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Harmonic Announces Fourth Quarter and Fiscal 2016 Results

SAN JOSE, Calif., Feb. 28, 2017 /PRNewswire/ -- Harmonic Inc. (NASDAQ: HLIT), the worldwide leader in video delivery infrastructure, announced today its unaudited results for the fourth quarter and fiscal year ended December 31, 2016.

GAAP net revenue for the fourth quarter of 2016 was $113.1 million, compared with $101.4 million for the third quarter of 2016 and $86.6 million for the fourth quarter of 2015. GAAP net revenue for fiscal 2016 was $405.9 million, compared with $377.0 million for 2015.

Non-GAAP net revenue for the fourth quarter of 2016 was $113.8 million, compared with $101.7 million for the third quarter of 2016 and $86.6 million for the fourth quarter of 2015. Non-GAAP net revenue for fiscal 2016 was $408.3 million, compared with $377.0 million for 2015.

Bookings for the fourth quarter of 2016 were $116.9 million, compared with $97.3 million for the third quarter of 2016 and $101.0 million for the fourth quarter of 2015.

The GAAP net loss for the fourth quarter of 2016 was $(10.4) million, or $(0.13) per diluted share, compared with a GAAP net loss for the third quarter of 2016 of $(16.0) million, or $(0.21) per diluted share, and a GAAP net loss for the fourth quarter of 2015 of $(7.2) million, or $(0.08) per diluted share. The GAAP net loss for fiscal 2016 was $(72.3) million, or $(0.93) per diluted share, compared to a GAAP net loss of $(15.7) million, or $(0.18) per diluted share, for 2015.

Non-GAAP net income for the fourth quarter of 2016 was $6.7 million, or $0.08 per diluted share, compared with a non-GAAP net loss for the third quarter of 2016 of $(1.1) million, or $(0.01) per diluted share, and non-GAAP net income for the fourth quarter of 2015 of $0.6 million, or $0.01 per diluted share. The Non-GAAP net loss for fiscal 2016 was $(2.8) million, or $(0.04) per diluted share, compared with non-GAAP net income of $9.1 million, or $0.10 per diluted share, for 2015. See "Use of Non-GAAP Financial Measures" and "GAAP to Non-GAAP Reconciliations" provided below.

Total cash, cash equivalents and short-term investments were $62.6 million at the end of the fourth quarter of 2016, up $9.9 million from $52.7 million as of the end of the prior quarter. In the fourth quarter of 2016, the Company generated approximately $13.4 million of cash from operations.

"In 2016, we made significant progress with our Video operating segment as we continued our transition to software based products and services and completed the integration of Thomson Video Networks," said Patrick Harshman, CEO of Harmonic Inc. "We are targeting year-over-year revenue growth and double digit operating profit in 2017 for our Video business.  For our Cable Edge operating segment, we look forward to a planned major roll-out of our new CableOS products and services in the second half of 2017 and the resultant operating profit."

Fourth Quarter 2016 Highlights

  • Near record backlog and deferred revenue of $188.4 million
  • Record video segment revenue and operating margin driven by continued momentum in our software transition, aided by order timing
  • VOS software-as-a-service (SaaS) win with a leading North American media company
  • Global demand for our legacy EdgeQAM technology continued to decline and consequently the Cable Edge segment experienced its lowest revenue quarter on record
  • Declared general commercial availability for CableOS, the industry's first software-based CMTS core
  • First CableOS revenue shipments into live commercial deployments with a tier 1 service provider in Europe
  • Expanded CableOS field trial activity and pipeline
  • Completed the integration of Thomson Video Networks, realized annualized cost savings above our $20 million target

Business Outlook

First Quarter 2017 GAAP Financial Guidance

For the first quarter of 2017, Harmonic anticipates:

  • Net revenue to be $86.5 million to $94.5 million, which includes Video revenue of $79.8 million to $85.8 million and Cable Edge revenue of $6.7 million to $8.7 million
  • Gross margin to be 49.0% to 50.0%
  • Operating expense to be $58.7 million to $59.7 million
  • Operating loss to be $(16.0) million to $(12.0) million
  • EPS to be $(0.24) to $(0.19)
  • Tax expense to be approximately $0.5 million
  • Share count for EPS calculation to be approximately 80 million shares of Harmonic common stock
  • Cash and short-term investments at quarter-end to be $60 million to $65 million

