SAN JOSE, Calif., April 27, 2020 /PRNewswire/ -- Harmonic Inc.
(NASDAQ: HLIT) today announced its unaudited results for the first
quarter of 2020.
"While Harmonic's financial results were impacted by Covid-19,
we delivered on several key business initiatives," said
Patrick Harshman, president and
chief executive officer of Harmonic. "Cable Access segment revenue
grew over 85% and recurring SaaS and Service revenue grew over 10%
in the past year. The future impacts of the pandemic are difficult
to forecast but we are well positioned for the long term, as the
broadband cable access and video streaming services we enable
remain vital and our core technology position remains strong. We
continue to operate effectively with near-term focus on ensuring
the wellbeing of our employees and support of our customers."
Q1 Financial and Business Highlights
Financial
- Revenue: $78.4 million, down 2.1%
year over year.
- SaaS and service revenue: $30.7
million, up 10.5% year over year.
- Gross margin: GAAP 46.8% and non-GAAP 48.9%, compared to GAAP
52.2% and non-GAAP 54.5% in the year ago period.
- Cable Access segment revenue: $24.0
million, up 85.6% year over year.
- Video segment gross margin: 51.3%, compared to 57.5% in the
year ago period.
- Operating loss: GAAP loss $18.0
million and non-GAAP loss $9.5
million, compared to GAAP loss $8.4
million and non-GAAP loss $3.8
million in the year ago period.
- EPS: GAAP net loss per share 23
cents and non-GAAP net loss per share 10 cents, compared to GAAP net loss per share
13 cents and non-GAAP net loss per
share 5 cents in the year ago
period.
- Cash: $71.7 million, up
$1.8 million year over year.
Business
- CableOS solution commercially deployed with 27 customers, up
over 17% quarter over quarter.
- CableOS deployments scaled to over 1.3 million served cable
modems, up 30% quarter over quarter and 94% year over year.
- Video SaaS customer base increased from 48 to 57 customers, up
19% quarter over quarter and 128% year over year.
- Over 7,300 cloud channels deployed globally, up 56% quarter
over quarter and 155% year over year.
Select Financial Information
|
|
GAAP
|
|
Non-GAAP
|
Key Financial
Results
|
|
Q1
2020
|
|
Q4
2019
|
|
Q1
2019
|
|
Q1
2020
|
|
Q4
2019
|
|
Q1
2019
|
|
|
(in millions,
except per share data)
|
Net
revenue
|
|
$
|
78.4
|
|
|
$
|
122.2
|
|
|
$
|
80.1
|
|
|
$
|
78.4
|
|
|
$
|
122.2
|
|
|
$
|
80.1
|
|
Net income
(loss)
|
|
$
|
(22.0)
|
|
|
$
|
5.6
|
|
|
$
|
(11.3)
|
|
|
$
|
(9.8)
|
|
|
$
|
12.1
|
|
|
$
|
(4.8)
|
|
Diluted
EPS
|
|
$
|
(0.23)
|
|
|
$
|
0.06
|
|
|
$
|
(0.13)
|
|
|
$
|
(0.10)
|
|
|
$
|
0.12
|
|
|
$
|
(0.05)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial
Information
|
Q1
2020
|
|
Q4
2019
|
|
Q1
2019
|
|
(in
millions)
|
Adjusted
EBITDA
|
$
|
(7.0)
|
|
|
$
|
17.6
|
|
|
$
|
(1.3)
|
|
Bookings for the
quarter
|
$
|
76.3
|
|
|
$
|
140.1
|
|
|
$
|
81.0
|
|
Backlog and deferred
revenue as of quarter end
|
$
|
207.9
|
|
|
$
|
210.2
|
|
|
$
|
187.2
|
|
Cash and cash
equivalents as of quarter end
|
$
|
71.7
|
|
|
$
|
93.1
|
|
|
$
|
69.9
|
|
Explanations regarding our use of non-GAAP financial measures
and related definitions, and reconciliations of our GAAP and
non-GAAP measures, are provided in the sections below entitled "Use
of Non-GAAP Financial Measures" and "GAAP to Non-GAAP
Reconciliations".
Financial Guidance
Financial guidance for the second quarter of 2020 is set out in
the tables below. Due to the economic uncertainties arising
from the Covid-19 crisis, Harmonic is withdrawing its previously
issued full-year 2020 guidance. The company will reassess this
position based on the clarity of macroeconomic recovery at the end
of the second quarter.
