HLIT-2013.12.31 8-K


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 8-K
 
 
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
January 28, 2014
 
Date of Report (Date of earliest event reported)
  
HARMONIC INC.
(Exact name of Registrant as specified in its charter)
 
 
Delaware
000-25826
77-0201147
(State or other jurisdiction of
incorporation or organization)
Commission
File Number
(I.R.S. Employer
Identification Number)
4300 North First Street
San Jose, CA 95134
(408) 542-2500
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




TABLE OF CONTENTS
 
 
 
 
 
 
Item 2.02
 
Results of Operations and Financial Condition
  
 
 
 
Item 9.01
 
Financial Statements and Exhibits
  
 
 
SIGNATURES
  




Item 2.02.
Results of Operations and Financial Condition.
On January 28, 2014, Harmonic Inc. (“Harmonic”) issued a press release regarding its preliminary unaudited financial results for the quarter and year ended December 31, 2013. In the press release, Harmonic also announced that it would be holding a conference call on January 28, 2014 to discuss its financial results for the quarter and year ended December 31, 2013. A copy of the press release is furnished as Exhibit 99.1 hereto, and the information in Exhibit 99.1 is incorporated herein by reference.
The information in this Current Report on Form 8-K and the exhibit attached hereto is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and this Current Report on Form 8-K and the exhibit furnished herewith shall not be incorporated by reference into any filing by Harmonic under the Securities Act of 1933, as amended, or under the Exchange Act.
 
Item 9.01.
Financial Statements and Exhibits.
(d)
Exhibits.
Exhibit
Number
  
Description
99.1

  
Press release of Harmonic Inc., issued on January 28, 2014

3



SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
 
Date: January 28, 2014
 
 
 
HARMONIC INC.
 
 
 
 
 
 
 
 
By:
 
/s/ Carolyn V. Aver
 
 
 
 
 
 
Carolyn V. Aver
 
 
 
 
 
 
Chief Financial Officer



4



EXHIBIT INDEX
 
 
 
 
Exhibit
Number
  
Description
99.1

  
Press release of Harmonic Inc., issued on January 28, 2014.


