the second quarter ended June 29, 2003 increased 528% or $9.7 million to $11.5 million, compared to $1.8 million for the quarter ended June 30, 2002. Included in the net income for the second quarter was a reversal of a deferred tax valuation allowance of $9.8 million. On a per share basis, net income was $0.57 per basic share and $0.48 per diluted share in the second quarter of 2003, including $0.48 and $0.41 respectively relating to the one time reversal. This compares to $0.09 per basic and diluted share in the second quarter of 2002.

Net revenue for the six-month period ended June 29, 2003 increased 35% or $35.6 million to $136.7 million, compared to $101.1 million for the six months ended June 30, 2002. Net income for the six-month period ended June 29, 2003 increased 453% or $10.7 million to $13.1 million, from $2.4 million for the six months ended June 30, 2002. On a per share basis, net income was $0.65 per basic share and $0.55 per diluted share for the six-month period ended June 29, 2003, including $0.48 and $0.41 respectively relating to the one time reversal, compared to a net loss attributable to common shareholders of $(0.70) per basic and diluted share for the six months ended June 30, 2002. The 2002 period includes a deemed non-cash preferred dividend of $17.9 million.

Patrick Lo, Chairman and Chief Executive Officer of NETGEAR, commented, "We are pleased with the second quarter. This was another strong quarter for us as our customer focused strategy of serving the networking needs of the small business and home-networking markets is driving record growth in revenue and operating profit. Importantly, the needs and demand levels of the small business and home networking markets remain robust and give us confidence in our prospects."

"We completed our Initial Public Offering on July 31. The IPO represents a major milestone in the history of NETGEAR and further strengthens the company`s financial position, which will allow us to address new business and technology opportunities as we continue to expand the breadth of our product offerings and geographic reach," continued Lo. "I would like to thank our employees and early investors for their dedication and support through our IPO process. We also would like to thank our public investors for their show of confidence in our business and our management."

Through its initial public offering, NETGEAR raised approximately $102 million net of expenses. The Company used $20.0 million of the proceeds to repay an outstanding note to Nortel Networks and $17.0 million to repay amounts drawn on its bank line of credit. The repayment of debt is expected to result in a pre-tax charge of approximately $6.0 million in the third quarter 2003 due to the acceleration of interest expense equal to the unamortized discount balance at the date of payment.

Jonathan Mather, Chief Financial Officer of NETGEAR, said, "During the second quarter, we saw strength across all product categories and geographies. The higher revenues, combined with a more favorable product mix and ongoing operating efficiency improvement, led to an expansion in our gross margin to 27.6% compared to 27.3% in the first quarter and 25.6% in the year ago second quarter."

During the quarter, NETGEAR announced further enhancements to its already comprehensive set of small business and home networking solutions by expanding its line of 802.11g wireless networking products for homes and launching the industry`s first dual band 802.11a+g VPN firewall for small business. In addition, NETGEAR introduced a new category of business-class wireless solutions, including an access point and antennae line that deliver higher security and expanded wireless range to small business.

Looking forward, Mr. Lo added, "We are entering the seasonally strong second half with confidence in our outlook. Our retail channel is experiencing good back-to-school demand. We are also benefiting from strength in our small businesses channels such as Value Added Re-sellers (VARs), and Direct Marketing Re-sellers (DMRs), as more and more business customers seek the improved performance and mobility offered by our high speed wired and wireless solutions."

About NETGEAR Inc.

NETGEAR (Nasdaq: NTGR - News) designs technologically advanced, branded networking products that address the specific needs of small business and home users. The Company`s suite of approximately 100 products enables users to share Internet access, peripherals, files, digital multimedia content and applications among multiple personal computers and other Internet-enabled devices. NETGEAR is headquartered in Santa Clara, Calif. For more information, visit the company`s Web site at www.netgear.com or call (408) 907-8000.

NETGEAR is a registered trademark of NETGEAR, Inc. in the United States and other countries.

Contacts:
Doug Hagan David Pasquale
Senior Manager, Public Relations Senior Vice President,
Investor Relations
NETGEAR, Inc. The Ruth Group
(408) 907-8053 (646) 536-7006
doug.hagan@netgear.com dpasquale@theruthgroup.com


Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 for NETGEAR, Inc.:

This release contains forward-looking statements. The forward-looking statements represent NETGEAR, Inc.`s expectations or beliefs concerning future events and include statements, among other, regarding the expected performance, market acceptance, market growth, market position of NETGEAR, and its products and technology. NETGEAR undertakes no duty to update these forward-looking statements. These statements are subject to risks and uncertainties, including without limitation, the price/performance requirements of customers, the ability of NETGEAR to sell products incorporating the technology, the impact and pricing of competing technologies, the introduction of alternative technological solutions, the inability of NETGEAR`s new products to gain wide market acceptance and other risks detailed from time-to-time in NETGEAR`s SEC filings and reports.

- Tables Attached -

NETGEAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)
(In thousands, except per share data)

Three months ended Six months ended
June 29, June 30, June 29, June 30,
2003 2002 2003 2002
Net revenue $ 69,003 $ 55,538 $136,709 $101,066

Cost of revenue:
Cost of revenue 49,889 41,326 99,135 76,011
Amortization of deferred
stock-based compensation 42 20 31 86
Total Cost of revenue 49,931 41,346 99,166 76,097

Gross profit 19,072 14,192 37,543 24,969

Operating expenses:
Research and development 1,882 1,606 3,898 2,500
Sales and marketing 11,706 7,809 22,667 14,989
General and administrative 1,779 2,024 3,681 3,552
Amortization of deferred
stock-based compensation:
Research and development 103 37 199 180
Sales and marketing 179 45 288 188
General and administrative 98 167 249 367

Total operating expenses 15,747 11,688 30,982 21,776

Income from operations 3,325 2,504 6,561 3,193
Interest income 25 45 53 66
Interest expense (370) (526) (731) (544)
Other income, net 128 108 50 40

Income before income taxes 3,108 2,131 5,933 2,755
Provision (benefit) for
income taxes (8,395) 299 (7,182) 386

Net income 11,503 1,832 13,115 2,369
Deemed dividend on
Preferred Stock - - - (17,881)
Net income (loss)
attributable to
common stockholders $ 11,503 $1,832 $13,115 $(15,512)

Net income (loss) per
share attributable to
common stockholders
Basic $0.57 $0.09 $0.65 (0.70)
Diluted $0.48 $0.09 $0.55 $(0.70)

Pro forma net income per share

Basic $0.57 $0.09 $0.65 $0.11
Diluted $0.48 $0.09 $0.55 $0.11


NETGEAR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited)
(In thousands)

Pro forma
Stockholders`
Equity at
June 29, June 29, December 31,
2003 2003 2002(1)
ASSETS
Current assets:
Cash and cash equivalents $ 21,376 $19,880
Accounts receivable, net of
allowance for doubtful accounts
of $869 at June 29, 2003 and
$873 at December 31, 2002 52,328 42,492
Inventories 40,236 24,774
Deferred income taxes 9,772 -

Prepaid expenses and other current
assets 4,128 3,003
Total current assets 127,840 90,149

Property and equipment, net 3,617 3,144
Goodwill, net 558 558

Total assets $132,015 $93,851

LIABILITIES, REDEEMABLE CONVERTIBLE
PREFERRED STOCK AND STOCKHOLDERS`
EQUITY (DEFICIT)
Current liabilities
Accounts payable $30,228 $10,628
Payable to related parties 16,667 13,687
Accrued employee compensation 2,473 3,375
Other accrued liabilities 26,949 29,419
Deferred revenue 1,168 5,059
Income taxes payable 1,171 934
Borrowings under line of credit 8,000 -

Note payable to Nortel Networks 14,023 13,294
Total current liabilities 100,679 76,396
Redeemable convertible preferred stock $-- $48,039 $48,052

Stockholders` equity (deficit)
Common stock 20
Additional paid-in capital 61,184 13,165 12,810
Deferred stock-based compensation (4,573) (4,573) (4,997)
Accumulated deficit (25,295) (25,295) (38,410)
Total stockholders` equity (deficit) $31,336 (16,703) (30,597)

Total liabilities, redeemable
convertible preferred stock and
stockholders` equity (deficit) $132,015 $93,851


(1) Amounts as of December 31, 2002 are derived from audited financial
statements as of that date






--------------------------------------------------------------------------------
Source: NETGEAR Inc.
NETGEAR First to Small Business Market with Security-Rich Wireless 802.11g Firewall Router with Print Server
Monday September 22, 8:30 am ET
FWG114P ProSafe 802.11g Wireless Firewall Incorporates Router, Switch, USB Print Server, and Access Point, for All Cable, DSL, ISDN and Analog Modem Internet Connections


SANTA CLARA, Calif., Sept. 22 /PRNewswire-FirstCall/ -- NETGEAR, Inc., (Nasdaq: NTGR - News) a worldwide provider of technologically advanced, branded networking products, today announced the launch of the FWG114P ProSafe 802.11g Wireless Firewall with USB Print Server, a powerful feature-packed all-in-one business-class wired and wireless networking solution designed to meet the demanding flexibility and security requirements of small businesses. Compliant with the IEEE 802.11g wireless standard, the FWG114P enables the wireless support of bandwidth-intensive applications such as video streaming, large file transfers and video conferencing.

The full-featured FWG114P networking solution enables companies to easily connect to a broadband Internet connection to establish and maintain a secure Ethernet-based and wireless network for sharing Internet access, printers and other network resources. The FWG114P combines a router, four-port 10/100 switch, 802.11b/g compliant 54Mbps wireless access point, USB print server, an SPI firewall, and advanced industry-standard wireless security features soon to include Wi-Fi Protected Access (WPA), via a free firmware upgrade, making it one of the most secure, complete networking products available for small businesses.

"Networking solutions targeted at fulfilling the needs of growing small businesses require a unique blend of flexibility, functionality and security," explained Lianne Caetano, Product Line Manager at NETGEAR. "Small businesses need their network infrastructures to be cost-effective, easy-to-manage, secure, and able to accommodate rapid growth, because they don`t typically have large IT budgets and dedicated network administrators. The FWG114P is a powerful all-in-one wired and wireless networking solution for small businesses that incorporates a powerful business-class security suite and includes NETGEAR`s browser-based Smart Wizard for ease-of-installation and management."

NETGEAR`s feature-rich ProSafe 802.11g Wireless Firewall with USB Print Server also incorporates an RS-232 serial port to accommodate many popular ISDN or analog modems. With the ability to add an ISDN or analog modem, users can have Internet access where cable or DSL service is not available or simply use the additional modem for an automatic fail-over backup connection. Available via a future firmware upgrade, the serial port can also support single-user remote access server (RAS) functionality, enabling a remote user to access resources on the LAN.

A powerful detachable 5dBi antenna optimizes wireless performance and is compatible with NETGEAR`s line of antennas and accessories. Easy-to-install and manage, the FWG114P includes the browser-based Smart Wizard Install Assistant, which automatically detects the ISP connection type and guides users through each step of the installation process.

The secure FWG114P incorporates a host of security features including Wi-Fi Protected Access (WPA) available via a free firmware upgrade (expected December 2003), Stateful Packet Inspection (SPI) firewall, Network Address Translation (NAT), Denial of Service (DoS) attack protection, intrusion detection, 40/64 and 128-bit WEP encryption, and Virtual Private Network (VPN) pass-through.

The NETGEAR FWG114P ProSafe 802.11g Wireless Firewall with USB Print Server is backed by a three-year warranty and 24/7 technical support, and is scheduled for release in October 2003 via leading retailers, direct marketers, e-commerce sites, and value-added resellers at a list price of $276.

About NETGEAR, Inc.

NETGEAR designs technologically advanced, branded networking products that address the specific needs of small business and home users. The Company`s suite of approximately 100 products enables users to share Internet access, peripherals, files, digital multimedia content and applications among multiple personal computers and other Internet-enabled devices. NETGEAR is headquartered in Santa Clara, Calif. For more information, visit the company`s Web site at www.netgear.com or call 408-907-8000.

NOTE: NETGEAR is a registered trademark of NETGEAR, Inc. in the United States and other countries.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 for NETGEAR, Inc.:

Various matters set forth in this press release, such as statements relating to the expected performance characteristics, specifications, market acceptance, market growth, specific uses and market position of NETGEAR, Inc. and its products and technology are forward-looking statements. These statements are subject to risks and uncertainties, including without limitation, the price/performance requirements of customers, the ability of NETGEAR to sell products incorporating the technology, the impact and pricing of competing technologies, the introduction of alternative technological solutions, and other risks detailed from time-to-time in NETGEAR`S SEC filings and reports.

(Logo: http://www.newscom.com/cgi-bin/prnh/20030730/NETGEARLOGO )



--------------------------------------------------------------------------------
Source: NETGEAR, Inc.
Netgear CEO eyes Cisco competition
Patrick Lo steers former Nortel unit toward growth

By Steve Gelsi, CBS.MarketWatch.com
Last Update: 2:40 PM ET Sept. 29, 2003

NEW YORK (CBS.MW) - Netgear went public at $14 per share on July 31 as one of the few debutantes from the technology sector to stage an initial public offering in 2003. The stock is now trading at $16.40.


Netgear (NTGR: news, chart, profile) was spun off into a separate company in 2000 after operating as a unit of Nortel (NT: news, chart, profile).

A specialist in networking equipment for wireless Internet access, Netgear went public after posting net income in the first quarter of $1.6 million, nearly double the year-ago level.

More recently, Netgear reported second-quarter earnings of $11.5 million, including a gain of $9.8 million from the reversal of a deferred tax valuation allowance. Revenue jumped 24 percent to $69 million.

It`s part of a small crop of successful and mostly profitable tech IPOs in 2003, including Sigmatel (SGTL: news, chart, profile), Intervideo (IVII: news, chart, profile), Ipass (IPAS: news, chart, profile), Formfactor (FORM: news, chart, profile) and AMI Semi (AMIS: news, chart, profile).

Netgear is facing competition from Cisco, which bought networking firm Linksys for $500 million back in March. See full story.

Netgear CEO Patrick Lo, 46, helped found the company in 1996. Lo has also worked for Bay Networks, and Hewlett Packard. He holds a B.S. degree in Electrical Engineering from Brown University.

Q. CBSMW: This hasn`t exactly been a warm year for IPOs. Why did you decided to go public now?

A. Lo: I think that the market is attractive in the sense that you don`t that much competition when it`s not too warm. But it is lukewarm enough that there is enough demand out there, so with ourselves, we set some goals before we decided to go or not. First, the indexes have to go up for about 13 weeks straight; and second, the inflow of equity funds must go back into the equity market; and third, there is at least a few other tech IPOs to go together with us. Those are the three conditions we set for ourselves for the right time to go out.

Q. CBSMW: So it wasn`t the best time for an IPO, but it met your criteria. So you`re happy with it so far?

A. Lo: We`re very happy with the public offering and thanks to the investors` confidence and support in us, we are able to raise about $110 million for the company, and after all the fees, we still have a pretty good cash cushion that will help us to go forward on a steep growth curve.

Q. CBSMW: Unlike in the past, you didn`t need the IPO cash to stay in business, because you`re generating net income, right?

A. Lo: In 2002, we generated about $10 million in cash. On the other hand, with that $10 million generated, plus what we had before, we only had $20 million cash in the bank, and we figured this year we`d generate another $10 or $15 million. However, we calculated with that we can only grow 20 to 25 percent with that cash, so we think there might be opportunities that we can grow faster, but without cash we cannot do that.

Q. CBSMW: So the cash would enable you to make acquisitions and grow faster that way?

A. Lo: That certainly is one avenue of applying the cash, but even for organic growth, when you grow your business, you have to handle accounts receivable, you have to handle purchase of materials that will require cash to fund the growth. And furthermore, our suppliers, which are subcontract manufacturers in southern China, will always look at how much cash we have when they sell so much stuff to us. When we have too little cash, they`ll demand more in the form of credit insurance and that will cost us more money.

Q. CBSMW: You did go out on your road show like any other company that goes public. This is your chance to air out your company for Wall Street. What did they like about the company and what was their biggest concern with the company?

A. Lo: I think what they liked about the company is that we`re the only to-be-publicly traded company with a 100 percent focus on the fastest growing home and small business home networking market, with a heavy emphasis on Wi-Fi. That was the good thing they liked because the growth is going to continue for a long time. The things that they think would be a challenge for us is that we`re fighting with the behemoth of the industry, Cisco.

Q. CBS MW: Yes, Cisco bought Linksys. And now they`re going up against you . . . maybe that is a concern. How do you address that?

A. Lo: I think there`s a good side and a bad side of it. On the good side, Cisco is validating the market. It`s telling the whole world that this is indeed a very attractive market -- so attractive that they want to come in and they pay a price, a huge price for it. Then, certainly the challenge is now you have to compete with Cisco, but we figured that the market is big enough that`ll accommodate two three or even four profitable, fast-growing companies. I actually welcome Cisco because it`ll help us keep us on our toes, to always be competitive, bring out the latest and the greatest to our customers. The end benefit will be the customers.

Q. CBS MW: You mentioned the home user, small business and Wi-Fi systems. Breaking that out, where do you see the most potential for Netgear?

A. Lo: We traditionally sell about 60 percent of our products to the office users, be it home office or small businesses, and the other 40 percent to the pure consumer home users. We believe the growth potential in the short-term will be the home consumer users, which are growing at a faster clip. The other side is still growing at 10 percent a year. We believe that once the economy picks up as we`re seeing it now, then that side of home office will match the consumer growth as well.