GAAP Financial
Guidance
|
|
Q2 2020
|
|
Low
|
|
High
|
(in millions,
except percentages and per share data)
|
Net
Revenue
|
|
$
|
62.0
|
|
|
$
|
77.0
|
|
|
Video
|
|
$
|
42.0
|
|
|
$
|
50.0
|
|
|
Cable
Access
|
|
$
|
20.0
|
|
|
$
|
27.0
|
|
Gross Margin
%
|
|
46.0
|
%
|
|
47.0
|
%
|
Operating
Expenses
|
|
$
|
49.5
|
|
|
$
|
51.5
|
|
Operating
Loss
|
|
$
|
(23.0)
|
|
|
$
|
(13.0)
|
|
Tax
Expense
|
|
$
|
(0.6)
|
|
|
$
|
(0.6)
|
|
EPS
|
|
$
|
(0.28)
|
|
|
$
|
(0.17)
|
|
Shares
|
|
96.8
|
|
|
96.8
|
|
Cash
|
|
$
|
60.0
|
|
|
$
|
70.0
|
|
Non-GAAP
Financial Guidance
|
|
Q2 2020
|
|
Low
|
|
High
|
(in millions,
except percentages and per share data)
|
Net
Revenue
|
|
$
|
62.0
|
|
|
$
|
77.0
|
|
|
Video
|
|
$
|
42.0
|
|
|
$
|
50.0
|
|
|
Cable
Access
|
|
$
|
20.0
|
|
|
$
|
27.0
|
|
Gross Margin
%
|
|
47.0
|
%
|
|
48.0
|
%
|
Operating
Expenses
|
|
$
|
45.0
|
|
|
$
|
47.0
|
|
Operating
Loss
|
|
$
|
(18.0)
|
|
|
$
|
(8.0)
|
|
Adjusted
EBITDA
|
|
$
|
(15.5)
|
|
|
$
|
(5.5)
|
|
Tax rate
|
|
10
|
%
|
|
10
|
%
|
EPS
|
|
$
|
(0.18)
|
|
|
$
|
(0.09)
|
|
Shares
|
|
96.8
|
|
|
96.8
|
|
Cash
|
|
$
|
60.0
|
|
|
$
|
70.0
|
|
See "Use of Non-GAAP Financial Measures" and "GAAP to Non-GAAP
Reconciliations" below.
Conference Call Information
Harmonic will host a conference call to discuss its financial
results at 2:00 p.m. Pacific (5:00 p.m. Eastern)
on Monday, April 27, 2020. The live webcast will be available
on the Harmonic Investor Relations website at
http://investor.harmonicinc.com. An audio version of the
webcast will be available by calling +1.574.990.1032 or
+1.800.240.9147 (passcode 6576215). A replay will be available
after 5:00 p.m. PT on the same web
site or by calling +1.404.537.3406 or +1.855.859.2056 (passcode
6576215).
About Harmonic Inc.
Harmonic (NASDAQ: HLIT), the worldwide leader in video delivery
technology and services, enables media companies and service
providers to deliver ultra-high-quality broadcast and OTT video
services to consumers globally. The Company has also revolutionized
cable access networking via the industry's first virtualized
cable access solution, enabling cable operators to more flexibly
deploy gigabit internet service to consumers' homes and mobile
devices. Whether simplifying OTT video delivery via
innovative cloud and software-as-a-service (SaaS) technologies, or
powering the delivery of gigabit internet cable services, Harmonic
is changing the way media companies and service providers monetize
live and VOD content on every screen. More information is available
at www.harmonicinc.com.
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: GAAP net revenue,
GAAP gross margins, GAAP operating expenses, GAAP operating income
(loss), GAAP tax expense, GAAP EPS, non-GAAP revenue, non-GAAP
gross margins, non-GAAP operating expenses, non-GAAP operating
income (loss), Adjusted EBITDA, non-GAAP tax rate and non-GAAP EPS
and cash. 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, in no
particular order, the following: the market and technology trends
underlying our Video and Cable Access businesses will not continue
to develop in their current direction or pace; the possibility that
our products will not generate sales that are commensurate with our
expectations or that our cost of revenue or operating expenses may
exceed our expectations; the potential impact of the Covid-19
pandemic on our operations or the operations of our supply chain or
our customers; the impact of general economic conditions on our
sales and operations; 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, telco,
broadcast and media industries; customer concentration and
consolidation; our ability to develop new and enhanced products in
a timely manner and market acceptance of our new or existing
products; losses of one or more key customers; risks associated
with our international operations; exchange rate fluctuations of
the currencies in which we conduct business; risks associated with
our CableOS® and VOS® product solutions; dependence on market
acceptance of various types of broadband services, on the adoption
of new broadband technologies and on broadband industry trends;
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, on both revenue and gross margins; difficulties
associated with rapid technological changes in our markets; risks
associated with unpredictable sales cycles; our dependence on
contract manufacturers and sole or limited source suppliers; and
the effect on our business of natural disasters. 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 most recent Annual Report on
Form 10-K for the year ended December 31,
2019, our most recent Quarterly Report 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.
Use of Non-GAAP Financial Measures
The Company reports its financial results in accordance with
accounting principles generally accepted in the United States ("GAAP" or referred to
herein as "reported"). However, management believes that certain
non-GAAP financial measures provide management and other users with
additional meaningful financial information that should be
considered when assessing our ongoing performance. Our management
regularly uses our supplemental non-GAAP financial measures
internally to understand, manage and evaluate our business,
establish operating budgets, set internal measurement targets and
make operating decisions.
