Press Release

ARRIS Announces Preliminary and Unaudited First Quarter 2009 Results
SUWANEE, Ga., April 29, 2009 /PRNewswire-FirstCall via COMTEX/ -- ARRIS Group, Inc. (Nasdaq: ARRS), a global technology leader in the development of advanced cable telephony, next generation high-speed data, demand driven video solutions, operations software and broadband access equipment, today announced preliminary and unaudited financial results for the first quarter 2009, which were within the revenue and earnings guidance that the Company provided on February 11, 2009.

Revenues were $253.5 million as compared to first quarter 2008 revenues of $273.5 million and as compared to fourth quarter 2008 revenues of $292.4 million.

Non-GAAP net income in the first quarter 2009 was $0.18 per diluted share, as compared to the first quarter 2008 of $0.12 per diluted share and the fourth quarter 2008 of $0.25 per diluted share.

GAAP net income in the first quarter 2009 was $0.10 per diluted share, as compared to the first quarter 2008 net income of $0.03 per diluted share, and as compared to the fourth quarter 2008 net loss of $(1.33) per diluted share. The fourth quarter 2008 loss was primarily the result of a goodwill impairment, net of a related estimated tax benefit, of $(184.6) million, or $(1.48) per diluted share resulting from the Company's annual goodwill impairment analysis.

Significant non-GAAP items in the first quarter 2009 include: amortization of intangibles, equity compensation expense, non-cash interest related to convertible debt, and a gain on the partial retirement of convertible debt. A reconciliation of non-GAAP to GAAP earnings per share is attached to this release and also can be found on the Company's website (www.arrisi.com).

The Company ended the first quarter 2009 with $424.4 million of cash and short-term investments, which compares to $427.3 million at the end of 2008. The Company generated approximately $13.8 million of cash from operating activities in the first quarter 2009. This amount compares to cash generated from operating activities of $30.5 million during the first quarter 2008. The Company used $10.6 million of cash to retire $15.0 million face value convertible debt in the first quarter 2009.

Order backlog at the end of the first quarter 2009 was $155.0 million and the Company's book to bill ratio in the first quarter was approximately 1.16. This amount compares to order backlog of $114.8 million and book to bill ratio of 0.90 for the fourth quarter of 2008.

"Although macro-economic conditions caused 2009 to start off somewhat slowly, we delivered a solid quarter with significantly higher earnings than a year ago," said Bob Stanzione, ARRIS Chairman & CEO. "During the quarter we have seen positive signs in our business that, coupled with the current plans of our customers, gives me cautious optimism that our business will gain momentum in the second quarter and beyond."

During the quarter the Company announced that Japan Cablenet Limited, the second largest cable operator in Japan, will begin wide-scale deployment of a 160 Mbps Super High Speed Data service, called "Speed Star 160," across its cable system footprint using both the ARRIS C4 CMTS platform and the ARRIS DOCSIS 3.0 customer premises equipment. In addition, the Company announced the debut of the newest member of its industry-leading CMTS portfolio, the C4c(TM), a small-form factor DOCSIS 3.0-based CMTS chassis that uses existing C4(R) architecture and modules and is designed for smaller operators and for headends lacking the space or environmental capacity for a full C4(R) chassis.

"We are off to a solid start to the year, particularly in light of the overall market conditions and I am pleased to see strengthening demand in the second quarter," said David Potts, ARRIS EVP & CFO. "As a result, we now project that revenues for the Company in the second quarter 2009 will be in the range of $270 to $290 million with non-GAAP net income per diluted share in the range of $0.20 to $0.24 and GAAP net income per diluted share, in the range of $0.12 to $0.16."

ARRIS management will conduct a conference call at 5:00pm EDT, today, Wednesday, April 29, 2009, to discuss these results in detail. You may participate in this conference call by dialing 888-713-4215 or 617-213-4867 for international calls prior to the start of the call and providing the ARRIS Group, Inc. name, conference passcode 66272751 and Jim Bauer as the moderator. Please note that ARRIS will not accept any calls related to this earnings release until after the conclusion of the 5:00pm EDT conference call. A replay of the conference call can be accessed approximately two hours after the call through Monday, May 4, 2009 by dialing 888-286-8010 or 617-801-6888 for international calls and using the passcode 62429395. A replay also will be made available for a period of 12 months following the conference call on ARRIS' website at www.arrisi.com.