Steve Gelsi is a reporter for CBS.MarketWatch.com in New York.
NETGEAR First to Market with Wireless 802.11g USB 2.0 Adapter
Wednesday October 1, 8:30 am ET
Easy-to-Install NETGEAR WG121 USB Wireless Adapter First to Support Both 802.11g and USB 2.0 to Deliver 54Mbps Wireless Speeds


SANTA CLARA, Calif., Oct. 1 /PRNewswire-FirstCall/ -- NETGEAR, Inc., (Nasdaq: NTGR - News) a worldwide provider of technologically advanced, branded networking products, today announced the launch of the NETGEAR WG121 54Mbps Wireless USB 2.0 adapter. Compliant with the IEEE 802.11g wireless standard, the WG121 easily connects laptop or desktop personal computers wirelessly to office or home networks and to the Internet. It is the first solution to combine USB 2.0 technology and 802.11g wireless speeds, enabling users to realize the 54Mbps benefit of 802.11g.
ADVERTISEMENT


The WG121, which augments NETGEAR`s expansive offering of 802.11g-compliant network hardware, delivers faster wireless network access to desktop or notebook PCs at speeds up to five times faster than 802.11b. Compatible with 802.11b and 802.11g networks, the WG121 enables network connectivity at up to 40 times faster than USB 1.1 when connected to a PC`s hot-swappable USB 2.0 port. Utilizing new antenna technology to deliver greater range, the WG121 provides home and small business users with an easy-to-install, portable, high-speed wireless networking solution.

"NETGEAR is once again leading the industry with the introduction of the first available 802.11g-compliant USB 2.0 adapter," stated Kartik Gada, Product Line Manager at NETGEAR. "Consumers and business users are increasingly turning to NETGEAR for reliable, high-performance, easy-to-use networking solutions. The WG121 is an easy-to-install, affordable, versatile network adapter that enables users to take full advantage of 54Mbps 802.11g wireless speeds with USB 2.0 port on the PC."

Incorporating NETGEAR`s Smart Wizard install assistant for ease-of-installation and management, the WG121 54Mbps Wireless USB 2.0 adapter features new antenna technology to provide superior range above previous generation 802.11b adapters. Housed in a sleek NETGEAR platinum case, the WG121 supports Microsoft Windows® 98, ME, 2000 and XP, and comes standard with a five foot USB cable to optimize signal strength and performance.

Backed by a one-year warranty and 24/7 technical support, the NETGEAR WG121 54Mbps Wireless USB 2.0 Adapter is expected to be available in October 2003 via retailers, direct marketers, and e-commerce sites, at a retail price of around $79.95.

About NETGEAR, Inc.

NETGEAR designs technologically advanced, branded networking products that address the specific needs of small business and home users. The Company`s suite of approximately 100 products enables users to share Internet access, peripherals, files, digital multimedia content and applications among multiple personal computers and other Internet-enabled devices. NETGEAR is headquartered in Santa Clara, Calif. For more information, visit the company`s Web site at www.netgear.com or call (408) 907-8000.

NOTE: NETGEAR is a registered trademark of NETGEAR, Inc. in the United States and other countries.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 for NETGEAR, Inc.:

Various matters set forth in this press release, such as statements relating to the expected performance characteristics, specifications, market acceptance, market growth, specific uses and market position of NETGEAR, Inc. and its products and technology are forward-looking statements. These statements are subject to risks and uncertainties, including without limitation, the price/performance requirements of customers, the ability of NETGEAR to sell products incorporating the technology, the impact and pricing of competing technologies, the introduction of alternative technological solutions, and other risks detailed from time-to-time in NETGEAR`S SEC filings and reports.

(Logo: http://www.newscom.com/cgi-bin/prnh/20030730/NETGEARLOGO )



--------------------------------------------------------------------------------
Source: NETGEAR, Inc.
http://www.forbes.com/2003/08/19/cx_ah_0819tentech.html


Ten O`Clock Tech
Wireless Networking Gets Easy
Arik Hesseldahl, 08.19.03, 10:00 AM ET

NEW YORK - If you think you`d benefit from the installation of a home network that connects several computers to a broadband Internet connection, but have resisted because you think it`s going to be an oppressively complicated task, that excuse is quickly evaporating.

While the costs for home routers--the device that lets a DSL or cable modem be shared by more than one computer at a time--have gone down to levels that make them less prohibitive, the technical knowledge needed to install them has dropped as well.


If you`re still wary, then perhaps the right product can change your mind. We recently tried out the latest wireless home router from Netgear (nasdaq: NTGR - news - people ). It`s the WGR614, and it bears the same metallic silver casing of many other Netgear products, but there`s also a conspicuous black antenna rising from the back.

It`s a router that will look at home on a desktop not far from your monitor. Its strength is that it`s both extremely easy to install and flexible.

Installation was a ridiculous snap. Once we made the right connections--connecting the DSL modem to the router, then the router to the PC--we opened a Web address that brought up a configuration window in the PC`s Web browser. A simple step-by-step process included the router automatically detecting the type of DSL connection we were using--and then making the necessary configurations. Then we changed the default user name and password, and within minutes the router was connected to the Internet and we were surfing away like nothing had changed, feeling oddly like we had missed some complicated step in the process. But we hadn`t.

We initially installed the router using an Apple (nasdaq: AAPL - news - people ) PowerMac G4 running Mac OS X, but we also connected a Windows-based notebook and another Mac, this one a Powerbook also running OS X, to the router via Ethernet cables. The router has four Ethernet ports and supports Unix and Linux systems.

But it also supports the wireless networking standard known as IEEE 802.11g, which is the latest step in the evolution of Wi-Fi wireless networking. In case you missed it, Wi-Fi lets you cut the cord you`ve heretofore used to reach the Internet and access your fast connection from the far side of the house without need for an extra cord to maintain the connection.

You`ll remember the first Wi-Fi standard was initially known as IEEE 802.11b. The G standard has a faster maximum data transmission speed--54 megabits per second--than the B standard, which topped out at 10 MB per second. But it`s backward-compatible with the B standard, meaning that a router or other access point that uses the G standard can also support a notebook outfitted for the B standard, but only at the slower speed. The faster speed is making PC cards that support the G standard a popular add-on device for notebooks, and Netgear is among those offering them.

The router also has a handful of interesting features aimed at home users, particularly parents who want to keep a close eye on the activities their kids engage in while using the Internet. The same Web screen we called up to set up the router also allows access to a series of administrative options that, among other things, includes turning Wireless access on and off, blocking certain URLs, keeping logs of network activity and creating e-mail alerts that let you know when Junior is trying to do something he shouldn`t.

With a price range of $95 to $150 depending on who you buy it from, there`s little argument against using a Netgear product as your first entry into the world of home networking. Its ease of use and wide support for mixed-computing environments makes it a solid choice for the first-timer and the seasoned home networker with simple needs.

Certainly, the company`s reputation for solid products didn`t hurt when it did something unusual for tech companies these days: It went public. Its debut on the Nasdaq exchange on July 31 raised $98 million, and its stock price closed more than 26% above its opening. It turned a profit in its first quarter of 2003 of $1.6 million on sales of $67.7 million. The company launched in 1996 as a division of Bay Networks, and then became part of the Canadian telecom concern Nortel Networks (nyse: NT - news - people ), which spun it off in 1998. It went on to report $237 million in sales last year. Years ago, home networking was a technical curiosity meant only for those with the patience and the cash to undertake it. Now, as if the point needed any more emphasis, Netgear has proved it`s finally for the masses.
http://news.com.com/2008-7351-5087307.htmlThe story behind Wi-Fi
Last modified:October 7, 2003, 4:00 AM PDT
By Richard Shim
Staff Writer, CNET News.com




When he hears some people fret over the future of wireless networking and hot-spot service, NetGear CEO Patrick Lo can`t understand all the fuss.
Some of the details may have been different, but Lo recalls that similar concerns surfaced when automatic teller machines debuted. In his mind, it`s just a matter of time before all the pieces fall into place for Wi-Fi.





Wi-Fi will reign, but cooperation is needed
John Little, CEO, Portal Software
Even as Wi-Fi moves beyond the early adopter set, questions linger about price, security and service. Lo`s answer is that gear manufacturers and chipmakers will come up with faster, less expensive and more capable products, a trend he says will lead to the integration of wireless technology in every new device. Lo also sees a market for retrofitting older devices, such as TVs and radios, with Wi-Fi capabilities. He spoke with CNET News.com, offering a hardware maker`s perspective on the industry`s march toward an untethered future and what it will mean to users.

NetGear is a networking company that sells everything from switches to networking power plugs. But Wi-Fi is getting the attention these days. How significant is it to your business?
In the next 18 to 24 months, it will probably permeate 60 to 70 percent of our products.

How are things changing on the ground?
When Wi-Fi first started, it was just about cards that plugged into your PC and then access points. Then Wi-Fi moved into routers, firewalls and switches. It will become a standard feature. You used to have to pay extra for an Ethernet card, a 56K modem, a DVD drive. Over the years, all of those things became standard features that came with a PC. The same will happen with Wi-Fi. Eventually all digital devices will have to be connected to the Internet. We`re talking about MP3 players, basically anything with digital media, whose use is growing every day.

How do you see the sequence unfolding?
All PCs need to be able to be connected to the Internet--either through a wired or wireless means. We`re pretty far along already. Today you practically cannot buy a PC--unless you want something really dirt cheap, and even then you have to make an effort to find one of those--that does not have a wired connection to the Internet. Now the wave is starting to outfit every PC with a wireless connection to the Internet as well. That`s where the revolution is starting.

So it starts off with the PC and then it will move onto other devices. As an equipment maker, are you looking at those other opportunities?
Absolutely. For example, today we provide Wi-Fi connections both to a PC as well as to a PDA, and you`re starting to see PDAs with Wi-Fi built in. That`s a trend (integrating Wi-Fi into devices) that is going to be accelerated. And then naturally we do a lot of business retrofitting installed PDAs and installed PCs.

There are two things we think are going to happen. The newer digital devices--I`ve already seen some models like high-definition digital Wi-Fi became big over the last 18 months because the price dropped.
TVs in Japan--will come with Wi-Fi. You could see it because you know TV and cable are going digital so you know those are going to have Wi-Fi built in. That can similarly be said for Internet radios, which are digital devices that not only can receive broadcast channels, they can also receive digital channels from the Internet. This is a new generation of digital devices, which will come with built-in Wi-Fi.

But again, there`s a huge retrofit market. You could retrofit back for digital devices, such as gaming consoles, TVs and ordinary radios, using a digital media adapter so you can retrofit the old analog devices to connect to the Internet. We believe that will become big next year.

What do you think is responsible for Wi-Fi becoming so popular, so fast?
Wireless has always been the preferred choice for connections because it`s flexible and easy to install. The phone is a good example. The phone started off wired, but now most people have a cordless phone in their home. People don`t just sit around. They move around and you want to connect with people that move around, so you must have a way of connecting flexibility to a moving subject. What prevented it from happening earlier was technology and price.

And why now?
Wireless LANs have been around for 20 years but did not become big until it got easy to use and affordable, just like with PCs. Wi-Fi became big over the last 18 months because the price dropped. That`s because chip prices came down as makers came up to challenge Lucent, which was the main Wi-Fi source. Two and a half years ago, Intersil entered the market, and that`s when a second source of chips became available. Then, of course, many others entered and prices dropped. The second reason is Wi-Fi finally became easy to use because system vendors like us and our worthy competitor Linksys made the set up of Wi-Fi easy. So when the two converged, things just took off.

That is a good history of Wi-Fi, but what`s the future?
We need to focus on ease of use and the continued increase in the price performance curve. That doesn`t necessarily mean dropping the price all the time because you get to a point where that isn`t possible anymore. But you can improve what it does. Wi-Fi is evolving from "b" to "g" to "super g," so from 11 megabits to 54 megabits to 108 megabits per second. But that`s not the end of it--you will continue to see higher speeds and more features.

One popular theory is that the more devices out there, the greater the possibility for hot-spot service to take off. What`s your take?
Hot spots are the best thing on earth. The question is whether people willing to pay for that service.
Hot spots are the best thing on earth. The question is whether people willing to pay for that service. Psychologically, it will be difficult for people to get over the hump in terms of paying for it. People must continue to experiment to figure out what is the right model for getting people to pay.

I like to compare them to ATMs. People said, "Why should I pay to get my own money?" It was ridiculous, and the banks, 20 years ago, realized you just can`t be competitive without ATM service. So over the years banks changed their views on ATMs. They were free, and then they charged for them, and then they were free again.

Now banks look at ATMs as a necessary customer-enhancing service to attract and retain customers, while other people are willing to spend $20,000 to $30,000 for a machine so they can to stick it in a grocery store and make a killing on charging fees. The industry found equilibrium, where ATMs would be a customer retention tool for some, while in other places people charged.

And you see the parallel with hot spots?
It`s the same scenario. The industry just has to find the right balance to get there. Along the way there will be those that can`t hit it and fold and others that will hit it and survive. It`s just like e-commerce. Some people asked, who can make money out of e-commerce? Guess what? Some people did, and there were a lot of companies that ended up as road kill along the way.
http://www.lightreading.com/document.asp?doc_id=38711&site=l…

Gartner: Ethernet Switch Market Slips

--------------------------------------------------------------------------------

STAMFORD, Conn. -- As enterprises remain cautious with their IT budgets, the Ethernet switch market continues to struggle. Worldwide Ethernet switch port shipments totaled 37.4 million units in the second quarter of 2003, a 2.6 percent decline from the second quarter of 2002, according to preliminary results by Gartner, Inc. (NYSE: IT and ITB). Worldwide Ethernet switch vendor revenue declined 15 percent from a year ago, to $2.3 billion.

"Despite new features such as enhanced security and Power over Ethernet, vendors that play in the enterprise market are facing challenges in selling upgrades to their installed bases," said Rachna Ahlawat, principal analyst for Gartner`s Enterprise Networking and Communications Worldwide group. "The lack of adoption of Gigabit Ethernet to the desktop, despite significant price reductions, indicates that increased speed will not lead the market out of its doldrums in 2004."

Cisco Systems continued to dominate the market in the second quarter of 2003, claiming 70.6 percent of worldwide Ethernet switching revenue (see Table 1) and 37.7 percent of port shipments (see Table 2). Hewlett-Packard was the only top-tier vendor to post positive growth in both revenue and port shipments.


Table 1: Preliminary Worldwide Ethernet Switching Vendor Revenue Estimates for 2Q03 (Millions of Dollars)

Company 2Q03 Revenue 2Q03 Market Share (%) 2Q02 Revenue 2Q02 Market Share (%) Growth (%)
Cisco 1,649.7 70.6 1,910.0 69.4 -13.6
Nortel 97.5 4.2 120.5 4.4 -19.0
3Com 93.4 4.0 119.5 4.3 -21.8
Hewlett-Packard 78.3 3.3 51.1 1.9 53.2
Extreme 74.4 3.2 91.0 3.3 -18.2
Others 344.7 14.7 461.1 16.7 -25.2
Total 2,338.0 100.0 2,753.2 100.0 -15.0
Source: Gartner Dataquest (August 2003)



The consumer and government segments were key growth areas in the second quarter of 2003. SOHO switch sales remained strong, evident by an increase in port shipments by D-Link and Netgear. Gartner analysts said highly competitive pricing appears to be driving demand of low-end switches.


Table 2: Preliminary Worldwide Ethernet Switching Vendor Port Shipments Estimates for 2Q03 (Thousands of Units)

Company 2Q03 Shipments 2Q03 Market Share (%) 2Q02 Shipments 2Q02 Market Share (%) Growth (%)
Cisco 13,952.2 37.7 14,127.9 36.7 -1.3
D-Link 4,713.6 12.7 3,708.7 9.6 27.1
Netgear 4,413.6 11.9 3,057.7 7.9 44.3
3Com 4,282.0 11.6 4,097.0 10.7 4.5
Hewlett-Packard 2,367.4 6.4 1,784.4 4.6 32.7
Others 7,716.3 20.6 11,656.3 30.3 -33.8
Total 37,444.6 100.0 38,432.0 100.0 -2.6
Source: Gartner Dataquest (August 2003)



"The second-quarter results make a second-half upturn less likely, and Ethernet switching vendors should carefully plan out their activities for the second half of 2003," Ahlawat said. "Vendors must also prepare themselves to respond to possible rapid changes in demand and strengthen their position in some of the verticals, such as education, government, and healthcare, where the demand for networking equipment has increased."

Additional information is available in the Gartner Dataquest Alert "Ethernet Switches Market Remains Weak in 2Q03." This Alert examines the state of the worldwide Ethernet switch industry. It also looks at what trends are developing and how the top-tier vendors are performing. This report can be purchased on Gartner`s Web site at www.gartner.com/DisplayDocument?id=406866&ref=g_search.

These results are preliminary. Final statistics will be available soon in a detailed market statistics report broken out by business size, technology segment and a separate section on Gigabit and 10 Gigabit Ethernet. This report can purchased on Gartner`s Web site at www.gartner.com.

