8-KEarnings & Results

CISCO SYSTEMS, INC. 8-K Report, Financial Results (Feb 7, 2006)

Filed February 7, 2006For Securities:CSCO

Summary

Cisco Systems, Inc. (CSCO) filed an 8-K on February 7, 2006, to report its financial results for the fiscal second quarter ended January 28, 2006. The filing primarily serves to furnish a press release detailing these results, which are presented in both GAAP and non-GAAP (pro forma) measures. The company emphasizes that these non-GAAP measures are provided to offer additional insights into financial and business trends and are used internally by management for budgeting and performance review. Investors should note that the press release contains detailed financial information, including net income, earnings per share, inventory turns, and gross margins, presented on a pro forma basis. Cisco explains its rationale for providing non-GAAP figures, highlighting that they exclude items such as stock-based compensation expense, payroll tax on stock option exercises, in-process R&D, acquisition-related compensation, and amortization of intangibles. The company intends for these non-GAAP metrics to supplement, not replace, the standard GAAP reporting, offering a clearer view of operational performance and the impact of specific accounting adjustments, particularly as the company prepares to adopt SFAS 123(R).

Key Highlights

  • 1Cisco Systems reported its fiscal second quarter 2006 financial results on February 7, 2006.
  • 2The filing includes a press release (Exhibit 99.1) with detailed financial performance for the quarter ended January 28, 2006.
  • 3Both Generally Accepted Accounting Principles (GAAP) and non-GAAP (pro forma) financial measures are presented.
  • 4The company explains its use of non-GAAP measures to provide additional insight into financial and business trends.
  • 5Non-GAAP results exclude specific items, including stock-based compensation, payroll tax on stock options, and amortization of intangibles.
  • 6Management utilizes these non-GAAP measures alongside GAAP figures for internal budgeting and financial review.
  • 7The filing notes the upcoming adoption of SFAS 123(R) and the usefulness of non-GAAP reporting in reflecting its impact.

Frequently Asked Questions

The main purpose of this 8-K filing is to report Cisco Systems' financial results for its fiscal second quarter ended January 28, 2006, by furnishing a press release that contains these results.

Cisco provides non-GAAP financial information because it believes these measures offer useful insights to management and investors regarding financial and business trends. They are presented alongside GAAP measures to provide a more comprehensive view of the company's performance, particularly by excluding certain expenses like stock-based compensation and amortization of intangibles, which can fluctuate and may impact comparability.

Cisco's non-GAAP reporting excludes expenses such as stock-based compensation related to employee stock options and purchases, payroll tax on stock option exercises, in-process research and development costs, compensation expense related to acquisitions and investments, and amortization of purchased intangible assets. Income tax effects of these items are also excluded.

No, the information contained in this 8-K filing and its accompanying exhibit is furnished, not filed. Therefore, it is not subject to the liabilities of Section 18 of the Securities Exchange Act of 1934 or Sections 11 and 12(a)(2) of the Securities Act of 1933.