Extreme Networks Announces $75 Million Share Buyback Plan

Extreme Networks

today announced its Board of Directors has authorized the repurchase of common stock worth up to $75 million which may be purchased over the next three years from time to time in the open market or in privately negotiated transactions. "Our business is generating positive cash flow and in September 2012 the $46 million sale of our headquarters campus in Santa Clara was completed. Our long term capital allocation strategy is to aim to preserve a minimum cash balance of approximately $125 million to demonstrate our long term viability to customers, while maximizing shareholder value with excess cash. We believe that returning capital to our investors in the form of a share buy-back plan is one of the best uses of excess cash today and that our stock represents an attractive value relative to our future prospects," said Oscar Rodriguez, Chief Executive Officer for Extreme Networks, Inc. "We believe that our core earnings potential should continue to improve from growth in our ethernet data center products, and in particular, our leading edge 10GbE products." The share repurchase of up to $75 million represents the initial capital authorization for the next three years and will be reviewed at least annually by the Board of Directors. The plan implementation will be designed to maintain the value of our deferred tax assets resulting from net operating losses. Because of this, it is currently expected that purchases will occur unevenly over the 3 year period, ramping over time. The Board of Directors has authorized management to determine the exact timing and amount of any shares repurchased based on an evaluation of market conditions and other factors. Repurchases may also be made under a Rule 10b5-1 plan, which would permit shares to be repurchased when the company might otherwise be precluded from doing so under its insider trading practices. The repurchase program may be suspended or discontinued at any time. Any repurchased shares will be cancelled and not available for future corporate purposes. Extreme Networks will fund the share repurchases from cash on hand, which was approximately $200 million as of September 30, 2012. As of August 6, 2012, there were approximately 95 million shares of common stock outstanding.