First Quarter 2017 Non-GAAP Financial Guidance

For the first quarter of 2017, Harmonic anticipates:

  • Net revenue to be $87.0 million to $95.0 million, which includes Video revenue of $80.0 million to $86.0 million and Cable Edge revenue of $7.0 million to $9.0 million
  • Gross margin to be 53.0% to 54.0%
  • Operating expense to be $52.0 million to $53.0 million
  • Operating loss to be $(6.0) million to $(2.0) million
  • EPS to be $(0.08) to $(0.04)
  • Tax rate to be approximately 15%
  • Share count for EPS calculation to be approximately 81 million shares of Harmonic common stock
  • Cash and short-term investments at quarter-end to be $60 million to $65 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, February 28, 2017. A listen-only broadcast of the conference call can be accessed either from the Company's website at www.harmonicinc.com or by calling +1.574.990.1032 or +1.800.240.9147 (passcode 64276801). A replay of the conference call will be available after 4:30 p.m. Pacific at the same website address or by calling +1.404.537.3406 or +1.855.859.2056 (passcode 64276801).

About Harmonic Inc.

Harmonic (NASDAQ: HLIT) is the worldwide leader in video delivery infrastructure for emerging television and video services. The Company's production-ready innovation enables content and service providers to efficiently create, prepare, and deliver differentiated services for television and new media video platforms. 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 fourth quarter and fiscal year ended December 31, 2016; 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), non-GAAP EPS, and Non-GAAP tax rate for the first quarter of 2017, share count, as well as cash and short-term investments at the end of the first quarter of 2017. 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: 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 CableOS™  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, total non-operating income (expense), net and net income (loss), tax rate, 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 warrant amortization, 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.

 


Harmonic Inc.

Preliminary Consolidated Balance Sheets

(Unaudited, in thousands, except per share data)



December 31, 2016


December 31, 2015

ASSETS




Current assets:




   Cash and cash equivalents

$

55,635



$

126,190


   Short-term investments

6,923



26,604


   Accounts receivable

86,765



69,515


   Inventories

41,193



38,819


   Prepaid expenses and other current assets

26,319



25,003


Total current assets

216,835



286,131


Property and equipment, net

32,164



27,012


Goodwill

237,279



197,781


Intangibles, net

29,231



4,097


Other long-term assets

38,560



9,936


Total assets

$

554,069



$

524,957






LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




   Other debts and capital lease obligations, current

$

7,275



$


   Accounts payable

28,892



19,364


   Income taxes payable

1,166



307


   Deferred revenues

52,414



33,856


   Accrued and other current liabilities

55,150



31,354


Total current liabilities

144,897



84,881


Convertible notes, long-term

103,259



98,295


Other debts and capital lease obligations, long-term

13,915




Income taxes payable, long-term

2,926



3,886


Other non-current liabilities

18,431



9,727


Total liabilities

283,428



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; 78,456 and 76,015 shares issued and outstanding at December 31, 2016 and 2015, respectively

78



76


   Additional paid-in capital

2,254,055



2,236,418


   Accumulated deficit

(1,976,222)



(1,903,908)


   Accumulated other comprehensive loss

(7,270)



(4,418)


Total stockholders' equity

270,641



328,168


Total liabilities and stockholders' equity

$

554,069



$

524,957


 


Harmonic Inc.

Preliminary Consolidated Statements of Operations

(Unaudited, in thousands, except per share data)



Three months ended


Year ended


December 31, 2016


December 31, 2015


December 31, 2016


December 31, 2015

Revenue:








     Product

$

79,918



$

61,711



$

285,260



$

276,876


     Service

33,184



24,892



120,651



100,151


Total net revenue

113,102



86,603



405,911



377,027


Cost of revenue:








     Product

40,016



26,967



145,714



121,988


     Service

15,393



12,568



59,447



52,327


Total cost of revenue

55,409



39,535



205,161



174,315


Total gross profit

57,693



47,068



200,750



202,712


Operating expenses:








   Research and development

24,129



21,721



98,401



87,545


   Selling, general and administrative

38,883



29,517



144,381



120,960


   Amortization of intangibles

796



1,445



10,402



5,783


   Restructuring and related charges

10,114



746



14,602



1,372


Total operating expenses

73,922



53,429



267,786



215,660


Loss from operations

(16,229)



(6,361)



(67,036)



(12,948)


Interest and other expense, net

(2,822)



(435)



(10,628)



(333)


Other income (expense), net

(26)



17



(31)



(282)


Loss on impairment of long-term investment





(2,735)



(2,505)


Loss before income taxes

(19,077)



(6,779)



(80,430)



(16,068)


Provision for (benefit from) income taxes

(8,634)



420



(8,116)



(407)


Net loss

$

(10,443)



$

(7,199)



$

(72,314)



$

(15,661)


Net loss per share:








   Basic and diluted

$

(0.13)



$

(0.08)



$

(0.93)



$

(0.18)


Shares used in per share calculations:








   Basic and diluted

78,389



84,932



77,705



87,514


 


Harmonic Inc.

Preliminary Consolidated Statements of Cash Flows

(Unaudited, in thousands)



Year ended


December 31, 2016


December 31, 2015

Cash flows from operating activities:




Net loss

$

(72,314)



$

(15,661)


Adjustments to reconcile net loss to net cash provided by operating activities:




   Amortization of intangibles

14,836



6,502


   Depreciation

18,819



13,241


   Stock-based compensation

13,060



15,582


   Amortization of discount on convertible debt

4,964



216


   Provision for non-cash warrant

434




   Restructuring, asset impairment and (gain) loss on retirement of fixed assets

2,305



641


   Loss on impairment of long-term investment

2,735



2,505


   Gain on pension curtailment

(1,955)




   Deferred income taxes, net

(10,085)



(512)


   Provision for doubtful accounts, returns and discounts

2,589



2,034


   Provision for excess and obsolete inventories

6,871



1,585


   Other non-cash adjustments, net

408




   Changes in operating assets and liabilities, net of effects of acquisition:




      Accounts receivable

(2,563)



2,595


      Inventories

(4,107)



(5,954)


      Prepaid expenses and other assets

(1,892)



(8,206)


      Accounts payable

5,793



4,683


      Deferred revenues

18,106



(4,541)


      Income taxes payable

(133)



(1,637)


      Accrued and other liabilities

2,567



(6,722)


Net cash provided by operating activities

438



6,351


Cash flows from investing activities:




    Acquisition of business, net of cash acquired

(75,669)




   Purchases of investments



(25,261)


   Proceeds from maturities of investments

19,707



30,379


   Purchases of property and equipment

(15,107)



(14,356)


   Purchases of long-term investments



(85)


   Restricted cash

591



(1,091)


Net cash used in investing activities

(70,478)



(10,414)


Cash flows from financing activities:




   Proceeds from convertible debt



128,250


   Payment of convertible debt issuance cost

(582)



(3,527)


   Proceeds from other debts and capital leases

5,968




   Repayment of other debts and capital leases

(8,338)




   Proceeds from common stock issued to employees

4,444



9,222


   Payment of tax withholding obligations related to net share settlements of restricted stock units

(1,644)



(3,549)


   Payments for repurchases of common stock



(72,863)


Net cash (used in) provided by financing activities

(152)



57,533


Effect of exchange rate changes on cash and cash equivalents

(363)



(312)


Net (decrease) increase in cash and cash equivalents

(70,555)



53,158


Cash and cash equivalents at beginning of period

126,190



73,032


Cash and cash equivalents at end of period

$

55,635



$

126,190


 


Harmonic Inc.

