Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message| ()  

Executives

Joseph Vitalta – IR, The Ruth Group

Patrick Lo – Chairman and CEO

Christine Gorjanc – CFO

Analysts

Lin Yang [ph] – Barclays Capital

Hamed Khorsand – BWS Financial

Woo Jin Ho – Bank of America/Merrill Lynch

Sam Wilson – JMP Securities

Maynard Um – UBS

NETGEAR, Inc. (NTGR) Q3 2009 Earnings Call Transcript October 22, 2009 5:00 PM ET

Operator

Greetings and welcome to the NETGEAR Inc. third quarter 2009 results conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Mr. Joseph Vitalta of The Ruth Group. Thank you, Mr. Vitalta. You may begin.

Joseph Vitalta

Thank you, Jennifer. Good afternoon and welcome to NETGEAR's third quarter 2009 financial results conference call. Joining us from the company are Mr. Patrick Lo, Chairman and Chief Executive Officer; and Ms. Christine Gorjanc, Chief Financial Officer. The format of the call will be a brief business review by Patrick, followed by Christine providing detail on the financials. We'll then have time for any questions.

If you have not yet received a copy of today's earnings release please call The Ruth Group at 646-536-7003 or you can go to NETGEAR's corporate website at www.netgear.com. Before we begin the formal remarks, the company's attorneys advise us that today's conference call contains forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995. The words anticipate, expect, believe, will, may, should, estimate, project, outlook, forecast or other similar words are used to identify such forward-looking statements. However, the absence of these words does not mean the statements are not forward-looking.

Forward-looking statements represent NETGEAR Inc.'s expectations or beliefs concerning future events based on information available at the time, such statements were made and include statements among others regarding NETGEAR's expected revenue, earnings, growth and operating income, margin and tax rate on both a GAAP and non-GAAP basis.

The effect of the global economic environment on the company's business, our position in the market relative to our competition, the long-term future of NETGEAR's business, our ability to innovate anticipated new product offerings, current and future demand for the company's existing and anticipated new products, willingness of the consumers to purchase and use the company's products and the ability to increase distribution and market share for the company's products domestically and worldwide.

These statements are based on management's current expectations and are subject to certain risks and uncertainties, including without limitation the following

Future demands for the company's products may be lower than anticipated. Consumers may choose not to adopt the company's new product offerings or adopt competing products. Product performance may be adversely affected by real world operating conditions; the company may be unsuccessful or experience delays in manufacturing and distributing its new and existing products.

Telecommunication service providers may choose to slow their deployment of the company's products or utilize competing products. The company may be unable to collect receivables as they become due, the company may fail to manage costs including the cost of developing new products, and manufacturing and distribution of its existing offerings.

Channel inventory information reported and estimated based on average number of weeks of inventory on hand on the last Saturday of the quarter as reported by NETGEAR's customers, changes in the level of NETGEAR's cash resources and the company planned usage of such resources, changes in the company's stock price, developments in the business that could increase the company's cash needs and fluctuations in foreign exchange rates.

Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements.

Further information on potential risk factors are detailed in the company's periodic filings with the SEC, including but not limited to those risks and uncertainties listed in the section entitled, Part 2, Item 1A, risk factors, pages 35 to 49 in the company's quarterly report on Form 10-Q for the quarter ended June 28, 2009, filed with the SEC on August 6, 2009.

NETGEAR undertakes no obligation to release publicly any revisions to any forward-looking statements contained herein to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events. In addition, several non-GAAP financial measures will be mentioned on this call. Information relating to the corresponding GAAP measures and reconciliation of the non-GAAP and GAAP measures can be found in our press release on the Investor Relations website at netgear.com.

At this time, I would now like to turn the call over to Mr. Patrick Lo. Please go ahead sir.

Please go ahead sir.

Operator

Mr. Lo, your line is live.

Patrick Lo

Yes.

Operator

Please go ahead, sir.

Patrick Lo

Okay. Thank you everybody for joining the call. Sorry about some technical difficulty just now. The third quarter of 2009 was a solid quarter for NETGEAR, while making significant progress in our business among the improving macroeconomic environment; we are extremely pleased to achieve net revenue of $171.1 million in the third quarter exceeding expectations.

By holding down our expenses, we were able to capitalize on the upside on the top line to generate extra operating profit thus exceeding our prior operating margin guidance by a healthy margin.