ARRIS is a global communications technology company specializing in the design, engineering and supply of technology supporting triple and quad-play broadband services for residential and business customers around the world. The Company supplies broadband operators with the tools and platforms they need to deliver reliable telephony, demand driven video, next-generation advertising and high-speed data services. ARRIS products expand and help grow network capacity with access and outside plant construction equipment, reliably deliver voice, video and data services and assure optimal service delivery for end customers. Headquartered in Atlanta, Georgia, USA, ARRIS has R&D centers in Atlanta; Chicago; Beaverton, Oregon; State College, Pennsylvania; Wallingford, Connecticut; Ireland and China, and operates support and sales offices throughout the world. Information about ARRIS products and services can be found at http://www.arrisi.com.

Forward-looking statements:

Statements made in this press release, including those related to:

    --  growth expectations for 2009;
    --  second quarter and 2009 revenues and net income;
    --  expected sales levels and acceptance of certain ARRIS products;
    --  the general market outlook; and
    --  the outlook for industry trends

are forward-looking statements. These statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. Among other things,

    --  projected results for the second quarter as well as the general outlook
        for 2009 and beyond are based on preliminary estimates, assumptions and
        projections that management believes to be reasonable at this time, but
        are beyond management's control;
    --  our customers operate in a capital intensive industry, and the current
        disruptions in the capital markets may adversely impact their ability to
        finance, and therefore purchase, the products that we offer; and
    --  because the market in which ARRIS operates is volatile, actions taken
        and contemplated may not achieve the desired impact relative to changing
        market conditions and the success of these strategies will be dependent
        on the effective implementation of those plans while minimizing
        organizational disruption.

In addition to the factors set forth elsewhere in this release, other factors that could cause results to differ from current expectations include: the uncertain current economic climate and its impact on our customers' plans and access to capital; the impact of rapidly changing technologies; the impact of competition on product development and pricing; the ability of ARRIS to react to changes in general industry and market conditions including regulatory developments; rights to intellectual property, market trends and the adoption of industry standards; and consolidations within the telecommunications industry of both the customer and supplier base. These factors are not intended to be an all-encompassing list of risks and uncertainties that may affect the Company's business. Additional information regarding these and other factors can be found in ARRIS' reports filed with the Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2008. In providing forward-looking statements, the Company expressly disclaims any obligation to update publicly or otherwise these statements, whether as a result of new information, future events or otherwise.


                                 ARRIS GROUP, INC.
                      PRELIMINARY CONSOLIDATED BALANCE SHEETS
                                  (in thousands)


                                     March 31,   December 31,  September 30,
                                       2009          2008          2008
                                    (unaudited)    (audited)    (unaudited)
                                    -----------    ---------    -----------

    ASSETS

    Current assets:
      Cash and cash equivalents      $398,938      $409,894       $305,987
      Short-term investments, at
       fair value                      25,494        17,371         23,571
                                       ------        ------         ------
        Total cash, cash
         equivalents and
         short-term investments       424,432       427,265        329,558

      Restricted cash                   4,550         5,673          5,768
      Accounts receivable, net        155,792       159,443        180,367
      Other receivables                 6,636         4,749          5,180
      Inventories, net                120,774       129,752        139,598
      Prepaids                          6,994         8,004          5,156
      Current deferred income tax
       assets                          49,027        44,004         42,714
      Other current assets             18,315        19,782         22,132
                                       ------        ------         ------
        Total current assets          786,520       798,672        730,473

    Property, plant and equipment,
     net                               59,438        59,204         60,268
    Goodwill                          231,684       231,684        449,418
    Intangible assets, net            218,085       227,348        236,689
    Investments                        14,593        14,681         15,086
    Noncurrent deferred income
     Tax assets                         3,771        12,157          3,988
    Other assets                        5,483         6,576          7,173
                                        -----         -----          -----
                                   $1,319,574    $1,350,322     $1,503,095
                                   ==========    ==========     ==========