These non-GAAP measures are not in accordance with, or an
alternative for, measures prepared in accordance with generally
accepted accounting principles and may be different from non-GAAP
measures used by other companies. In addition, these non-GAAP
measures are not based on any comprehensive set of accounting rules
or principles. The Company believes that non-GAAP measures have
limitations in that they do not reflect all of the amounts
associated with Harmonic's results of operations as determined in
accordance with GAAP and that these measures should only be used to
evaluate Harmonic's results of operations in conjunction with the
corresponding GAAP measures.
The Company believes that the presentation of non-GAAP measures
when shown in conjunction with the corresponding GAAP measures,
provides useful information to investors and management regarding
financial and business trends relating to its financial condition
and its historical and projected results of operations. Non-GAAP
financial measures should be viewed in addition to, and not as an
alternative to, the Company's reported results prepared in
accordance with GAAP.
The non-GAAP measures presented here are: revenue, segment
revenue, gross profit, operating expenses, income (loss) from
operations, non-operating expenses and net income (loss) (including
those amounts as a percentage of revenue), Adjusted EBITDA and net
income (loss) per diluted 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 provided with this press release. The non-GAAP
adjustments described below have historically been excluded from
our GAAP financial measures.
Our non-GAAP financial measures reflect adjustments based on the
following items, as well as the related income tax effects:
Cable Access inventory charge - Harmonic
from time to time incurs inventory
impairment charges associated with material business shifts, such
as the repositioning of our Cable Access segment. We exclude these
items, because we do not believe they are reflective of our ongoing
long-term business and operating results.
Stock-based compensation - Although stock-based
compensation is a key incentive offered to our employees, we
continue to evaluate our business performance excluding stock-based
compensation expenses. We believe that management is limited in its
ability to project the impact stock-based compensation would have
on our operating results. In addition, for comparability purposes,
we believe it is useful to provide a non-GAAP financial measure
that excludes stock-based compensation in order to better
understand the long-term performance of our core business and to
facilitate the comparison of our results to the results of our peer
companies.
Amortization of intangibles - A portion of the purchase
price of our acquisitions is generally allocated to intangible
assets, and is subject to amortization. However, Harmonic does not
acquire businesses on a predictable cycle. Additionally, the amount
of an acquisition's purchase price allocated to intangible assets
and the term of its related amortization can vary significantly and
is unique to each acquisition. Therefore, we believe that the
presentation of non-GAAP financial measures that adjust for the
amortization of intangible assets provides investors and others
with a consistent basis for comparison across accounting
periods.
Restructuring and related charges - Harmonic
from time to time incurs restructuring
charges which primarily consist of employee severance, one-time
termination benefits related to the reduction of its workforce,
lease exit costs, and other costs. These charges are
associated with material business shifts.
We exclude these items because we do not believe they are
reflective of our ongoing long-term
business and operating results.
Non-cash interest expense and other expenses related to
convertible notes - We record the accretion of the debt
discount related to the equity component and amortization of
issuance costs as non-cash interest expense. We believe that
excluding these costs provides meaningful supplemental information
regarding operational performance and liquidity, along with
enhancing investors' ability to view the Company's results from
management's perspective. In addition, we believe excluding these
costs from the non-GAAP measures facilitates comparisons to our
historical operating results and comparisons to peer company
operating results.
Accounting impact related to warrant amortization - We
issued a warrant to a customer, Comcast Corporation, in
September 2016 pursuant to which
Comcast may purchase up to 7.8 million shares of Harmonic common
stock. In July 2019, in connection
with Comcast's election of enterprise license pricing for the
Company's CableOS software, all warrant shares were fully vested as
of July 1, 2019. As a result of
Comcast's election of enterprise license pricing, we no longer
excluded the effect of warrant amortization in our non-GAAP
financial measures beginning with the third quarter of fiscal
2019.
Discrete tax items and tax effect of non-GAAP adjustments
- The income tax effect of non-GAAP adjustments relates to the
tax effect of the adjustments that we incorporate into non-GAAP
financial measures in order to provide a more meaningful measure of
non-GAAP net income.
Harmonic
Inc.