This analysis is provided by Gartner`s Worldwide Telecommunications and Networking group. This group provides an analysis for the full spectrum of telecom and networking issues. To keep up to date on the latest telecommunications issues, visit Gartner`s Telecommunications Focus Area at www.gartner.com/telecom-mkt. To purchase reports or subscribe to Gartner programs, call 408-468-8000 or go to www.gartner.com.
NETGEAR and Mediabolic Team to Introduce Next Generation Entertainment Networking Solutions
Tuesday October 28, 8:32 am ET
NETGEAR Networking Products Integrating Mediabolic M1 Platform to Offer Simpler and Easier Solutions for Digital Entertainment


SANTA CLARA, Calif., Oct. 28 /PRNewswire-FirstCall/ -- NETGEAR, Inc. (Nasdaq: NTGR - News), a worldwide provider of technologically advanced, branded networking products, and Mediabolic, a leader in networked entertainment software, today announced they are teaming to introduce next generation entertainment networking solutions. The co-developed products, based on NETGEAR`s networking technologies and Mediabolic`s M1 Entertainment Operating Platform, will enable broadband Internet households to access digital media anywhere in the home and will make distributing digital entertainment from the home network or streaming from the Internet simpler, easier, and more affordable than products currently on the market.
ADVERTISEMENT


"With the increasing availability of legal entertainment content on the Internet, NETGEAR believes the time is ripe to provide simpler, easier, and more affordable networked entertainment solutions that can wirelessly connect to the home network and play digital media anywhere in the house," says Vivek Pathela, Director for Home Products at NETGEAR, Inc. "NETGEAR is pleased to work with Mediabolic to make our vision of the connected home a reality for consumers."

With the Mediabolic M1 Platform integrated into NETGEAR`s new networking solutions, customers will be able to access digital entertainment, as well as live Internet streaming, to play in different locations throughout their homes and on their existing consumer electronic components. Mediabolic software offers automatic device recognition and communication technologies and leverages industry standards including the Digital Home Working Group and Universal Plug and Play(TM). NETGEAR and Mediabolic expect their first entertainment networking solution to be available to customers in December, just in time for the Holiday season.

"Mediabolic is very excited about working with NETGEAR, a leading provider of networking solutions," said Daniel Putterman, CEO of Mediabolic. "NETGEAR understands the market for networking technologies along with the needs of customers for easy to use and affordable solutions. Having the opportunity to work with NETGEAR on the entertainment networking solutions in their already extensive product lineup is a huge win for Mediabolic as well as for consumers."

About NETGEAR, Inc.

NETGEAR designs technologically advanced, branded networking products that address the specific needs of small business and home users. The Company`s suite of approximately 100 products enables users to share Internet access, peripherals, files, digital multimedia content and applications among multiple personal computers and other Internet-enabled devices. NETGEAR is headquartered in Santa Clara, Calif. For more information, visit the company`s Web site at www.netgear.com or call 408-907-8000.

NOTE: NETGEAR is a registered trademark of NETGEAR, Inc. in the United States and other countries.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 for NETGEAR, Inc.:

Various matters set forth in this press release, such as statements relating to the expected performance characteristics, specifications, market acceptance, market growth, specific uses and market position of NETGEAR, Inc. and its products and technology are forward-looking statements. These statements are subject to risks and uncertainties, including without limitation, the price/performance requirements of customers, the ability of NETGEAR to sell products incorporating the technology, the impact and pricing of competing technologies, the introduction of alternative technological solutions, and other risks detailed from time-to-time in NETGEAR`S SEC filings and reports.

About Mediabolic, Inc.

Mediabolic is a privately held company providing an embedded software platform for consumer electronics products, PCs and PC peripherals. The middleware leverages patent-pending technology and open industry standards to create and extend consumer entertainment devices. The software operates both in new and traditional categories of consumer electronics products. The modular platform is compatible with a wide variety of operating systems and chipsets. Founded in 1999, Mediabolic is based in San Francisco, CA.




--------------------------------------------------------------------------------
Source: NETGEAR, Inc.
NETGEAR Reports Strong Third Quarter 2003 Results
Tuesday October 28, 4:03 pm ET
- 18% Revenue growth year over year to $75.8 million - Pro forma net income increases to $2.4 million from $1.5 million pro forma net income in prior year; up 62% - Pro forma diluted EPS at $0.08


SANTA CLARA, Calif., Oct. 28 /PRNewswire-FirstCall/ -- NETGEAR, Inc. (Nasdaq: NTGR - News), a worldwide provider of technologically advanced, branded networking products, today reported financial results for the third quarter ended September 28, 2003.
ADVERTISEMENT


Net revenue for the third quarter ended September 28, 2003 increased 18% or $11.4 million to $75.8 million, compared to $64.4 million for the quarter ended September 29, 2002. Revenue increased approximately 10% over the prior quarter of 2003 due to a strong increase in demand for Ethernet switching, broadband and wireless products. Reported net revenue in North America grew 8% to $46.2 million in the third quarter of 2003, compared to $42.8 million in the second quarter of 2003. Sales in North America were buoyant due to strong back-to-school seasonal promotions with the Company`s resellers in the retail and e-commerce channels. The Europe, Middle East and Africa (EMEA) region achieved sequential net revenue growth of over 27% to $24.2 million in the third quarter of 2003 compared to $19.0 million in the second quarter of 2003, which the Company believes is due to significant market share gains. As expected, revenue derived from other regions, including the Asia Pacific, declined 25% sequentially to $5.4 million in the third quarter of 2003, compared to $7.2 million in that region`s seasonally strong second quarter. Separately, the Company grew worldwide sales derived from the carrier channel due to increased shipments to Time Warner Cable in the U.S. and Telewest in the UK. In addition, initial shipments to Comcast in the U.S. started during the second half of the third quarter.

Net loss computed in accordance with United States Generally Accepted Accounting Principles, or GAAP, for the third quarter ended September 28, 2003 was $4.0 million, as compared to net income of $2.3 million for the quarter ended September 29, 2002. The Company had a net loss per basic and diluted share of $0.15 for the third quarter of 2003, as compared to net income of $0.12 per basic share and $0.10 per diluted share in the third quarter of 2002. Pro forma net income, which excludes certain charges described below, for the third quarter ended September 28, 2003 was $2.4 million, a 62% increase over the pro forma net income of $1.5 million for the quarter ended September 29, 2002. Pro forma net income per share was $0.09 per basic share and $0.08 per diluted share in the third quarter of 2003, compared to $0.07 per basic and diluted share in the third quarter of 2002. The pro forma net income for the third quarter of 2003 excludes the impact of an extinguishment of debt charge of $5.9 million and non-cash stock-based compensation expense of $516,000. The third quarter of 2002 pro forma net income excludes the impact of a $1.1 million benefit from net operating loss tax carry forwards (NOL`s) utilized during the quarter and non-cash stock-based compensation expense of $262,000. The accompanying statements of operations provide a reconciliation of our net income (loss) computed on a GAAP basis to our net income computed on a non-GAAP, or pro forma, basis.

Unit shipments in all product categories, Ethernet switching, wireless, and wired routers and gateways, grew sequentially from the second quarter 2003 to the third quarter 2003. Ethernet switching products, primarily for small businesses grew 16% sequentially in units, and wireless products, including wireless cards, access points, routers, firewalls and home gateways, grew 25% sequentially in units. Wireless shipments increased from 628,000 nodes in the second quarter 2003 to nearly 800,000 nodes in the third quarter 2003. As expected, unit shipment growth of wired routers and firewalls was up 7% sequentially because of the ongoing accelerated adoption of more popular wireless technologies.

Patrick Lo, Chairman and Chief Executive Officer of NETGEAR, commented, "This was another strong quarter based on revenue and pro forma net income, new product introductions and increased channel penetration. Growth in the U.S. was driven by robust back-to-school seasonal demand, promotions and increased network infrastructure spending, along with an accelerated consumer adoption of wireless technologies. In Europe, our growth came from competitive market share gains due to our attractive consumer and small-business product offerings and strength of our distribution and retail networks. Finally, we expect to gain momentum in the Asia Pacific region as we leverage our partner relationships to penetrate these attractive, fast growing markets."

During the third quarter of 2003, NETGEAR introduced 12 new products. Among them were two powerful new Ethernet switches for the small business market. One switch enables businesses to manage their networks via simple screens on their preferred web browser. The other product is a 12-port Gigabit Layer 3 switch, which augments NETGEAR`s 24 port offering introduced in the second quarter 2003. NETGEAR also introduced four industry first home products: a 108Mbps wireless 802.11g router and card, a USB 2.0 54Mbps wireless 802.11g card, and a DSL II modem gateway. The Company has already experienced strong demand for all four of these products and believes these products will contribute significantly to its future revenue growth.

Jonathan Mather, Chief Financial Officer of NETGEAR, said, "We continue to achieve impressive growth in profitability, notwithstanding increased marketing and tech support costs related to our higher revenue base and additional expenses related to operating as a newly public company. Importantly, our gross margin reached 27.8% in the third quarter from 27.6% in the second quarter and from 25.1% in the year ago third quarter. Our balance sheet is strong with $75.7 million in cash and cash equivalents as of the end of the quarter, providing us the resources to execute upon the growth opportunities in front of us. We continue to manage our inventory closely, with quarter ending inventory at $33.4 million, representing 6.5 turns, compared to $40.2 million and 5 turns at the end of the second quarter. Day`s sales outstanding (DSO`s) increased slightly from 69 days in the second quarter to 71 days at the end of the third quarter due to the non-linearity of shipments experienced during the quarter. Channel inventory has been reduced in the third quarter from prior quarter, to 3.5 weeks in the U.S. distribution channel and 7.8 weeks in the U.S. retail channel."

Total operating expenses were 23% of net revenue in the third quarter of 2003, as compared to 21% of net revenue in the third quarter of 2002. Sales and marketing expenses increased to 16.4% of net revenue in the third quarter of 2003, from 13.1% of net revenue for the third quarter of 2002. The increase in sales and marketing expenses as a percentage of net revenue is due to additional channel and promotion activities in the third quarter of 2003, including joint print and TV advertising with retail stores. Research and development expenses decreased to 2.7% of net revenue for the quarter ended September 28, 2003, as compared to 3.7% of net revenue for the quarter ended September 29, 2002. While the spending for research and development has decreased as a percentage of net revenue, the Company continues to support new product developments, such as the following: Layer 3 switches, Gigabit switches, secured wireless and firewalls, 108Mbps wireless and home entertainment device network adapters.

Looking forward, Mr. Lo added, "We are entering the seasonally strong fourth quarter with high confidence in our outlook. Based on very positive initial bookings from our channel partners, we believe our current momentum will continue through the fourth quarter. Specifically, we expect revenues for the quarter ending December 31, 2003 will be in the range of $79 million to $81 million and operating income in the range of 5.8% to 6.2%."

Investor Conference Call / Webcast Details

NETGEAR will review third quarter 2003 results and discuss management`s expectations for the fourth quarter of 2003 and current views of the industry today, October 28, 2003, at 5PM EST. The conference call-in will be available at www.netgear.com and by telephone at 973-582-2745. A replay will be available from 8PM EST on October 28 through midnight EST on Tuesday, November 4 at www.netgear.com and by telephone at 973-341-3080. The confirmation identification for both the live call and the replay is 4222124.

About NETGEAR Inc.

NETGEAR designs technologically advanced, branded networking products that address the specific needs of small business and home users. The Company`s suite of approximately 100 products enables users to share Internet access, peripherals, files, digital multimedia content and applications among multiple personal computers and other Internet-enabled devices. NETGEAR is headquartered in Santa Clara, Calif. For more information, visit the company`s Web site at www.netgear.com or call 408-907-8000.

(Logo: http://www.newscom.com/cgi-bin/prnh/20030730/NETGEARLOGO )
NOTE: NETGEAR is a registered trademark of NETGEAR, Inc. in the United States and other countries.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 for NETGEAR, Inc.:

This release contains forward-looking statements. The forward-looking statements represent NETGEAR, Inc.`s expectations or beliefs concerning future events and include statements, among other, regarding NETGEAR`s expected revenues and earnings, anticipated momentum in the Asia Pacific region, and revenues expected to result from sales of our new product offerings. These statements are subject to risks and uncertainties. For example, our revenues could be less than expected if demand for our products is less than anticipated, we are unable to manufacture and distribute our products, or we are unable to collect receivables as they become due. Our earnings depend upon our revenues, as well as our ability to manage our costs, including the cost of developing new products and manufacturing and distributing our existing offerings. Other factors that could affect our forward-looking statements include without limitation, demand for our products, including our new 802.11g offerings, the price/performance requirements of customers, the ability of NETGEAR to sell products incorporating the technology, the impact and pricing of competing technologies, the introduction of alternative technological solutions and other risks detailed from time-to-time in NETGEAR`s SEC filings and reports. NETGEAR undertakes no duty to update these forward-looking statements.

Contacts:
Doug Hagan David Pasquale
Senior Manager, Public Relations Senior Vice President, Investor
NETGEAR, Inc. Relations
408-907-8053 The Ruth Group
doug.hagan@netgear.com, 646-536-7006
dpasquale@theruthgroup.com


NETGEAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

Three Months Ended Nine Months Ended
Sept. 28, Sept. 29, Sept. 28, Sept. 29,
2003 2002 2003 2002
(Unaudited)


Net revenue $75,785 $64,362 $212,494 $165,428
Cost of revenue:
Cost of revenue 54,691 48,188 153,826 124,199
Amortization of
deferred stock-based
compensation 46 22 77 108
Total cost of
revenue 54,737 48,210 153,903 124,307
Gross profit 21,048 16,152 58,591 41,121
Operating expenses:
Research and
development 2,079 2,378 5,977 4,878
Sales and marketing 12,419 8,456 35,086 23,445
General and
administrative 2,356 2,113 6,037 5,665
Amortization of
deferred stock-based
compensation:
Research and
development 135 51 334 231
Sales and marketing 227 59 515 247
General and
administrative 108 130 357 497
Total operating
expenses 17,324 13,187 48,306 34,963

Income from operations 3,724 2,965 10,285 6,158
Interest income 123 32 176 98
Interest expense (170) (339) (901) (883)
Extinguishment of debt (5,868) -- (5,868) --
Other income, net (95) 73 (44) 113
Income before income
taxes (2,286) 2,731 3,648 5,486
Provision (benefit)
for income taxes 1,664 385 (5,517) 771
Net income (loss) (3,950) 2,346 9,165 4,715
Deemed dividend on
Preferred Stock -- -- -- (17,881)
Net income (loss)
attributable to
common stockholders $(3,950) $2,346 $9,165 $(13,166)
Net income (loss) per
share attributable to
common stockholders
Basic $(0.15) $0.12 $0.42 $(0.61)
Diluted $(0.15) $0.10 $0.35 $(0.61)
Weighted average shares
outstanding for net
income (loss) per share
Basic 25,684 20,234 21,957 21,504
Diluted 25,684 22,519 25,851 21,504


NETGEAR, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Excluding Extinguishment of debt charge, Deferred tax asset valuation
allowance reversal, Deemed dividend on preferred stock, Stock-based
compensation and Benefit from utilization of net operating loss carry forwards
(NOL`s)
(In thousands, except per share data)

Three Months Ended Nine Months Ended
Sept. 28, Sept. 29, Sept. 28, Sept. 29,
2003 2002 2003 2002
(Unaudited)

Net revenue $75,785 $64,362 $212,494 $165,428
Cost of revenue:
Cost of revenue 54,691 48,188 153,826 124,199
Amortization of
deferred stock-based
compensation -- -- -- --
Total cost of
revenue 54,691 48,188 153,826 124,199
Gross profit 21,094 16,174 58,668 41,229
Operating expenses:
Research and
development 2,079 2,378 5,977 4,878
Sales and marketing 12,419 8,456 35,086 23,445
General and
administrative 2,356 2,113 6,037 5,665
Amortization of
deferred stock-based
compensation:
Research and
development -- -- -- --
Sales and marketing -- -- -- --
General and
administrative -- -- -- --
Total operating
expenses 16,854 12,947 47,100 33,988

Income from operations 4,240 3,227 11,568 7,241
Interest income 123 32 176 98
Interest expense (170) (339) (901) (883)
Extinguishment of debt -- -- -- --
Other income, net (95) 73 (44) 113
Income before income
taxes 4,098 2,993 10,799 6,569
Provision (benefit) for
income taxes 1,664 1,488 4,255 2,987
Net income (loss) 2,434 1,505 6,544 3,582
Deemed dividend on
Preferred Stock -- -- -- --
Net income (loss)
attributable to common
stockholders $2,434 $1,505 $6,544 $3,582
Net income (loss) per
share attributable to
common stockholders
Basic $0.09 $0.07 $0.30 $0.17
Diluted $0.08 $0.07 $0.25 $0.16
Weighted average shares
outstanding for net
income (loss) per share
Basic 25,684 20,234 21,957 21,504
Diluted 29,869 22,519 25,851 22,712


NETGEAR, INC.
GAAP TO PRO FORMA RECONCILIATION
(In thousands, except per share data)

Three months ended Nine months ended
September 28, 2003 September 28, 2003
Pro Pro
GAAP Excluded forma GAAP Excluded forma

Net revenue $75,785 $-- $75,785 $212,494 $-- $212,494

Cost of revenue:
Cost of revenue 54,691 -- 54,691 153,826 -- 153,826
Amortization of
deferred stock
-based
compensation 46 46 -- 77 77 --
Total Cost of
revenue 54,737 46 54,691 153,903 77 153,826

Gross profit 21,048 (46) 21,094 58,591 (77) 58,668

Operating expenses:
Research and
development 2,079 -- 2,079 5,977 -- 5,977
Sales and
marketing 12,419 -- 12,419 35,086 -- 35,086
General and
administrative 2,356 -- 2,356 6,037 -- 6,037
Amortization of
deferred stock
-based
compensation:
Research and
development 135 135 -- 334 334 --