    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:
      Accounts payable                $44,422       $75,863        $54,304
      Accrued compensation,
       benefits and related taxes      15,583        27,024         21,831
      Accrued warranty                  5,306         5,652          6,354
      Deferred revenue                 44,006        44,461         35,986
      Current portion of long-term
       debt                               147           146            234
      Current deferred income tax
       liability                          241         1,059              -
      Other accrued liabilities        31,922        25,410         30,205
                                       ------        ------         ------
        Total current liabilities     141,627       179,615        148,914
    Long-term debt, net of current
     portion                          203,080       211,870        209,340
    Accrued pension                    19,289        18,820         10,622
    Noncurrent income tax payable      12,441         9,607         10,128
    Noncurrent deferred income tax
     liability                         42,530        41,598         67,403
    Other long-term liabilities        14,391        15,343         18,088
                                       ------        ------         ------
          Total liabilities           433,358       476,853        464,495

    Stockholders' equity:
      Preferred stock                       -             -              -
      Common stock                      1,368         1,362          1,360
      Capital in excess of par
       value                        1,159,054     1,159,097      1,155,211
      Treasury stock at cost          (75,960)      (75,960)       (75,960)
      Unrealized gain (loss) on
       marketable securities             (372)         (274)          (128)
      Unfunded pension liability       (8,070)       (8,070)        (3,358)
      Accumulated deficit            (189,620)     (202,502)       (38,341)
      Cumulative translation
       adjustments                       (184)         (184)          (184)
                                         ----          ----           ----
        Total stockholders' equity    886,216       873,469      1,038,600
                                      -------       -------      ---------
                                   $1,319,574    $1,350,322     $1,503,095
                                   ==========    ==========     ==========


                                             June 30,       March 31,
                                               2008            2008
                                           (unaudited)     (unaudited)
                                           -----------     -----------

    ASSETS

    Current assets:
      Cash and cash equivalents            $290,266         $243,515
      Short-term investments, at
       fair value                             7,503           49,513
                                              -----           ------
        Total cash, cash
         equivalents and short-term
         investments                        297,769          293,028

      Restricted cash                         7,051            7,186
      Accounts receivable, net              178,178          172,719
      Other receivables                       9,067            6,074
      Inventories, net                      144,507          122,361
      Prepaids                                5,305            5,680
      Current deferred income tax assets     47,412           51,993
      Other current assets                   18,916           10,952
                                             ------           ------
        Total current assets                708,205          669,993

    Property, plant and equipment, net       60,823           60,747
    Goodwill                                452,398          453,454
    Intangible assets, net                  244,575          257,029
    Investments                               9,937           10,200
    Noncurrent deferred income tax assets     4,256            4,430
    Other assets                              9,488           10,641
                                              -----           ------
                                         $1,489,682       $1,466,494
                                         ==========       ==========


    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:
      Accounts payable                      $68,476          $60,490
      Accrued compensation,
       benefits and related taxes            18,072           14,397
      Accrued warranty                        7,566            7,919
      Deferred revenue                       37,614           32,738
      Current portion of long-term
       debt                                     314              310
      Current deferred income tax
       liability                                  -                -
      Other accrued liabilities              26,884           32,922
                                             ------           ------
        Total current liabilities           158,926          148,776
    Long-term debt, net of current
     portion                                206,865          204,288
    Accrued pension                          11,362           10,905
    Noncurrent income tax payable             6,250            6,487
    Noncurrent deferred income tax
     liability                               74,805           74,164
    Other long-term liabilities              18,694           19,704
                                             ------           ------
          Total liabilities                 476,902          464,324

    Stockholders' equity:
      Preferred stock                             -                -
      Common stock                            1,358            1,357
      Capital in excess of par value      1,151,680        1,148,815
      Treasury stock at cost                (76,007)         (76,007)
      Unrealized gain (loss) on
       marketable securities                     66              151
      Unfunded pension liability             (3,358)          (3,358)
      Accumulated deficit                   (60,775)         (68,604)
      Cumulative translation
       adjustments                             (184)           (184)
                                               ----             ----
        Total stockholders' equity        1,012,780        1,002,170
                                          ---------        ---------
                                         $1,489,682       $1,466,494
                                         ==========       ==========



