Harmonic Announces Second Quarter 2016 Results
/EINPresswire.com/ -- SAN JOSE, CA--(Marketwired - August 09, 2016) - Harmonic Inc. (NASDAQ: HLIT), the worldwide leader in video delivery infrastructure, announced today its preliminary and unaudited results for the second quarter of 2016.
GAAP net revenue for the second quarter of 2016 was $108.8 million, compared with $81.8 million for the first quarter of 2016 and $103.1 million for the second quarter of 2015.
Non-GAAP net revenue for the second quarter of 2016 was $109.5 million, compared with $82.5 million for the first quarter of 2016 and $103.1 million for the second quarter of 2015.
Bookings for the second quarter of 2016 were $117.3 million, compared with $109.6 million for the first quarter of 2016 and $99.3 million for the second quarter of 2015.
GAAP net loss for the second quarter of 2016 was $(20.6) million, or $(0.27) per diluted share, compared with a GAAP net loss for the first quarter of 2016 of $(25.2) million, or $(0.33) per diluted share, and a GAAP net loss of $(1.0) million, or $(0.01) per diluted share, for the second quarter of 2015.
Non-GAAP net loss for the second quarter of 2016 was $(0.2) million, or $0.00 per diluted share, compared with non-GAAP net loss for the first quarter of 2016 of $(8.2) million, or $(0.11) per diluted share, and non-GAAP net income of $4.2 million, or $0.05 per diluted share, for the second quarter of 2015. See "Use of Non-GAAP Financial Measures" and "GAAP to Non-GAAP Reconciliations" below.
Total cash, cash equivalents and short-term investments were $65.3 million at the end of the second quarter of 2016, down $11.0 million from $76.2 million at the end of the prior quarter, primarily due to the payment of certain purchase price adjustments related to the Thomson Video Networks ("TVN") acquisition and an increase in accounts receivable which reflects our sequential revenue growth and payments of restructuring and integration charges. In the second quarter of 2016, the Company used approximately $2.9 million of cash from operations.
"Our financial results for the second quarter of 2016 were at the high end of our plan for both our Video and Cable Edge segments," said Patrick Harshman, Harmonic's President and CEO. "Consequently, we enter the second half of the year with record backlog and deferred revenue. Our new CableOS products are scheduled to begin shipping in the fourth quarter of this year, and we remain on track to realize targeted synergy savings from the combination of Harmonic and TVN," concluded Mr. Harshman.
Second Quarter 2016 Highlights
- Strong sequential and year-over-year bookings and revenue growth.
- Backlog and deferred revenue grew to a record $190.4 million.
- Remained on track to realize $20-$22 million of annualized cost savings from the combination of Harmonic and TVN by the end of calendar year 2016.
- Entered into a $10 million engineering collaboration agreement that will extend into 2017.
- Several key trials underway on our recently announced VOS Cloud and VOS 360 software-as-a-service offerings with new cloud partners and tier 1 pay TV operators.
Business Outlook
Third Quarter 2016 GAAP Financial Guidance
For the third quarter of 2016, Harmonic anticipates:
- Net revenue to be $104.5 million to $109.5 million, which includes Video revenue of $92.5 million to $95.5 million and Cable Edge revenue of $12.0 million to $14.0 million
- Gross margin to be 50.0% to 51.0%
- Operating expense to be $65.5 million to $66.5 million
- Operating loss to be $(12.5) million to $(10.5) million
- EPS to be $(0.16) to $(0.14)
- Share count for EPS calculation to be approximately 78 million shares of Harmonic common stock
- Cash on hand at quarter-end to be $60.0 million to $65.0 million
2016 GAAP Financial Guidance
Harmonic's projections for full year 2016 include two fiscal quarters of financial projections for TVN, from the third quarter through the fourth quarter of 2016.