The third quarter showed a robust back-to-school demand and market share gain in the US, resulting in our year-over-year growth in the US net revenue. We reduced our on-hand inventory sequentially to $73.9 million and we increased our non-GAAP operating margin to 10.6%.

We generated significant cash from our operations in Q3, 2009, increasing our cash, cash equivalents and short-term investments by about $10 million resulting in a cash balance of $234.5 million, while bringing our DSO down 3 days as compared to Q2 to 66 days.

We also experienced improved SMB demand quarter-over-quarter across all three geographic regions. Most importantly, we introduced a record 21 new products during the quarter and continued to gain share in all important US retail channels. In January 2009, we announced the implementation of a cost reduction initiative aiming to reduce operating expenses by $10 million for 2009 as compared to the annualized full quarter 2008 run rate. We've already experienced significant cost saving results from our efforts, about $8.8 million through the first nine months of 2009 and we expect to meet our goal of $10 million by the end of the year.

Our North American net revenue was $75.4 million in Q3, while Europe, the Middle East and Africa or EMEA, net revenue was $72.6 million. In our Asia Pacific or APAC the net revenue was $23.1 million. Compared to Q3 of 2008, our North America revenue increased approximately 2%, while EMEA and APAC net revenue decreased 11% and 4% respectively, primarily due to currency fluctuations.

From a product perspective, we are excited to have introduced 21 new products in the third quarter, a record number for us for a single quarter. Our investment in R&D has resulted in a number of notable product introductions, including the Digital Entertainer Live for viewing Internet video programs on TVs; Stora, our home multimedia network server, accessible anywhere in the world from both laptops and smartphones; and the “ultimate networking machine” – a dual band, gigabit, super high speed WiFi router packed with state of the art features such as ReadyShare USB storage access and broadband usage metering.

On the SMB front, we introduced the 12-Bay Super Performance Rackmount ReadyNAS network storage for up to 12TB of secured data; and a full line of ProSecure security appliances ranging from UTMs for up to 25 users and Content Threat Managers for up to 600 users. We also introduced breakthrough products such as our new DOCSIS 3.0 cable

WiFi gateway and revolutionary “configurable” unmanaged switches, which we named as unmanaged plus switches. We remain focused on product development and intend to introduce another 15 to 20 new products in Q4 further positioning us for revenue growth and market share gain in new geographies in our current markets.

In the third quarter, our net revenue from service providers accounted for approximately 25% of total net revenue, compared to 18% of total net revenue in the third quarter of 2008, and 30% in the second quarter of 2009. Additionally, we are pleased to add J:COM in Japan and Comhem in Sweden to our service provider customer list in the third quarter.

Our value added reseller base remained strong at over 37,000 worldwide despite economic downturn. We are seeing the up-tick of end user demand in North America and Asia Pacific markets with signs of stabilization in Europe. We have confidence that our overall year-on-year revenue growth will return in Q4. We will continue to invest in innovation, ramp our sales and marketing efforts, operate efficiently, tightly manage our inventory levels and focus on generating cash. We are confident that our exciting new product pipeline will allow us to gain on our competitors and increase our market share worldwide in the fourth quarter and beyond.

Now let me turn the call over to Christine for details on our financials.

Christine Gorjanc

Thank you, Patrick. Let me now provide you with a summary of the financials for Q3. As Patrick noted, net revenue for the third quarter ended September 27, 2009, was $171.1 million, compared to $179.4 million for the third quarter ended September 28, 2008, and $144.7 million in the second quarter ended June 28, 2009.

We shipped a total of about 3.8 million units in the third quarter, including 3.1 million nodes of wireless products.

Shipments of our wired and wireless routers and gateways combined in the third quarter were about 2.2 million units. Moving to the product category basis, third quarter net revenue split between wireless and wired was about 61% and 39% respectively. The third quarter net revenue split between homes and small business products, was about 61% and 39% respectively.

Products introduced in the last 15 months constituted about 34% of our third quarter shipment, while products introduced in the last 12 months constituted about 25% of our third quarter shipment. Non-GAAP gross margin in the third quarter of 2009 was 33.5%, compared to 35.5% in the year ago comparable quarter and 29.6% in the second quarter of 2009.

