8-KEarnings & Results

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

Filed August 8, 2006For Securities:CSCO

Summary

This Form 8-K filing from Cisco Systems, Inc. (CSCO) on August 8, 2006, announces the company's financial results for its fiscal fourth quarter and full fiscal year ended July 29, 2006. The report primarily serves to furnish a press release detailing these results, which includes both GAAP and non-GAAP financial metrics. Investors should note that Cisco is presenting non-GAAP measures such as non-GAAP net income, non-GAAP net income per share, and non-GAAP inventory turns, which exclude certain expenses like stock-based compensation, purchase accounting adjustments, payroll taxes on stock option exercises, acquisition-related expenses, in-process R&D, and gains/losses on equity securities. The company states these non-GAAP measures are used internally for performance evaluation and are believed to provide useful insights into financial and business trends when viewed alongside GAAP results. The exclusion of these specific items, particularly stock-based compensation and acquisition-related costs, is a key focus for investors. Cisco's management believes these excluded items do not fully reflect the ongoing operational performance of the business. The filing also clarifies that certain of these excluded items, such as stock-based compensation and amortization of intangibles, are expected to continue in future periods, while others like in-process R&D are dependent on specific transactions. Investors are cautioned that these non-GAAP measures are not standardized and may differ from those presented by other companies.

Key Highlights

  • 1Cisco Systems reported its financial results for the fiscal fourth quarter and full fiscal year ended July 29, 2006.
  • 2The 8-K filing includes a press release with both GAAP and non-GAAP financial results.
  • 3Non-GAAP financial measures are presented, including non-GAAP net income and non-GAAP net income per share.
  • 4Key exclusions from non-GAAP measures include stock-based compensation, acquisition-related costs, and purchase accounting adjustments.
  • 5Cisco management utilizes non-GAAP measures for internal performance assessment and believes they offer valuable insights into business trends.
  • 6Investors are advised that non-GAAP measures are not standardized and may differ from those of other companies.
  • 7The company expects certain excluded items, like stock-based compensation, to continue in future periods.

Frequently Asked Questions

The primary purpose of this Form 8-K filing is to officially report Cisco Systems' financial results for its fiscal fourth quarter and full fiscal year ended July 29, 2006, by furnishing the accompanying press release.

Cisco's non-GAAP results exclude several items that are included in GAAP. These exclusions primarily consist of stock-based compensation expenses, impact from purchase accounting adjustments to inventory, payroll tax on stock option exercises, compensation expense related to acquisitions and investments, in-process research and development, amortization of purchased intangible assets, and gains/losses on publicly traded equity securities, along with their related tax effects. Cisco believes these exclusions provide a clearer view of ongoing operational performance.

Cisco states that it provides non-GAAP measures because management uses them for internal budgeting and performance review, and believes they offer useful insights into financial and business trends related to its operations and inventory management. They are presented to supplement, not replace, GAAP results.

No, Cisco explicitly states that its non-GAAP measures are not in accordance with, or an alternative for, Generally Accepted Accounting Principles (GAAP). They may differ from non-GAAP measures used by other companies and are not based on a comprehensive set of accounting rules or principles. Investors should exercise caution when comparing these measures to those of other entities.