CALABASAS, CA--(Marketwire - April 19, 2012) - Ixia (NASDAQ: XXIA) today reported its financial results for the first quarter ended March 31, 2012.

Total revenue for the 2012 first quarter was $85.6 million, compared with $78.5 million reported for the 2011 first quarter and $83.7 million reported for the 2011 fourth quarter.

On a GAAP basis, the company recorded net income for the 2012 first quarter of $4.4 million, or $0.06 per diluted share, compared with net income of $7.1 million, or $0.10 per diluted share, for the 2011 first quarter.

Non-GAAP net income for the 2012 first quarter was $11.4 million, or $0.15 per diluted share, compared with non-GAAP net income of $12.2 million, or $0.16 per diluted share, for the 2011 first quarter.

Additional non-GAAP information and a reconciliation of our non-GAAP measures to the most directly comparable GAAP measures for the 2012 and 2011 first quarters may be found in the attached financial tables.

"In the first quarter, we achieved record revenue primarily driven by a robust quarter in Japan as well as the strong sales of our LTE solutions worldwide," commented Victor Alston, Ixia's chief operating officer. "We are encouraged by the strong start to the year and the opportunities for growth we see in 2012. While we have seen increases in the levels of our operating expenses over the last few quarters, we believe that these investments position us well in the more rapidly growing and promising segments of our market, including virtualization, cloud, mobility and security test solutions for the converged networks of the future. These investments pave the way for Ixia to be a leader in emerging markets for the years to come." 

Ixia ended the first quarter with approximately $422 million in cash and investments, compared with $385 million at December 31, 2011. 

Conference Call and Webcast Information

Ixia will host a conference call today, at 5:00 p.m., Eastern time, for analysts and investors to discuss its 2012 first quarter results and its business outlook for the 2012 second quarter. Open to the public, investors may access the call by dialing (678) 825-8347. A live webcast of the conference call, along with supplemental financial information, will be accessible from the "Investors" section of Ixia's web site (www.ixiacom.com). Following the live webcast, an archived version will be available in the "Investors" section on the Ixia web site for 90 days.

Non-GAAP Information

To supplement our consolidated financial results prepared in accordance with Generally Accepted Accounting Principles ("GAAP"), we have included certain non-GAAP financial measures in this press release and in the attachments hereto. Specifically, we have provided non-GAAP financial measures (e.g., non-GAAP cost of revenues, non-GAAP operating expenses, non-GAAP operating margin, non-GAAP income tax expense, non-GAAP net income, and non-GAAP diluted earnings per share) that exclude certain non-cash and/or non-recurring income and expense items such as proceeds and expenses from certain legal and contractual settlements, stock-based compensation expenses, acquisition and other related costs, the amortization of acquisition-related intangible assets, and the related income tax effects of these items, as well as the income tax impacts of the valuation allowance recorded against certain deferred tax assets. The aforementioned items represent income and expense items that may be difficult to estimate from period to period and/or that we believe are not directly attributable to the underlying performance of our business operations. These non-GAAP financial measures are provided to enhance the user's overall understanding of our financial performance. We believe that by excluding these items, our non-GAAP measures provide supplemental information to both management and investors that is useful in assessing our core operating performance, in evaluating our ongoing business operations and in comparing our results of operations on a consistent basis from period to period. These non-GAAP financial measures are also used by management to plan and forecast future periods and to assist in making operating and strategic decisions. The presentation of this additional information is not prepared in accordance with GAAP. The information therefore may not necessarily be comparable to that of other companies and should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. Investors are encouraged to review the reconciliations of GAAP to non-GAAP financial measures which are included below in the attached financial tables.

About Ixia

Ixia provides the industry's most comprehensive converged IP services testing solution - from the wireless edge to the Internet core. Network equipment manufacturers, service providers, enterprises and government agencies use Ixia's industry-leading test and simulation platforms to design and validate a broad range of wired, Wi-Fi and 3G/LTE networking equipment and networks. Ixia's solutions create real-world conditions by emulating a full range of high-scaling networking protocols and generating media-rich application traffic to validate performance, conformance and security of cloud, core, data center, wireless and multiplay networks. For more information, visit www.ixiacom.com.