Preliminary
Condensed Consolidated Balance Sheets
(Unaudited, in
thousands, except per share data)
|
|
|
March 27,
2020
|
|
December 31,
2019
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and
cash equivalents
|
$
|
71,712
|
|
|
$
|
93,058
|
|
Accounts
receivable, net
|
93,058
|
|
|
88,500
|
|
Inventories, net
|
34,854
|
|
|
29,042
|
|
Prepaid
expenses and other current assets
|
32,001
|
|
|
40,762
|
|
Total current
assets
|
231,625
|
|
|
251,362
|
|
Property and
equipment, net
|
37,091
|
|
|
22,928
|
|
Operating lease
right-of-use assets
|
26,281
|
|
|
27,491
|
|
Goodwill
|
238,614
|
|
|
239,780
|
|
Intangibles,
net
|
2,789
|
|
|
4,461
|
|
Other long-term
assets
|
39,875
|
|
|
41,305
|
|
Total
assets
|
$
|
576,275
|
|
|
$
|
587,327
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Other
debts and finance lease obligations, current
|
$
|
6,343
|
|
|
$
|
6,713
|
|
Accounts
payable
|
45,159
|
|
|
40,933
|
|
Income
taxes payable
|
419
|
|
|
1,226
|
|
Deferred
revenue
|
48,719
|
|
|
37,117
|
|
Accrued
and other current liabilities
|
52,080
|
|
|
62,535
|
|
Convertible notes, short-term
|
44,008
|
|
|
43,375
|
|
Total current
liabilities
|
196,728
|
|
|
191,899
|
|
Convertible notes,
long-term
|
89,832
|
|
|
88,629
|
|
Other debts and
finance lease obligations, long-term
|
10,048
|
|
|
10,511
|
|
Income taxes payable,
long-term
|
180
|
|
|
178
|
|
Other non-current
liabilities
|
41,388
|
|
|
41,254
|
|
Total
liabilities
|
$
|
338,176
|
|
|
$
|
332,471
|
|
|
|
|
|
Convertible
notes
|
1,777
|
|
|
2,410
|
|
Stockholders'
equity:
|
|
|
|
Preferred stock, $0.001 par value, 5,000 shares authorized; no
shares issued or outstanding
|
—
|
|
|
—
|
|
Common
stock, $0.001 par value, 150,000 shares authorized; 96,566 and
91,875 shares issued and outstanding at March 27, 2020 and December
31, 2019, respectively
|
97
|
|
|
92
|
|
Additional paid-in capital
|
2,336,459
|
|
|
2,327,359
|
|
Accumulated deficit
|
(2,093,894)
|
|
|
(2,071,940
|
|
Accumulated other comprehensive loss
|
(6,340)
|
|
|
(3,065)
|
|
Total stockholders'
equity
|
236,322
|
|
|
252,446
|
|
Total liabilities and
stockholders' equity
|
$
|
576,275
|
|
|
$
|
587,327
|
|
Harmonic
Inc.
Preliminary
Condensed Consolidated Statements of
Operations (Unaudited, in thousands, except per share
data)
|
|
|
|
Three months
ended
|
|
March 27,
2020
|
|
March 29,
2019
|
Revenue:
|
|
|
|
Appliance and
integration
|
$
|
47,752
|
|
|
$
|
52,365
|
|
SaaS and service
|
30,665
|
|
|
27,741
|
|
Total net
revenue
|
78,417
|
|
|
80,106
|
|
Cost of
revenue:
|
|
|
|
Appliance and
integration
|
26,287
|
|
|
27,054
|
|
SaaS and service
|
15,392
|
|
|
11,203
|
|
Total cost of
revenue
|
41,679
|
|
|
38,257
|
|
Total gross
profit
|
36,738
|
|
|
41,849
|
|
Operating
expenses:
|
|
|
|
Research
and development
|
22,123
|
|
|
21,401
|
|
Selling,
general and administrative
|
31,218
|
|
|
28,011
|
|
Amortization of intangibles
|
770
|
|
|
788
|
|
Restructuring and related charges
|
676
|
|
|
57
|
|
Total operating
expenses
|
54,787
|
|
|
50,257
|
|
Loss from
operations
|
(18,049)
|
|
|
(8,408)
|
|
Interest expense,
net
|
(2,903)
|
|
|
(2,906)
|
|
Other expense,
net
|
(273)
|
|
|
(311)
|
|
Loss before income
taxes
|
(21,225)
|
|
|
(11,625)
|
|
Provision for
(benefit from) income taxes
|
729
|
|
|
(319)
|
|
Net loss
|
$
|
(21,954)
|
|
|
$
|
(11,306)
|
|
Net loss per
share:
|
|
|
|
Basic
and diluted
|
$
|
(0.23)
|
|
|
$
|
(0.13)
|
|
Shares used in per
share calculations:
|
|
|
|
Basic
and diluted
|
95,575
|
|
|
88,165
|
|
Harmonic
Inc.