Sales and
marketing 227 227 -- 515 515 --

General and
administrative 108 108 -- 357 357 --

Total
operating
expenses 17,324 470 16,854 48,306 1,206 47,100

Income (loss)
from operations 3,724 (516) 4,240 10,285 (1,283) 11,568
Interest income 123 -- 123 176 -- 176
Interest expense (170) -- (170) (901) -- (901)
Extinguishment of
debt (5,868) (5,868) -- (5,868) (5,868) --

Other income
(expense), net (95) -- (95) (44) -- (44)

Income (loss)
before income
taxes (2,286) (6,384) 4,098 3,648 (7,151) 10,799
Provision
(benefit) for
income taxes 1,664 -- 1,664 (5,517) (9,772) 4,255

Net income (3,950) (6,384) 2,434 9,165 2,621 6,544
Deemed dividend
on Preferred
Stock -- -- -- -- -- --
Net income (loss)
attributable to
common
stockholders $(3,950) $(6,384) $2,434 $9,165 $2,621 $6,544

Net income
(loss) per share
attributable to
common
stockholders

Basic $(0.15) $(0.25) $0.09 $0.42 $0.12 $0.30
Diluted $(0.15) $(0.25) $0.08 $0.35 $0.10 $0.25

Weighted average
shares outstanding

for net income
(loss) per share
Basic 25,684 25,684 21,957 21,957
Diluted 25,684 29,869 25,851 25,851


NETGEAR, INC.
GAAP TO PRO FORMA RECONCILIATION
(In thousands, except per share data)

Three months ended Nine months ended
September 29, 2002 September 29, 2002
Pro Pro
GAAP Excluded forma GAAP Excluded forma

Net revenue. $64,362 $-- $64,362 $165,428 $-- $165,428

Cost of revenue:
Cost of revenue 48,188 -- 48,188 124,199 -- 124,199
Amortization of
deferred stock
-based
compensation 22 22 -- 108 108 --
Total Cost of
revenue 48,210 22 48,188 124,307 108 124,199

Gross profit 16,152 (22) 16,174 41,121 (108) 41,229

Operating expenses:
Research and
development 2,378 -- 2,378 4,878 -- 4,878
Sales and
marketing 8,456 -- 8,456 23,445 -- 23,445
General and
administrative 2,113 -- 2,113 5,665 -- 5,665
Amortization of
deferred stock
-based
compensation:
Research and
development 51 51 -- 231 231 --
Sales and
marketing 59 59 -- 247 247 --
General and
administrative 130 130 -- 497 497 --

Total
operating
expenses 13,187 240 12,947 34,963 975 33,988

Income (loss)
from operations 2,965 (262) 3,227 6,158 (1,083) 7,241
Interest income 32 -- 32 98 -- 98
Interest expense (339) -- (339) (883) -- (883)
Extinguishment
of debt -- -- -- -- -- --
Other income
(expense), net 73 -- 73 113 -- 113

Income (loss)
before income
taxes 2,731 (262) 2,993 5,486 (1,083) 6,569
Provision (benefit)
for income taxes 385 (1,103) 1,488 771 (2,216) 2,987

Net income 2,346 841 1,505 4,715 1,133 3,582
Deemed dividend
on Preferred
Stock -- -- -- (17,881) (17,881) --
Net income (loss)
attributable
to common
stockholders $2,346 $841 $1,505 $(13,166)$(16,748) $3,582

Net income (loss)
per share
attributable
to common
stockholders
Basic $0.12 $0.04 $0.07 $(0.61) $(0.78) $0.17
Diluted $0.10 $0.04 $0.07 $(0.61) $(0.78) $0.16

Weighted average
shares outstanding
for net income
(loss) per share
Basic 20,234 20,234 21,504 21,504
Diluted 22,519 22,519 21,504 22,712


NETGEAR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

Sept. 28, Dec. 31,
2003 2002
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $75,673 $19,880
Accounts receivable, net of allowance
for doubtful accounts of $964 at
September 28, 2003 and $873 at
December 31, 2002 58,790 42,492
Inventories 33,430 24,774
Deferred income taxes 9,772 --
Prepaid expenses and other current assets 5,598 3,003
Total current assets 183,263 90,149
Property and equipment, net 3,302 3,144
Goodwill, net 558 558
Total assets $187,123 $93,851

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED
STOCK AND STOCKHOLDERS` EQUITY (DEFICIT)
Current liabilities
Accounts payable $20,673 $10,628
Payable to related parties 4,658 13,687
Accrued employee compensation 2,955 3,375
Other accrued liabilities 26,014 29,419
Deferred revenue 2,216 5,059
Income taxes payable 837 934
Borrowings under line of credit -- --
Note payable to Nortel Networks -- 13,294
Total current liabilities 57,353 76,396
Redeemable convertible preferred stock $-- $48,052
Stockholders` equity (deficit) Common stock 28 --
Additional paid-in capital 163,839 12,810
Deferred stock-based compensation (4,852) (4,997)
Accumulated deficit (29,245) (38,410)
Total stockholders` equity (deficit) 129,770 (30,597)
Total liabilities, redeemable convertible
preferred stock and stockholders`
equity (deficit) $187,123 $93,851




--------------------------------------------------------------------------------
Source: NETGEAR, Inc.
:cry: @panik:

toll wie du alles aus Finance.yahoo herauskopieren und hier einstellen kannst!! mich würde vielmehr interessieren, warum die Aktie seit Tagen nur nach Süden zieht???????
@baedman:mad:

ist doch nett..das hier die Infos reingestellt werden!!!!



Ich finde sehr gut!

weiter so panik :)


im übrigen bin auch in Netgear investiert!


Viele grüße
@t All

Halte Netgear ebenfalls für sehr aussichtsreich. Das Unternehmen wurde vor ein paar Ausgaben in der BörseOnline vorgestellt. Leider hat sich die Aktie im Gegensatz zu anderen Wireless-Ausrüstern etwas gegen den Trend entwickelt.
Trotzdem denke ich das man weiter in dem Markt für Wireless Distrb. investieren sollte. Halte neben Netgear auch Netopia für sehr interessant. Die Aktie markierte vor kurzem ein erneutes Jahreshoch. Sollten die Umsätze jedoch weiter so stark ansteigen, wäre ein Investment zu überlegen.

Cultom
Wireless LAN Hardware Market Up 11% to $658M in 3Q03; Fledgling Wireless LAN Switch Market to Reach $169M by CY06
Thursday November 20, 6:26 pm ET


LONDON, Nov. 20 /PRNewswire/ -- Worldwide wireless LAN hardware revenue topped $658 million in the third quarter, up 11% from the second quarter, and is projected to grow to $3.6 billion in 2006, more than doubling from $1.6 billion in 2002, according to Infonetics Research`s quarterly worldwide market share and forecast service, Wireless LAN Hardware. Growth in the market is being driven by the widespread popularity of WiFi across enterprise, consumer, and hotspot markets as mobility becomes ingrained both as a way of working and in consumer lifestyles.
"One of the most interesting aspects of this market is the wireless LAN switch segment, which is immature but has strong potential. Port shipments grew 95% to 23,000 this quarter, and revenue grew 100% to $12 million," said Infonetics Research`s Richard Webb, lead analyst of the report. "This hearty growth is due mostly to the fact that this quarter marks the first quarter of recognized shipments and revenue for several vendors. But we forecast healthy quarterly revenue and port growth in the double-digit percentages through 2004, and annual revenue and port growth in the double- to triple-digit percentages through 2006, at which time worldwide revenue for wireless LAN switches will reach $169 million. However, this is a conservative forecast based on initial results. If the wireless LAN switch vendors can get into the larger enterprise, this figure will be much larger."

3Q03 Market Highlights

-- Cisco is the number one worldwide vendor with 14% of the worldwide
total wireless LAN hardware revenue market share
-- Linksys is a close number two with 13%
-- Wireless specialists Symbol and Proxim continue to do well in the
enterprise segment but without a focus on the consumer market, they
lose out relative to the high-volume, lower-cost players such as
Linksys, Buffalo, NETGEAR, and D-Link
-- Consumers make up 42% of the wireless LAN hardware revenue, enterprises
47%, and service providers 11%; this breakdown will change as
enterprise-class switching and security systems drive adoption into the
enterprise market, and as service providers roll out wireless hotspots
in public spaces
-- North America accounts for 52% of WLAN hardware revenue; EMEA for 25%,
Asia Pacific for 19%, and CALA for 4%


Wireless LAN Hardware tracks WLAN access points (standalone, wireless broadband gateways, bridges, and switches), and NICs (USB, PCI, PCMCIA cards). Access points and NICs are broken out by 802.11a vs. 802.11b vs 802.11g, and the wireless LAN hardware revenue total is broken out by enterprise vs. consumers vs. service providers. Standalone access points are broken out by SOHO/consumer vs. service provider/enterprise.

Forecasts and market share are updated quarterly and cover all regions (worldwide, North America, EMEA, Asia Pacific, and CALA). Companies tracked in this service include 2Wire, 3Com, Actiontec, Airespace, Aruba Networks, Avaya, Belkin, Buffalo Technology, Cisco, D-Link, Enterasys, HP, Linksys, NETGEAR, Nortel Networks, Proxim, SMC, Symbol, Trapeze Networks, US Robotics, ZyXEL, and others.

For the table of contents, log on to the new Infonetics Research Information Portal and download it at www.info.infonetics.com or contact Larry Howard, vice president, at larry@infonetics.com, 408-298-7999, ext. 225.

Infonetics Research (www.infonetics.com) is an international market research and consulting firm covering the data networking and telecommunications industries in North America, Europe, and Asia. Infonetics helps companies develop, market, and sell products and services by providing objective analysis of end-users, service providers, and product manufacturers. Infonetics has offices in Silicon Valley, the Boston Metro Area, and London.




--------------------------------------------------------------------------------
Source: Infonetics Research
NETGEAR Expands Asian Footprint With Selection of SOFTBANK BB Corp. as Sole Product Distributor in Japan
Thursday December 4, 7:30 pm ET
Networking Products Company Enhances Presence in Retail Market With Increased On-Site Personnel, Improved Service Program, and Relationship with Japan`s Leading Broadband Services Provider


SANTA CLARA, Calif., Dec. 4 /PRNewswire-FirstCall/ -- NETGEAR, Inc. (Nasdaq: NTGR - News), a worldwide provider of technologically advanced, branded networking products, announced today that it has entered into an agreement with SOFTBANK BB Corp. (SBB), one of Japan`s largest broadband communications carriers and IT distributors, for the exclusive distribution of NETGEAR`s products in Japan. The appointment of SBB will increase NETGEAR`s brand and product awareness for both business and consumer product lines in Asia`s foremost market.

"We are delighted to have a partner in Japan as prestigious and qualified as SBB as we look to accelerate NETGEAR`s growth in Asia," said Patrick Lo, chairman and chief executive officer of NETGEAR. "We currently derive about ten percent of our revenue from the Asia-Pacific region, but due to the faster roll-out of last-mile broadband networks in Japan, and the consumers` fascination with all things wireless, we see the country as offering us very attractive growth potential. While we have sold our business-class product line in Japan for several years, we now see the market as ripe for our award- winning wireless consumer product line."

The appointment of SBB for the Japanese market continues NETGEAR`s success in partnering with market leaders on a global basis to distribute the company`s products. NETGEAR is generally the number one or two provider of networking product segments to small and medium businesses and homes on a global basis.

NETGEAR`s new relationship with SBB is a key component in the company`s strategic expansion into the consumer market in Japan, where it already enjoys success with its networking products aimed at small and medium-sized businesses. SBB will distribute NETGEAR products through a network of resellers, including retail stores and systems integrators. To further underscore its new emphasis on the market, NETGEAR is expanding its personnel in the NETGEAR Japan offices, is offering an improved and expanded menu of services, and is increasing its marketing activities in the country.

Said Naoki Hayashida, country manager for NETGEAR Japan, "SBB is a household name in Japan, due to its pioneering position in broadband services, so NETGEAR`s association with the company should greatly burnish our reputation. We look upon this relationship as a great opportunity to materially expand NETGEAR`s consumer business in Japan to match the success we`ve had with our networking products for small and medium-sized businesses." Mr. Hayashida, former country manager for Polycom Japan, recently joined NETGEAR to spearhead the company`s local expansion.

SBB launched "Yahoo! BB" jointly with Yahoo Japan Corporation in June 2001 to provide low-cost broadband services, such as high-speed data and video, to the Japanese market, and now has approximately 3.9 million ADSL subscribers. In April 2002, SBB introduced its broadband voice services, "BB Phone," and has more than 3 million telephone customers to date. It has also offered IT- related distribution services for more than 20 years.

"We are so pleased to be able to assist NETGEAR as it moves into the center spotlight in Japan," said Ken Miyauchi, executive vice president of SOFTBANK BB Corp. "NETGEAR has a well deserved reputation for developing high-quality networking products that are extremely easy to use, so they`re sure to strike a cord within the retail market. And in Japan, where people are famously addicted to fashionable consumer products, we think that NETGEAR`s stylish products will become a must-have for trendsetters. We`re honored that NETGEAR has chosen SBB as its sole distributor in Japan."

Through SBB, NETGEAR is introducing Japan to its multiple award-winning Platinum Family of wireless home networking products based on the new 802.11g standard and on the widely adopted 802.11b standard, all providing top-notch range and performance. At blazing speeds of up to 54 Mbps -- five times faster than the 802.11b wireless standard -- NETGEAR`s 802.11g wireless products still maintain backward compatibility with 802.11b products, protecting customers` existing investments.

NETGEAR`s 802.11g wireless product line delivers faster performance ideal for high-bandwidth applications such as home entertainment networks, with CD- quality audio and DVD-quality video streaming. NETGEAR also delivers next- generation wireless security with the deployment of Wi-Fi Protected Access (WPA), Advanced Encryption Standard (AES) and Temporal Key Integrity Protocol (TKIP).

The NETGEAR line of wireless products for the home now available in Japan includes:

* WGR614 54 Mbps Wireless Router
* WG511 54 Mbps Wireless PC Card
* WGB511 bundled package (WGR614 54 Mbps Wireless Router/WG511 54 Mbps
Wireless PC Card)
* MA111 11Mbps Wireless USB adapter
* MA521 11Mbps Wireless PC Card
* MB521 bundled package (11 Mbps Wireless Router/MA521 11 Mbps
Wireless PC Card)


Backed by a warranty of up to two years and 24/7 technical support, NETGEAR products distributed through SBB in Japan are available via systems integrators, value-added resellers, and are currently on shelves in leading electronics retailers nationwide. The company expects to have a presence shortly in as many as 200 stores in Japan.

About SOFTBANK BB Corp.

SOFTBANK BB Corp. engages in the provision of broadband infrastructure and services centering on Yahoo! BB as well as in technical development, marketing, sales and support. The Company offers IT-related distribution and services, supervises and administers affiliated broadband and e-commerce companies. Its head office is in Tokyo. For more information, visit http://www.softbankbb.co.jp .

About NETGEAR, Inc.

NETGEAR designs technologically advanced, branded networking products that address the specific needs of small and medium business and home users. The Company`s suite of approximately 100 products enables users to share Internet access, peripherals, files, digital multimedia content and applications among multiple personal computers and other Internet-enabled devices. NETGEAR is headquartered in Santa Clara, Calif. For more information, visit the company`s Web site at www.netgear.com or call 408-907-8000.

NOTE: NETGEAR and the NETGEAR logo are registered trademarks of NETGEAR, Inc. in the United States and other countries. Other brand and product names are trademarks of their respective holders. Information is subject to change without notice. All rights reserved.

Safe Harbor Statement under the Private Securities Litigation Reform Act

of 1995 for NETGEAR, Inc.:

Various matters set forth in this press release, such as statements relating to the expected potential market growth in Japan and the Asian markets in general, acceptance of NETGEAR`s consumer products in Japan, as well as performance characteristics, specifications, specific uses and general market position of NETGEAR, Inc. and its products and technology are forward- looking statements. These statements are subject to risks and uncertainties, including without limitation, the price/performance requirements of customers, the ability of NETGEAR to sell products incorporating the technology, the impact and pricing of competing technologies, the introduction of alternative technological solutions, and other risks detailed from time-to-time in NETGEAR`S SEC filings and reports.

(Logo: http://www.newscom.com/cgi-bin/prnh/20030730/NETGEARLOGO )



--------------------------------------------------------------------------------
Source: NETGEAR, Inc.
NETGEAR Signs Cooperative Agreement With Legend Group to Co-Brand Networking Products in China
Friday December 5, 8:30 am ET
China`s Largest IT Enterprise to Sell NETGEAR Products for Homes And Small Offices


SANTA CLARA, Calif., Dec. 5 /PRNewswire-FirstCall/ -- NETGEAR, Inc. (Nasdaq: NTGR - News), a worldwide provider of technologically advanced, branded networking products, announced today that it has entered into a cooperative agreement with the Digital Home Business Unit of Legend Group Limited, the largest IT enterprise in China. In Asia`s largest market, Legend and NETGEAR will co-brand NETGEAR`s full line of wired and wireless networking equipment to jumpstart the growing small office/home office (SOHO) networking market.
ADVERTISEMENT


"This agreement is another milestone in NETGEAR`s plan to expand our presence in the burgeoning Asian market," said Patrick Lo, chairman and chief executive officer of NETGEAR. "The Legend Group is indeed a legend in China, so for it to choose to sell NETGEAR products is a great compliment to the huge effort NETGEAR puts into our product innovation to ensure high performance, easy-to-use products."