Moving to non-GAAP operating expenses, total non-GAAP operating expenses declined by 11%, compared to the prior year same quarter, reflecting the impact of our cost saving efforts. Total non-GAAP operating expenses came in at $39.1 million for the third quarter of 2009. This compares to non-GAAP operating expense of $43.7 million in the third quarter of 2008 and $37.4 million in the second quarter of 2009.

As Patrick mentioned, we continue to target a $10 million reduction in operating expenses in 2009 as compared to the annualized run rate of Q4, 2008. We saved $8.8 million in operating expenses in the first three quarters of 2009, and as things stand we are confident in our ability to achieve our annual savings target. On a GAAP basis, the company recorded net income of $8.5 million or $0.24 per diluted share for the third quarter of 2009, compared to net income of $3.1 million or $0.09 per diluted share for the third quarter of 2008, and a net loss of $3.3 million or $0.10 per diluted share in the second quarter 2009.

On a non-GAAP basis, the company experienced net income of $11 million for the third quarter of 2009 as compared to non-GAAP net income of $6.9 million for the third quarter of 2008, and the non-GAAP net loss of $522,000 for the second quarter of 2009. Non-GAAP net income was $0.31 per diluted share for the third quarter of 2009, compared to net income of $0.19 per diluted share in the third quarter of 2008 and a net loss of $0.02 per diluted share in the second quarter of 2009.

In Q3, 2009, we recorded a net foreign currency loss of $266,000 compared to a net $4.7 million loss in the third quarter of 2008, and a net $443,000 loss in the prior quarter.

GAAP tax expense was $5.8 million in the third quarter of 2009, compared to $7.9 in Q3 '08 and $4.4 million in Q2 '09. Non-GAAP tax expense was $6.9 million in the third quarter of 2009, compared to $9.4 million in the third quarter of 2008 and $5.7 million in the second quarter of 2009.

The reconciliation of GAAP to non-GAAP is detailed in our financial statements released earlier today.

We continue to maintain a strong balance sheet ending the third quarter with $234.5 million in cash, cash equivalents, and short-term investments. Our accounts receivable collections remained strong, DSOs for the third quarter decreased to 66 days compared to 69 days in the second quarter of 2009.

Our continued efforts to efficiently manage our inventory resulted in a $1.2 million sequentially inventory reduction, and an increase in inventory turns from 5.5 to 6.2 over the prior quarter.

In the fourth quarter of 2009, we anticipate continued revenue expansion in new categories such as consumer and high-end network storage, DOCSIS 3.0 cable gateways, and security appliances in addition to overall market share gain in retail and SMB channels worldwide.

We also plan to expand our worldwide sales and marketing team given the early signs of market demand turnaround. We believe we can continue to grow and gain market share in the US, Asia-Pacific and other emerging markets. We continue to focus on our successful strategy as successful innovation, new product introduction, superior customer service and winning channel program. We expect this strategy will allow us to stay ahead of our competition.

Channel inventory rationalization was mostly complete in the third quarter, and distribution channel inventory in all regions is now at the right level. However, we are experiencing constrained ship supplies in specific product categories, and to shorten our overall product cycle time, we will have to spend incremental air freight dollars in Q4 to satisfy contractual customer arrangement and to ensure adequate supplies for holiday promotional activities.

For the fourth quarter of 2009, we expect net revenue in the range of approximately $170 million to $180 million and non-GAAP operating margin to be in the range 7% to 9%.

Operator, that concludes our comments and we will be happy to take questions.

Question-and-Answer Session

Operator

(Operator instructions) Our first question comes from Lin Yang [ph] of Barclays Capital. Please proceed with your question.

Lin Yang - Barclays Capital

Thanks for taking the questing and congratulations on an excellent quarter.

Patrick Lo

Thank you.

Christine Gorjanc

Thank you.

Lin Yang - Barclays Capital

I just wanted to first ask about the guidance, at the midpoint, it seems like it comes out to about maybe 2.5% sequential growth. It is a little bit below I think what you have done historically. Can you talk about some of the factors that may swing it to the lower end versus the higher end?

Patrick Lo

Clearly right now, the worldwide economies just in the early stage of stabilization. We are not living in a normal historical environment. As you can see last year, Q4 was actually significantly smaller than Q3. Under this kind of environment, it is still difficult to predict what the economy is going to do. I think Christmas around the world is still pretty big a testing – litmus test on how the economic recovery is going.