                         ARRIS GROUP, INC.
         PRELIMINARY CONSOLIDATED STATEMENTS OF OPERATIONS
               (in thousands, except per share data)

                                            For the Three Months
                                               Ended March 31,
                                          -------------------------
                                              2009         2008
                                          (unaudited)   (unaudited)
                                          -----------   -----------

    Net sales                               $253,518     $273,506
    Cost of sales                            158,008      188,258
                                             -------      -------
      Gross margin                            95,510       85,248
      Gross margin %                            37.7%        31.2%

    Operating expenses:
      Selling, general, and administrative
       expenses                               35,343       36,982
      Research and development expenses       28,395       28,122
      Restructuring                              120          405
      Amortization of intangible assets        9,263       13,254
                                               -----       ------
                                              73,121       78,763
                                              ------       ------
    Operating income                          22,389        6,485
    Other expense (income):
      Interest expense                         4,487        4,021
      Loss on investments                        297            2
      Loss (gain) on foreign currency            958         (990)
      Interest income                           (385)      (2,685)
      Gain on debt retirement                 (4,151)           -
      Other (income) expense, net               (103)         (36)
                                                ----          ---
    Income from continuing
     operations before income taxes           21,286        6,173
      Income tax expense                       8,404        2,344
                                               -----        -----
        Net income                           $12,882       $3,829
                                             =======       ======

    Net income per common share:
      Basic                                    $0.10        $0.03
                                               =====        =====
      Diluted                                  $0.10        $0.03
                                               =====        =====

    Weighted average common shares:
      Basic                                  123,281      130,763
                                             =======      =======
      Diluted                                124,920      131,981
                                             =======      =======



                               ARRIS GROUP, INC.
               PRELIMINARY CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

                                                      For the Three Months
                                                         Ended March 31,
                                                    ------------------------
                                                        2009        2008
                                                    (unaudited)  (unaudited)
                                                    -----------  -----------

    Operating Activities:
      Net income                                      $12,882       $3,829
      Adjustments to reconcile net income to net
       cash provided by operating activities:
        Depreciation                                    4,827        4,963
        Amortization of intangible assets               9,263       13,254
        Stock compensation expense                      3,401        2,551
        Deferred income tax provision (benefit)         4,689       (6,389)
        Amortization of deferred finance fees             189          191
        Provision for doubtful accounts                     6          205
        Loss on investments                               297            2
        Non-cash interest expense                       2,818        2,605
        Gain on debt retirement                        (4,152)           -
        Excess tax benefits from stock-based
         compensation plans                              (431)           -
      Changes in operating assets & liabilities,
       net of effects of acquisitions and disposals:
        Accounts receivable                             3,645       (5,336)
        Other receivables                              (2,032)      (1,744)
        Inventory                                       8,978       10,245
        Income taxes payable                           (1,123)      (1,734)
        Accounts payable and accrued liabilities      (35,789)       9,300
        Other, net                                      6,377       (1,427)
                                                        -----       ------
          Net cash provided by operating activities    13,845       30,515

    Investing Activities:
      Purchases of property, plant, and equipment      (5,066)      (6,429)
      Cash paid for acquisition, net of cash
       acquired                                          (200)      (4,192)
      Cash proceeds from sale of property, plant
       & equipment                                          -          224
      Purchases of short-term-investments             (23,870)     (16,887)
      Disposals of short-term-investments              15,806       30,500
                                                       ------       ------
          Net cash provided by (used in) investing
           activities                                 (13,330)       3,216

    Financing Activities:
      Payment of debt and capital lease obligations   (10,592)     (35,097)
      Repurchase of common stock                            -      (75,960)
      Excess tax benefits from stock-based
       compensation plans                                 431            -
      Employer repurchase of shares to satisfy
       minimum tax withholdings                        (1,807)        (239)
      Fees and proceeds from issuance of common
       stock, net                                         497       (2,717)
                                                          ---       ------
          Net cash provided by (used in)
           financing activities                       (11,471)    (114,013)