Preliminary
Condensed Consolidated Statements of Cash
Flows (Unaudited, in thousands)
|
|
|
|
Three months
ended
|
|
March 27,
2020
|
|
March 29,
2019
|
Cash flows from
operating activities:
|
|
|
|
Net loss
|
$
|
(21,954)
|
|
|
$
|
(11,306)
|
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
Amortization of intangibles
|
1,655
|
|
|
2,083
|
|
Depreciation
|
2,843
|
|
|
2,846
|
|
Stock-based compensation
|
6,259
|
|
|
2,113
|
|
Amortization of discount on convertible debt
|
1,835
|
|
|
1,605
|
|
Amortization of non-cash warrant
|
434
|
|
|
25
|
|
Restructuring, asset impairment and loss on retirement of fixed
assets
|
8
|
|
|
103
|
|
Foreign
currency adjustments
|
(2,066)
|
|
|
(638)
|
|
Deferred
income taxes, net
|
653
|
|
|
(538)
|
|
Provision for doubtful accounts, returns and discounts
|
331
|
|
|
417
|
|
Provision for excess and obsolete inventories
|
234
|
|
|
254
|
|
Other
non-cash adjustments, net
|
113
|
|
|
287
|
|
Changes
in operating assets and liabilities:
|
|
|
|
Accounts
receivable
|
(5,068)
|
|
|
22,351
|
|
Inventories
|
(6,281)
|
|
|
(4,157)
|
|
Prepaid expenses and
other assets
|
10,579
|
|
|
1,417)
|
|
Accounts
payable
|
(242)
|
|
|
(8,177)
|
|
Deferred
revenues
|
12,477
|
|
|
4,750
|
|
Income taxes
payable
|
(768)
|
|
|
(192)
|
|
Accrued and other
liabilities
|
(12,083)
|
|
|
(9,027)
|
|
Net cash provided by
(used in ) operating activities
|
(11,041)
|
|
|
4,216
|
|
Cash flows from
investing activities:
|
|
|
|
Purchases of property and equipment
|
(11,224)
|
|
|
(1,674)
|
|
Net cash used in
investing activities
|
(11,224)
|
|
|
(1,674)
|
|
Cash flows from
financing activities:
|
|
|
|
Payment
of convertible debt issuance costs
|
(35)
|
|
|
—
|
|
Proceeds
from other debts and finance leases
|
—
|
|
|
160
|
|
Repayment of other debts and finance leases
|
(406)
|
|
|
(97)
|
|
Proceeds
from common stock issued to employees
|
3,000
|
|
|
2,012
|
|
Payment
of tax withholding obligations related to net share settlements of
restricted stock units
|
(829)
|
|
|
(657)
|
|
Net cash provided by
financing activities
|
1,730
|
|
|
1,418
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
(811)
|
|
|
(33)
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
(21,346)
|
|
|
3,927
|
|
Cash, cash
equivalents and restricted cash, beginning of the year
|
93,058
|
|
|
65,989
|
|
Cash, cash
equivalents and restricted cash, end of the year
|
$
|
71,712
|
|
|
$
|
69,916
|
|
Harmonic
Inc.
Preliminary
Revenue Information (Unaudited, in thousands, except
percentages)
|
|
|
|
Three months
ended
|
|
March 27,
2020
|
|
December 31,
2019
|
|
March 29,
2019
|
|
GAAP
|
Adjustment(1)
|
Non-GAAP
|
|
GAAP
|
Adjustment(1)
|
Non-GAAP
|
|
GAAP
|
Adjustment(1)
|
Non-GAAP
|
Geography
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
$
|
37,650
|
|
$
|
—
|
|
$
|
37,650
|
|
48%
|
|
$
|
68,869
|
|
$
|
—
|
|
$
|
68,869
|
|
56%
|
|
$
|
34,188
|
|
$
|
25
|
|
$
|
34,213
|
|
43%
|
EMEA
|
27,816
|
|
—
|
|
27,816
|
|
35%
|
|
39,874
|
|
—
|
|
39,874
|
|
33%
|
|
28,078
|
|
—
|
|
28,078
|
|
35%
|
APAC
|
12,951
|
|
—
|
|
12,951
|
|
17%
|
|
13,435
|
|
—
|
|
13,435
|
|
11%
|
|
17,840
|
|
—
|
|
17,840
|
|
22%
|
Total
|
$
|
78,417
|
|
$
|
—
|
|
$
|
78,417
|
|
100%
|
|
$
|
122,178
|
|
$
|
—
|
|
$
|
122,178
|
|
100%
|
|
$
|
80,106
|
|
$
|
25
|
|
$
|
80,131
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service
Provider
|
$
|
43,759
|
|
$
|
—
|
|
$
|
43,759
|
|
56%
|
|
$
|
83,976
|
|
$
|
—
|
|
$
|
83,976
|
|
69%
|
|
$
|
44,212
|
|
$
|
25
|
|
$
|
44,237
|
|
55%
|
Broadcast and
Media
|
34,658
|
|
—
|
|
34,658
|
|
44%
|
|
38,202
|
|
—
|
|
38,202
|
|
31%
|
|
35,894
|
|
—
|
|
35,894
|
|
45%
|
Total
|
$
|
78,417
|
|
$
|
—
|
|
$
|
78,417
|
|
100%
|
|
$
|
122,178
|
|
$
|
—
|
|
$
|
122,178
|
|
100%
|
|
$
|
80,106
|
|
$
|
25
|
|
$
|
80,131
|
|
100%
|
|
(1) See "Use of
Non-GAAP Financial Measures" above and "GAAP to Non-GAAP
Reconciliations" below.
|
Harmonic
Inc.