So I think compounded on that as we mentioned there is a pretty severe chip shortage that limit our supply capability. So I would say if Christmas turns out to be good or better than what we think and chip supply would ease a little bit than we will be at the high-end, but if Christmas turns out to be conservative as we think it could be and chip supply doesn't ease up it will be at the low end.

Lin Yang - Barclays Capital

Okay, that makes sense. And maybe just a question on the US retail environment, it sounds like you mentioned you are getting share, could you just maybe delve a little bit deeper into just the competitive landscape, how the pricing environment was for you this quarter?

Patrick Lo

The pricing environment has been very stable throughout the year, and you probably noticed that one of our weaker competitors dealing had been gradually exceeding the market. And clearly we are grabbing share from that opportunity. So that has enabled us to continue to ride on the improvement in the US market demand. As a matter of fact, the year-on-year growth on the US market is returning.

Lin Yang - Barclays Capital

Okay, I think that is all from me. Thank you.

Patrick Lo

Sure.

Operator

Thank you. Our next question comes from the line of Woo Jin Ho. Please proceed with your question. It is not working. Mr. Woo Jin Ho, your line is live.

Okay, our next question comes from the line of Sam Wilson. Please proceed with your question.

Christine Gorjanc

Sam.

Sam Wilson - JMP Securities

Operator?

Operator

Yes, Mr. Wilson your line is live.

Sam Wilson - JMP Securities

Operator?

Operator

Yes, your line is live, Mr. Wilson.

Patrick Lo

No, I mean she is muting everybody.

Sam Wilson - JMP Securities

Operator?

Operator

Yes, my line is live, Mr. Wilson your line is live; you may ask your question.

Christine Gorjanc

Actually, this is NETGEAR. We don’t have Sam Wilson on the line.

Patrick Lo

Operator, Sam Wilson is not on the line.

Operator

Mr. Hamed Khorsand, can you please proceed with your question.

Hamed Khorsand - BWS Financial

Yes, good afternoon.

Christine Gorjanc

Hi.

Patrick Lo

Hi.

Hamed Khorsand - BWS Financial

All right. You can hear me.

Patrick Lo

Yes, I can hear you.

Hamed Khorsand - BWS Financial

All right. My question is, you guys introduced 21 products this past quarter. Now you are looking at let us say, you hit your high mark and introduced 20 products in Q4. That is 40 products in two quarters and your guidance suggests that your incremental income, your incremental revenue isn’t as high as it would be with – in previous quarter from these new products. Can you touch on that for me a little bit?

Patrick Lo

As we maintain, it really depends on the supply of the chips, and it really depends on – in the meantime when we introduce new products, we all obsolete old products as well. So, it is a matter of ramp of the new products versus decline of the old products, and clearly right now if you look at the landscape, 11 N is absolutely taking over the 11 G. So it really depends on 11 N growth, whether it will offset the decline of the 11 G.

Same thing on gigabit versus offset the decline of 10/100, all those have to be in play. So – certainly chip supply is a concern as well.

Hamed Khorsand - BWS Financial

Okay, and then as far as the chip supply goes, I imagine there is at least two or three vendors who continue to design the same product, with two or three different chips or does that have to be the same chip from the same manufacturer?

Patrick Lo

It is actually across multiple categories and multiple vendors. I think there is tremendous foundry capacity issue.

Hamed Khorsand - BWS Financial

Okay, and then as far as your operating margin goes, your guidance suggests that you are going to be taking a lot of expenses this quarter. Is this all related to logistics and air freight?

Patrick Lo

Yes, pretty much.

Hamed Khorsand - BWS Financial

Okay, that's it from me. Thank you.

Patrick Lo

Okay.

Operator

Thank you. Our next question comes from the line of Woo Jin Ho with Bank of America/Merrill Lynch. Please proceed with your question.

Woo Jin Ho - Bank of America/Merrill Lynch

Can you hear me?

Patrick Lo

Yes.

Christine Gorjanc

Woo Jin, yes, we can hear you.

Woo Jin Ho - Bank of America/Merrill Lynch

Great. Patrick and Christine, could you clarify your comments on Europe. I believe you said growth, is it sequential or year-over-year?

Patrick Lo

Sequential.