For 2016, Harmonic anticipates:
- Net revenue to be $408.0 million to $418.0 million, which includes Video revenue of $348.0 million to $353.0 million and Cable Edge revenue of $60.0 million to $65.0 million
- Gross margin to be 50.0% to 51.0%
- Operating expense to be $257.5 million to $261.5 million
- Operating loss to be $(55.0) million to $(50.0) million
- EPS to be $(0.69) to $(0.64)
- Share count for EPS calculation to be 78 million to 79 million shares of Harmonic common stock
- Capital expenditures to be $14.0 million to $16.0 million
- Cash on hand at year-end to be $65.0 million to $70.0 million
Third Quarter 2016 Non-GAAP Financial Guidance
For the third quarter of 2016, Harmonic anticipates:
- Net revenue to be $105.0 million to $110.0 million, which includes Video revenue of $93.0 million to $96.0 million and Cable Edge revenue of $12.0 million to $14.0 million
- Gross margin to be 53.0% to 54.0%
- Operating expense to be $54.0 million to $55.0 million
- Operating income to be $2.0 million to $4.0 million
- EPS to be $0.01 to $0.03
- Tax rate to be approximately 15%
- Share count for EPS calculation to be approximately 78 million shares of Harmonic common stock
- Cash on hand at quarter-end to be $60.0 million to $65.0 million
See "Use of Non-GAAP Financial Measures" and "GAAP to Non-GAAP Reconciliations" below.
2016 Non-GAAP Financial Guidance
For 2016, Harmonic anticipates:
- Net revenue to be $410.0 million to $420.0 million, which includes Video revenue of $350.0 million to $355.0 million and Cable Edge revenue of $60.0 million to $65.0 million
- Gross margin to be 53.0% to 54.0%
- Operating expense to be $212.0 million to $216.0 million
- EPS to be $0.01 to $0.06
- Tax rate to be approximately 15%
- Share count for EPS calculation to be 78 million to 79 million shares of Harmonic common stock
- Capital expenditures to be $14.0 million to $16.0 million
- Cash on hand at year-end to be $65.0 million to $70.0 million
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 Tuesday, August 9, 2016. A listen-only broadcast of the conference call can be accessed either from the Company's website at www.harmonicinc.com or by calling +1.847.585.4405 or +1.888.771.4371 (passcode 42982000). The replay will be available after 4:30 p.m. Pacific at the same website address or by calling +1.630.652.3042 or +1.888.843.7419 (passcode 42982000#).
About Harmonic Inc.
Harmonic (NASDAQ: HLIT) is the worldwide leader in video delivery infrastructure for emerging television and video services. Harmonic enables customers to produce, deliver, and monetize amazing video experiences, with unequalled business agility and operational efficiency, by providing market-leading innovation, high-quality service, and compelling total-cost-of-ownership. 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: our final results for the second quarter ended July 1, 2016 and our expectations concerning quarter-on-quarter growth; GAAP net revenue, GAAP gross margins, GAAP operating expenses, GAAP operating income (loss), GAAP EPS, non-GAAP revenue, non-GAAP gross margins, non-GAAP operating expenses, non-GAAP operating income (loss), non-GAAP EPS, and tax rate and capital expenditures for the third quarter of 2016 and fiscal year ended December 31, 2016, as well as cash on hand at the end of the third quarter of 2016 and at December 31, 2016. 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: unexpected delays, difficulties and/or costs relating to integrating TVN with Harmonic; anticipated business opportunities and operational efficiencies for the combined company do not fully materialize; the trends toward more high-definition, on-demand and anytime, anywhere video will not continue to develop at its current pace or will expire; a strong U.S. dollar may have a negative impact on our business in certain international markets; 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 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 on our sales and operations; 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, including in Ukraine; risks associated with our CCAP and VOS™ product initiatives; 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 fluctuations 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; the effect on our business of natural disasters; and risks associated with our outstanding convertible notes. 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, 2015, our recent 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.