HLIT-2013.12.31 Press Release


Exhibit 99.1
FOR IMMEDIATE RELEASE
Harmonic Announces Fourth Quarter and Year End 2013 Results
SAN JOSE, Calif.-January 28, 2014-Harmonic Inc. (NASDAQ: HLIT), the worldwide leader in video delivery infrastructure, announced today its preliminary and unaudited results for the fourth quarter and fiscal year ended December 31, 2013.
On March 5, 2013, Harmonic completed the sale of its Cable Access HFC business and, accordingly, the following pertains only to its continuing operations.
Net revenue for the fourth quarter of 2013 was $120.2 million, compared with $122.9 million for the third quarter of 2013 and $118.0 million for the fourth quarter of 2012. For the full year 2013, net revenue was $461.9 million, compared with $476.9 million for 2012.
Bookings for the fourth quarter of 2013 were $113.3 million, compared with $115.9 million for the third quarter of 2013 and $110.8 million for the fourth quarter of 2012.
Total backlog and deferred revenue was $114.0 million as of December 31, 2013, compared to $123.6 million as of September 27, 2013.
The GAAP net loss for the fourth quarter of 2013 was $2.2 million, or $(0.02) per diluted share, compared with GAAP net income for the third quarter of 2013 of $36.7 million, or $0.36 per diluted share, which included a discrete net tax benefit of $38.4 million related to the release of tax reserves for uncertain tax positions of prior years, and GAAP net income for the fourth quarter of 2012 of $0.9 million, or $0.01 per diluted share. For the full year 2013, GAAP net income was $21.6 million, or $0.20 per share, compared to a GAAP net loss of $16.2 million, or $(0.14) per diluted share, for 2012.
Non-GAAP net income for the fourth quarter of 2013 was $8.3 million, or $0.08 per diluted share, compared with non-GAAP net income for the third quarter of 2013 of $7.1 million, or $0.07 per diluted share, and non-GAAP net income for the fourth quarter of 2012 of $8.3 million, or $0.07 per diluted share. For the full year 2013, non-GAAP net income was $18.3 million, or $0.17 per diluted share, compared with $22.8 million, or $0.19 per diluted share, for 2012. See “Use of Non-GAAP Financial Measures” and “GAAP to Non-GAAP Reconciliations” provided below.
GAAP gross margin was 49.6% and GAAP operating margin was (0.8)% for the fourth quarter of 2013, compared with 46.2% and (2.1)%, respectively, for the third quarter of 2013, and 50.9% and (0.6)%, respectively, for the fourth quarter of 2012.
Non-GAAP gross margin was 54.3% and non-GAAP operating margin was 8.9% for the fourth quarter of 2013, compared with 50.8% and 7.1%, respectively, for the third quarter of 2013, and 55.8% and 9.5%, respectively, for the fourth quarter of 2012. See “Use of Non-GAAP Financial Measures” and “GAAP to Non-GAAP Reconciliations” provided below.
Total cash, cash equivalents and short-term investments were $170.6 million at the end of the fourth quarter of 2013, up $1.3 million from $169.3 million as of the end of the prior quarter. In the fourth quarter of 2013, the Company generated approximately $18.6 million of cash from operations, and used approximately $13.0 million to repurchase approximately 1.8 million shares of common stock under its share repurchase program.
“Our revenue was again driven by our growing Broadcast and Media business, and we continued to see a solid rebound in our Cable Edge business,” said Patrick Harshman, President and Chief Executive Officer. “Business fundamentals were led by robust gross margin expansion and cash generation from operations. Strategic execution was highlighted by progress on our NSG Pro converged cable access platform, where we recognized our first revenue, next generation video compression, where we had our first tier one customer order, ultra high definition television and over-the-top multiscreen.”






Business Outlook
For the first quarter of 2014, Harmonic anticipates:
Net revenue in the range of $105 million to $115 million
GAAP gross margins in the range of 49% to 50%
GAAP operating expenses in the range of $60 million to $61 million
Non-GAAP gross margins in the range of 51% to 52%
Non-GAAP operating expenses in the range of $54 million to $55 million
See “Use of Non-GAAP Financial Measures” and “GAAP to Non-GAAP Reconciliations” provided 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, January 28, 2014. A listen-only broadcast of the conference call can be accessed either from the Company's website at www.harmonicinc.com or by calling +1.847.413.3731 or +1.800.773.2954 (passcode# 36464268). A replay of the conference call will be available after 6:00p.m. Pacific at the same website address or by calling +1.630.652.3042 or +1.888.843.7419 (passcode# 36464268).
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, 2013; our expectations concerning quarter-on-quarter and year-on-year growth; and net revenue, GAAP gross margins, GAAP operating expenses, non-GAAP gross margins and non-GAAP operating expenses for the first quarter of 2014. Our expectations regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include the possibility, in no particular order, that: the trends toward more high-definition, on-demand and anytime, anywhere video will not continue to develop at its current pace or will expire; 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, including as a result of recent turmoil in the global financial markets 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; dependence on market acceptance of several 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; the effect on our business of natural disasters; the risks that our international sales and support center will not provide the operational or tax benefits that we anticipate or that its expenses exceed our plans; and the risk that our share repurchase program will not continue to result in material purchases of our common stock. 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, 2012, 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 gross margin, operating expenses, operating margin, income (loss) from operations, net income (loss) 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. These adjustments are costs related to consulting fees associated with a potential proxy contest, restructuring and related charges and non-cash items, such as stock-based compensation expense, amortization of intangibles, 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.
CONTACTS:
 
