8-KEarnings & Results

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

Filed November 8, 2006For Securities:CSCO

Summary

Cisco Systems, Inc. (CSCO) filed an 8-K on November 8, 2006, to report its financial results for the fiscal first quarter ended October 28, 2006. The filing primarily includes a press release detailing these results and an explanation of the company's use of non-GAAP financial measures. Investors should note that Cisco provided both GAAP and non-GAAP figures, with the latter excluding items such as employee share-based compensation, purchase accounting adjustments, payroll taxes on stock option exercises, and acquisition-related expenses. The company utilizes these non-GAAP measures, which exclude certain expenses it deems not reflective of ongoing operating results or not directly related to its core business operations, to offer a more focused view on its financial and business trends. While these non-GAAP figures are presented to supplement the GAAP results, investors are cautioned to consider them alongside the official GAAP financial statements.

Key Highlights

  • 1Cisco Systems, Inc. announced its financial results for the fiscal first quarter ended October 28, 2006.
  • 2The 8-K filing includes a press release (Exhibit 99.1) detailing the quarterly results.
  • 3The company provided both GAAP (Generally Accepted Accounting Principles) and non-GAAP financial measures.
  • 4Non-GAAP measures exclude items such as employee share-based compensation expense and acquisition-related costs.
  • 5Cisco management uses these non-GAAP measures for internal budgeting and operational reviews.
  • 6The company believes non-GAAP measures offer useful insights into financial and business trends when viewed with GAAP results.
  • 7Investors are advised that non-GAAP measures may differ from those of other companies and should be evaluated alongside GAAP figures.

Frequently Asked Questions

The main purpose of this 8-K filing is to report Cisco Systems, Inc.'s financial results for its fiscal first quarter ended October 28, 2006, through an accompanying press release.

Cisco's non-GAAP financial measures exclude items such as employee share-based compensation expense, impact to cost of sales 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 significant gains and losses on publicly traded equity securities, along with their related income tax effects.

Cisco believes that presenting non-GAAP financial measures alongside corresponding GAAP measures provides useful information to investors and management regarding financial and business trends. They exclude items that management does not believe are reflective of ongoing operating results or directly correlated to the operation of the business, offering a potentially clearer view of core operational performance.

Investors should interpret the non-GAAP information as supplementary to the official GAAP financial results. Cisco itself states that these measures are not in accordance with, or an alternative for, GAAP and may differ from similar measures used by other companies. They should be used to evaluate the company's results in conjunction with the corresponding GAAP measures.