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ARRIS Announces Preliminary and Unaudited Fourth Quarter and Full Year 2009 Results
SUWANEE, Ga., Feb 10, 2010 /PRNewswire 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 fourth quarter and full year 2009.

Revenues in the fourth quarter 2009 were $300.0 million, compared to third quarter 2009 revenues of $275.8 million and fourth quarter 2008 revenues of $292.4 million. Full year 2009 and 2008 revenues were $1,107.8 million and $1,144.6 million, respectively.

Adjusted net income (a non-GAAP measure) for the fourth quarter 2009 was $0.32 per diluted share, compared to $0.25 per diluted share for the third quarter 2009 and $0.25 per diluted share for the fourth quarter of 2008. Adjusted net income was $1.01 per diluted share for the full year 2009 as compared to $0.77 per diluted share for the full year 2008. The increased profitability is primarily due to the continued success of the Company's new generation cable edge routers.

GAAP net income for the fourth quarter 2009 was $0.26 per diluted share, as compared to the third quarter 2009 of $0.17 per diluted share, and the fourth quarter 2008 loss of $(1.33) per diluted share. Full year 2009 GAAP net income was $0.71 per diluted share as compared to a loss of $(1.04) per diluted share for 2008. Significant GAAP items that have been excluded in computing adjusted net income and adjusted earnings per share include 2008 goodwill impairment, amortization of intangibles, equity compensation, non-cash interest expense, restructuring and acquisition-related costs, and certain discrete tax items. A reconciliation of adjusted net income to GAAP net income (loss) per share is attached to this release and also can be found on the Company's website (www.arrisi.com).

Gross margin for the fourth quarter 2009 was 44.8%, which compares to the third quarter 2009 of 41.9% and the fourth quarter 2008 of 37.2%.

The Company ended 2009 with $625.6 million of cash resources (cash, short-term and long term marketable security investments) , up in the aggregate by approximately $48.9 million from the end of the third quarter 2009 and up $198.3 million from the end of 2008, as a result of both strong earnings and effective working capital management. The Company generated $69.8 million of cash from operating activities during the fourth quarter 2009 and $241.0 million during the full year 2009, which compares to $102.5 million and $189.1 million during the same periods in 2008. Order backlog at the end of the fourth quarter 2009 was $144.4 million as compared to $169.5 million and $114.8 million at the end of the third quarter 2009 and the fourth quarter 2008, respectively. The Company's book to bill ratio in the fourth quarter 2009 was 0.92 as compared to the third quarter 2009 of 1.01 and the fourth quarter 2008 of 0.90.

"We ended 2009 with very strong performance," said Bob Stanzione, ARRIS Chairman & CEO. "New applications, growth of Internet TV and competition from both telco and satellite providers require ongoing network capacity additions in our customers' networks. I am confident that ARRIS has the market leading products and services necessary for our customers to meet these challenges. Longer term, we are well positioned to provide new products for a converged platform to deliver voice, data and video. We have taken key steps to grow our current business to include a strong video product suite in order to capitalize on the industry's vision of a converged voice, data and video platform."

During the quarter the Company completed the successful integration of the recent acquisitions of EG Technologies and Digeo. These two acquisitions provide ARRIS with valuable expertise and intellectual property as it expands its portfolio of video products.

The Company also announced today that it will hold an Analyst & Investor Conference at its corporate headquarters in Suwanee, GA on March 17 & 18, 2010. Details of the conference and instructions on how to register as well as travel and hotel accommodations will be issued in a separate press release.

"We ended the year with outstanding performance, exceeding our sales and earnings guidance for the fourth quarter," said David Potts, ARRIS EVP & CFO. "It is also very noteworthy that we generated over $240 million of cash from operating activities in 2009 and ended the year with $626 million of cash and short-term investments. Our strong fourth quarter was partially the result of customers accelerating purchases we had anticipated in 2010, which has been factored into our guidance for the first quarter 2010. As a result, we now project that first quarter 2010 revenues for the Company will be in the range of $253 to $273 million, with adjusted net income per diluted share in the range of $0.18 to $0.22 and GAAP net income per diluted share, in the range of $0.10 to $0.14."