Carolyn V. Aver
Michael Bishop
Chief Financial Officer
Investor Relations
Harmonic Inc.
+1.415.217.4968
+1.408.542.2500
 
 








Harmonic Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

 
December 31, 2013
 
December 31, 2012
 
(In thousands, except par value amounts)
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
90,329

 
$
96,670

Short-term investments
80,252

 
104,506

Accounts receivable
75,052

 
85,920

Inventories
36,926

 
64,270

Deferred income taxes
24,650

 
21,870

Prepaid expenses and other current assets
21,521

 
23,636

Total current assets
328,730

 
396,872

Property and equipment, net
34,945

 
38,122

Goodwill, intangibles and other assets
242,409

 
282,537

Total assets
$
606,084

 
$
717,531

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
22,380

 
$
25,447

Income taxes payable
1,041

 
1,797

Deferred revenues
27,020

 
33,235

Accrued liabilities
35,349

 
42,415

Total current liabilities
85,790

 
102,894

Income taxes payable, long-term
15,165

 
49,309

Other non-current liabilities
11,673

 
11,915

Total liabilities
112,628

 
164,118

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; 99,413 and 114,193 shares issued and outstanding at December 31, 2013 and 2012, respectively
99

 
114

Capital in excess of par value
2,335,565

 
2,432,790

Accumulated deficit
(1,841,999
)
 
(1,879,026
)
Accumulated other comprehensive loss
(209
)
 
(465
)
Total stockholders’ equity
493,456

 
553,413

Total liabilities and stockholders’ equity
$
606,084

 
$
717,531







Harmonic Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
 
Three months ended
 
Year ended
 
December 31, 2013
 
December 31, 2012
 
December 31, 2013
 
December 31, 2012
 
(In thousands, except per share amounts)
Net revenue
$
120,222

 
$
117,981

 
$
461,940

 
$
476,871

Cost of revenue
60,626

 
57,870

 
241,495

 
256,339

Gross profit
59,596

 
60,111

 
220,445

 
220,532

Operating expenses:
 
 
 
 
 
 
 
Research and development
24,307

 
25,422

 
99,938

 
102,627

Selling, general and administrative
33,794

 
33,255

 
134,014

 
127,117

Amortization of intangibles
1,997

 
2,157

 
8,096

 
8,705

Restructuring and related charges
496

 

 
1,421

 

Total operating expenses
60,594

 
60,834

 
243,469

 
238,449

Loss from operations
(998
)
 
(723
)
 
(23,024
)
 
(17,917
)
Interest and other income (expense), net
(199
)
 
(260
)
 
(128
)
 
222

Loss from continuing operations before income taxes
(1,197
)
 
(983
)
 
(23,152
)
 
(17,695
)
Provision for (benefit from) income taxes
982

 
(1,873
)
 
(44,741
)
 
(1,506
)
Income (loss) from continuing operations
(2,179
)
 
890

 
21,589

 
(16,189
)
Income (loss) from discontinued operations, net of taxes (including gain on disposal of $14,663, net of taxes, for the year ended December 31, 2013)
(181
)
 
3,914

 
15,438

 
5,252

Net income (loss)
$
(2,360
)
 
$
4,804

 
$
37,027

 
$
(10,937
)
Basic net income (loss) per share from:
 
 
 
 
 
 
 
Continuing operations
$
(0.02
)
 
$
0.01

 
$
0.20

 
$
(0.14
)
Discontinued operations
$
0.00

 
$
0.03

 
$
0.14

 
$
0.05

Net income (loss)
$
(0.02
)
 
$
0.04

 
$
0.35

 
$
(0.09
)
Diluted net income (loss) per share from:
 
 
 
 
 
 
 
Continuing operations
$
(0.02
)
 
$
0.01

 
$
0.20

 
$
(0.14
)
Discontinued operations
$
0.00

 
$
0.03

 
$
0.14

 
$
0.05

Net income (loss)
$
(0.02
)
 
