SAN JOSE, CA — (Marketwire) — 07/21/11 — Harmonic Inc. (NASDAQ: HLIT), a global leader
in video infrastructure solutions, today announced its preliminary and
unaudited results for the quarter ended July 1, 2011. Results for 2011
include contributions from Omneon Inc., acquired on September 15, 2010.
Net revenue for the second quarter of 2011 was $134.0 million, up from
$95.5 million in the second quarter of 2010. International sales
represented 59% of total revenue for the second quarter of 2011. For the
first six months of 2011, net revenue was $266.8 million, up from $180.4
million in the same period of 2010. Total bookings in the second quarter of
2011 were approximately $131.7 million, up from approximately $103.9
million for the second quarter of 2010.
The Company reported GAAP net income for the second quarter of 2011 of $0.4
million, or $0.00 per diluted share, compared to net income of $4.4
million, or $0.05 per diluted share, for the second quarter of 2010. For
the first six months of 2011, GAAP net income was $0.9 million, or $0.01
per diluted share, compared to $9.8 million, or $0.10 per diluted share,
for the same period of 2010. Non-GAAP net income for the second quarter of
2011 was $10.5 million, or $0.09 per diluted share, compared to $9.1
million, or $0.09 per diluted share, for the same period of 2010. For the
first six months of 2011, non-GAAP net income was $20.7 million, or $0.18
per diluted share, compared to $15.0 million, or $0.15 per diluted share,
for the same period of 2010. See “Use of Non-GAAP Financial Measures” and
“GAAP to Non-GAAP Net Income Reconciliation” below.
For the second quarter of 2011, Harmonic had GAAP gross margins of 46% and
GAAP operating margins of 1%, compared to 48% and 4%, respectively, for the
same period of 2010. Non-GAAP gross margins were 51% and non-GAAP operating
margins were 11% for the second quarter of 2011, compared to 51% and 13%,
respectively, for the same period of 2010.
As of July 1, 2011, the Company had cash, cash equivalents and short-term
investments of $134.3 million, up from $117.3 million as of April 1, 2011.
“While our international business grew 26% year-over-year on a pro-forma
basis, we saw reduced demand from our domestic customers in the second
quarter,” said Patrick Harshman, President and Chief Executive Officer.
“We-re pleased to see our Omneon revenue up 14% from the prior quarter. We
are also optimistic about the progress with both international and domestic
customers on a range of new Internet and multiscreen video initiatives. We
remain focused on carefully managing our operational expenses while
executing our growth strategy.”
Business Outlook
Harmonic anticipates net revenue in a range of $130 million to $140 million
for the third quarter of 2011 and $540 million to $550 million for the full
year of 2011. GAAP gross margins and operating expenses for the third
quarter of 2011 are expected to be in the range of 45% to 47% and $60 to
$61 million, respectively. Non-GAAP gross margins and operating expenses
for the third quarter of 2011, which will exclude charges for stock-based
compensation and the amortization of intangibles, are anticipated to be in
the range of 50% to 52% and $53 to $54 million, respectively.
Conference Call Information
Harmonic will host a conference call today to discuss its financial results
at 2:00 P.M. Pacific (5:00 P.M. Eastern). A listen-only broadcast of the
conference call can be accessed on the Company-s website at
or by calling +1.706.634.9047 (conference
identification code 51970033). The replay will be available after 6:00 p.m.
Pacific at the same website address or by calling +1.706.645.9291
(conference identification code 51970033).
About Harmonic Inc.
Harmonic Inc. (NASDAQ: HLIT) provides infrastructure that powers the video
economy. The company enables content and service providers to efficiently
create, prepare, and deliver differentiated video services for television
and new media platforms. More information is available at
.
Legal Notice Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, including statements related to our
expectations: regarding our final results for the second quarter ended July
1, 2011; our progress with international and domestic customers on a range
of new Internet and multiscreen video initiatives; our focus on managing
expenses while executing our growth strategy; and regarding net revenue,
GAAP gross margins, GAAP operating expenses, non-GAAP gross margins and
non-GAAP operating expenses for the third quarter of 2011 and net revenue
for the full year. Our expectations regarding these matters may not
materialize, and actual results in future periods are subject to risks and
uncertainties that could cause actual results to differ materially from
those projected. These risks include the possibility, in no particular
order, that: we will not be able to fully integrate Omneon into our
business as effectively or efficiently as expected; Omneon does not provide
Harmonic with the benefits that we expected from the acquisition; the
trends toward more high-definition, on-demand and anytime, anywhere video
will not continue to develop at its current pace, or at all; the
possibility that our products will not generate sales that are commensurate
with our expectations; the mix of products and services sold in various
geographies and the effect it has on gross margins; delays or decreases in
capital spending in the cable, satellite and telco and broadcast and media
industries; customer concentration and consolidation; the impact of general
economic conditions, including recent turmoil in the global financial
markets, particularly on our European and other international sales and
operations; market acceptance of new or existing Harmonic products; losses
of one or more key customers; risks associated with Harmonic-s
international operations; inventory management; the lack of timely
availability of parts or raw materials necessary to produce our products;
the impact of increases in the prices of raw materials and oil; the effect
of competition; difficulties associated with rapid technological changes in
Harmonic-s markets; the need to introduce new and enhanced products and the
risk that our product development is not timely or does not result in
expected benefits or market acceptance; risks associated with unpredictable
sales cycles; our dependence on contract manufacturers; and the risks that
our international sales and support center will not provide the operational
or tax benefits that we anticipate or that its expenses exceed our plans.
The forward-looking statements contained in this press release are also
subject to other risks and uncertainties, including those more fully
described in Harmonic-s filings with the Securities and Exchange
Commission, including our Annual Report on Form 10-K for the year ended
December 31, 2010, our Quarterly Reports on Form 10-Q and our Current
Reports on Form 8-K. The forward-looking statements in this press release
are based on information available to the Company as of the date hereof,
and Harmonic disclaims any obligation to update any forward-looking
statements.
EDITOR-S NOTE – Product and company names used herein are trademarks or
registered trademarks of their respective owners.
Use of Non-GAAP Financial Measures
In establishing operating budgets, managing its business performance, and
setting internal measurement targets, the Company excludes a number of
items required by GAAP. Management believes that these accounting charges
and credits, most of which are non-cash or non-recurring in nature, are not
useful in managing its operations and business. Historically, the Company
has also publicly presented these supplemental non-GAAP measures in order
to assist the investment community to see the Company “through the eyes of
management,” and thereby enhance understanding of its operating
performance. The non-GAAP measures presented here are gross margins,
operating expense, net income and net income per share. The presentation of
non-GAAP information is not intended to be considered in isolation or as a
substitute for results prepared in accordance with GAAP, and is not
necessarily comparable to non-GAAP results published by other companies. A
reconciliation of the historical non-GAAP financial measures discussed in
this press release to the most directly comparable historical GAAP
financial measures is included with the financial statements contained in
this presentation. The non-GAAP adjustments described below have
historically been excluded from our GAAP financial measures. These
adjustments are excess facilities charges, severance charges, acquisition
related costs, discrete tax items and adjustments and non-cash items, such
as stock-based compensation expense and amortization of intangibles.
CONTACTS:
Carolyn V. Aver
Chief Financial Officer
Harmonic Inc.
(408) 542-2500
Michael Newman
Investor Relations
StreetConnect
(408) 542-2760
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