Revenue Information

(Unaudited, in thousands, except percentages)



Three months ended


December 31, 2016


September 30, 2016


December 31, 2015


GAAP


Adjustment(1)


Non-GAAP


GAAP


Adjustment(1)


Non-GAAP


GAAP and Non-GAAP(2)

Product


















Video Products

$

75,151



$



$

75,151


67%


$

63,288



$



$

63,288


62%


$

50,293



58%

Cable Edge

4,767



295



5,062


4%


6,997





6,997


7%


11,418



13%

Services and Support

33,184



378



33,562


29%


31,121



325



31,446


31%


24,892



29%

Total

$

113,102



$

673



$

113,775


100%


$

101,406



$

325



$

101,731


100%


$

86,603



100%



















Geography


















Americas

$

52,736



$

474



$

53,210


47%


$

47,856



$

166



$

48,022


47%


$

46,782



54%

EMEA

41,036



77



41,113


36%


32,405



106



32,511


32%


21,120



24%

APAC

19,330



122



19,452


17%


21,145



53



21,198


21%


18,701



22%

Total

$

113,102



$

673



$

113,775


100%


$

101,406



$

325



$

101,731


100%


$

86,603



100%



















Market


















Service Provider

$

69,426



$

568



$

69,994


62%


$

53,459



$

97



$

53,556


53%


$

52,057



60%

Broadcast and Media

43,676



105



43,781


38%


47,947



228



48,175


47%


34,546



40%

Total

$

113,102



$

673



$

113,775


100%


$

101,406



$

325



$

101,731


100%


$

86,603



100%

 



Twelve months ended


December 31, 2016


December 31, 2015


GAAP


Adjustment(1)


Non-GAAP


GAAP and Non-GAAP(2)

Product











Video Products

$

244,313



$

560



$

244,873


60%


$

203,732



54%

Cable Edge

40,947



295



41,242


10%


73,144



19%

Services and Support

120,651



1,546



122,197


30%


100,151



27%

Total

$

405,911



$

2,401



$

408,312


100%


$

377,027



100%












Geography











Americas

$

207,249



$

864



$

208,113


51%


$

212,568



56%

EMEA

126,752



1,051



127,803


31%


92,422



25%

APAC

71,910



486



72,396


18%


72,037



19%

Total

$

405,911



$

2,401



$

408,312


100%


$

377,027



100%












Market











Service Provider

$

239,888



$

1,143



$

241,031


59%


$

230,523



61%

Broadcast and Media

166,023



1,258



167,281


41%


146,504



39%

Total

$

405,911



$

2,401



$

408,312


100%


$

377,027



100%


(1) Non-GAAP revenue for the three months ended December 31, 2016 and September 30, 2016, and for the twelve months ended December 31, 2016 include $0.2 million, $0.3 million and $2.0 million adjustments relating to TVN deferred revenue as a result of acquisition accounting, respectively. Non-GAAP revenue for the three and twelve months ended December 31, 2016 also includes $0.4 million adjustment related to the amortization of Comcast warrant.


(2) There is no revenue adjustment for the three and twelve months ended December 31, 2015.

 

Harmonic Inc.

Segment Revenue and Operating Income (Loss)

(Unaudited, in thousands)



Three months ended


December 31, 2016


September 30, 2016


December 31, 2015


GAAP

Adjustments(1)

Non-GAAP


GAAP

Adjustments(1)

Non-GAAP


GAAP

Adjustments(1)

Non-GAAP

Net revenue:












  Video

$

104,540


$

239


$

104,779



$

91,353


$

325


$

91,678



$

72,401


$


$

72,401


  Cable Edge

8,562


434


8,996



10,053



10,053



14,202



14,202


Total consolidated net revenue

$

113,102


$

673


$

113,775



$

101,406


$

325


$

101,731



$

86,603


$


$

86,603














Operating income (loss):












  Video

$

13,906


$

239


$

14,145



$

4,886


$

325


$

5,211



$

5,143


$


$

5,143


  Cable Edge

(5,013)


434


(4,579)



(4,767)



(4,767)



(4,181)



(4,181)


Total segment operating income (loss)

8,893


673


9,566



119


325


444



962



962


  Unallocated corporate expenses

(18,479)


18,479




(4,983)


4,983




(2,055)


2,055



  Stock-based compensation

(4,518)


4,518




(2,680)


2,680




(3,737)


3,737



  Amortization of intangibles

(2,125)


2,125




(4,389)


4,389




(1,531)


1,531



Income (loss) from operations

(16,229)


25,795


9,566



(11,933)


12,377


444



(6,361)


7,323


962


Non-operating (expense) income, net

(2,848)


1,197


(1,651)



(4,321)


2,609


(1,712)



(418)


184


(234)