$
0.04

 
$
0.34

 
$
(0.09
)
Shares used in per share calculation:
 
 
 
 
 
 
 
Basic
100,372

 
115,097

 
106,529

 
116,457

Diluted
100,372

 
115,732

 
107,808

 
116,457







Harmonic Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
Year ended
 
December 31, 2013
 
December 31, 2012
 
(In thousands)
Cash flows from operating activities:
 
 
 
Net income (loss)
$
37,027

 
$
(10,937
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
Amortization of intangibles
27,329

 
29,204

Depreciation
16,641

 
15,195

Stock-based compensation
16,089

 
18,926

Gain on sale of discontinued operations, net of tax
(14,663
)
 

Loss on impairment of fixed assets
149

 

Deferred income taxes
(13,218
)
 
(4,969
)
Provision for doubtful accounts and sales returns
960

 
3,602

Provision for excess and obsolete inventories
3,475

 
3,377

Excess tax benefits from stock-based compensation
(141
)
 
(121
)
Other non-cash adjustments, net
2,193

 
970

Changes in assets and liabilities, net of effect of acquisitions:
 
 
 
Accounts receivable
9,908

 
20,368

Inventories
13,290

 
3,003

Prepaid expenses and other assets
1,807

 
(2,684
)
Accounts payable
(3,363
)
 
(5,201
)
Deferred revenues
(1,922
)
 
1,334

Income taxes payable
(35,865
)
 
1,535

Accrued and other liabilities
(5,937
)
 
(2,789
)
Net cash provided by operating activities
53,759

 
70,813

Cash flows from investing activities:
 
 
 
Purchases of investments
(78,764
)
 
(133,778
)
Proceeds from sales and maturities of investments
100,924

 
98,838

Purchases of property and equipment
(14,581
)
 
(12,609
)
Proceeds from sale of discontinued operations, net of selling costs
43,515

 

Net cash provided by (used in) investing activities
51,094

 
(47,549
)
Cash flows from financing activities:
 
 
 
Proceeds from issuance of common stock, net
5,186

 
4,819

Payments for repurchase of common stock
(116,529
)
 
(22,639
)
Excess tax benefits from stock-based compensation
141

 
121

Net cash used in financing activities
(111,202
)
 
(17,699
)
Effect of exchange rate changes on cash and cash equivalents
8

 
122

Net increase (decrease) in cash and cash equivalents
(6,341
)
 
5,687

Cash and cash equivalents at beginning of period
96,670

 
90,983

Cash and cash equivalents at end of period
$
90,329

 
$
96,670







Harmonic Inc.
Revenue Information
(Unaudited)
 
Three months ended
 
Year ended
 
December 31,
2013
 
 
 
December 31,
2012
 
 
 
December 31,
2013
 
 
 
December 31,
2012
 
 
 
(In thousands, except percentages)
Product
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Video Processing
$
56,305

 
47
%
 
$
57,561

 
49
%
 
$
219,667

 
48
%
 
$
219,441

 
46
%
Production and Playout
24,256

 
20
%
 
24,919

 
21
%
 
87,799

 
19
%
 
90,246

 
19
%
Cable Edge
18,072

 
15
%
 
13,113

 
11
%
 
69,132

 
15
%
 
86,637

 
18
%
Services and Support
21,589

 
18
%
 
22,388

 
19
%
 
85,342

 
18
%
 
80,547

 
17
%
Total
$
120,222

 
100
%
 
$
117,981

 
100
%
 
$
461,940

 
100
%
 
$
476,871

 
100
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Geography
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
United States
$
47,942

 
40
%
 
$
45,398

 
38
%
 
$
199,790

 
43
%
 
$
208,874

 
44
%
International
72,280

 
60
%
 
72,583

 
62
%
 
262,150

 
57
%
 
267,997

 
56
%
Total
$
120,222

 
100
%
 
$
117,981

 
100
%
 
$
461,940

 
100
%
 
$
476,871

 
100
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Market
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cable
$
42,510