Safe Harbor Under the Private Securities Litigation Reform Act of 1995:
Certain statements made in this press release are forward-looking statements, including, without limitation, statements regarding growth, profitability, financial performance and future business. In some cases, such forward-looking statements can be identified by terms such as may, will, should, expect, plan, believe, estimate, predict or the like. Such statements reflect our current intent, belief and expectations and are subject to risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in the forward-looking statements. Factors that may cause future results to differ materially from our current expectations include changes in the global economy, competition, consistency of orders from significant customers, our success in developing and producing new products, market acceptance of our products and war, terrorism, political unrest, natural disasters and other circumstances that could, among other consequences, reduce the demand for our products, disrupt our supply chain or impact the delivery of our products. Such factors also include those identified in our Annual Report on Form 10-K for the year ended December 31, 2011, and in our other filings with the U.S. Securities and Exchange Commission. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
				March 31,			December 31,
				2012			2011
Assets
Current assets:
	Cash and cash equivalents			$	49,414		$	42,729
	Short-term investments in marketable securities				169,751			156,684
	Accounts receivable, net				63,357			65,357
	Inventories				26,796			27,239
	Prepaid expenses and other current assets				13,330			12,700
		Total current assets			322,648			304,709
Investments in marketable securities					202,381			185,608
Property and equipment, net					25,817			25,060
Intangible assets, net					42,189			46,028
Goodwill					66,429			66,429
Other assets					6,750			6,633
		Total assets		$	666,214		$	634,467
Liabilities and Shareholders' Equity
Current liabilities:
	Accounts payable			$	9,948		$	5,005
	Accrued expenses				31,685			27,301
	Deferred revenues				46,731			40,963
	Income taxes payable				900			895
		Total current liabilities			89,264			74,164
Deferred revenues					10,220			10,092
	Other liabilities				6,494			5,849
	Convertible senior notes				200,000			200,000
		Total liabilities			305,978			290,105
Shareholders' equity:
	Common stock, without par value; 200,000 shares authorized at March 31, 2012 and December 31, 2011; 71,179 and 70,240 shares issued and outstanding as of March 31, 2012 and December 31, 2011, respectively				138,277			132,330
	Additional paid-in capital				150,598			145,840
	Retained earnings				68,344			63,962
	Accumulated other comprehensive income				3,017			2,230
		Total shareholders' equity			360,236			344,362
		Total liabilities and shareholders' equity		$	666,214		$	634,467

IXIA
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
					Three months ended
					March 31,
					2012				2011
Revenues:
	Products				$	69,043			$	64,927
	Services					16,600				13,534
		Total revenues				85,643				78,461
Costs and operating expenses:(1)
	Cost of revenues - products					14,782				14,021
	Cost of revenues - services					2,130				1,478
	Research and development					20,851				18,519
	Sales and marketing					24,607				22,918
	General and administrative					11,516				8,398
	Amortization of intangible assets					4,045				3,690
	Acquisition and other related					425				--
		Total costs and operating expenses				78,356				69,024
		Income from operations				7,287				9,437
Interest income and other, net						110				538
Interest expense						(1,800	)			(1,800	)
		Income before income taxes				5,597				8,175
Income tax expense						1,215				1,066
		Net income			$	4,382			$	7,109
Earnings per share:
	Basic				$	0.06			$	0.10
	Diluted				$	0.06			$	0.10
Weighted average number of common and common equivalent shares outstanding:
	Basic					70,580				68,121
	Diluted					72,954				71,433
(1) Stock-based compensation included in:
			Cost of revenues - products		$	96			$	136
			Cost of revenues - services			37				51
			Research and development			1,279				1,374
			Sales and marketing			1,023				1,041
			General and administrative			1,666				1,259