ARRIS management will conduct a conference call at 5:00 pm EDT, today, Wednesday, February 10, 2010, to discuss these results in detail. You may participate in this conference call by dialing (888) 679-8037 or (617) 213-4849 for international calls prior to the start of the call and providing the ARRIS Group, Inc. name, conference pass code 18555894 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 5:00 pm EDT conference call. A replay of the conference call can be accessed approximately two hours after the call through Monday, February 15, 2010 by dialing (888) 286-8010 or (617) 801-6888 for international calls and using the pass code 88718508. A replay also will be made available for a period of 12 months following the conference call on ARRIS' website at www.arrisi.com.

About ARRIS

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 carrier-grade telephony, demand driven video, next-generation advertising, network and workforce management solutions, access and transport architectures and ultra high-speed data services. Headquartered in Suwanee, Georgia, USA, ARRIS has R&D centers in Atlanta; Beaverton, OR; Chicago, IL; Kirkland, WA; State College, PA; Wallingford, CT; Waltham, MA; Cork, Ireland; and Shenzhen, China, and operates support and sales offices throughout the world. Information about ARRIS products and services can be found at www.arrisi.com.

Forward-looking statements:

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

  • growth expectations and business prospects;
  • first quarter and 2010 revenues and net income;
  • expected sales levels and acceptance of new ARRIS products;
  • the general market outlook and 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 first quarter as well as the general outlook for 2010 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;
  • ARRIS' customers operate in a capital intensive consumer based industry, and the current volatility in the capital markets or changes in customer spending may adversely impact their ability or willingness to purchase the products that the Company offers; 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-Q for the quarter ended September 30, 2009. 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)

                           December 31,      September 30,         June 30,
                             2009                2009                2009
                           (unaudited)        (unaudited)        (unaudited)
                           ------------      -------------       -----------

    ASSETS

    Current assets:
      Cash and cash
       equivalents             $500,565            $461,795        $476,846
      Short-term investments,
       at fair value            125,031              99,917          47,195
                                -------              ------          ------
                                625,596             561,712         524,041

      Restricted cash             4,475               4,473           4,552
      Accounts
       receivable, net          143,708             119,125         128,482
      Other receivables           6,113               2,235           5,904
      Inventories, net           95,851             100,024         115,944
      Prepaids                   11,675              10,764           7,700
      Income taxes recoverable    3,106               4,212             366
      Current deferred Income
       tax assets                35,994              32,883          41,166
      Other current assets       15,790              12,981          11,995
                                -------             -------         -------
        Total current assets    942,308             848,409         840,150

    Property, plant and
     equipment, net              57,195              58,339          60,048
    Goodwill                    235,388             234,416         231,684
    Intangible assets, net      204,572             201,351         208,822
    Investments                  20,618              30,574          10,317
    Noncurrent deferred
     income tax assets            6,759               3,593           3,870
    Other assets                  8,776               7,648           6,251
                             ----------          ----------      ----------
                             $1,475,616          $1,384,330      $1,361,142
                             ==========          ==========      ==========


    LIABILITIES AND
     STOCKHOLDERS' EQUITY

    Current
     liabilities:
      Accounts payable          $53,979             $42,659         $48,859
      Accrued compensation,
       benefits and related
       taxes                     36,936              27,054          20,753
      Accrued warranty            4,265               5,292           5,185
      Deferred revenue           47,044              35,423          43,727
      Current portion
       of long-term debt            124                 148             148
      Current deferred income
       tax liability                  -                 250             248
      Other accrued liabilities  46,203              34,979          35,852
                                 ------              ------          ------
        Total current
         liabilities            188,551             145,805         154,772
    Long-term debt,
     net of current portion     211,248             208,433         205,710
    Accrued pension              16,408              18,914          19,665
    Noncurrent income tax
     payable                     14,815              10,632          12,386
    Noncurrent deferred income
     tax liability               37,203              35,188          33,999
    Other noncurrent
     liabilities                 16,021              15,301          15,094
                                -------             -------         -------
         Total liabilities      484,246             434,273         441,626

    Stockholders' equity:
      Preferred stock                 -                   -               -
      Common stock                1,388               1,385           1,379
      Capital in excess
       of par value           1,183,872           1,177,958       1,169,223
      Treasury stock at cost    (75,960)            (75,960)        (75,960)
      Unrealized gain (loss)
       on marketable
       securities                    28                 (60)           (161)
      Unfunded pension
       liability                 (6,041)             (8,070)         (8,070)
      Accumulated deficit      (111,733)           (145,012)       (166,711)
      Cumulative translation
       adjustments                 (184)               (184)           (184)
                                -------             -------         -------
        Total
         stockholders'
         equity                 991,370             950,057         919,516
                             ----------          ----------      ----------
                             $1,475,616          $1,384,330      $1,361,142
                             ==========          ==========      ==========