Income (loss) before income taxes

$

(19,077)


$

26,992


$

7,915



$

(16,254)


$

14,986


$

(1,268)



$

(6,779)


$

7,507


$

728


 


Twelve months ended


December 31, 2016


December 31, 2015


GAAP

Adjustments(1)

Non-GAAP


GAAP

Adjustments(1)

Non-GAAP

Net revenue:








  Video

$

351,489


$

1,967


$

353,456



$

291,779


$


$

291,779


  Cable Edge

54,422


434


54,856



85,248



85,248


Total consolidated net revenue

$

405,911


$

2,401


$

408,312



$

377,027


$


$

377,027










Operating income (loss):








  Video

$

11,963


$

2,156


$

14,119



$

13,529


$


$

13,529


  Cable Edge

(12,131)


434


(11,697)



(1,599)



(1,599)


Total segment operating income (loss)

(168)


2,590


2,422



11,930



11,930


  Unallocated corporate expenses

(38,972)


38,972




(2,794)


2,794



  Stock-based compensation

(13,060)


13,060




(15,582)


15,582



  Amortization of intangibles

(14,836)


14,836




(6,502)


6,502



Income (loss) from operations

(67,036)


69,458


2,422



(12,948)


24,878


11,930


Non-operating (expense) income, net

(13,394)


7,702


(5,692)



(3,120)


2,689


(431)


Income (loss) before income taxes

$

(80,430)


$

77,160


$

(3,270)



$

(16,068)


$

27,567


$

11,499



(1) See "Use of Non-GAAP Financial Measures" and "GAAP to Non-GAAP Reconciliations" below.

 

Harmonic Inc.

GAAP to Non-GAAP Reconciliations (Unaudited)

(in thousands, except percentages and per share data)



Three months ended


December 31, 2016


Revenue

Gross Profit

Total Operating Expense

Income (loss) from Operations

Total Non-operating expense, net

Net Income(Loss)

GAAP

$

113,102


$

57,693


$

73,922


$

(16,229)


$

(2,848)


$

(10,443)


  Cable Edge inventory charge


(327)



(327)



(327)


  Acquisition accounting impact related to TVN deferred revenue

239


239



239



239


  Accounting impact related to warrant amortization

434


434



434



434


  Stock-based compensation in cost of revenue


543



543



543


  Stock-based compensation in research and development



(1,130)


1,130



1,130


  Stock-based compensation in selling, general and administrative



(2,845)


2,845



2,845


  Amortization of intangibles


1,328


(797)


2,125



2,125


  Restructuring and related charges


3,975


(11,519)


15,494



15,494


  Gain on pension curtailment


(551)


1,404


(1,955)



(1,955)


  TVN acquisition-and integration-related costs


439


(4,828)


5,267


(98)


5,169


  Non-cash interest expenses related to convertible notes





1,295


1,295


  Discrete tax items and tax effect of non-GAAP adjustments






(9,821)


Total adjustments

673


6,080


(19,715)


25,795


1,197


17,171









Non-GAAP

$

113,775


$

63,773


$

54,207


$

9,566


$

(1,651)


$

6,728


As a % of revenue (GAAP)


51.0

%

65.4

%

(14.3)%


(2.5)%


(9.2)%


As a % of revenue (Non-GAAP)


56.1

%

47.6

%

8.4

%

(1.5)%


5.9

%

Diluted income (loss) per share:







  Diluted net loss per share-GAAP






$

(0.13)


  Diluted net income per share-Non-GAAP






$

0.08


Shares used to compute net income (loss) per share:







  GAAP






78,389


  Non-GAAP






80,112










Three months ended


September 30, 2016


Revenue

Gross Profit

Total Operating Expense

Income (loss) from Operations

Total Non-operating expense, net

Net loss

GAAP

$

101,406


$

51,363


$

63,296


$

(11,933)


$

(4,321)


$

(16,012)


  Cable Edge inventory charge


(159)



(159)



(159)


  Acquisition accounting impact related to TVN deferred revenue

325


325



325



325


  Stock-based compensation in cost of revenue


360



360



360


  Stock-based compensation in research and development



(771)


771



771


  Stock-based compensation in selling, general and administrative



(1,549)