IXIA
Non-GAAP Information and Reconciliation to Comparable GAAP Financial Measures
(in thousands, except percentages and per share data)
(unaudited)
			Three months ended March 31,
			2012							2011
			Amount ($)				% Total Revenues			Amount ($)				% Total Revenues
Total revenues			$	85,643			100	%		$	78,461			100	%
Total cost of revenues - GAAP			$	16,912			19.7	%		$	15,499			19.8	%
	Stock-based compensation(a)			(133	)		-0.1	%			(187	)		-0.3	%
Total cost of revenues - Non-GAAP			$	16,779			19.6	%		$	15,312			19.5	%
Operating expenses - GAAP			$	61,444			71.7	%		$	53,525			68.2	%
	Amortization of intangible assets(b)			(4,045	)		-4.7	%			(3,690	)		-4.7	%
	Acquisition and other related(c)			(425	)		-0.5	%			--			--	%
	Stock-based compensation(a)			(3,968	)		-4.6	%			(3,674	)		-4.7	%
	Legal, contract settlements and other(d)			(1,682	)		-2.0	%			(900	)		-1.1	%
Operating expenses - Non-GAAP			$	51,324			59.9	%		$	45,261			57.7	%
Operating margin - GAAP			$	7,287			8.5	%		$	9,437			12.0	%
	Amortization of intangible assets(b)			4,045			4.7	%			3,690			4.7	%
	Acquisition and other related(c)			425			0.5	%			--			--	%
	Stock-based compensation(a)			4,101			4.8	%			3,861			5.0	%
	Legal, contract settlements and other (d)			1,682			2.0	%			900			1.1	%
Operating margin - Non-GAAP			$	17,540			20.5	%		$	17,888			22.8	%
Income tax expense - GAAP			$	1,215			1.4	%		$	1,066			1.4	%
	Effect of reconciling items(e)			3,211			3.8	%			3,391			4.3	%
Income tax expense - Non-GAAP			$	4,426			5.2	%		$	4,457			5.7	%
Net income - GAAP			$	4,382			5.1	%		$	7,109			9.1	%
	Effect of reconciling items(f)			7,042			8.2	%			5,060			6.4	%
Net income - Non-GAAP			$	11,424			13.3	%		$	12,169			15.5	%
Diluted earnings per share - GAAP			$	0.06						$	0.10
	Effect of reconciling items(g)(h)			0.09							0.06
Diluted earnings per share - Non-GAAP			$	0.15						$	0.16

(a)	This reconciling item represents stock-based compensation expenses. As stock-based compensation represents a non-cash charge that is not directly attributable to the underlying performance of our business operations, we believe that by excluding stock-based compensation, we provide our investors with supplemental information that is useful in comparing our operating results from period to period and in evaluating our core operations and performance. While we expect to continue to recognize stock-based compensation expense in the future, management also excludes this expense when evaluating current performance, forecasting future results, measuring core operating results, and making operating and strategic decisions.
(b)	This reconciling item represents the amortization of intangible assets related to the acquisitions of various businesses and technologies such as the acquisitions of Catapult Communications Corporation, Agilent Technologies' N2X Data Network Testing Product line and VeriWave, Inc. As the amortization expense represents a non-cash charge that is not directly attributable to the underlying performance of our business operations, we believe that by excluding the amortization of acquisition-related intangible assets, we provide investors with supplemental information that is useful in evaluating our ongoing operations and performance. While the amortization of acquisition-related intangible assets is expected to continue in the future, management also excludes this expense when evaluating current performance, forecasting future results, measuring core operating results, and making operating and strategic decisions.
(c)	This reconciling item represents costs associated with acquisition-related activities. These acquisition and other related costs consist primarily of professional fees for legal, accounting and tax services, and other related costs. We believe that by excluding acquisition and other related costs, we provide investors with supplemental information that is useful in comparing our ongoing operating results from period to period and in evaluating our core operations and performance.
(d)	This reconciling item represents a one-time charge of $900,000 incurred in the first quarter of 2011 to terminate and settle a development contract and a one-time transition charge of $1.7 million incurred in the first quarter of 2012 in connection with the previously announced departure of our CEO. We believe that by excluding these charges, we provide our investors with supplemental information that is useful in comparing our operating results from period to period and in evaluating our core operations and performance.
(e)	This adjustment represents the income tax effects of the reconciling items noted in footnotes (a), (b), (c) and (d) as well as changes in the valuation allowance relating to the company's deferred tax assets.
(f)	This adjustment represents the effects of the reconciling items noted in footnotes (a), (b), (c), (d) and (e).
(g)	This adjustment represents the effects of the reconciling items noted in footnotes (a), (b), (c), (d) and (e), on a diluted per share basis.
(h)	This reconciling item for the non-GAAP diluted earnings per share calculation includes the impact of our convertible senior notes as these were anti-dilutive for the equivalent GAAP earnings per share calculations.

Financial Contact:
The Blueshirt Group
Investor Relations
Maria Riley
415-217-7722
or
Tom Miller
Chief Financial Officer
Dir: 818-444-2325
Email Contact