                                          March 31,       December 31,
                                            2009             2008
                                         (unaudited)
                                         -----------      ------------
    ASSETS

    Current assets:
      Cash and cash equivalents             $398,938          $409,894
      Short-term investments, at fair
       value                                  25,494            17,371
                                             -------           -------
                                             424,432           427,265

      Restricted cash                          4,550             5,673
      Accounts receivable, net               155,792           159,443
      Other receivables                        6,636             4,749
      Inventories, net                       120,774           129,752
      Prepaids                                 6,994             8,004
      Income taxes recoverable                 3,232               362
      Current deferred income tax
       assets                                 49,027            44,004
      Other current assets                    15,083            19,420
                                             -------           -------
        Total current assets                 786,520           798,672

    Property, plant and equipment,
     net                                      59,438            59,204
    Goodwill                                 231,684           231,684
    Intangible assets, net                   218,085           227,348
    Investments                               14,593            14,681
    Noncurrent deferred income tax
     assets                                    3,771            12,157
    Other assets                               5,483             6,576
                                          ----------        ----------
                                          $1,319,574        $1,350,322
                                          ==========        ==========


    LIABILITIES AND STOCKHOLDERS'
     EQUITY

    Current liabilities:
      Accounts payable                       $44,422           $75,863
      Accrued compensation, benefits
       and related taxes                      15,583            27,024
      Accrued warranty                         5,306             5,652
      Deferred revenue                        44,006            44,461
      Current portion of long-term
       debt                                      147               146
      Current deferred income tax
       liability                                 241             1,059
      Other accrued liabilities               31,922            25,410
                                             -------           -------
        Total current liabilities            141,627           179,615
    Long-term debt, net of current
     portion                                 203,080           211,870
    Accrued pension                           19,289            18,820
    Noncurrent income tax payable             12,441             9,607
    Noncurrent deferred income tax
     liability                                42,530            41,598
    Other noncurrent liabilities              14,391            15,343
                                             -------           -------
         Total liabilities                   433,358           476,853

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


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

                          For the Three Months       For the Twelve Months
                           Ended December 31,          Ended December 31,
                          ------------------           ------------------
                         2009            2008          2009           2008
                      (unaudited)    (unaudited)   (unaudited)
                      -----------    -----------   -----------    ----------
    Net sales            $299,995       $292,398    $1,107,806    $1,144,565
    Cost of sales         165,495        183,535       645,043       751,436

      Gross margin        134,500        108,863       462,763       393,129
    Gross margin %          44.8%          37.2%         41.8%         34.3%
    Operating expenses:
      Selling, general,
       and administrative
       expenses            37,622         36,957       148,403       143,997
      Research and
       Development
       expenses            35,102         29,285       124,550       112,542
      Restructuring
       charges              2,917            429         3,702         1,211
      Goodwill impairment       -        209,297             -       209,297
      Amortization of
       intangible assets    9,554          9,341        37,361        44,195
                            -----          -----        ------        ------
                           85,195        285,309       314,016       511,242
                           ------       --------       -------      --------
    Operating income       49,305       (176,446)      148,747      (118,113)
    Other expense (income):
      Interest expense      4,549          4,451        17,670        17,123
      Loss (gain) on
       investments           (258)           507          (711)          717
      Loss (gain) On
       foreign currency      (198)          (164)        3,445          (422)
      Interest income        (237)        (1,333)       (1,409)       (7,224)
      Gain on debt
       retirement               -              -        (4,152)            -
      Other (income)
       expense, net           174         (1,000)         (714)       (1,043)
                              ---         ------          ----        ------
    Income (loss) from
     continuing operations
     before income taxes   45,275       (178,907)      134,618      (127,264)
      Income tax expense
       (benefit)           11,996        (15,176)       43,849         2,375
                           ------        -------        ------         -----
        Net income (loss) $33,279      $(163,731)      $90,769     $(129,639)
                          =======      =========       =======     =========