Preliminary
Segment Information (Unaudited, in thousands, except
percentages)
|
|
|
|
Three months ended
March 27, 2020
|
|
Video
|
|
Cable
Access
|
|
Total Segment
Measures (non-GAAP)
|
|
Adjustments
(1)
|
|
Consolidated GAAP
Measures
|
Net
revenue
|
$
|
54,372
|
|
|
$
|
24,045
|
|
|
$
|
78,417
|
|
|
$
|
—
|
|
|
$
|
78,417
|
|
Gross
profit
|
27,907
|
|
|
10,414
|
|
|
38,321
|
|
|
(1,583)
|
|
|
36,738
|
|
Gross
margin%
|
51.3
|
%
|
|
43.3
|
%
|
|
48.9
|
%
|
|
|
|
46.8
|
%
|
Operating
loss
|
(6,267)
|
|
|
(3,265)
|
|
|
(9,532)
|
|
|
(8,517)
|
|
|
(18,049)
|
|
Operating
margin%
|
(11.5)
|
%
|
|
(13.6)
|
%
|
|
(12.2)
|
%
|
|
|
|
(23.0)
|
%
|
|
Three months ended
December 31, 2019
|
|
Video
|
|
Cable
Access
|
|
Total Segment
Measures (non-GAAP)
|
|
Adjustments
(1)
|
|
Consolidated GAAP
Measures
|
Net
revenue
|
$
|
79,172
|
|
|
$
|
43,006
|
|
|
$
|
122,178
|
|
|
$
|
—
|
|
|
$
|
122,178
|
|
Gross
profit
|
47,463
|
|
|
16,492
|
|
|
63,955
|
|
|
(2,260)
|
|
|
61,695
|
|
Gross
margin%
|
60.0
|
%
|
|
38.3
|
%
|
|
52.3
|
%
|
|
|
|
50.5
|
%
|
Operating
income
|
11,105
|
|
|
3,649
|
|
|
14,754
|
|
|
(8,048)
|
|
|
6,706
|
|
Operating
margin%
|
14.0
|
%
|
|
8.5
|
%
|
|
12.1
|
%
|
|
|
|
5.5
|
%
|
|
Three months ended
March 29, 2019
|
|
Video
|
|
Cable
Access
|
|
Total Segment
Measures (non-GAAP)
|
|
Adjustments
(1)
|
|
Consolidated GAAP
Measures
|
Net
revenue
|
$
|
67,176
|
|
|
$
|
12,955
|
|
|
$
|
80,131
|
|
|
$
|
(25)
|
|
*
|
$
|
80,106
|
|
Gross
profit
|
38,602
|
|
|
5,093
|
|
|
43,695
|
|
|
(1,846)
|
|
|
41,849
|
|
Gross
margin%
|
57.5
|
%
|
|
39.3
|
%
|
|
54.5
|
%
|
|
|
|
52.2
|
%
|
Operating income
(loss)
|
1,968
|
|
|
(5,797)
|
|
|
(3,829)
|
|
|
(4,579)
|
|
|
(8,408)
|
|
Operating
margin%
|
2.9
|
%
|
|
(44.7)
|
%
|
|
(4.8)
|
%
|
|
|
|
(10.5)
|
%
|
|
(1) See "Use of
Non-GAAP Financial Measures" above and "GAAP to Non-GAAP
Reconciliations" below.
|
* This non-GAAP
adjustment is for warrant amortization and relate to our Cable
Access segment. After applying this adjustment to the non-GAAP
revenue for the Cable Access segment, our GAAP revenue for the
Cable Access segment for the three months ended March 29, 2019 was
$12,930.
|
Harmonic
Inc.
GAAP to Non-GAAP
Reconciliations (Unaudited)
(in thousands,
except percentages and per share data)
|
|
|
|
Three months ended
March 27, 2020
|
|
Revenue
|
Gross
Profit
|
Total Operating
Expense
|
Loss from
Operations
|
Total
Non-operating expense, net
|
Net
Loss
|
GAAP
|
$
|
78,417
|
|
$
|
36,738
|
|
$
|
54,787
|
|
$
|
(18,049)
|
|
$
|
(3,176)
|
|
$
|
(21,954)
|
|
Stock-based
compensation
|
—
|
|
771
|
|
(5,488)
|
|
6,259
|
|
—
|
|
6,259
|
|
Amortization
of intangibles
|
—
|
|
885
|
|
(770)
|
|
1,655
|
|
—
|
|
1,655
|
|
Restructuring
and related charges
|
—
|
|
(73)
|
|
(676)
|
|
603
|
|
—
|
|
603
|
|
Non-cash
interest and other expenses related to convertible notes
|
—
|
|
—
|
|
—
|
|
—
|
|
1,835
|
|
1,835
|
|
Discrete tax
items and tax effect of non-GAAP adjustments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,816
|
|
Total
adjustments
|
—
|
|
1,583
|
|
(6,934)
|
|
8,517
|
|
1,835
|
|
12,168
|
|
Non-GAAP
|
$
|
78,417
|
|
$
|
38,321
|
|
$
|
47,853
|
