8-KEarnings & Results

CISCO SYSTEMS, INC. 8-K Report, Financial Results (Aug 13, 2014)

Filed August 13, 2014For Securities:CSCO

Summary

Cisco Systems, Inc. (CSCO) filed an 8-K on August 13, 2014, to report its financial results for the fourth quarter and full fiscal year 2014, which ended on July 26, 2014. This filing primarily serves to furnish the press release detailing these results, which was issued on the same date. While the 8-K itself does not contain the detailed financial figures, it highlights Cisco's use of non-GAAP financial measures. The company explains its rationale for presenting non-GAAP net income, non-GAAP effective tax rates, non-GAAP net income per share, non-GAAP inventory turns, and free cash flow. These adjustments are intended to provide investors with a clearer view of underlying business trends by excluding items such as share-based compensation, amortization of acquisition-related intangibles, acquisition/divestiture costs, and significant litigation or restructuring charges. Investors should note that these non-GAAP measures are not prepared in accordance with GAAP and should be considered alongside the company's GAAP financial statements.

Key Highlights

  • 1Cisco Systems reported its fourth quarter and full fiscal year 2014 results on August 13, 2014.
  • 2The filing is primarily a notification and furnishing of a press release (Exhibit 99.1) detailing these results.
  • 3Cisco emphasizes its use of non-GAAP financial measures for reporting.
  • 4Key non-GAAP metrics discussed include net income, effective tax rates, net income per share, inventory turns, and free cash flow.
  • 5The company justifies the use of non-GAAP measures to provide insight into operating trends by excluding certain non-recurring or non-cash items.
  • 6Excluded items include share-based compensation, amortization of acquisition-related intangibles, acquisition/divestiture costs, and significant asset impairments/restructurings.
  • 7Free cash flow is highlighted as a key liquidity measure, reflecting cash available for shareholder returns and business investments.

Frequently Asked Questions

The primary purpose of this 8-K filing is to formally announce and provide Cisco Systems, Inc.'s financial results for its fourth fiscal quarter and the full fiscal year 2014, which ended on July 26, 2014. It serves to furnish the press release that contains these detailed results.

Non-GAAP financial measures are financial metrics that are adjusted to exclude certain items that may not be indicative of Cisco's core operating performance. Cisco uses these measures, such as non-GAAP net income and free cash flow, to provide investors with a more consistent and comparable view of its ongoing business trends by excluding expenses like share-based compensation, acquisition-related costs, and restructuring charges. The company believes these adjusted figures offer useful insights when viewed alongside their GAAP counterparts.

No, the non-GAAP financial measures presented by Cisco are not prepared in accordance with GAAP. They are an alternative to, and may differ from, similar measures used by other companies. Cisco explicitly states that these measures have limitations and should only be used to evaluate their financial performance in conjunction with the corresponding GAAP measures.

Cisco excludes several items when calculating its non-GAAP results, which can include, but are not limited to: share-based compensation expense, amortization of acquisition-related intangible assets, inventory purchase accounting adjustments, acquisition and divestiture costs, significant asset impairments and restructurings, significant litigation and other contingencies, and the tax effects of these items. The company may also exclude significant tax matters that relate to prior fiscal years.