Legend Group will sell NETGEAR wireless products such as access points, routers, gateways, PC and PCI cards and USB adapters based on the 802.11a, 802.11b and the new 802.11g technology standards, as well as products with dual mode a/b and a/g technology. It will also sell wired products such as cable/DSL routers and fast Ethernet switches.

Legend Group will sell co-branded NETGEAR wired and wireless networking products through a business model involving three distribution channels. It plans to offer NETGEAR products through up to 200 retail franchises across China, and will also "bundle" products such as wireless adapter cards into "starter kits" with Legend`s own desktop and notebook PCs -- the best-selling brand in China, with a 27 percent market share. Legend will also sell NETGEAR products such as firewall gateways and switches via Internet service providers catering to the emerging market for ADSL broadband services to the home, such as China Telecom`s "wireless home" project.

In the U.S., the award-winning NETGEAR product line for homes and small- and medium-sized businesses is available via retailers, commercial resellers, direct marketers and e-commerce sites. Products are backed by a warranty of up to two years and come with 24/7 technical support.

About Legend Group Limited

Legend Group Limited (HKSE stock code: 992; ADR stock code: LGHLY) is the largest IT enterprise in China boasting a diverse business profile. The Group`s own brand PCs have been the best sellers in China since 1997, commanding a market share of about 27% in 2002. Legend PCs also top the bestseller list in the Asia Pacific region (excluding Japan) with a market share of 12.7%. In addition to PCs, the Group`s product portfolio also includes servers, mobile handsets, handheld devices, digital products, motherboards, etc. The Group also offers professional IT consulting services. Legend was listed on the Hong Kong Stock Exchange in 1994, and is a constituent stock of the Hang Seng Index. Its American Depositary Receipts are being traded in the United States. For more information, please visit: www.lenovo.com .

About NETGEAR, Inc.

NETGEAR designs technologically advanced, branded networking products that address the specific needs of small and medium business and home users. The Company`s suite of approximately 100 products enables users to share Internet access, peripherals, files, digital multimedia content and applications among multiple personal computers and other Internet-enabled devices. NETGEAR is headquartered in Santa Clara, Calif. For more information, visit the company`s Web site at www.netgear.com or call 408-907-8000.

NOTE: NETGEAR and the NETGEAR logo are registered trademarks of NETGEAR, Inc. in the United States and other countries. Other brand and product names are trademarks of their respective holders. Information is subject to change without notice.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 for NETGEAR, Inc.:

Various matters set forth in this press release, such as statements relating to the expected performance characteristics, specifications, market acceptance and market growth, especially in China, specific uses and market position of NETGEAR, Inc. and its products and technology are forward-looking statements. These statements are subject to risks and uncertainties, including without limitation, the price/performance requirements of customers, the demand in China for NETGEAR products, the success of our co-branding strategy, and the ability of our strategic partner to promote and sell the co-branded products, the ability of NETGEAR to sell products incorporating the technology, the impact and pricing of competing technologies, the introduction of alternative technological solutions, and other risks detailed from time-to-time in NETGEAR`S SEC filings and reports.

(Photo: http://www.newscom.com/cgi-bin/prnh/20030730/NETGEARLOGO )



--------------------------------------------------------------------------------
Source: NETGEAR, Inc.
http://www.forbes.com/2003/12/05/cx_ah_1205sf.html?partner=y…



Stock Focus
Betting On Wi-Fi
Arik Hesseldahl, 12.05.03, 8:30 AM ET

NEW YORK - If you travel often with a laptop and still connect to the Internet using a dial-up modem, then you`re behind the times. The way to hook up to the Net from the road these days is via Wi-Fi, the increasingly popular wireless Internet connection technology.

Wi-Fi technology also makes it possible for home users to share a high-speed Internet connection as well as printers, scanners and files. A growing number of handheld computers also offer Wi-Fi capability.

How can investors profit from the Wi-Fi trend? One fairly safe option is Intel (nasdaq: INTC - news - people ). Intel made a $300 million bet in marketing costs alone, on building wireless Internet capabilities into its Centrino chip platform. The firm`s Centrino-based products for notebook computers fueled a year-over-year doubling of mobile chip sales in its most recent quarter. Centrino-based chips are expected to account for more than half of mobile semiconductors that Intel ships in the current quarter.

Intel is now betting that integrating Wi-Fi capability into a forthcoming chipset for desktops--which gives them the ability to act as Wi-Fi hotspots--will do the same for the desktop PC business. Shares of Intel trade near their 52-week high and for 29 times estimated 2004 profits.

Cisco Systems (nasdaq: CSCO - news - people ), the dominant gearmaker for wired networks is also making a big push into wireless equipment. In June it completed its acquisition of Linksys, a vendor of wired and wireless networking equipment for the home and small business market. Cisco, which is expected to generate revenue of $14.6 billion in 2003 is free of long-term debt and sells for 29 times estimated earnings of 81 cents per share for its fiscal year ending in July 2005.

Smaller firms like Netgear (nasdaq: NTGR - news - people ) may find the Wi-Fi business more difficult as bigger companies like Intel and Cisco expand their wireless offerings. Spun off from Nortel Networks (nyse: NT - news - people ) in 2000, Netgear went public July 31, 2003 at $14 per share and peaked at $21 in September. The stock has since fallen back and now trades just above its offering price. Netgear was profitable for the first two quarters of 2003, but it reported a 15 cent per share loss in its most recent quarter on sales of $75.8 million. For 2004, analysts are expecting profits of 52 cents per share.

While it is relatively easy to set up a wireless network, it is more difficult to protect client computers from hackers and other evildoers. This is creating new opportunities for companies like Symantec (nyse: SYMC - news - people ), which sells a wide range of security software. At 27 times expected profits for the fiscal year ending in March 2005, Symantec is priced near its historical high.

Wild About Wi-Fi
Company Price Sales (mil) Market Cap (mil) Fiscal 2003 EPS Estimate Fiscal 2004 EPS Estimate Fiscal 2004 P/E
Agere Systems (nyse: AGR.A - news - people ) $ 3.14 $ 2,177 $ 5,163 $ 0.06 $ 0.15 22
Apple Computer (nasdaq: AAPL - news - people ) 21.15 6,207 7,712 0.20 0.40 54
Broadcom (nasdaq: BRCM - news - people ) 35.22 1,083 10,908 0.46 0.72 51
Cisco Systems (nasdaq: CSCO - news - people ) 23.98 18,878 160,848 0.59 0.70 33
Conexant Systems (nasdaq: CNXT - news - people ) 5.54 602 1,490 0.00 0.16 35
GlobeSpanVirata (nasdaq: GSPN - news - people ) 6.36 229 959 0.21 0.33 19
Intel (nasdaq: INTC - news - people ) 33.54 26,764 217,777 0.82 1.18 29
NetGear (nasdaq: NTGR - news - people ) 14.92 237 425 0.34 0.52 28
Netopia (nasdaq: NTPA - news - people ) 15.17 64 309 -0.36 0.32 50
Proxim (nasdaq: PROX - news - people ) 1.56 145 183 -0.13 -0.02 N/A
RF Micro Devices (nasdaq: RFMD - news - people ) 10.72 508 2,003 0.19 0.35 32
Symantec (nasdaq: SYMC - news - people ) 33.04 1,407 10,024 1.07 1.19 27
3Com (nasdaq: COMS - news - people ) 7.99 933 2,999 -0.50 -0.20 N/A
Prices as of 12/4/03. Sources: FT Interactive Data, Reuters Fundamentals and MarketGuide via FactSet Research Systems
NETGEAR to Market Yahoo! Premium Broadband Services with Home Networking Products
Tuesday December 16, 8:30 am ET
Customers to Benefit from Special Offers for a Selection of Yahoo!`s Premium Broadband Services, Including Newly Launched Yahoo! Plus, with NETGEAR Home Routers


SANTA CLARA, Calif., Dec. 16 /PRNewswire-FirstCall/ -- NETGEAR, Inc. (Nasdaq: NTGR - News), a worldwide provider of technologically advanced, branded networking products, today announced that Yahoo! premium services will be co-marketed with NETGEAR home networking products. Customers will benefit from a number of free trials and special offers not otherwise available on the Yahoo! network including such leading Yahoo! products as Yahoo! Mail Plus, Yahoo! Personals and the newly launched Yahoo! Plus. The first NETGEAR product to be co-marketed with Yahoo! will be the new NETGEAR WGT624 108 Mbps Wireless Firewall Router, and then will be extended to other NETGEAR home routers.
"We are excited to work with Yahoo! to deliver to customers what we believe is the best of broadband products and services along with the best in networking," said Ray Robidoux, NETGEAR`s President. "Customers will have an even more enhanced experience with the combination of NETGEAR`s award winning home networking products and leading Yahoo! products and services like Yahoo! Plus."

"We are very pleased to be working with NETGEAR, one of the leading home networking companies in the country, to offer consumers a suite of Yahoo!`s premium services," said Doug Garland, Senior Vice President, Broadband and Mobile Services, Yahoo! Inc. "As households move to broadband, they often revisit their existing access relationships and look for new solutions to meet their needs. The combination of NETGEAR`s high-quality home networking product line with Yahoo!`s premium broadband offerings like Yahoo! Plus ensures that the companies together can address the needs of the broadband household with a more complete broadband solution."

Special offers available only through this promotion and not otherwise currently available on the Yahoo! network include 30 days free online dating service at Yahoo! Personals and 30 days free premium mail services through Yahoo! Mail Plus. Additional offers include a 7 day free trial of Yahoo! LAUNCHcast Plus, a premium web radio product. Customers will also benefit from access to other Yahoo! premium services such as Yahoo! Stores, Web Hosting, and GeoCities Personal Web Sites.

Starting in the new year, NETGEAR home routers will include a suite of Yahoo! premium services on the installation CD, on the company`s website and in NETGEAR packaging. Yahoo! will promote NETGEAR on the Yahoo! network, including a presence on Yahoo! Shopping.

About NETGEAR, Inc.

NETGEAR designs technologically advanced, branded networking products that address the specific needs of small and medium business and home users. The Company`s suite of approximately 100 products enables users to share Internet access, peripherals, files, digital multimedia content and applications among multiple personal computers and other Internet-enabled devices. NETGEAR is headquartered in Santa Clara, Calif. For more information, visit the company`s Web site at www.netgear.com or call 408-907-8000.

NOTE: NETGEAR®, the NETGEAR Logo, and ProSafe are trademarks or registered trademarks of Netgear, Inc. in the United States and/or other countries. Yahoo! and the Yahoo! logo are registered trademarks of Yahoo! Inc. Other brand and product names are trademarks or registered trademarks of their respective holders. Information is subject to change without notice. All rights reserved.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 for NETGEAR, Inc.:

Various matters set forth in this press release, such as statements relating to the expected performance characteristics, specifications, market acceptance, market growth, specific uses and market position of NETGEAR, Inc. and its products and technology are forward-looking statements. These statements are subject to risks and uncertainties, including without limitation, the price/performance requirements of customers, the ability of NETGEAR to sell products incorporating the technology, the impact and pricing of competing technologies, the introduction of alternative technological solutions, and other risks detailed from time-to-time in NETGEAR`S SEC filings and reports.

(Logo: http://www.newscom.com/cgi-bin/prnh/20030730/NETGEARLOGO )



--------------------------------------------------------------------------------
Source: NETGEAR, Inc.
http://yahoo.businessweek.com/technology/content/dec2003/tc2…


Intel: King of the Wi-Fi Frontier?
Its new Grantsdale chipset for desktops stands to do for traditional PCs what Centrino has done for laptops


For Intel, the world`s largest semiconductor manufacturer, 2003 can be summed up in one word: mobile. In March, the chip heavyweight, which holds an 82% market share in microprocessors for desktop PCs, introduced the Pentium M -- a chip that provides notebook PCs with better performance and longer battery life. It subsequently introduced Centrino -- a package that combines the Pentium M with several other chips, including one that connects laptops, via devices called "access points," to high-speed, wireless fidelity (Wi-Fi) networks that are typically then connected to the Internet. On the shoulders of a $300 million marketing campaign, Centrino sales took off.


And how. The Pentium M plus the Centrino combo accounted for about 25% of Intel`s (INTC ) total revenue in 2003, estimates Richard Whittington, an analyst with American Technology Research in Greenwich, Conn. In the third quarter, the dynamic duo spurred Intel`s strongest year-over-year revenue growth since 1996: Sales rose a sizzling 20% in the period, to $7.8 billion, while profits jumped 142% vs. a year ago, to $1.7 billion.

The new chips have contributed disproportionately to profits, since Centrino`s average selling price -- about $250 -- is around 40% higher than that for an average Intel microprocessor, Whittington estimates. The result is that the chip king`s stock is up more than 80% this year, to around $32 as of Dec. 29.

MIGHTY MITES. Ready or not, Intel is rapidly becoming more tightly tethered to the wireless world -- and vice versa. Research consultancy Gartner Group predicts that big businesses increasingly will choose Centrino-enabled laptops as they replace their dead and dying desktop PCs over the next few years. Corporations want wireless because it makes employees more productive, letting them wander around the office with computer in hand.

And though much of the recent buzz on Intel has focused on its plans for digital-TV chips and a new desktop microprocessor, those won`t benefit it nearly as much in 2004 as the next-generation Centrino and Pentium M chips scheduled for the first quarter. For the full year, Whittington estimates, those two products could account for 35% of total revenues and for a larger share of profits.

In part, that`s because the new Pentium M, code-named Dothan, will be smaller than its predecessor -- and half as costly to make, according to analysts at Morgan Stanley. That helps explain why analysts polled by financial service First Call expect Intel`s earnings per share to climb 61% in 2004, to around $1.24, as revenues rise 15.3%, to $35 billion. These analysts expect Intel`s stock to hit $37 or so in 2004, up more than 20%.

ALL ACCESS PASS. The next Wi-Fi move will be to try to replicate Centrino`s success on more than 120 million desktops that consumers buy each year. Sometime before mid-2004, Intel will unveil a new desktop chipset named Grantsdale -- its first total overhaul of that component in a decade.

In addition to doing the traditional task of coordinating the activities of key chips in a PC, Grantsdale will have wireless features that will significantly broaden the capabilities of desktops. Essentially, it will turn them into the type of access points that Centrino-enabled laptops must have to make a Wi-Fi connection.

For a couple of years now, Wi-Fi aficionados have connected their laptops to the Net via access points -- as long as those are within 300 feet of the laptop. Intel`s theory is that it can now persuade millions of homeowners to install their own access points -- a desktop PC costing perhaps $1,000 that can connect every machine in a multi-laptop family to the Net.

PACKAGE DEAL. Better yet, says William Leszinske Jr., director of chipset and software marketing at Intel, access-point desktops that are equipped with a special circuit card will use radio signals to beam images to the family TV or music to the stereo.

That may sound farfetched. But more than half of laptops sold in 2003 came with Wi-Fi capability installed. And according to industry analysts, many customers buy laptops with Centrino inside mainly because of its Wi-Fi chip. That`s fine with Intel, which makes most of its money on the Pentium M processor, by far the most expensive element in the package.

Most likely, Intel will pursue a similar strategy with Grantsdale. For instance, it could sell the chipset as part of a package deal with its new desktop processor. Called Prescott, it`s a smaller-size (read: higher margin) Pentium IV that began shipping in small volumes in the fourth quarter. Intel declines to comment on its marketing plans.

CLOSING THE GAP. These initiatives could turn Intel into the king of Wi-Fi chips, now a $1 billion market. Nearly 8% of laptops shipped in October contained Centrino vs. 3.5% in May, according to NPD Group. That`s an indication that Intel has begun to catch up with competitors such as Conexant (CNXT ), Broadcom (BRCM ), and Agere (AGRa , AGRb ), which sell Wi-Fi chips separately instead of packaging them into combos such as Centrino.

Intel`s new Centrino, whose Wi-Fi chip will match its rivals` capabilities by connecting to a wider variety of Wi-Fi networks, will further close the gap, says Dean McCarron, founder of processor consultancy Mercury Research. So will Intel`s huge Centrino ad campaign, one goal of which is to establish the chipmaker`s Wi-Fi credentials in the minds of consumers. Craig Mathias, founder of wireless consultancy FarPoint Group, believes that within 12 to 18 months, Intel will dominate the Wi-Fi chip market.

In both microprocessors and Wi-Fi chips, Intel still has hurdles to overcome. Next year, rival AMD (AMD ) will roll out notebook processors based on its Althon64 architecture that could outperform Intel`s, thanks to AMD`s 64-bit processing capability, vs. Intel`s 32. AMD lacks Intel`s marketing muscle. But it`s getting accolades from tech analysts, which will likely force Intel to cut prices on the new Centrino. Some analysts also question whether millions of consumers really will buy desktops to set up Wi-Fi access points at home.

"REVOLUTIONARY" CHANGE. Still, Grantsdale will likely succeed, if only because it includes features that allow for better graphics. And as it makes its way into PCs, consumers may ultimately find it cheaper to simply add a radio card -- which a desktop will need to function as an access point -- rather than buying a specialized access device from the likes of Netgear (NTGR ) or Cisco (CSCO ).

"[Grantsdale`s wireless features] are revolutionary, and it will change a lot of business practices [of Intel`s rivals]," says Steve Baker, an analyst with market consultancy NPD Techworld in Port Washington, N.Y. Clearly, the move to mobile is well under way. And it will help Intel continue to ride a wave of prosperity.
http://news.com.com/2100-7351_3-5136256.html?tag=st_lh

NetGear plugs Wi-Fi into hi-fis
Last modified: January 6, 2004, 5:30 PM PST
By Richard Shim
Staff Writer, CNET News.com


NetGear unveiled a Wi-Fi device on Tuesday that is designed to retrofit stereos so they can connect to wireless networks.