          Net increase (decrease) in cash and
           cash equivalents                           (10,956)     (80,282)
    Cash and cash equivalents at beginning
     of period                                        409,894      323,797
                                                      -------      -------
    Cash and cash equivalents at end of period       $398,938     $243,515
                                                     ========     ========



                               ARRIS GROUP, INC.
               PRELIMINARY SUPPLEMENTAL NET INCOME (LOSS) RECONCILIATION
                     (in thousands, except per share data)
                                 (unaudited)

                                   -------------------   -------------------
                                          Q1 2009              Q1 2008
                                   -------------------   -------------------
                                           Per Diluted           Per Diluted
                                   Amount     Share      Amount     Share
                                   ------  -----------   ------  -----------
    Net income                    $12,882     $0.10      $3,829     $0.03

    Highlighted items:
      Impacting gross margin:
        Stock compensation
         expense                      303         -         201         -

      Impacting operating
       expenses:
        Integration costs               -         -         427         -
        Restructuring charges         120         -         405         -
        Amortization of
         intangible assets          9,263      0.07      13,254      0.10
        Stock compensation
         expense                    3,098      0.02       2,350      0.02

      Impacting other (income) /
       expense:
        Convertible debt
         non-cash interest          2,818      0.02       2,605      0.02
        Gain on retirement of
         debt                      (4,152)    (0.03)          -         -

      Impacting income tax expense:
        Adjustments of income tax
         valuation
         allowances and research
         & development credits
         and other                  1,455      0.01

      Tax related to
       highlighted items above     (3,646)    (0.03)     (7,268)    (0.06)

                                    -----      ----      ------      ----
    Total highlighted items         9,259      0.07      11,974      0.09
                                    -----      ----      ------      ----
    Net income excluding
     highlighted items            $22,141     $0.18     $15,803     $0.12
                                  =======     =====     =======     =====

    Weighted average common
     shares - diluted                       124,920               131,981
                                            =======               =======


    With respect to stock compensation expense,  ARRIS records non-cash
    compensation expense related to grants of options and restricted stock.
    Depending upon the size, timing and the terms of the grants, this
    non-cash compensation expense may vary significantly.  With respect to
    amortization of intangibles, the intangibles being amortized relate to
    our recent acquisition of C-COR.  The restructuring charge adjustments
    reflect items that, although they or similar items might recur, are of a
    nature and magnitude that identifying them separately provides investors
    with a greater ability to project ARRIS'  future performance. With
    respect to the convertible debt non-cash interest, ARRIS records non-cash
    interest expense related to the 2013 convertible debt as a result of the
    adoption of FSP ABP 14-1 on January 1, 2009.  Disclosing the non-cash
    piece provides investors with the information regarding interest that
    will not be paid out in cash.  During the first quarter of 2009, ARRIS
    repurchased a portion of their convertible debt and recognized a gain
    of approximately $4.2 million.  In the first quarter of 2009, a tax
    expense of approximately $1.5 million was recorded for state  valuation
    allowances and research and development tax credits.  During the first
    quarter of 2008, ARRIS recorded incremental costs of $0.4 million as a
    result of the C-COR integration.

    In assessing operating performance and preparing budgets and forecasts,
    ARRIS' management considers performance after making these adjustments
    and believes that providing investors with the same information provides
    greater transparency and insight into management's analysis.



                           ARRIS GROUP, INC.
                 Net Income Reconciliation (unaudited)
                         Q2 EPS 2009 Guidance


    Estimated GAAP EPS - diluted                     $0.12 - $0.16
    Reconciling Items:
        Amortization of intangibles, after tax                0.05
        Stock compensation expense, after tax                 0.02
      Non-cash interest expense, after tax                    0.01
                                                              ----
          Subtotal                                            0.08
                                                              ----
    Estimated adjusted (non-GAAP) EPS - diluted      $0.20 - $0.24
                                                     =============


    See the Supplemental Net Income Reconciliation for a
    discussion regarding management's reasoning for providing
    this non-GAAP financial measure.

SOURCE ARRIS Group, Inc.


http://www.arrisi.com