1,549



1,549


  Amortization of intangibles


1,380


(3,009)


4,389



4,389


  Restructuring and related charges


(1)


27


(28)



(28)


  TVN acquisition-and integration-related costs


119


(5,051)


5,170


98


5,268


  Loss on impairment of long-term investment





1,259


1,259


  Non-cash interest expenses related to convertible notes





1,252


1,252


  Discrete tax items and tax effect of non-GAAP adjustments






(52)


Total adjustments

325


2,024


(10,353)


12,377


2,609


14,934









Non-GAAP

$

101,731


$

53,387


$

52,943


$

444


$

(1,712)


$

(1,078)


As a % of revenue (GAAP)


50.7

%

62.4

%

(11.8)%


(4.3)%


(15.8)%


As a % of revenue (non-GAAP)


52.5

%

52.0

%

0.4

%

(1.7)%


(1.1)%


Diluted loss per share:







  Diluted net loss per share-GAAP






$

(0.21)


  Diluted net loss per share-Non-GAAP






$

(0.01)


Shares used to compute diluted loss per share:







  GAAP and Non-GAAP






78,092










Three months ended


December 31, 2015


Revenue

Gross Profit

Total Operating Expense

Income (loss) from Operations

Total Non-operating expense, net

Net Income (loss)

GAAP

$

86,603


$

47,068


$

53,429


$

(6,361)


$

(418)


$

(7,199)


  Stock-based compensation in cost of revenue


479



479



479


  Stock-based compensation in research and development



(1,186)


1,186



1,186


  Stock-based compensation in selling, general and administrative



(2,072)


2,072



2,072


  Amortization of intangibles


86


(1,445)


1,531



1,531


  Restructuring and related charges



(746)


746



746


  Loss on impairment of long-term investment







  TVN acquisition costs



(1,309)


1,309



1,309


  Non-cash interest expenses related to convertible note





184


184


  Discrete tax items and tax effect of non-GAAP adjustments






266


Total adjustments


565


(6,758)


7,323


184


7,773









Non-GAAP

$

86,603


$

47,633


$

46,671


$

962


$

(234)


$

574


As a % of revenue (GAAP)


54.3

%

61.7

%

(7.3)%


(0.5)%


(8.3)%


As a % of revenue (Non-GAAP)


55.0

%

53.9

%

1.1

%

(0.3)%


0.7

%

Diluted income (loss) per share:







  Diluted net loss per share-GAAP






$

(0.08)


  Diluted net income per share-Non-GAAP






$

0.01


Shares used to compute diluted income (loss) per share:







  GAAP






84,932


  Non-GAAP






85,629









 



Year ended


December 31, 2016


Revenue

Gross Profit

Total Operating Expense

Income (loss) from Operations

Total Non-operating expense, net

Net loss

GAAP

$

405,911


$

200,750


$

267,786


$

(67,036)


$

(13,394)


$

(72,314)


  Cable Edge inventory charge


4,033



4,033



4,033


  Acquisition accounting impact related to TVN deferred revenue

1,967


1,967



1,967



1,967


  Accounting impact related to warrant amortization

434


434



434



434


  Acquisition accounting impacts related to TVN fair value of inventory


189



189



189


  Stock-based compensation in cost of revenue


1,554



1,554



1,554


  Stock-based compensation in research and development



(3,711)


3,711



3,711


  Stock-based compensation in selling, general and administrative



(7,795)


7,795



7,795


  Amortization of intangibles


4,433


(10,403)


14,836



14,836


  Restructuring and related charges


3,951


(16,007)


19,958



19,958


  Gain on pension curtailment


(551)


1,404


(1,955)



(1,955)


  TVN acquisition-and integration-related costs


1,049


(15,887)


16,936



16,936


  Loss on impairment of long-term investment





2,735


2,735


  Non-cash interest expenses related to convertible notes





4,967


4,967


  Discrete tax items and tax effect of non-GAAP adjustments






(7,624)


Total adjustments

2,401


17,059


(52,399)


69,458


7,702


69,536









Non-GAAP

$

408,312


$

217,809


$

215,387


$

2,422


$

(5,692)


$

(2,778)


As a % of revenue (GAAP)