The Santa Clara, Calif.-based company plans to demonstrate its NetGear MP101 Wireless Digital Music Player at the Consumer Electronics Show in Las Vegas later this week. It will also show off a wireless router with storage-sharing features.

NetGear CEO Patrick Lo has said in past interviews with CNET News.com that he sees a significant opportunity for manufacturers in adapting older devices--such as televisions, music stereos and handheld devices--so they can work with wireless networks. The digital music player is the first product to result from this push.

The MP101 network adapter allows a stereo to play music stored on PC or other device connected to the wireless network. It will be available in stores in February at a price of around $200, according to NetGear. It comes with a remote control and connects to 802.11b and 802.11g wireless networks. It plugs into a stereo through audio inputs and plays MP3 and Windows Media files.

Using the device, people will be able to navigate music libraries and view song, artist and album information using a remote control that communicates with the box, which features a liquid crystal display. The device plays Internet radio streams and comes with a 30-day trial of RealNetworks` Rhapsody music service.

NetGear worked with Digital 5 on the software in the MP101 that allows stereos to access files stored on a PC.

On Tuesday, NetGear also announced the WGT634U Super Wireless Media Router. The router connects to an external hard drive over a USB 2.0 connection and allows client devices on the router`s Wi-Fi network to access the data on that hard drive.

The router uses Atheros` 108 megabit per second Super G technology, which promises fast transfer speeds as well as a network range that exceeds 200 feet, according to a NetGear representative. The router will be available in the first quarter of 2004 and will cost around $200, the company said.
NetGear`s Home Invasion Plan
Arik Hesseldahl, 01.12.04, 12:43 PM ET

LAS VEGAS - In 1976 Patrick Lo arrived in America with $200 in his pocket and a scholarship to Brown University. A China native reared in Hong Kong, he raised from family friends the money for a $700 airline ticket to the U.S.

More on NetGear
Tear Sheet




It was a warm-up act for what would come later in his career. He`s now the president and chief executive of NetGear (nasdaq: NTGR - news - people ), and in 2000 he was raising millions in venture capital money to fund the company`s separation from Nortel Networks (nyse: NO - news - people ). NetGear is now one of the market leaders in the ever-growing but margin-thin home networking business.

Lo, now 48, took Santa Clara, Calif.-based NetGear public in July, and the company is on track to clear $293 million in 2003 sales.

The timing certainly was right. As home broadband Internet connections have grown--almost 50 million Americans have a broadband connection, according to Nielsen NetRatings--more home Internet users are connecting two or more PCs to a network that shares the broadband connection. According to one estimate by market research firm InStat/MDR in Scottsdale, Ariz., the number of networked homes in the U.S. and Canada, which numbered only 9.2 million in 2002, will grow to 28 million by 2007.

And while it`s one thing to connect a few computers to share an Internet connection and a printer, the main force encouraging these novice networking engineers is digital entertainment. Lo is making a big push to broaden NetGear`s entertainment-related products. This dovetails with one of the overarching themes--the mainstreaming of digital entertainment--of this year`s International Consumer Electronics Show (CES), where we caught up with Lo last week.

While Microsoft (nasdaq: MSFT - news - people ), Hewlett-Packard (nyse: HPQ - news - people ) and Gateway (nyse: GTW - news - people ) want to sell you a $2,000 Media Center PC and maybe a flat-panel TV to go with it, NetGear will be happy selling you a $200 router for sharing your broadband Internet connection throughout your home, using existing PCs. A new product, the $150 MP101, streams music stored on a PC to any home stereo over a wireless network and comes with a free trial for RealNetworks` (nasdaq: RNWK - news - people ) Rhapsody digital music service.

A product that does similar things for video and photos by connecting to an existing TV is already in the works for later this year. A third product combines a wireless router with the ability to easily connect hard drives to the network for sharing files independent of particular PCs. Beyond entertainment, Lo wants to get into making equipment for voice-over-Internet-Protocol telephone calls.

"This isn`t just about connecting TVs to the Internet," Lo says. "The model of providing entertainment is changing from broadcasters pushing their content to consumers pulling what they want. We`re going to have an environment that mixes both, but right now the kids are showing us that they like the pull mode better," he says, referring to music download services like Kazaa and the original Napster.

He may have big plans, but he also has big competitors. Last year networking giant Cisco Systems (nasdaq: CSCO - news - people ) paid $500 million to acquire Linksys, NetGear`s main rival and the market segment`s leader. Taiwan-based D-Link Systems is also a big competitor. Both showed up at CES with their competitive guns blazing. Linksys announced a DVD player that can play media files stored on a PC over a network. D-Link announced a PC card that can access both Wi-Fi networks and wireless data services over the GSM mobile phone networks.

D-Link also announced a deal with Time Warner`s (nyse: TWX - news - people ) America Online to sell its customers a D-Link device that lets them see their digital pictures on a TV set and listen to their music downloads on a stereo.

But NetGear does have allies in the fight. Its products sell well with retailers like Best Buy (nyse: BBY - news - people ), CompUSA and Staples (nasdaq: SPLS - news - people ). Both Time Warner Cable and Comcast (nyse: CMCSA - news - people ) sell NetGear routers to their cable modem customers.

The increase in products and sales is helping the company dig itself out of the red. Last year, NetGear reported a loss per share of 32 cents. For this fiscal year, the mean estimate on Thomson Financial/First Call is net income of 35 cents per share. Sales are expected to rise 23% this year. It hasn`t been all good news for the company. On its first day of trading in July, shares rose 26% to $17.69 from $14, but they are currently trading lower, around $16.68.

Margins have been thinner than Lo planned for. In its most recent quarter, NetGear had an operating margin of 5.6%. He`s promised to push that to 10% by 2005.

If nothing else, Lo runs a tight ship. He has no assistant and expects other NetGear execs do without them. And to his credit, the competitive scrap over consumer home entertainment networks is still in its early stages. Chipmaker Intel (nasdaq: INTC - news - people ) said last week it plans to invest $200 million in companies looking for ways to let consumers use their digital media on their home entertainment gear. There are no apparent winners yet.
NETGEAR Raises Guidance for Fourth Quarter 2003
Thursday January 22, 8:30 am ET
Announces 45 Day Lock-Up Extension for Certain Shareholders


SANTA CLARA, Calif., Jan. 22 /PRNewswire-FirstCall/ -- NETGEAR, Inc. (Nasdaq: NTGR - News), a worldwide provider of technologically advanced, branded networking products, today announced that results for the fourth quarter of 2003 are expected to exceed previously provided guidance. The Company now expects revenues for the fourth quarter ended December 31, 2003 will be in the range of approximately $85.0 million to $87.0 million, ahead of prior guidance provided on October 28, 2003 for revenues to be in the range of $79.0 million to $81.0 million. Pro forma net income for the fourth quarter is expected to range from $4.0 million to $4.4 million or $0.13 to $0.14 per fully diluted share. Net income for the fourth quarter of 2003 reflects an income tax benefit of $612,000, or $0.02 per fully diluted share, recorded in connection with research and development tax credits claimable for the year ended December 31, 2003. Pro forma results exclude non-cash stock-based compensation expense of approximately $490,000.
"Preliminary results indicate that the seasonally strong fourth quarter came in above our initial forecast," said Patrick Lo, CEO and Chairman of NETGEAR. "We continue to benefit from increased demand in our core small business and home networking markets. Our new products introduced in the third and fourth quarters of 2003 also contributed significantly to the growth of our revenue and profitability. The entry into new international markets further strengthened our worldwide market share position. We believe our sales and profitability momentum will continue through 2004 as we benefit from continuous new technology and product introductions and market expansion."

Separately, NETGEAR announced it has entered into agreements with certain of its largest shareholders, holding approximately 16.3 million shares, to extend their lock-up agreements for an additional 45 days beyond the original lock-up period, which ends January 26, 2004.

NETGEAR is planning to report fourth quarter 2003 results the week of February 16, 2004.

About NETGEAR Inc.

NETGEAR designs technologically advanced, branded networking products that address the specific needs of small and medium business and home users. The Company`s suite of approximately 100 products enables users to share Internet access, peripherals, files, digital multimedia content and applications among multiple personal computers and other Internet-enabled devices. NETGEAR is headquartered in Santa Clara, Calif. For more information, visit the company`s Web site at www.netgear.com or call 408-907-8000.

NETGEAR is a registered trademark of NETGEAR, Inc. in the United States and other countries.

Contacts:
Doug Hagan
Senior Manager, Public Relations
NETGEAR, Inc.
(408) 907-8053
doug.hagan@netgear.com

David Pasquale
Senior Vice President, Investor Relations
The Ruth Group
(646) 536-7006
dpasquale@theruthgroup.com


Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 for NETGEAR, Inc.:

This release contains forward-looking statements. The forward-looking statements represent NETGEAR, Inc.`s expectations or beliefs concerning future events and include statements, among other, regarding NETGEAR`s expected revenues and earnings, anticipated momentum in the Asia Pacific region, and revenues expected to result from sales of our new product offerings. These statements are subject to risks and uncertainties. For example, our revenues could be less than expected if demand for our products is less than anticipated, we are unable to manufacture and distribute our products, or we are unable to collect receivables as they become due. Our earnings depend upon our revenues, as well as our ability to manage our costs, including the cost of developing new products and manufacturing and distributing our existing offerings. Other factors that could affect our forward-looking statements include without limitation, demand for our products, including our new 802.11g offerings, the price/performance requirements of customers, the ability of NETGEAR to sell products incorporating the technology, the impact and pricing of competing technologies, the introduction of alternative technological solutions, foreign currency exchange rates, additional shares of common stock becoming available for sale after expiration of certain lock-up periods, and other risks detailed from time-to-time in NETGEAR`s SEC filings and reports. NETGEAR undertakes no duty to update these forward-looking statements.

(Logo: http://www.newscom.com/cgi-bin/prnh/20030730/NETGEARLOGO )



--------------------------------------------------------------------------------
Source: NETGEAR, Inc.
9:56AM NTGR: Pacific Growth comments on share unlock 17.38 -1.35: Pacific Growth says that approx 4 mln NetGear shares come unlocked today; firm says would view any pressure on the stock as a buying opportunity.
Worldwide 802.11 Market Exceeds $500 Million in 4Q03, Fueled by Strong Holiday Sales According to Dell`Oro Group
Wednesday February 11, 10:30 am ET


REDWOOD CITY, Calif.--(BUSINESS WIRE)--Feb. 11, 2004--According to a recently published report from Dell`Oro Group, the Wireless LAN - 802.11 market grew 10% sequentially, realizing revenues of $509 million in 4Q03. For the full-year 2003, the total WLAN market reached $1.8 B, an increase of 16% over 2002.
"The growth during 4Q03 came primarily from the SOHO Infrastructure (Access Points-SOHO plus Broadband Gateways) or "SOHO" and NIC markets, which grew a combined 16% on a revenue basis compared with 3Q03," said Greg Collins, Senior Director, Dell`Oro Group. "The holiday season is typically very strong for the wireless LAN market and 2003 was no exception. Consumers are increasingly networking their home in order to share a broadband Internet connection among multiple computers. Moreover, consumers are beginning to network their gaming devices and consumer electronics in order to access both content and services on the Internet, and to share content across their home network."

In contrast, after two quarters of approximately 20% sequential growth, the Enterprise WLAN market declined 8% in 4Q03. This decline is expected to be temporary, with the Enterprise market seeing a return to growth in 1Q04.

Wireless LAN - 802.11 Total Market

(Includes Enterprise and SOHO-class Access Points/Bridges,
Broadband Gateways and NICs for 802.11b, 802.11g and Multimode
or 802.11a/b/g)

Q/Q
Total Market 4Q03 Growth
------------ ---- ------
MFG Revenue ($M) $509 +10%

Vendor Rank
------ ----
Linksys (Cisco) 1 +29%
D-Link 2 +28%
Cisco 3 -22%
NETGEAR 4 +35%
Buffalo 5 -9%

About the Report

The information reflected above can be found in our 4Q03 Quarterly Wireless LAN Report.

This report focuses on detailed quarterly analysis of market size, market share, unit shipments and average selling prices as it pertains to markets and vendors. The report tracks 802.11b, 802.11g, and Multimode technologies in the following product categories: Access Points - Enterprise, Access Points - SOHO, Broadband Gateways, and Networks Interface Cards (NICs). To purchase this report, please contact Julie Learmond-Criqui at 650-622-9400 ext. 223 or via e-mail to julie@delloro.com

About Dell`Oro Group

Dell`Oro Group is a market research firm that specializes in strategic competitive analysis in the networking and telecommunications industries. Our Quarterly Reports and 5-Year Forecasts offer detailed quantitative information on revenues, port and/or unit shipments, and average selling prices.



--------------------------------------------------------------------------------
Contact:
Dell`Oro Group
Julie Learmond-Criqui, 650-622-9400 ext 223
julie@delloro.com
www.delloro.com



--------------------------------------------------------------------------------
Source: Dell`Oro Group
NETGEAR Reports Fourth Quarter 2003 Results
Thursday February 12, 6:03 am ET
- Fourth quarter 2003 net revenue increased to $86.8 million; 20.7% year over year growth - Full year 2003 net revenue increased to $299.3 million; 26.1% year over year growth - Fourth quarter 2003 pro forma net income increased to $4.4 million, as compared to $2.4 million in the comparable prior year quarter, an 84.7% increase - Full year 2003 pro forma net income increased to $11 million, as compared to $6 million in the prior year, an 83.5% increase - Fourth quarter pro forma diluted EPS of $0.14 and full year pro forma diluted EPS of $0.41 - Fourth quarter gross margin improved to 29.1% and pro forma operating margin to 7.2% - Expects first quarter 2004 net revenue to be in the range of $85 million to $88 million, with pro forma operating margin in the range of 7.1% to 7.5%


SANTA CLARA, Calif., Feb. 12 /PRNewswire-FirstCall/ -- NETGEAR, Inc. (Nasdaq: NTGR - News), a worldwide provider of technologically advanced, branded networking products, today reported financial results for the fourth quarter ended December 31, 2003.
ADVERTISEMENT


Net revenue for the fourth quarter ended December 31, 2003 increased to $86.8 million, as compared to $71.9 million for the fourth quarter ended December 31, 2002, a 20.7% increase. Net revenue increased approximately 14.5% over net revenue of $75.8 million in the third quarter of 2003. For the full year 2003, net revenue totaled $299.3 million, a 26.1% increase over the full year 2002 net revenue of $237.3 million. The Europe, Middle East and Africa (EMEA) regions again achieved strong sequential net revenue growth of 31.2% to $31.8 million in the fourth quarter of 2003, compared to $24.2 million in the third quarter of 2003. Net revenue derived from the Asia Pacific increased 44.6% to $7.8 million in the fourth quarter of 2003, compared to $5.4 million in the third quarter of 2003. Net revenue in North America grew 2.3% to $47.2 million in the fourth quarter of 2003, compared to $ 46.2 million in the third quarter of 2003.

There was strong demand in the fourth quarter for NETGEAR`s wireless and broadband products worldwide, as the Company introduced 12 new products during the quarter. Growth in units and the increase in ASP (average selling price) was driven by the introduction of the Super G 108Mbps wireless products in the third quarter of 2003 and the DSL 2 broadband gateways in fourth quarter of 2003. Shipments of wireless nodes exceeded one million units in the fourth quarter, representing growth of approximately 30% over the prior third quarter. Shipments of wired and wireless broadband routers/gateways exceeded 675,000 units in the fourth quarter of 2003, representing an increase of approximately 45% over the prior third quarter. Sales of Ethernet switches continued to be strong, growing 7% in units sequentially. Leading switch products included NETGEAR`s Gigabit and managed switches, including the Company`s popular Smart Switches.

The Company further improved its gross margin in the fourth quarter of 2003 to 29.1%, as compared to 27.8% in the prior quarter. For the full year, gross margin improved to 28%, as compared to 25.4% in 2002. The improvement in gross margin was due to increased volume leverage on the Company`s buying power, increased sales of new products with higher margins, and an increased percentage of sales derived from Europe, which tends to be a higher margin. Pro forma income from operations was 7.2%, compared to 5.6% in the prior quarter. Pro forma operating expenses were 22.0% of total revenues, and sales and marketing expense were 16.0% of net revenue in the fourth quarter of 2003. Research and development expenses remained essentially flat from the prior quarter at approximately 2.6% of net revenue for the quarter. General and administration costs increased from 3.1% in the third quarter of 2003 to 3.4% in the fourth quarter of 2003 reflecting the impact of a full quarter`s costs associated with being a public company, as well as certain additional expenses.