 
35
%
 
$
44,952

 
38
%
 
$
171,624

 
37
%
 
$
200,385

 
42
%
Satellite and Telco
27,110

 
23
%
 
26,159

 
22
%
 
103,573

 
23
%
 
107,885

 
23
%
Broadcast and Media
50,602

 
42
%
 
46,870

 
40
%
 
186,743

 
40
%
 
168,601

 
35
%
Total
$
120,222

 
100
%
 
$
117,981

 
100
%
 
$
461,940

 
100
%
 
$
476,871

 
100
%







Harmonic Inc.
GAAP to Non-GAAP Reconciliations (Unaudited)
(in thousands, except percentages and per share data)
 
Three months ended
 
December 31, 2013
 
Gross Profit
Total Operating Expense
Income (loss) from Operations
Net Income (loss)
GAAP from continuing operations
$
59,596

$
60,594

$
(998
)
$
(2,179
)
  Stock-based compensation in cost of revenue
574


574

574

  Stock-based compensation in research and development

(1,031
)
1,031

1,031

  Stock-based compensation in selling, general and administrative

(2,531
)
2,531

2,531

  Amortization of intangibles
4,763

(1,997
)
6,760

6,760

  Restructuring and related charges
293

(496
)
789

789

  Discrete tax items and tax effect of non-GAAP adjustments



(1,220
)
Non-GAAP from continuing operations
$
65,226

$
54,539

$
10,687

$
8,286

As a % of revenue (GAAP)
49.6
%
50.4
%
(0.8
)%
(1.8
)%
As a % of revenue (Non-GAAP)
54.3
%
45.4
%
8.9
 %
6.9
 %
Diluted income (loss) per share from continuing operations:
 
 
 
 
  Diluted net loss per share from continuing operations-GAAP
 
 
 
$
(0.02
)
  Diluted net income per share from continuing operations-Non-GAAP
 
 
 
$
0.08

Shares used to compute diluted income (loss) per share from continuing operations:
 
 
 
 
  GAAP
 
 
 
100,372

  Non-GAAP
 
 
 
101,937

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended
 
September 27, 2013
 
Gross Profit
Total Operating Expense
Income (loss) from Operations
Net Income
GAAP from continuing operations
$
56,792

$
59,347

$
(2,555
)
$
36,675

  Stock-based compensation in cost of revenue
605


605

605

  Stock-based compensation in research and development

(1,076
)
1,076

1,076

  Stock-based compensation in selling, general and administrative

(2,264
)
2,264

2,264

  Amortization of intangibles
4,763

(2,001
)
6,764

6,764

  Restructuring and related charges
324

(259
)
583

583

  Discrete tax items and tax effect of non-GAAP adjustments



(40,846
)
Non-GAAP from continuing operations
$
62,484

$
53,747

$
8,737

$
7,121

As a % of revenue (GAAP)
46.2
%
48.3
%
(2.1
)%
29.8
 %
As a % of revenue (non-GAAP)
50.8
%
43.7
%
7.1
 %
5.8
 %
 
 
 
 
 
Diluted income per share from continuing operations:
 
 
 
 
  Diluted net income per share from continuing operations-GAAP
 
 
 
$
0.36

  Diluted net income per share from continuing operations-Non-GAAP
 
 
 
$
0.07

Shares used to compute diluted income per share from continuing operations:
 
 
 
 
  GAAP
 
 
 
102,723

  Non-GAAP
 
 
 
102,723

 
 
 
 
 





 
 
 
 
 
 
Three months ended
 
December 31, 2012
 
Gross Profit
Total Operating Expense
Income (loss) from Operations
Net Income
GAAP from continuing operations
$
60,111