Use of Non-GAAP Financial Measures
In establishing operating budgets, managing its business performance, and setting internal measurement targets, we exclude 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: revenue, gross profit, operating expenses, income (loss) from operations and net income (loss) (including those amounts as a percentage of revenue), 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 types of non-GAAP adjustments described below have historically been excluded from our GAAP financial measures: acquisition accounting impacts to TVN deferred revenue and TVN inventory valuation; TVN acquisition-and integration-related costs; Cable Edge inventory charge in connection with certain product lines; restructuring and related charges; and non-cash items, such as impairment of long-term investment, stock-based compensation expense, amortization of intangibles and non-cash interest expenses related to convertible debt and adjustments that normalize the tax rate. With respect to our expectations under "Business Outlook" above, reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available without unreasonable efforts on a forward-looking basis due to the high variability and low visibility with respect to the charges which are excluded from these non-GAAP measures. The effects of stock-based compensation expense specific to common stock options are directly impacted by unpredictable fluctuations in our stock price. We expect the variability of the above charges to have a significant impact on our GAAP financial results.
Harmonic Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except per share data)
December 31,
July 1, 2016 2015
---------------- ----------------
ASSETS
Current assets:
Cash and cash equivalents $ 51,516 $ 126,190
Short-term investments 13,760 26,604
Accounts receivable, net 102,668 69,515
Inventories 36,624 38,819
Prepaid expenses and other current
assets 44,210 25,003
---------------- ----------------
Total current assets 248,778 286,131
Property and equipment, net 36,517 27,012
Goodwill 235,369 197,781
Intangibles, net 39,638 4,097
Other long-term assets 28,635 9,936
---------------- ----------------
Total assets $ 588,937 $ 524,957
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Other debts and capital lease
obligations, current $ 7,829 $ -
Accounts payable 35,794 19,364
Income taxes payable 139 307
Deferred revenue 63,518 33,856
Accrued liabilities 52,346 31,354
---------------- ----------------
Total current liabilities 159,626 84,881
Convertible debt, long-term 100,712 98,295
Other debts and capital lease obligations,
long-term 16,190 -
Income taxes payable, long-term 3,980 3,886
Deferred tax liabilities, long-term 957 -
Other non-current liabilities 15,341 9,727
---------------- ----------------
Total liabilities 296,806 196,789
---------------- ----------------
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; 78,015 and 76,015
shares issued and outstanding at July
1, 2016 and December 31, 2015,
respectively 78 76
Additional paid-in capital 2,245,120 2,236,418
Accumulated deficit (1,949,715) (1,903,908)
Accumulated other comprehensive loss (3,352) (4,418)
---------------- ----------------
Total stockholders' equity 292,131 328,168
---------------- ----------------
Total liabilities and stockholders' equity $ 588,937 $ 524,957
================ ================
Harmonic Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share amounts)
Three months ended Six months ended
--------------------- ---------------------
July 1, July 3, July 1, July 3,
2016 2015 2016(1) 2015
---------- ---------- ---------- ----------
Net revenue $ 108,759 $ 103,103 $ 190,591 $ 207,119
Cost of revenue 57,667 48,718 98,845 97,706
---------- ---------- ---------- ----------
Gross profit 51,092 54,385 91,746 109,413
Operating expenses:
Research and development 26,507 21,816 50,070 44,145
Selling, general and
administrative 36,516 31,281 69,386 62,477
Amortization of intangibles 4,232 1,446 6,597 2,892
Restructuring and asset
impairment charges 1,903 185 4,515 229
---------- ---------- ---------- ----------
Total operating expenses 69,158 54,728 130,568 109,743
Loss from operations (18,066) (343) (38,822) (330)
Interest (expense) income, net (2,651) 17 (5,072) 72
Other income (expense), net 332 59 323 (447)
Loss on impairment of long-term
investment - - (1,476) (2,505)
---------- ---------- ---------- ----------
Loss before income taxes (20,385) (267) (45,047) (3,210)
Provision for income taxes 242 727 760 441
---------- ---------- ---------- ----------
Net loss $ (20,627) $ (994) $ (45,807) $ (3,651)
========== ========== ========== ==========
Net loss per share:
Basic and diluted $ (0.27) $ (0.01) $ (0.59) $ (0.04)
========== ========== ========== ==========
Shares used in per share
calculation:
Basic and diluted 77,342 88,426 77,168 88,541
========== ========== ========== ==========
(1) On February 29, 2016, Harmonic closed the acquisition of TVN and as a
result, our 2016 results for the six months ended July 1, 2016 include TVN
results beginning on February 29, 2016.