Woo Jin Ho - Bank of America/Merrill Lynch

Sequential, okay. Well, I mean even then Europe had a really nice rebound. What gives you the confidence? What really went on in Europe to give you that nice rebound, and can you just talk about the sustainability aspect of Europe?

Patrick Lo

As you probably know, the GDP in Europe is trying to rebound, and we're seeing sell-through demand grow week after week. So that gives us the signal that Europe is finally healing.

Woo Jin Ho - Bank of America/Merrill Lynch

Is it primarily on the retail side or on the SMB side that is healing?

Patrick Lo

It is across the board.

Woo Jin Ho - Bank of America/Merrill Lynch

Got it. Okay, and can you just touch upon the G inventories, how are G inventories today, and it sounds like it really hasn't had any impact on pricing, but as we head into the seasonally strong fourth quarter could that have any impact on promotional activity in the fourth quarter?

Patrick Lo

I don't think there was any promotional activities around G anymore. I don't think anybody is going to do it.

Woo Jin Ho - Bank of America/Merrill Lynch

Well, my point is that I am seeing G routers that are going for $29. I mean at the very low end, and just curious what impact that may have on the mid-tier and high-end N routers?

Patrick Lo

People know that you know G is basically no more – the future technology, and at 29.99 not all people would opt for it, especially if you could buy a NETGEAR G router at 39.99, people would tend to pay that $10 delta for better quality and N routers (inaudible) starts at 69.99. So there is still a big price differential.

Woo Jin Ho - Bank of America/Merrill Lynch

Right. Okay and lastly from me as we look out into the fourth quarter and into 2010, it seems as if you are introducing more products that have more subscriptions like revenues. How should we think about the business model going forward over the next several quarters?

Patrick Lo

Yes, I mean you are clearly right that we are introducing products with higher software components that involve both higher margin software as subscription revenue. Now this is revenue new for us. So we are yet to find the right model going forward, but that is the direction.

Woo Jin Ho - Bank of America/Merrill Lynch

Great. Thanks.

Patrick Lo

Sure.

Operator

Thank you. Our next question comes from the line of Sam Wilson. Please proceed with your question.

Sam Wilson - JMP Securities

All right. We are going to try this again. Can you hear me this time?

Patrick Lo

Yes, loud and clear.

Christine Gorjanc

Yes.

Sam Wilson - JMP Securities

Thank goodness. First, a simple one for Christine, just cash flow from operations and CapEx, I'm sorry I missed it.

Christine Gorjanc

Sure. Now cash flow is $10.1 million for the current quarter positive, and then CapEx is about $1.7 million for the current quarter.

Sam Wilson - JMP Securities

Great. Patrick can you give us just a sense, when you look at your international business and when you look at Europe and everything else, can you give us a sense of the delta between what is going on in the emerging market countries versus the more mature? Are you seeing Eastern Europe do better or worse than like UK, Germany and then are you seeing China and India do differently than Japan, let us say, just sort of that sense?

Christine Gorjanc

Well, I mean Japan is a matured economy and market. So let us not lump them into the emerging market. In the emerging market, as you probably see it all the time, China is absolutely the engine, and the economic growth is at 9% range. So that clearly is the locomotive, and as I mentioned many a time before when China does well, Australia will do well because the two were very linked.

So clearly, those two markets are leading the way. As far as Eastern Europe is concerned, our exposure in the Eastern Europe is very tiny. Even with that tiny exposure, we see them really, really struggling and the Western Europe is actually recovering a lot faster.

So for now, our focus will continue to be in China as well as in India. Certainly Latin America, we are seeing a good up-tick in Brazil, in Mexico as well. Those two markets are encouraging.

Sam Wilson - JMP Securities

Are you seeing China behave substantially better than let us say the US market right now, in terms of NETGEAR’s business there?

Patrick Lo

They are quite different. China – US certainly we have a much, much bigger coverage in terms of distribution and brand name, and we are the indigenous vendor, while in China we certainly do not have any distribution beyond the first tier cities, and we are considered to be a foreigner. We're not the indigenous vendor. So we have some ways to go, however, we are considered in China as the premium brand, which helps us.

So in China we maintain a pretty good balance between the consumer and SMB. It seems our pricings are generally higher than local brands. We're seeing a little bit more success on the SMB side. So we will continue to work on our product and cost structure so that we will be able to get a bigger bite on the consumer side as well going forward in China.