$
60,834

$
(723
)
$
890

  Stock-based compensation in cost of revenue
652


652

652

  Stock-based compensation in research and development

(1,396
)
1,396

1,396

  Stock-based compensation in selling, general and administrative

(2,633
)
2,633

2,633

  Amortization of intangibles
5,043

(2,157
)
7,200

7,200

  Discrete tax items and tax effect of non-GAAP adjustments



(4,489
)
Non-GAAP from continuing operations
$
65,806

$
54,648

$
11,158

$
8,282

As a % of revenue (GAAP)
50.9
%
51.6
%
(0.6
)%
0.8
 %
As a % of revenue (Non-GAAP)
55.8
%
46.3
%
9.5
 %
7.0
 %
Diluted income per share from continuing operations:
 
 
 
 
  Diluted net income per share from continuing operations-GAAP
 
 
 
$
0.01

  Diluted net income per share from continuing operations-Non-GAAP
 
 
 
$
0.07

Shares used to compute diluted income per share from continuing operations:
 
 
 
 
  GAAP
 
 
 
115,732

  Non-GAAP
 
 
 
115,732







 
Year ended
 
December 31, 2013
 
Gross Profit
Total Operating Expense
Income (loss) from Operations
Net Income
GAAP from continuing operations
$
220,445

$
243,469

$
(23,024
)
$
21,589

  Stock-based compensation in cost of revenue
2,412


2,412

2,412

  Stock-based compensation in research and development

(4,431
)
4,431

4,431

  Stock-based compensation in selling, general and administrative

(9,159
)
9,159

9,159

  Proxy contest consultant expenses in selling, general and administrative

(750
)
750

750

  Amortization of intangibles
19,233

(8,096
)
27,329

27,329

  Restructuring and related charges
823

(1,421
)
2,244

2,244

  Discrete tax items and tax effect of non-GAAP adjustments



(49,607
)
Non-GAAP from continuing operations
$
242,913

$
219,612

$
23,301

$
18,307

As a % of revenue (GAAP)
47.7
%
52.7
%
(5.0
)%
4.7
 %
As a % of revenue (Non-GAAP)
52.6
%
47.5
%
5.0
 %
4.0
 %
Diluted income per share from continuing operations:
 
 
 
 
  Diluted net income per share from continuing operations-GAAP
 
 
 
$
0.20

  Diluted net income per share from continuing operations-Non-GAAP
 
 
 
$
0.17

Shares used to compute diluted income per share from continuing operations:
 
 
 
 
  GAAP
 
 
 
107,808

  Non-GAAP
 
 
 
107,808

 
 
 
 
 
 
 Year ended
 
December 31, 2012
 
Gross Profit
Total Operating Expense
Income (loss) from Operations
Net Income (loss)
GAAP from continuing operations
$
220,532

$
238,449

$
(17,917
)
$
(16,189
)
  Stock-based compensation in cost of revenue
2,828


2,828

2,828

  Stock-based compensation in research and development

(6,151
)
6,151

6,151

  Stock-based compensation in selling, general and administrative

(9,449
)
9,449

9,449

  Amortization of intangibles
20,499

(8,705
)
29,204

29,204

  Discrete tax items and tax effect of non-GAAP adjustments



(8,692
)
Non-GAAP from continuing operations
$
243,859

$
214,144

$
29,715

$
22,751

As a % of revenue (GAAP)
46.2
%
50.0
%
(3.8
)%
(3.4
)%
As a % of revenue (Non-GAAP)
51.1
%
44.9
%
6.2
 %
4.8
 %
 
 
 
 
 
Diluted income (loss) per share from continuing operations:
 
 
 
 
  Diluted net loss per share from continuing operations-GAAP
 
 
 
$
(0.14
)
  Diluted net income per share from continuing operations-Non-GAAP
 
 
 
$
0.19

Shares used to compute diluted income (loss) per share from continuing operations:
 
 
 
 
  GAAP
 
 
 
116,457

  Non-GAAP
 
 
 
117,041