    Net income (loss) per
     common share
      Basic                $0.26          $(1.33)        $0.73        $(1.04)
                           =====          ======         =====        ======
      Diluted              $0.26          $(1.33)        $0.71        $(1.04)
                           =====          ======         =====        ======

    Weighted average
     common shares:
      Basic              125,698         123,128       124,716       124,878
                         =======         =======       =======       =======
      Diluted            129,524         123,128       128,085       124,878
                         =======         =======       =======       =======


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

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

    Operating Activities:
      Net income (loss)     $33,279     $(163,731)     $90,769      $(129,639)
        Depreciation          5,492         5,394       20,862         20,915
        Amortization of
         intangible assets    9,554         9,341       37,361         44,195
        Stock compensation
         expense              4,207         2,991       15,921         11,277
        Deferred income tax
         provision
         (benefit)           (5,681)        5,100        7,997          7,963
        Deferred income tax
         related to goodwill
         impairment               -       (24,725)           -        (24,725)
        Amortization of
         deferred finance
         fees                   180           189          728            760
        Provision for
         doubtful accounts   (1,281)          454       (1,280)           819
        Loss (gain) on
         investments           (258)          507         (711)           717
        Loss on disposal of
         fixed assets           474            29          428             14
        Non-cash interest
         expense              2,828         2,764       11,136         10,736
        Gain on debt
         retirement               -             -       (4,152)             -
        Excess income tax
         benefits from stock-
         based compensation
         plans                 (980)          (32)      (3,007)           (56)
        Goodwill impairment       -       209,297            -        209,297
      Changes in operating
       assets & liabilities,
       net of effects of
       acquisitions and
       disposals:
        Accounts
         receivable         (19,097)       20,682       21,704          8,579
        Other receivables    (2,922)        3,530       (2,383)          (471)
        Inventory             8,457        10,051       38,906          4,023
        Income taxes payable/
         recoverable          7,834        (1,801)       4,966         (2,458)
        Accounts payable and
         accrued
         liabilities         37,031        29,762        4,707         41,905
        Other, net           (9,344)       (7,261)      (2,975)       (14,778)
                             ------        ------       ------        -------
          Net cash provided by
           operating
           activities        69,773       102,541      240,977        189,073
    Investing Activities:
      Purchases of
       property, plant, and
       equipment             (4,336)       (4,908)     (18,663)       (21,352)
      Cash paid for
       acquisition, net of
       cash acquired        (14,604)         (434)     (22,734)       (10,500)
      Cash proceeds from
       sale of property,
       plant & equipment          2             -          210            250
      Purchases of short-
       term investments     (64,859)      (26,736)    (216,704)      (113,734)
      Disposals of short-
       term investments      50,072        32,628      104,488        155,114
                             ------        ------      -------        -------
          Net cash provided
           by (used in)
           investing
           activities       (33,725)          550     (153,403)         9,778

    Financing Activities:
      Payment of debt and
       capital lease
       obligations              (37)         (346)     (10,714)       (35,864)
      Repurchase of common
       stock                      -             -            -        (75,960)
      Excess income tax
       benefits from stock-
       based compensation
       plans                    980            32        3,007             56
      Repurchase of shares
       to satisfy employee
       tax withholdings           -             -       (2,180)        (1,035)
      Proceeds from
       issuance of common
       stock                  1,779         1,130       12,984             49
                              -----         -----       ------            ---
          Net cash provided by
           (used in) financing
           activities         2,722           816        3,097       (112,754)

          Net increase in
           cash and cash
           equivalents       38,770       103,907       90,671         86,097
    Cash and cash
     equivalents at
     beginning of period    461,795       305,987      409,894        323,797
                            -------       -------      -------        -------
    Cash and cash
     equivalents at end
     of period             $500,565      $409,894     $500,565       $409,894
                           ========      ========     ========       ========


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

                                  Q4 2009               Year 2009
                                  -------               ---------
                                 Unaudited              Unaudited
                                 ---------              ---------
                                     Per Diluted                  Per Diluted
                            Amount      Share        Amount          Share
                            ------    ----------        ------    -----------
    Net income (loss)      $33,279      $0.26       $90,769              0.71
    Highlighted items:
      Impacting gross
       margin:
        Stock compensation
         expense               383          -         1,446              0.01