Harmonic Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Six months ended
---------------------
July 1, July 3,
2016 2015
---------- ----------
Cash flows from operating activities:
Net loss $ (45,807) $ (3,651)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Amortization of intangibles 8,322 3,439
Depreciation 7,737 6,930
Stock-based compensation 5,862 8,018
Amortization of discount on convertible debt 2,417 -
Restructuring, asset impairment and loss on
retirement of fixed assets 1,687 252
Loss on impairment of long-term investment 1,476 2,505
Deferred income taxes 38 -
Provision for excess and obsolete inventories 5,203 843
Allowance for doubtful accounts, returns and
discounts 697 (713)
Excess tax benefits from stock-based compensation - (22)
Other non-cash adjustments, net 144 -
Changes in assets and liabilities, net of effects of
acquisition:
Accounts receivable (16,000) (1,222)
Inventories 3,158 (595)
Prepaid expenses and other assets (5,039) (11,635)
Accounts payable 2,168 6,415
Deferred revenue 26,795 9,833
Income taxes payable (122) (815)
Accrued and other liabilities (7,029) (5,994)
---------- ----------
Net cash (used in) provided by operating activities (8,293) 13,588
---------- ----------
Cash flows from investing activities:
Acquisition of business, net of cash acquired (72,989) -
Purchases of investments - (12,986)
Proceeds from sales and maturities of investments 12,842 15,744
Purchases of property and equipment (7,708) (7,505)
Purchases of long-term investments - (85)
---------- ----------
Net cash used in investing activities (67,855) (4,832)
---------- ----------
Cash flows from financing activities:
Payment of convertible debt issuance costs (582) -
Increase in other debts and capital leases 5,972 -
Repayment of other debts and capital leases (6,524) -
Payments for repurchase of common stock - (12,171)
Proceeds from common stock issued to employees 3,737 9,133
Payment of tax withholding obligations related to
net share settlements of restricted stock units (1,034) (2,642)
Excess tax benefits from stock-based compensation - 22
---------- ----------
Net cash provided by (used in) financing activities 1,569 (5,658)
---------- ----------
Effect of exchange rate changes on cash and cash
equivalents (95) (81)
---------- ----------
Net (decrease) increase in cash and cash equivalents (74,674) 3,017
Cash and cash equivalents at beginning of period 126,190 73,032
---------- ----------
Cash and cash equivalents at end of period $ 51,516 $ 76,049
========== ==========
Harmonic Inc.
Revenue Information
(Unaudited, in thousands, except percentages)
Three months
ended
------------------------------------
July 1, 2016
------------------------------------
Adjustment
GAAP (1) Non-GAAP
--------- ---------- ---------------
Product
Video Products $ 62,158 $ 205 $ 62,363 57%
Cable Edge 15,751 - 15,751 14%
Services and Support 30,850 575 31,425 29%
--------- ---------- ---------------
Total $ 108,759 $ 780 $109,539 100%
========= ========== ========
Geography
Americas $ 57,681 $ 150 $ 57,831 53%
EMEA 33,456 488 33,944 31%
APAC 17,622 142 17,764 16%
--------- ---------- ---------------
Total $ 108,759 $ 780 $109,539 100%
========= ========== ========
Market
Service Provider $ 64,921 $ 329 $ 65,250 60%
Broadcast and Media 43,838 451 44,289 40%
--------- ---------- ---------------
Total $ 108,759 $ 780 $109,539 100%
========= ========== ========
Three months Three months
ended ended
--------------------------------- ---------------
April 1, 2016 July 3, 2015
--------------------------------- ---------------
Adjustment GAAP and Non-
GAAP(2) (1) Non-GAAP(2) GAAP(3)
------- ---------- -------------- ---------------
Product
Video Products $44,212 $ 355 $44,567 54% $ 56,096 54%
Cable Edge 13,432 - 13,432 16% 21,351 21%
Services and Support 24,188 268 24,456 30% 25,656 25%
------- ---------- -------------- -------- ------
Total $81,832 $ 623 $82,455 100% $103,103 100%
======= ========== ======= ========
Geography
Americas $48,977 $ 81 $49,058 59% $ 60,342 58%
EMEA 19,855 401 20,256 25% 27,360 27%
APAC 13,000 141 13,141 16% 15,401 15%
------- ---------- -------------- -------- ------
Total $81,832 $ 623 $82,455 100% $103,103 100%
======= ========== ======= ========
Market
Service Provider $51,270 $ 150 $51,420 62% $ 64,041 62%
Broadcast and Media 30,562 473 31,035 38% 39,062 38%
------- ---------- -------------- -------- ------
Total $81,832 $ 623 $82,455 100% $103,103 100%
======= ========== ======= ========
(1) Non-GAAP revenue for the three months ended July 1, 2016 and April 1,
2016 include $0.8 million and $0.6 million adjustments relating to TVN
deferred revenue as a result of acquisition accounting, respectively.