Net income, computed in accordance with United States Generally Accepted Accounting Principles, or GAAP, for the fourth quarter of 2003 was $3.9 million, as compared to net income of $3.4 million for the fourth quarter of 2002. The Company had net income of $0.14 per basic share and $0.12 per diluted share for the fourth quarter of 2003, as compared to net income of $0.17 per basic and $0.15 per diluted share in the fourth quarter of 2002. The Company would like to note that any year over year comparison of earnings per share should take into account an increase of approximately 8 million basic shares outstanding reflecting the Company`s IPO, which was completed in July 2003. For the full year 2003, on a GAAP basis, net income was $13.1 million or $0.55 per basic share and $0.49 per diluted share, compared to a net loss of $9.7 million or $0.46 per basic and diluted share for the full year 2002. Pro forma net income, which excludes certain charges described below, for the fourth quarter of 2003 was $4.4 million, an 85% increase over the pro forma net income of $2.4 million for the fourth quarter of 2002. Pro forma net income per share was $0.15 per basic share and $0.14 per diluted share in the fourth quarter of 2003, compared to $0.12 per basic and $0.10 per diluted share in the fourth quarter of 2002. The fourth quarter of 2002 pro forma net income excludes the impact of a $1.6 million benefit because of the change in the valuation allowance on deferred tax assets arising from, among other factors, the utilization of net operating loss tax carryforwards (NOL`s), and non-cash stock-based compensation expense of $580,000. The fourth quarter of 2003 pro forma net income excludes a non-cash stock-based compensation expense of $490,000. For the full year 2003, pro forma net income was $11.0 million or $0.46 per basic and $0.41 per diluted share, compared to pro forma net income of $6.0 million or $0.28 per basic and $0.27 per diluted share for the full year 2002.

Both GAAP and pro forma net income for the fourth quarter and full year 2003 include an income tax benefit of $612,000 or $0.02 per fully diluted share, recorded in connection with research and development tax credits eligible to be claimed for the year ended December 31, 2003. The Company expects that it will realize a similar benefit in 2004, thereby lowering its effective tax rate. The accompanying statements of operations provide a reconciliation of net income computed on a GAAP basis to net income computed on a non-GAAP, or pro forma, basis.

Patrick Lo, Chairman and Chief Executive Officer of NETGEAR, commented, "The seasonally strong fourth quarter came in above expectations and marked the end of a remarkably positive year for NETGEAR, as we continued to execute on initiatives to drive our growth and profitability. We met with global success, led by our aggressive rollout of new innovative products, expanded strategic partner relationships and significantly improved financial performance. We remain focused on leveraging the increased demand in our core small business and home networking markets. Our new product plans and our expanding global channel presence give us confidence that our sales and profitability momentum will continue through 2004, as we benefit from continuous new technology, additional product introductions and market expansion. We believe that we will continue to gain market share worldwide throughout 2004."

Notable Fourth Quarter 2003 Achievements Included:
-- New Products: NETGEAR launched 12 new products in the fourth quarter,
bringing its total new product introductions in 2003 to 48. The
Company launched the ADSL2/ADSL 2+ 802.11g wireless gateway, the
DG834G 54 Mbps Wireless ADSL Firewall Router. The Company also
launched in the US DOCSIS 2.0 wireless 802.11g cable gateway, the
CG814WG 54 Mbps Wireless Cable Firewall Router. These new products,
together with the Super G 108Mbps wireless products and the Smart
Switches introduced in the third quarter of 2003, will contribute
significantly to 2004 revenue and margin growth.

-- Strategic Alliances: NETGEAR entered into a series of significant
strategic alliances in the fourth quarter, which are expected to help
drive future growth in attractive, fast growing markets. These
relationships included a cooperative agreement with the Digital Home
Business Unit of Legend Group Limited, the largest IT enterprise in
China. In Asia`s largest market, Legend and NETGEAR will co-brand
NETGEAR`s full line of wired and wireless networking equipment to
jumpstart the growing small office/home office (SOHO) networking
market in this region. Today, NETGEAR products can be found in about
30 Legend stores and 100 other stores in China. Separately, NETGEAR
entered into an agreement with SOFTBANK BB Corp. (SBB), one of Japan`s
largest broadband communications carriers and IT distributors, for the
exclusive distribution of NETGEAR`s products in Japan. The appointment
of SBB will increase NETGEAR`s brand and product awareness for both
business and consumer product lines in Asia`s foremost market.
Currently, there are over 400 retail stores in Japan carrying
NETGEAR`s products.

-- Strengthened Channel Presence: The Company continued to grow
worldwide sales derived from the carrier channel during the quarter,
with shipments to broadband service providers such as Time Warner
Cable and Comcast in the U.S., Telecom Denmark, and Telstra in
Australia. NETGEAR is able to partner with such global market leaders
due to the innovation and quality of the Company`s products.

-- Reinforced Quality Reputation: NETGEAR continued to achieve numerous
awards for its new products during the quarter, most notably that PC
World magazine`s readers ranked NETGEAR as being the #1 networking
vendor in service and reliability.


Jonathan Mather, Chief Financial Officer of NETGEAR, said, "Operationally, this was an impressive quarter for us. We again achieved double-digit revenue growth, both sequential and year over year, while further leveraging our operating costs and thereby improving profitability. We continue to make progress toward our operating model objective of over 30% gross margin. In the fourth quarter, gross margin was 29.1% and pro forma operating margin was 7.2%. This compared to 27.8% and 5.6% respectively in the third quarter of 2003, and 26.6% and 7.0% in the fourth quarter of 2002. While we believe that these are significant accomplishments, we also recognize that there is room for continued margin expansion in 2004 as we further benefit from the operating leverage in our business. We continue to manage our inventory closely with quarter ending inventory at $39.3 million, representing 6.3 turns, compared to $33.4 million and 6.5 turns at the end of the third quarter of 2003. Days` sales outstanding (DSOs`) were at 81 days in the fourth quarter of 2003. Distribution channel inventory increased slightly in the fourth quarter from the prior quarter. US retail channel inventory remained essentially flat from the third quarter of 2003."

Looking forward, Mr. Lo added, "NETGEAR is generating an enormous amount of interest and excitement in the global market as we capitalize on our product strength and quality. At the recent CES trade show, we won multiple industry awards reflecting our ability to develop and commercialize the next generation of wireless products ahead of our competitors. We also introduced several new products which provide consumer connectivity to the growing availability of digital entertainment, including our MP101 Wireless Digital Music Player, the industry`s first affordable and easy to use wireless network adapter for home stereos, and our WGT634U Super Wireless Media Router with USB access to shared storage, a Best of CES finalist, as well as CES `Best of Innovations` recipient. These products are scheduled to be shipped in volume during the first quarter of 2004 together with additional new models of our Smart Switches. These are just a few of the exciting innovative products we have in the pipeline for 2004, powering our continuous drive to gain market share and grow profitability. Overall, we are optimistic in our outlook for 2004. For the first quarter of 2004, we expect revenues to grow approximately 27% to 30% over the same period last year and in the range of $85 million to $88 million, with pro forma operating income in the range of 7.1% to 7.5%."

Investor Conference Call / Webcast Details

NETGEAR will review fourth quarter 2003 results and discuss management`s expectations for the first quarter 2004 today, February 12, 2004, at 8:30AM EST. The conference call-in will be available at www.netgear.com and by telephone at (706) 634-5125. A replay will be available from 11:30AM EST on February 12 through midnight EST on February 19 at www.netgear.com and by telephone at (706) 645-9291. The confirmation identification for both the live call and the replay is 5510650.

About NETGEAR Inc.

NETGEAR (Nasdaq: NTGR - News) designs technologically advanced, branded networking products that address the specific needs of small business and home users. The Company`s suite of approximately 100 products enables users to share Internet access, peripherals, files, digital multimedia content and applications among multiple personal computers and other Internet-enabled devices. NETGEAR is headquartered in Santa Clara, Calif. For more information, visit the company`s Web site at www.netgear.com or call (408) 907-8000.

NETGEAR is a registered trademark of NETGEAR, Inc. in the United States and other countries.

Doug Hagan
Senior Manager, Public Relations
NETGEAR, Inc.
(408) 907-8053
doug.hagan@netgear.com

David Pasquale
Senior Vice President, Investor Relations
The Ruth Group
(646) 536-7006
dpasquale@theruthgroup.com


Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 for NETGEAR, Inc.:

This release contains forward-looking statements. The forward-looking statements represent NETGEAR, Inc.`s expectations or beliefs concerning future events and include statements, among other, regarding NETGEAR`s expected revenues and earnings, anticipated momentum in the Asia Pacific region, and revenues expected to result from sales of our new product offerings. These statements are subject to risks and uncertainties. For example, our revenues could be less than expected if demand for our products is less than anticipated, we are unable to manufacture and distribute our products, or we are unable to collect receivables as they become due. Our earnings depend upon our revenues, as well as our ability to manage our costs, including the cost of developing new products and manufacturing and distributing our existing offerings. Other factors that could affect our forward-looking statements include without limitation, demand for our products, including our new 802.11g offerings, the price/performance requirements of customers, the ability of NETGEAR to sell products incorporating the technology, the impact and pricing of competing technologies, the introduction of alternative technological solutions and other risks detailed from time-to-time in NETGEAR`s SEC filings and reports. NETGEAR undertakes no duty to update these forward-looking statements.

NETGEAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

Three months ended Year ended
December 31, December 31, December 31, December 31,
2003 2002 2003 2002
(Unaudited) (Unaudited) (Unaudited)
Net revenue $86,808 $71,903 $299,302 $237,331

Cost of revenue:
Cost of revenue 61,506 52,773 215,332 176,972
Amortization of
deferred stock-based
compensation 51 36 128 144
Total Cost of revenue 61,557 52,809 215,460 177,116
Gross profit 25,251 19,094 83,842 60,215

Operating expenses:
Research and
development 2,243 2,481 8,220 7,359
Sales and marketing 13,877 9,177 48,963 32,622
General and
administrative 2,940 2,438 8,977 8,103
Amortization of
deferred stock-
based compensation:
Research and
development 120 75 454 306
Sales and marketing 200 99 715 346
General and
administrative 119 370 476 867
Total operating
expenses 19,499 14,640 67,805 49,603
Income (loss) from
operations 5,752 4,454 16,037 10,612
Interest income 188 21 364 119
Interest expense -- (357) (901) (1,240)
Extinguishment of debt -- -- (5,868) --
Other income
(expense), net (15) (132) (59) (19)
Income (loss) before
income taxes 5,925 3,986 9,573 9,472
Provision (benefit)
for income taxes 1,993 562 (3,524) 1,333
Net income 3,932 3,424 13,097 8,139
Deemed dividend on
Preferred Stock -- -- -- (17,881)
Net income (loss)
attributable to
common stockholders $ 3,932 $ 3,424 $13,097 $(9,742)

Net income (loss)
per share
attributable to
common stockholders
Basic $0.14 $0.17 $ 0.55 $(0.46)
Diluted $0.12 $0.15 $ 0.49 $(0.46)

Weighted average
shares outstanding
for net income
(loss) per share
Basic 28,545 20,234 23,653 21,181
Diluted 31,657 23,347 26,800 21,181


NETGEAR, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Excluding Extinguishment of debt charge, Deferred tax asset valuation
allowance reversal, Deemed dividend on preferred stock, Stock-based
compensation and Benefit from utilization of net operating loss carry forwards
(NOL`s)
(In thousands, except per share data)
(Unaudited)

Three months ended Year ended
December 31, December 31, December 31, December 31,
2003 2002 2003 2002
Net revenue $ 86,808 $ 71,903 $299,302 $237,331

Cost of revenue:
Cost of revenue 61,506 52,773 215,332 176,972
Amortization of
deferred stock-
based compensation -- -- -- --
Total Cost of revenue 61,506 52,773 215,332 176,972
Gross profit 25,302 19,130 83,970 60,359

Operating expenses:
Research and
development 2,243 2,481 8,220 7,359
Sales and marketing 13,877 9,177 48,963 32,622
General and
administrative 2,940 2,438 8,977 8,103
Amortization of
deferred stock-
based compensation:
Research and
development -- -- -- --
Sales and marketing -- -- -- --
General and
administrative -- -- -- --
Total operating
expenses 19,060 14,096 66,160 48,084
Income from operations 6,242 5,034 17,810 12,275
Interest income 188 21 364 119
Interest expense -- (357) (901) (1,240)
Extinguishment of debt -- -- -- --
Other income
(expense), net (15) (132) (59) (19)
Income before
income taxes 6,415 4,566 17,214 11,135
Provision for
income taxes 1,993 2,172 6,248 5,159
Net income 4,422 2,394 10,966 5,976
Deemed dividend
on Preferred Stock -- -- -- --
Net income
attributable to
common stockholders $4,422 $2,394 $ 10,966 $5,976
Net income per share
attributable to
common stockholders
Basic $0.15 $0.12 $0.46 $0.28
Diluted $0.14 $0.10 $0.41 $0.27
Weighted average
shares outstanding
for net income
per share
Basic 28,545 20,234 23,653 21,181
Diluted 31,657 23,347 26,800 22,431


NETGEAR, INC.
GAAP TO PRO FORMA RECONCILIATION
(In thousands, except per share data)
(Unaudited)

Three months ended Year ended
December 31, 2003 December 31, 2003
GAAP Excluded Pro forma GAAP Excluded Pro forma

Net revenue $86,808 $ -- $86,808 $299,302 $ -- $299,302

Cost of
revenue:
Cost of
revenue 61,506 -- 61,506 215,332 -- 215,332
Amortization
of deferred
stock-based
compensation 51 51 -- 128 128 --
Total Cost of
revenue 61,557 51 61,506 215,460 128 215,332
Gross profit 25,251 (51) 25,302 83,842 (128) 83,970

Operating
expenses:
Research and
development 2,243 -- 2,243 8,220 -- 8,220
Sales and
marketing 13,877 -- 13,877 48,963 -- 48,963
General and
administrative 2,940 -- 2,940 8,977 -- 8,977
Amortization
of deferred
stock-based
compensation:
Research and
development 120 120 -- 454 454 --
Sales and
marketing 200 200 -- 715 715 --
General and
administrative 119 119 -- 476 476 --
Total
operating
expenses 19,499 439 19,060 67,805 1,645 66,160

Income (loss)
from operations 5,752 (490) 6,242 16,037 (1,773) 17,810
Interest income 188 -- 188 364 -- 364
Interest expense -- -- -- (901) -- (901)
Extinguishment
of debt -- -- -- (5,868) (5,868) --
Other income
(expense), net (15) -- (15) (59) -- (59)
Income (loss)
before income
taxes 5,925 (490) 6,415 9,573 (7,641) 17,214
Provision
(benefit) for
income taxes 1,993 -- 1,993 (3,524) (9,772) 6,248
Net income 3,932 (490) 4,422 13,097 2,131 10,966
Deemed dividend
on Preferred
Stock -- -- -- -- -- --
Net income
(loss)
attributable
to common
stockholders $3,932 $(490) $ 4,422 $13,097 $2,131 $10,966
Net income
(loss) per
share
attributable to
common
stockholders
Basic $ 0.14 $0.15 $0.55 $0.46
Diluted $ 0.12 $0.14 $0.49 $0.41
Weighted average
shares
outstanding
for net income
(loss) per
share
Basic 28,545 28,545 23,653 23,653
Diluted 31,657 31,657 26,800 26,800


NETGEAR, INC.
GAAP TO PRO FORMA RECONCILIATION
(In thousands, except per share data)
(Unaudited)

Three months ended Year ended
December 31, 2002 December 31, 2002
GAAP Excluded Pro forma GAAP Excluded Pro forma

Net revenue $71,903 $ -- $71,903 $237,331 $ -- $237,331

Cost of
revenue:
Cost of
revenue 52,773 -- 52,773 176,972 -- 176,972
Amortization
of deferred
stock-based
compensation 36 36 -- 144 144 --
Total Cost of
revenue 52,809 36 52,773 177,116 144 176,972
Gross profit 19,094 (36) 19,130 60,215 (144) 60,359

Operating
expenses:
Research and
development 2,481 -- 2,481 7,359 -- 7,359
Sales and
marketing 9,177 -- 9,177 32,622 -- 32,622
General and
administrative 2,438 -- 2,438 8,103 -- 8,103
Amortization of
deferred
stock-based
compensation:
Research and
development 75 75 -- 306 306 --
Sales and
marketing 99 99 -- 346 346 --
General and
administrative 370 370 -- 867 867 --
Total
operating
expenses 14,640 544 14,096 49,603 1,519 48,084

Income (loss)
from operations 4,454 (580) 5,034 10,612 (1,663) 12,275
Interest income 21 -- 21 119 -- 119
Interest expense (357) -- (357) (1,240) -- (1,240)
Extinguishment
of debt -- -- -- -- -- --
Other income
(expense), net (132) -- (132) (19) -- (19)
Income (loss)
before income
taxes 3,986 (580) 4,566 9,472 (1,663) 11,135
Provision
(benefit) for
income taxes 562 (1,610) 2,172 1,333 (3,826) 5,159
Net income 3,424 1,030 2,394 8,139 2,163 5,976
Deemed dividend
on Preferred
Stock -- -- -- (17,881) (17,881) --
Net income
(loss)
attributable
to common
stockholders $3,424 $1,030 $ 2,394 $(9,742)$(15,718) $ 5,976
Net income
(loss) per
share
attributable to
common
stockholders
Basic $ 0.17 $0.12 $(0.46) $0.28
Diluted $ 0.15 $0.10 $(0.46) $0.27
Weighted average
shares
outstanding
for net income
(loss) per
share
Basic 20,234 20,234 21,181 21,181
Diluted 23,347 23,347 21,181 22,431


NETGEAR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

December 31, December 31,
2003 2002
(Unaudited)
ASSETS

Current assets:
Cash and cash equivalents $61,215 $19,880
Short-term investments 12,390 --
Accounts receivable, net 74,866 42,492
Inventories 39,266 24,774
Deferred income taxes 9,056 --
Prepaid expenses and other current assets 4,169 3,003
Total current assets 200,962 90,149
Property and equipment, net 3,626 3,144
Goodwill, net 558 558
Total assets $205,146 $93,851


LIABILITIES, REDEEMABLE CONVERTIBLE
PREFERRED STOCK AND STOCKHOLDERS`
EQUITY (DEFICIT)

Current liabilities:

Accounts payable $24,480 $10,628
Payable to related parties 6,412 13,687
Accrued employee compensation 3,871 3,375
Other accrued liabilities 31,299 29,419
Deferred revenue 2,380 5,059
Income taxes payable 1,765 934
Note payable to Nortel Networks -- 13,294
Total current liabilities 70,207 76,396

Redeemable convertible preferred stock $ -- $48,052

Stockholders` equity (deficit):
Common stock 28 --
Additional paid-in capital 164,459 12,810
Deferred stock-based compensation (4,248) (4,997)
Other comprehensive income 11 --
Accumulated deficit (25,311) (38,410)
Total stockholders` equity (deficit) 134,939 (30,597)
Total liabilities, redeemable
convertible preferred stock and
stockholders` equity (deficit) $205,146 $93,851




--------------------------------------------------------------------------------
Source: NETGEAR, Inc.
NETGEAR Reports Second Quarter 2004 Results
Thursday July 29, 4:05 pm ET
* Second quarter 2004 net revenue increased to $88.4 million; 28.1% year over year growth
* Second quarter 2004 pro forma net income increased to $5.3 million, as compared to $2.2 in the comparable prior year quarter, 147% year over year growth
* Second quarter 2004 pro forma diluted EPS of $0.17 as compared to $0.09 in the comparable prior year quarter, an 89% year over year growth
* Second quarter 2004 gross margin improved to 32.1% and pro forma operating margin to 8.9%
* Company expects third quarter 2004 net revenue to be in the range of $98 million to $101 million, with pro forma operating margin in the range of 9.0% to 9.3%


SANTA CLARA, Calif., July 29 /PRNewswire-FirstCall/ -- NETGEAR, Inc. (Nasdaq: NTGR - News), a worldwide provider of technologically advanced, branded networking products, today reported financial results for the second quarter ended June 27, 2004.
ADVERTISEMENT


Net revenue for the second quarter ended June 27, 2004 was $88.4 million, a 28.1% increase compared to $69.0 million for the second quarter ended June 29, 2003; net revenue was $88.4 million in first quarter ended March 28, 2004. Net revenue in the second quarter of 2004 derived from North America was $46.5 million, the Europe, Middle East and Africa region was $32.6 million and the Asia Pacific region was $9.3 million.