49.5

%

66.0

%

(16.5)%


(3.3)%


(17.8)%


As a % of revenue (Non-GAAP)


53.3

%

52.8

%

0.6

%

(1.4)%


(0.7)%


Diluted loss per share:







  Diluted net loss per share-GAAP






$

(0.93)


  Diluted net loss per share-Non-GAAP






$

(0.04)


Shares used to compute diluted loss per share:







  GAAP and Non-GAAP






77,705










 Year ended


December 31, 2015


Revenue

Gross Profit

Total Operating Expense

Income (loss) from Operations

Total Non-operating expense, net

Net Income (loss)

GAAP

$

377,027


$

202,712


$

215,660


$

(12,948)


$

(3,120)


$

(15,661)


  Stock-based compensation in cost of revenue


1,862



1,862



1,862


  Stock-based compensation in research and development



(4,435)


4,435



4,435


  Stock-based compensation in selling, general and administrative



(9,285)


9,285



9,285


  Amortization of intangibles


719


(5,783)


6,502



6,502


  Restructuring and related charges


113


(1,372)


1,485



1,485


  Loss on impairment of long-term investment





2,505


2,505


  TVN acquisition costs



(1,309)


1,309



1,309


  Non-cash interest expenses related to convertible note





184


184


  Discrete tax items and tax effect of non-GAAP adjustments






(2,823)


Total adjustments


2,694


(22,184)


24,878


2,689


24,744









Non-GAAP

$

377,027


$

205,406


$

193,476


$

11,930


$

(431)


$

9,083


As a % of revenue (GAAP)


53.8

%

57.2

%

(3.4)%


(0.8)%


(4.2)%


As a % of revenue (Non-GAAP)


54.5

%

51.3

%

3.2

%

(0.1)%


2.4

%








Diluted income (loss) per share:







  Diluted net loss per share-GAAP






$

(0.18)


  Diluted net income per share-Non-GAAP






$

0.10


Shares used to compute diluted income (loss) per share:







  GAAP






87,514


  Non-GAAP






88,476


 

Harmonic Inc.

GAAP to Non-GAAP Reconciliations on Business Outlook

(In millions, except percentages and per share data)



Q1-2017 Financial Guidance


Revenue

Gross Profit

Total Operating Expense

Loss from Operations

Total Non-operating expense, net

Net Loss

GAAP

$86.5 to
 $94.5

$42.7 to
 $47.7

$58.7 to
 $59.7

$(16.0) to
 $(12.0)

$(2.7)

$(19.1) to
 $(15.6)

  Acquisition accounting impact related to TVN deferred revenue

0.2

0.2

0.2

0.2

  Accounting impact related to warrant amortization

0.3

0.3

0.3

0.3

  Stock-based compensation expense

0.5

(3.6)

4.1

4.1

  Amortization of intangibles

1.3

(0.8)

2.1

2.1

  Restructuring and related charges and TVN integration costs

1.0

(2.3)

3.3

3.3

  Non-cash interest expense related to convertible notes

1.3

1.3

  Discrete tax items and tax effect of non-GAAP adjustments

1.3

Total adjustments

0.5

3.3

(6.7)

10.0

1.3

12.6








Non-GAAP

$87.0 to $95.0

$46.0 to
 $51.0

$52.0 to
 $53.0

$(6.0) to
 $(2.0)

$(1.4)

$(6.5) to
 $(3.0)

As a % of revenue (GAAP)


49% to 50%

63% to 68%

(18)% to (14)%

(3%)

(22)% to (16)%

As a % of revenue (Non-GAAP)


53% to 54%

56% to 60%

(6)% to (3)%

(1%)

(7)% to (3)%

Diluted income (loss) per share:







  Diluted net loss per share-GAAP






$(0.24) to $(0.19)

  Diluted net loss per share-Non-GAAP






$(0.08) to $(0.04)

Shares used to compute diluted income (loss) per share:







  GAAP






80.0

  Non-GAAP






81.0

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/harmonic-announces-fourth-quarter-and-fiscal-2016-results-300415260.html

SOURCE Harmonic Inc.

Harold Covert, Chief Financial Officer, Harmonic Inc., +1.408.542.2500; or Blair King, Investor Relations, +1.408.490.6172

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