(2) Excludes TVN revenue prior to March 1, 2016.
(3) There is no revenue adjustment for the three months ended July 3, 2015.
Harmonic Inc.
GAAP to Non-GAAP Reconciliations (Unaudited)
(In thousands, except percentages and per share data)
Three months ended
-------------------------------------------------------
July 1, 2016
-------------------------------------------------------
Total Income
Gross Operating (loss) from
Revenue Profit Expense Operations Net loss
-------------------------------------------------------
GAAP $108,759 $ 51,092 $ 69,158 $ (18,066) $(20,627)
Cable Edge inventory
charge - 4,519 - 4,519 4,519
Acquisition
accounting impact
related to TVN
deferred revenue 780 780 - 780 780
Stock-based
compensation in
cost of revenue - 424 - 424 424
Stock-based
compensation in
research and
development - - (841) 841 841
Stock-based
compensation in
selling, general
and
administrative - - (1,503) 1,503 1,503
Amortization of
intangibles - 1,307 (4,232) 5,539 5,539
Restructuring and
related charges - 6 (1,903) 1,909 1,909
TVN acquisition-
and integration-
related costs - 433 (2,970) 3,403 3,403
Non-cash interest
expenses related
to convertible
notes - - - - 1,233
Discrete tax items
and tax effect of
non-GAAP
adjustments - - - - 278
-------------------------------------------------------
Non-GAAP $109,539 $ 58,561 $ 57,709 $ 852 $ (198)
=======================================================
As a % of revenue
(GAAP) 47.0% 63.6% (16.6)% (19.0)%
As a % of revenue
(Non-GAAP) 53.5% 52.7% 0.8% (0.2)%
Diluted net loss per
share:
Diluted net loss
per share-GAAP $ (0.27)
==========
Diluted net loss
per share-Non-
GAAP $ 0.00
==========
Shares used to
compute diluted net
loss per share:
GAAP 77,342
==========
Non-GAAP 77,342
==========
Three months ended
-------------------------------------------------------
April 1, 2016
-------------------------------------------------------
Total
Gross Operating Loss from Net
Revenue Profit Expense Operations Loss
-------------------------------------------------------
GAAP $ 81,832 $ 40,654 $ 61,410 $ (20,756) $(25,180)
Acquisition
accounting impacts
related to TVN
deferred revenue 623 623 - 623 623
Acquisition
accounting impacts
related to TVN fair
value of inventory - 189 - 189 189
Stock-based
compensation in
cost of revenue - 227 - 227 227
Stock-based
compensation in
research and
development - - (969) 969 969
Stock-based
compensation in
selling, general
and
administrative - - (1,898) 1,898 1,898
Amortization of
intangibles - 418 (2,365) 2,783 2,783
Restructuring and
related charges - (29) (2,612) 2,583 2,583
TVN acquisition-
and integration-
related costs - 58 (3,038) 3,096 3,096
Impairment of
long-term
investment - - - - 1,476
Non-cash interest
expenses related
to convertible
notes - - - - 1,187
Discrete tax items
and tax effect of
non-GAAP
adjustments - - - - 1,963
-------------------------------------------------------
Non-GAAP $ 82,455 $ 42,140 $ 50,528 $ (8,388) $ (8,186)
=======================================================
As a % of revenue
(GAAP) 49.7% 75.0% (25.4)% (30.8)%
As a % of revenue
(Non-GAAP) 51.1% 61.3% (10.2)% (9.9)%
Diluted net loss per
share:
Diluted net loss
per share-GAAP $ (0.33)
==========
Diluted net loss
per share-Non-
GAAP $ (0.11)
==========
Shares used to
compute diluted net
loss per share:
GAAP 76,996
==========
Non-GAAP 76,996
==========
Three months ended
-------------------------------------------------------
July 3, 2015
-------------------------------------------------------
Income
Total (Loss) Net
Gross Operating from Income
Revenue Profit Expense Operations (Loss)
-------------------------------------------------------
GAAP $103,103 $ 54,385 $ 54,728 $ (343) $ (994)
Stock-based
compensation in
cost of revenue - 422 - 422 422
Stock-based
compensation in
research and
development - - (1,027) 1,027 1,027
Stock-based
compensation in
selling, general
and
administrative - - (2,435) 2,435 2,435
Amortization of
intangibles - 86 (1,446) 1,532 1,532
Restructuring and
related charges - - (185) 185 185
Discrete tax items
and tax effect of
non-GAAP
adjustments - - - - (393)
-------------------------------------------------------
Non-GAAP $103,103 $ 54,893 $ 49,635 $ 5,258 $ 4,214
=======================================================
As a % of revenue
(GAAP) 52.7% 53.1% (0.3)% (1.0)%
As a % of revenue
(Non-GAAP) 53.2% 48.1% 5.1% 4.1%
Diluted net income
(loss) per share:
Diluted net loss
per share-GAAP $ (0.01)
==========
Diluted net income
per share-Non-
GAAP $ 0.05
==========
Shares used to
compute diluted net
income (loss) per
share:
GAAP 88,426
==========
Non-GAAP 89,444
==========
Harmonic Inc.
GAAP to Non-GAAP Reconciliations on Business Outlook
(In millions, except percentages and per share data)
Q3 2016 Financial Guidance
-----------------------------------------------
Total
Operating
Revenue Gross Profit Expense
-----------------------------------------------
$104.5 to
GAAP $109.5 $53.0 to $56.0 $65.5 to $66.5
Acquisition accounting
impact related to TVN
deferred revenue Approx. $0.5 Approx. $0.5 -
Stock-based compensation
expense - Approx. $0.5 Approx. ($3.0)
Amortization of
intangibles - Approx. $1.5 Approx. ($3.5)
Restructuring and related
charges and TVN
acquisition/integration
costs - Approx. $0.5 Approx. ($5.0)
Non-cash interest expense
related to convertible
notes - - -
Discrete tax items and
tax effect of non-GAAP
adjustments - - -
-----------------------------------------------
Approx. $0.5 Approx. $3.0 Approx. ($11.5)
-----------------------------------------------
$105.0 to
Non-GAAP $110.0 $56.0 to $59.0 $54.0 to $55.0
===============================================
As a % of revenue (GAAP) 50% to 51% 61% to 63%
As a % of revenue (Non-
GAAP) 53% to 54% 50% to 52%
Diluted income (loss) per
share:
Diluted net loss per
share-GAAP
Diluted net income per
share-Non-GAAP
Shares used to compute
diluted income (loss) per
share:
GAAP and Non-GAAP
Q3 2016 Financial Guidance
---------------------------------
Income (loss)
from Net
Operations Income (loss)
---------------------------------
$(12.5) to ($12.5) to
GAAP $(10.5) ($10.5)
Acquisition accounting
impact related to TVN
deferred revenue Approx. $0.5 Approx. $0.5
Stock-based compensation
expense Approx. $3.5 Approx. $3.5
Amortization of
intangibles Approx. $5.0 Approx. $5.0
Restructuring and related
charges and TVN
acquisition/integration
costs Approx. $5.5 Approx. $5.5
Non-cash interest expense
related to convertible
notes - Approx. $1.0
Discrete tax items and
tax effect of non-GAAP
adjustments - Approx. ($2.5)
---------------------------------
Approx. $14.5 Approx. $13.0