      Impacting operating
       expenses:
        Integration costs        -          -             -                 -
        Acquisition costs,
         restructuring and
         other               2,917       0.02         3,977              0.03
        Amortization of
         intangible assets   9,554       0.07        37,361              0.29
        Stock compensation
         expense             3,824       0.03        14,475              0.11
        Goodwill Impairment      -          -             -                 -

      Impacting other
       (income) /expense:
        Non-cash interest
         expense             2,827       0.02        11,135              0.09
        Gain on repurchase of
         debt                    -          -        (4,152)            (0.03)

      Impacting income tax
       expense:

        Adjustments of income
         tax valuation
         allowances and
         research &
         development credits
         and goodwill
         impairment         (4,422)     (0.03)       (3,133)           (0.02)

        Tax related to
         highlighted items
         above, except for
         goodwill
         impairment         (7,375)     (0.06)      (22,305)           (0.17)
                            -------                 --------

    Total highlighted
     items                    7,708       0.06        38,804             0.30
                              -----       ----        ------             ----
    Net income excluding
     highlighted items      $40,987      $0.32      $129,573            $1.01
                            =======      =====      ========            =====

    Weighted average
     common shares -
     diluted                           129,524                        128,085
                                       =======                        =======



                                  Q4 2008                Year 2008
                                  -------                ---------
                                 Unaudited               Unaudited
                                 ---------               ---------
                                     Per Diluted                  Per Diluted
                            Amount    Share (1)      Amount        Share (1)
                            ------    --------       ------         --------
    Net income (loss)    $(163,731)      (1.32)   $(129,639)           (1.03)
    Highlighted items:
      Impacting gross
       margin:
        Stock compensation
         expense               269           -          979             0.01

      Impacting operating
       expenses:
        Integration costs        -           -          427             0.00
        Acquisition costs,
         restructuring and
         other                 429           -        1,211             0.01
        Amortization of
         intangible assets   9,341        0.08       44,195             0.35
        Stock compensation
         expense             2,722        0.02       10,298             0.08
        Goodwill
         Impairment        209,297        1.68      209,297             1.66

      Impacting other
       (income) /expense:
        Non-cash interest
         expense             2,763        0.02       10,735             0.09
        Gain on repurchase of
         debt                    -           -            -                -

      Impacting income tax
       expense:

        Adjustments of income
         tax valuation
         allowances and
         research &
         development credits
         and goodwill
         impairment        (24,725)      (0.20)     (26,255)           (0.21)

        Tax related to
         highlighted items
         above, except for
         goodwill
         impairment         (5,138)      (0.04)     (23,991)           (0.19)
                           -------                 --------
    Total highlighted
     items                 194,958        1.57      226,896             1.80
                           -------        ----      -------             ----
    Net income excluding
     highlighted items     $31,227       $0.25      $97,257            $0.77
                           =======       =====      =======            =====

    Weighted average
     common shares -
     diluted                           124,355                       126,277
                                       =======                       =======

    (1) Although net income for these periods is a loss and inclusion of
    options would be antidilutive, weighted average diluted shares are used in
    this calculation as the earnings excluding highlighted items is net
    income.

    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
    acquisitions.  The acquisition costs, restructuring, and other items
    reflect 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 and third quarter of 2009, a
    tax expense of approximately $1.3 million was recorded for state valuation
    allowances, research and development tax credits and provision to return
    differences resulting from filing of the 2008 tax return.  In the fourth
    quarter of 2009, a tax benefit of approximately $4.6 million was recorded
    for changes to foreign valuation allowances relating to historic net
    operating losses in the various jurisdictions.  During the first quarter
    of 2008, ARRIS recorded incremental costs of $0.4 million as a result of
    the C-COR integration.  In the third quarter of 2008, ARRIS recorded a net
    tax benefit of $1.6 million related to provision to return differences
    resulting from the filing of the 2007 tax return.  Lastly, during the
    fourth quarter 2008,  ARRIS recorded an impairment on goodwill of $209.3
    million and the related deferred tax adjustment of $24.7 million.

    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)
                           Q1 2010 EPS Guidance

    Estimated GAAP EPS - diluted                     $0.10 - $0.14
    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                                         $0.18 - $0.22
                                                     =============

    See the Supplemental Net Income (Loss) Reconciliation for a
    discussion regarding these adjustments and management's reasoning
    for providing this adjusted financial measure


SOURCE ARRIS Group, Inc.