The Company improved its gross margin in the second quarter of 2004 to 32.1%, as compared to 27.6% in the year ago comparable quarter and 31.1% in the prior quarter. Pro forma operating margin was 8.9% in the second quarter of 2004, compared to 5.4% in the year ago comparable quarter and 8.2% in the prior quarter. In the second quarter of 2004, pro forma operating expenses were 23.2% of net revenue, and sales and marketing expenses were 17.0% of net revenue. Research and development expenses remained essentially flat from the prior quarter at approximately 2.6% of net revenue for the second quarter of 2004. General and administration costs were 3.6% of net revenue for the second quarter of 2004.

Net income, computed in accordance with U.S. Generally Accepted Accounting Principles, or GAAP, for the second quarter of 2004 was $4.9 million or $0.16 per basic share and $0.15 per diluted share, compared to net income of $11.5 million for the second quarter of 2003 or $0.57 per basic share and $0.48 per diluted share. Included in net income for the prior year quarter was a $9.8 million reversal of a deferred tax valuation allowance. The year over year comparison of earnings per share takes into account an increase of approximately 8 million common shares outstanding reflecting the Company`s IPO, which was completed in July 2003.

Pro forma net income, which excludes non-cash, stock-based compensation expense of $445,000, for the second quarter of 2004 was $5.3 million, a 147.1% increase over the pro forma net income of $2.2 million for the second quarter of 2003, which excluded $422,000 for stock-based compensation expense and the $9.8 million reversal of deferred tax valuation allowance. Pro forma net income per share was $0.18 per basic share and $0.17 per diluted share in the second quarter of 2004, compared to $0.11 per basic share and $0.09 per diluted share in the second quarter of 2003. The accompanying schedules provide a reconciliation of net income computed on a GAAP basis to net income computed on a non-GAAP, or pro forma, basis.

Patrick Lo, Chairman and Chief Executive Officer of NETGEAR, commented, "This was another solid quarter for the business as demand for our wireless, broadband and Ethernet switching products worldwide remained strong. Our strength in the small business market helped offset a seasonally slower retail market. We expect our overall business momentum will continue as we enter the third quarter, which is typically more robust due to back-to-school demand in the retail market in the U.S. We expect that NETGEAR will experience better than industry growth as many of the products we introduced over the past two quarters continue to accelerate their sales momentum. The Company will also be introducing an impressive line-up of new products in the third quarter, which we expect will be well received, further powering our growth and market share gains in all regions in the quarters ahead."

Jonathan Mather, Chief Financial Officer of NETGEAR, said, "For the past four quarters as a public company NETGEAR has consistently met or exceeded our key financial metrics. In the second quarter of 2004, our gross margin again expanded, coming in at 32.1%, ahead of the 31.1% we achieved in the first quarter and well ahead of 27.6% in the year ago second quarter. We remain focused on further enhancing our revenue composition from a product, channel and geographic basis, and expect to benefit from additional improvements in gross margin. NETGEAR`s cash on hand, including short-term investments, increased to $111.2 million at the end of the second quarter of 2004 from $89.5 million at the end of the first quarter of 2004, primarily due to cash generated from operating activities."

Second quarter 2004 ending inventory was $44.2 million, representing 5.4 turns, compared to $39.1 million and 6.2 turns at the end of the first quarter of 2004. The increase is due to planned seasonal inventory stocking in advance of the back-to-school season in the U.S. Days sales outstanding (DSO`s) improved to 69 days in the second quarter of 2004, compared to 71 days in the first quarter of 2004. European distribution channel inventory ended at approximately 4.4 weeks. The U.S. retail channel inventory is at 9.2 weeks. U.S. distribution channel inventory is at 4.3 weeks.

Looking forward, Mr. Lo added, "We remain very optimistic for our business prospects as we continue to execute on the vast opportunities in our core small business and home users markets. We are also excited about the initial successes we have had globally in the service provider market, including the recent addition of Strato, one of Germany`s major Internet service providers, as a new customer. The international market continues to be a strong source of growth for NETGEAR. We believe that we continue to gain market share in Europe and our progress in Asia is encouraging, as evidenced by our 11% quarter over quarter growth there. We will be placing increased resources behind our efforts in our carrier and international businesses over the next few years given the significant opportunities. Overall, as we enter the seasonally stronger third quarter 2004 we expect net revenue to be in the range of approximately $98 million to $101 million, with pro forma operating income in the range of 9.0% to 9.3%. We also note that the third quarter of 2004 will contain 14 weeks compared to 13 weeks in the second quarter of 2004. Finally, we expect pro forma effective tax rate to remain about 37.0%."

Investor Conference Call / Webcast Details

NETGEAR will review second quarter 2004 results and discuss management`s expectations for the third quarter 2004 today, July 29, 2004, at 5:30 PM EDT (2:30 PM PDT). The conference call-in will be available at www.netgear.com and by telephone at (973) 582-2745. A replay will be available from 8:30 PM EDT (5:30 PM PDT) on July 29 through midnight EDT (9:00 PM PDT) on August 5 by telephone at (973) 341-3080. The confirmation identification for both the live call and the replay is 4960605.

About NETGEAR Inc.

NETGEAR designs technologically advanced, branded networking products that address the specific needs of small business and home users. The Company`s suite of approximately 100 products enables users to share Internet access, peripherals, files, digital multimedia content and applications among multiple personal computers and other Internet-enabled devices. NETGEAR is headquartered in Santa Clara, Calif. For more information, visit the Company`s Web site at www.netgear.com or call (408) 907-8000.

NOTE: NETGEAR is a registered trademark of NETGEAR, Inc. in the United States and other countries.

Contacts:
Doug Hagan David Pasquale
Director, Corporate Marketing Executive Vice President, Investor
NETGEAR, Inc. Relations
(408) 907-8053 The Ruth Group
doug.hagan@netgear.com (646) 536-7006
dpasquale@theruthgroup.com


Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 for NETGEAR, Inc.:

This release contains forward-looking statements. The forward-looking statements represent NETGEAR, Inc.`s expectations or beliefs concerning future events and include statements, among others, regarding NETGEAR`s expected revenue, earnings, operating income and tax rate, demand for products, and our prospects to gain market share internationally, especially in Europe and Asia. These statements are subject to risks and uncertainties. For example, our revenues could be less than expected if demand for our products is less than anticipated, we are unable to manufacture and distribute our products, or we are unable to collect receivables as they become due. Our earnings depend upon our revenues, as well as our ability to manage our costs, including the cost of developing new products and manufacturing and distributing our existing offerings. Other factors that could affect our forward-looking statements include without limitation, demand for our products, the price/performance requirements of customers, the ability of NETGEAR to sell products incorporating technology, the impact and pricing of competing technologies, the introduction of alternative technological solutions and other risks detailed from time-to-time in NETGEAR`s SEC filings and reports. NETGEAR undertakes no duty to update these forward-looking statements.

NETGEAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)

Three months ended Six months ended
June 27, June 29, June 27, June 29,
2004 2003 2004 2003

Net revenue $88,372 $69,003 $176,797 $136,709

Cost of revenue:
Cost of revenue 59,975 49,889 120,874 99,135
Amortization of deferred
stock-based compensation 40 42 82 31
Total Cost of revenue 60,015 49,931 120,956 99,166
Gross profit 28,357 19,072 55,841 37,543

Operating expenses:
Research and development 2,277 1,882 4,620 3,898
Sales and marketing 15,048 11,706 29,816 22,667
General and administrative 3,213 1,779 6,395 3,681
Amortization of deferred
stock-based compensation:
Research and development 119 103 237 199
Sales and marketing 189 179 377 288
General and administrative 97 98 194 249
Total operating
expenses 20,943 15,747 41,639 30,982
Income from operations 7,414 3,325 14,202 6,561
Interest income 321 25 544 53
Interest expense -- (370) -- (731)
Other income 206 128 103 50
Income before income taxes 7,941 3,108 14,849 5,933
Provision (benefit) for
income taxes 3,066 (8,395) 5,824 (7,182)
Net income $4,875 $11,503 $9,025 $13,115

Net income per share:
Basic $0.16 $0.57 $0.30 $0.65
Diluted $0.15 $0.48 $0.28 $0.55

Weighted average shares
outstanding for net income
per share:
Basic 30,367 20,230 29,951 20,230
Diluted 32,238 23,945 32,348 23,997


NETGEAR, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Excluding stock-based compensation and a deferred tax asset valuation
allowance reversal
(in thousands, except per share data)
(Unaudited)

Three months ended Six months ended
June 27, June 29, June 27, June 29,
2004 2003 2004 2003

Net revenue $88,372 $69,003 $176,797 $136,709

Cost of revenue:
Cost of revenue 59,975 49,889 120,874 99,135
Amortization of deferred
stock-based compensation -- -- -- --
Total Cost of revenue 59,975 49,889 120,874 99,135
Gross profit 28,397 19,114 55,923 37,574

Operating expenses:
Research and development 2,277 1,882 4,620 3,898
Sales and marketing 15,048 11,706 29,816 22,667
General and administrative 3,213 1,779 6,395 3,681
Amortization of deferred
stock-based compensation:
Research and development -- -- -- --
Sales and marketing -- -- -- --
General and administrative -- -- -- --
Total operating
expenses 20,538 15,367 40,831 30,246
Income from operations 7,859 3,747 15,092 7,328
Interest income 321 25 544 53
Interest expense -- (370) -- (731)
Other income 206 128 103 50
Income before income taxes 8,386 3,530 15,739 6,700
Provision for (benefit from)
income taxes 3,066 1,377 5,824 2,590
Net income $5,320 $2,153 $9,915 $4,110
Net income per share:
Basic $0.18 $0.11 $0.33 $0.20
Diluted $0.17 $0.09 $0.31 $0.17
Weighted average shares
outstanding for net income
per share:
Basic 30,367 20,230 29,951 20,230
Diluted 32,238 23,945 32,348 23,997


NETGEAR, INC.
SCHEDULE OF GAAP TO PRO FORMA RECONCILIATION
(in thousands, except per share data)
(Unaudited)

Three months ended Six months ended
June 27, 2004 June 27, 2004
Pro Pro
GAAP Excluded forma GAAP Excluded forma

Net revenue $88,372 $-- $88,372 $176,797 $-- $176,797

Cost of revenue:
Cost of revenue 59,975 -- 59,975 120,874 -- 120,874
Amortization of
deferred stock-
based compensation 40 40 -- 82 82 --
Total Cost of
revenue 60,015 40 59,975 120,956 82 120,874
Gross profit 28,357 (40) 28,397 55,841 (82) 55,923

Operating expenses:
Research and
development 2,277 -- 2,277 4,620 -- 4,620
Sales and marketing 15,048 -- 15,048 29,816 -- 29,816
General and
administrative 3,213 -- 3,213 6,395 -- 6,395
Amortization of
deferred stock-based
compensation:
Research and
development 119 119 -- 237 237 --
Sales and marketing 189 189 -- 377 377 --
General and
administrative 97 97 -- 194 194 --
Total operating
expenses 20,943 405 20,538 41,639 808 40,831
Income from
operations 7,414 (445) 7,859 14,202 (890) 15,092
Interest income 321 -- 321 544 -- 544
Interest expense -- -- -- -- -- --
Other income 206 -- 206 103 -- 103
Income before income
taxes 7,941 (445) 8,386 14,849 (890) 15,739
Provision for income
taxes 3,066 -- 3,066 5,824 -- 5,824
Net income $4,875 $(445) $5,320 $9,025 $(890) $9,915

Net income per share
Basic $0.16 $0.18 $0.30 $0.33
Diluted $0.15 $0.17 $0.28 $0.31
Weighted average shares
outstanding for net
income per share:
Basic 30,367 30,367 29,951 29,951
Diluted 32,238 32,238 32,348 32,348


NETGEAR, INC.
SCHEDULE OF GAAP TO PRO FORMA RECONCILIATION
(in thousands, except per share data)
(Unaudited)

Three months ended Six months ended
June 29, 2003 June 29, 2003
Pro Pro
GAAP Excluded forma GAAP Excluded forma

Net revenue $69,003 $-- $69,003 $136,709 $-- $136,709

Cost of revenue:
Cost of revenue 49,889 -- 49,889 99,135 -- 99,135
Amortization of
deferred stock-
based compensation 42 42 -- 31 31 --
Total Cost of
revenue 49,931 42 49,889 99,166 31 99,135
Gross profit 19,072 (42) 19,114 37,543 (31) 37,574

Operating expenses:
Research and
development 1,882 -- 1,882 3,898 -- 3,898
Sales and marketing 11,706 -- 11,706 22,667 -- 22,667
General and
administrative 1,779 -- 1,779 3,681 -- 3,681
Amortization of
deferred stock-
based compensation:
Research and
development 103 103 -- 199 199 --
Sales and marketing 179 179 -- 288 288 --
General and
administrative 98 98 -- 249 249 --
Total operating
expenses 15,747 380 15,367 30,982 736 30,246
Income from
operations 3,325 (422) 3,747 6,561 (767) 7,328
Interest income 25 -- 25 53 -- 53
Interest expense (370) -- (370) (731) --
(731)
Other income 128 -- 128 50 -- 50
Income before income
taxes 3,108 (422) 3,530 5,933 (767) 6,700
Provision (benefit)
for income taxes (8,395) (9,772) 1,377 (7,182)(9,772) 2,590
Net income $11,503 $9,350 $2,153 $13,115 $9,005 $4,110
Net income per share
Basic $0.57 $0.11 $0.65 $0.20
Diluted $0.48 $0.09 $0.55 $0.17
Weighted average
shares outstanding
for net income per
share
Basic 20,230 20,230 20,230 20,230
Diluted 23,945 23,945 23,997 23,997


NETGEAR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)

June 27, December 31,
2004 2003
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $98,923 $61,215
Short-term investments 12,303 12,390
Accounts receivable, net 67,291 74,866
Receivable from related parties 160 --
Inventories 44,156 39,266
Deferred income taxes 9,056 9,056
Prepaid expenses and other current assets 3,871 4,169
Total current assets 235,760 200,962
Property and equipment, net 3,338 3,626
Goodwill, net 558 558
Total assets $239,656 $205,146

LIABILITIES AND STOCKHOLDERS` EQUITY
Current liabilities:
Accounts payable $21,062 $24,480
Payable to related parties 8,492 6,412
Accrued employee compensation 6,489 3,871
Other accrued liabilities 41,156 31,299
Deferred revenue 3,420 2,380
Income taxes payable -- 1,765
Total current liabilities 80,619 70,207

Stockholders` equity:
Common stock 30 28
Additional paid-in capital 178,426 164,459
Deferred stock-based compensation (3,126) (4,248)
Other comprehensive income (5) 13
Accumulated deficit (16,288) (25,313)
Total stockholders` equity 159,037 134,939
Total liabilities and stockholders` equity $239,656 $205,146




--------------------------------------------------------------------------------
Source: NETGEAR, Inc.


Beitrag zu dieser Diskussion schreiben


Es handelt sich hier um einen ältere Diskussionen, daher ist das Schreiben in dieser Diskussion nicht mehr möglich. Bitte eröffnen Sie hier ein neue Diskussion.