|
$
|
(9,532)
|
|
$
|
(1,341)
|
|
$
|
(9,786)
|
|
As a % of revenue
(GAAP)
|
|
46.8
|
%
|
69.9
|
%
|
(23.0)
|
%
|
(4.1)
|
%
|
(28.0)
|
%
|
As a % of revenue
(Non-GAAP)
|
|
48.9
|
%
|
61.0
|
%
|
(12.2)
|
%
|
(1.7)
|
%
|
(12.5)
|
%
|
Diluted net income
per share:
|
|
|
|
|
|
|
Diluted net
loss per share-GAAP
|
|
|
|
|
|
$
|
(0.23)
|
|
Diluted net
loss per share-Non-GAAP
|
|
|
|
|
|
$
|
(0.10)
|
|
Shares used to
compute diluted net income per share:
|
|
|
|
|
|
|
GAAP and
Non-GAAP
|
|
|
|
|
|
95,575
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31, 2019
|
|
Revenue
|
Gross
Profit
|
Total Operating
Expense
|
Income from
Operations
|
Total
Non-operating expense, net
|
Net
Income
|
GAAP
|
$
|
122,178
|
|
$
|
61,695
|
|
$
|
54,989
|
|
$
|
6,706
|
|
$
|
(2,789)
|
|
$
|
5,570
|
|
Stock-based
compensation
|
—
|
|
297
|
|
(3,059)
|
|
3,356
|
|
—
|
|
3,356
|
|
Amortization
of intangibles
|
—
|
|
1,295
|
|
(782)
|
|
2,077
|
|
—
|
|
2,077
|
|
Restructuring
and related charges
|
—
|
|
668
|
|
(1,947)
|
|
2,615
|
|
—
|
|
2,615
|
|
Non-cash
interest and other expenses related to convertible notes
|
—
|
|
—
|
|
—
|
|
—
|
|
1,796
|
|
1,796
|
|
Discrete tax
items and tax effect of non-GAAP adjustments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(3,303)
|
|
Total
adjustments
|
—
|
|
2,260
|
|
(5,788)
|
|
8,048
|
|
1,796
|
|
6,541
|
|
Non-GAAP
|
$
|
122,178
|
|
$
|
63,955
|
|
$
|
49,201
|
|
$
|
14,754
|
|
$
|
(993)
|
|
$
|
12,111
|
|
As a % of revenue
(GAAP)
|
|
50.5
|
%
|
45.0
|
%
|
5.5
|
%
|
(2.3)
|
%
|
4.6
|
%
|
As a % of revenue
(Non-GAAP)
|
|
52.3
|
%
|
40.3
|
%
|
12.1
|
%
|
(0.8)
|
%
|
9.9
|
%
|
Diluted net income
per share:
|
|
|
|
|
|
|
Diluted net
income per share-GAAP
|
|
|
|
|
|
$
|
0.06
|
|
Diluted net
income per share-Non-GAAP
|
|
|
|
|
|
$
|
0.12
|
|
Shares used to
compute diluted net income per share:
|
|
|
|
|
|
|
GAAP and
Non-GAAP
|
|
|
|
|
|
97,499
|
|
|
|
|
|
|
|
|
|
Three months ended
March 29, 2019
|
|
Revenue
|
Gross
Profit
|
Total Operating
Expense
|
Loss from
Operations
|
Total
Non-operating expense, net
|
Net
Loss
|
GAAP
|
$
|
80,106
|
|
$
|
41,849
|
|
$
|
50,257
|
|
$
|
(8,408)
|
|
$
|
(3,217)
|
|
$
|
(11,306)
|
|
Accounting
impact related to warrant amortization
|
25
|
|
25
|
|
—
|
|
25
|
|
—
|
|
25
|
|
Stock-based
compensation
|
—
|
|
225
|
|
(1,888)
|
|
2,113
|
|
—
|
|
2,113
|
|
Amortization
of intangibles
|
—
|
|
1,295
|
|
(788)
|
|
2,083
|
|
—
|
|
2,083
|
|
Restructuring
and related charges
|
—
|
|
301
|
|
(57)
|
|
358
|
|
—
|
|
358
|
|
Non-cash
interest expenses related to convertible notes
|
—
|
|
—
|
|
—
|
|
—
|
|
1,606
|
|
1,606
|
|
Discrete tax
items and tax effect of non-GAAP adjustments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
334
|
|
Total
adjustments
|
25
|
|
1,846
|
|
(2,733)
|
|
4,579
|
|
1,606
|
|
6,519
|
|
Non-GAAP
|
$
|
80,131
|
|
$
|
43,695
|
|
$
|
47,524
|
|
$
|
(3,829)
|
|
$
|
(1,611)
|
|
$
|
(4,787)
|
|
As a % of revenue
(GAAP)
|
|
52.2
|
%
|
62.7
|
%
|
(10.5)
|
%
|
(4.0)
|
%
|
(14.1)
|
%
|
As a % of revenue
(Non-GAAP)
|
|
54.5
|
%
|
59.3
|
%
|
(4.8)
|
%
|
(2.0)
|
%
|
(6.0)
|
%
|
Diluted net loss
per share:
|
|
|
|
|
|
|
Diluted net