---------------------------------
Non-GAAP $2.0 to $4.0 $0.5 to $2.5
=================================
As a % of revenue (GAAP) (12)% to (9)% (12)% to (10)%
As a % of revenue (Non-
GAAP) 2% to 4% 0% to 2%
Diluted income (loss) per
share:
Diluted net loss per $(0.16) to
share-GAAP $(0.14)
===============
Diluted net income per
share-Non-GAAP $0.01 to $0.03
===============
Shares used to compute
diluted income (loss) per
share:
GAAP and Non-GAAP 78.0
===============
2016 Financial Guidance
-----------------------------------------------
Total
Operating
Revenue Gross Profit Expense
-----------------------------------------------
$408.0 to $202.5 to $257.5 to
GAAP $418.0 $211.5 $261.5
Acquisition accounting
impact related to TVN
deferred revenue Approx. $2.0 Approx. $2.0 -
Acquisition accounting
impact related to TVN
fair value of inventory - Approx. $0.2 -
Stock-based compensation
expense - Approx. $2.0 Approx. ($12.0)
Amortization of
intangibles - Approx. $4.3 Approx. ($11.0)
Restructuring and related
charges and TVN
acquisition/integration
costs - Approx. $1.5 Approx. ($22.5)
Cable Edge inventory
charge - Approx. $4.5 -
Non-cash interest expense
related to convertible
notes - - -
Discrete tax items and
tax effect of non-GAAP
adjustments - - -
-----------------------------------------------
Approx. $2.0 Approx. $14.5 Approx. ($45.5)
-----------------------------------------------
$410.0 to $217.0 to $212.0 to
Non-GAAP $420.0 $226.0 $216.0
===============================================
As a % of revenue (GAAP) 50% to 51% 62% to 63%
As a % of revenue (Non-
GAAP) 53% to 54% 51% to 52%
Diluted income (loss) per
share:
Diluted net loss per
share-GAAP
Diluted net income per
share-Non-GAAP
Shares used to compute diluted income (loss)
per share:
GAAP and Non-GAAP
2016 Financial Guidance
---------------------------------
Income (loss)
from Net
Operations Income (loss)
---------------------------------
$(55.0) to $(54.0) to
GAAP $(50.0) $(50.0)
Acquisition accounting
impact related to TVN
deferred revenue Approx. $2.0 Approx. $2.0
Acquisition accounting
impact related to TVN
fair value of inventory Approx. $0.2 Approx. $0.2
Stock-based compensation
expense Approx. $14.0 Approx. $14.0
Amortization of
intangibles Approx. $15.3 Approx. $15.3
Restructuring and related
charges and TVN
acquisition/integration
costs Approx. $24.0 Approx. $24.0
Cable Edge inventory
charge Approx. $4.5 Approx. $4.5
Non-cash interest expense
related to convertible
notes - Approx. $4.5
Discrete tax items and
tax effect of non-GAAP
adjustments - Approx. ($10.0)
---------------------------------
Approx. $60.0 Approx. $54.5
---------------------------------
Non-GAAP $5.0 to $10.0 $0.5 to $4.5
=================================
As a % of revenue (GAAP) (13)% to (12)% (13)% to (12)%
As a % of revenue (Non-
GAAP) 1% to 2% 0% to 1%
Diluted income (loss) per
share:
Diluted net loss per $(0.69) to
share-GAAP $(0.64)
===============
Diluted net income per
share-Non-GAAP $0.01 to $0.06
===============
Shares used to compute
diluted income (loss) per
share:
GAAP and Non-GAAP 78 to 79
===============
CONTACTS:
Harold Covert
Chief Financial Officer
Harmonic Inc.
+1.408.542.2500
Blair King
Director, Investor Relations
Harmonic Inc.
+1.408.490.6172
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