Sam Wilson - JMP Securities

Got it. And then I wanted to ask you a follow-up on the, you made the comment about air freight, and obviously component shortages. Is the air freight and the component shortage issue somewhat linked to each other. Are you finding that basically it is sort of hand to mouth and you have got to as soon as they come off the manufacturing line you’ve got to dump them on an airplane immediately. And also is that a function of the channel inventory got a little too low or is it all just back you can’t availability components right now.

Patrick Lo

It is primarily that we can’t get the components. For example, the lead times of the components all of a sudden increased by four or five weeks. So that wiped out our transit time overseas. So, in order to catch up on that four or five weeks we are forced to air freight.

Sam Wilson - JMP Securities

Got it, and then my last question for you is, I think it has been about a year now or little over a year, where you installed new sort of new ERP systems, and more importantly new forecasting systems, have you found over the last couple of quarters the company's ability to forecast what is going to happen it has been substantially different, better, worse et cetera?

Patrick Lo

The new ERP system has significantly upgraded our ability to manage the business. It makes our business a lot more predictable, and makes visibility of the progress of the business through the quarter a lot more accurate. As far as forecasting is concerned, the mechanics are improved. But a lot of that is still depending on our read on the market, which has not improved.

Sam Wilson - JMP Securities

Got it. Thank you so much.

Operator

Thank you. (Operator instructions) Our next question comes from the line of Maynard Um with UBS. Please proceed with your question.

Maynard Um – UBS

Hi, thanks. Just so we can see what normalized margins might be, can you just quantify the gross margin impact from freight, is it around 200 basis points?

Patrick Lo

Yes, pretty much.

Maynard Um – UBS

Okay, and then you talked about the better demand, about a combination of better demand and easing component shortages will help you get to the high-end of your guidance. If demand is actually better than you anticipate, do you think you will be able to squeeze out more from your chips suppliers to supply the upside demand?

Patrick Lo

Well, I'm doing my best. I am flying around.

Maynard Um – UBS

Okay, but if it is a foundry issue, is that something that just – that can't be resolved or…

Patrick Lo

It cannot be resolved in the short term, but I'm flying around getting my more than a fair share help of the allocation.

Maynard Um – UBS

Okay and do you get a better share of that allocation because of your scale and your market share?

Patrick Lo

Sure, but I still want more.

Maynard Um – UBS

Okay, and then if you can't fill any of the excess demand this quarter, do you think that pushes demand into Q1, and help alleviate some normal seasonal declines you would typically see?

Patrick Lo

Some, especially on the SMB side, might, but not on the consumer side. People just don't wait. If they don't see us having the product, then they will buy from our competitors, unfortunately.

Maynard Um – UBS

Okay, and then can you just provide any guidance on interest income or anything happening on your hedges rolling off and then also maybe on the tax rate for the fourth quarter?

Christine Gorjanc

Sure. As far as interest income, it is not much given that we are in really secure investments in that. So I think this quarter it was about 78 K. As far as FX, we don't really guide on that. We were hedged again for the quarter at rates more or less at the beginning of the quarter, and then they roll off and on at different times. So we hope that number is never a big number.

From a tax position, what I would say is, I believe the tax expense for Q4 will be between $7 million and $8 million for Q4, and it is sort of what we guided all along during the quarters and at the back-end we are that the high side of the expense.

Maynard Um – UBS

And then just last one from me given your cash balance, any thoughts on use of cash going forward. Thanks.

Patrick Lo

We always weight multiple options to apply to cash in mind that the best return on the value for our investors. I mean clearly the options are continuing to invest in R&D and equipment to generate more new products that would bring in higher revenue and a higher profit margin in the future, look at acquisitions to really strengthen either our presence in product, technology, market or channel and certainly we have a standby program to buy back shares.

Operator

Thank you. (Operator instructions) It appears there are no further questions at this time; do you have any closing comments?

Patrick Lo

Thank you everybody for joining the call, and we are excited about the product pipeline that we have, and we are excited on the continuous trend of us gaining share and the continuous improvement in market demand, and look forward to talking to all of you again for our Q4 wrap up and 2009 wrap up in February 2010. Thank you.

Operator

Thank you. Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: NETGEAR, Inc. Q3 2009 Earnings Call Transcript
This Transcript
All Transcripts