loss per share-GAAP
|
|
|
|
|
|
$
|
(0.13)
|
|
Diluted net
loss per share-Non-GAAP
|
|
|
|
|
|
$
|
(0.05)
|
|
Shares used to
compute diluted net income per share:
|
|
|
|
|
|
|
GAAP and
Non-GAAP
|
|
|
|
|
|
88,165
|
|
Harmonic
Inc. Preliminary Adjusted EBITDA Reconciliation
(Unaudited) (In thousands)
|
|
|
|
Three months
ended
|
|
March 27,
2020
|
December 31,
2019
|
March 29,
2019
|
Net income (loss)
- GAAP
|
$
|
(21,954)
|
|
$
|
5,570
|
|
$
|
(11,306)
|
|
Provision for
(benefit from) income taxes
|
729
|
|
(1,653)
|
|
(319)
|
|
Interest expense,
net
|
2,903
|
|
2,789
|
|
2,906
|
|
Depreciation
|
2,843
|
|
2,807
|
|
2,846
|
|
Amortization of
intangibles
|
1,655
|
|
2,077
|
|
2,083
|
|
EBITDA
|
(13,824)
|
|
11,590
|
|
(3,790)
|
|
|
|
|
|
Adjustments
|
|
|
|
Accounting impact
related to warrant amortization
|
—
|
|
—
|
|
25
|
|
Stock-based
compensation
|
6,259
|
|
3,356
|
|
2,113
|
|
Restructuring and
related charges
|
603
|
|
2,615
|
|
358
|
|
Adjusted
EBITDA
|
$
|
(6,962)
|
|
$
|
17,561
|
|
$
|
(1,294)
|
|
Harmonic
Inc.
GAAP to Non-GAAP
Reconciliations on Financial Guidance
(In millions,
except percentages and per share data)
|
|
|
|
Q2 2020 Financial
Guidance
|
|
Revenue
|
Gross
Profit
|
Total Operating
Expense
|
Loss from
Operations
|
Total
Non-operating Expense, net
|
Net
Loss
|
GAAP
|
$62.0 to
$77.0
|
$28.5 to
$36.3
|
$49.5 to
$51.5
|
$(23.0) to
$(13.0)
|
$(3.2)
|
$(26.6) to
$(16.8)
|
Stock-based
compensation
|
—
|
0.2
|
(3.4)
|
3.6
|
—
|
3.6
|
Amortization
of intangibles
|
—
|
0.1
|
(0.7)
|
0.8
|
—
|
0.8
|
Restructuring
and related charges
|
—
|
0.2
|
(0.2)
|
0.4
|
—
|
0.4
|
Non-cash
interest and other expenses related to convertible notes
|
—
|
—
|
—
|
—
|
1.9
|
1.9
|
Tax effect of
non-GAAP adjustments
|
—
|
—
|
—
|
—
|
—
|
$1.5 to
$2.5
|
Total
adjustments
|
—
|
0.5
|
(4.3)
|
4.8
|
1.9
|
$8.2 to
$9.2
|
Non-GAAP
|
$62.0 to
$77.0
|
$29.0 to
$36.8
|
$45.0 to
$47.0
|
$(18.0) to
$(8.0)
|
$(1.3)
|
$(17.4) to
$(8.6)
|
As a % of revenue
(GAAP)
|
|
46.0% to
47.0%
|
64.0% to
82.7%
|
(36.8)% to
(16.9)%
|
(4.2)% to
(5.2)%
|
(43.0)% to
(21.9)%
|
As a % of revenue
(Non-GAAP)
|
|
47.0% to
48.0%
|
58.4% to
75.8%
|
(29.0)% to
(10.6)%
|
(1.7)% to
(2.1)%
|
(28.1)% to
(11.2)%
|
Diluted net loss
per share:
|
|
|
|
|
|
|
Diluted net
loss per share-GAAP
|
|
|
|
|
|
$(0.28) to
$(0.17)
|
Diluted net
loss per share-Non-GAAP
|
|
|
|
|
|
$(0.18) to
$(0.09)
|
Shares used to
compute diluted net loss per share:
|
|
|
|
|
|
|
GAAP and
Non-GAAP
|
|
|
|
|
|
96,777
|
Harmonic
Inc.
Adjusted EBITDA
Reconciliation on Financial Guidance
(In
millions)
|
|
|
|
Q2 2020 Financial
Guidance
|
Net loss -
GAAP
|
$(26.6) to
$(16.8)
|
Provision for income
taxes
|
0.6
|
Interest expense,
net
|
2.9
|
Depreciation
|
2.9
|
Amortization of
intangibles
|
0.8
|
EBITDA
|
$(19.4) to
$(9.6)
|
|
|
Adjustments
|
|
Stock-based
compensation
|
3.6
|
Restructuring and
related charges
|
0.4
|
Adjusted
EBITDA
|
$(15.5) to
$(5.5)
|
CONTACT:
Sanjay Kalra
Chief Financial Officer
Harmonic Inc.
+1.408.490.6031
Michael Smiley
Investor Relations
Harmonic Inc.
+1.408.490.6176
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SOURCE Harmonic Inc.