Press Release

Harmonic Announces First Quarter 2017 Results

SAN JOSE, Calif., May 1, 2017 /PRNewswire/ -- Harmonic Inc. (NASDAQ: HLIT), the worldwide leader in video delivery infrastructure, announced today its unaudited results for the first quarter of 2017.

GAAP net revenue for the first quarter of 2017 was $82.9 million, compared with $113.1 million for the fourth quarter of 2016 and $81.8 million for the first quarter of 2016.

Non-GAAP net revenue for the first quarter of 2017 was $83.5 million, compared with $113.8 million for the fourth quarter of 2016 and $82.5 million for the first quarter of 2016.

Bookings for the first quarter of 2017 were $82.1 million, compared with $116.9 million for the fourth quarter of 2016 and $109.6 million for the first quarter of 2016.

The GAAP net loss for the first quarter of 2017 was $(24.0) million, or $(0.30) per diluted share, compared with a GAAP net loss for the fourth quarter of 2016 of $(10.4) million, or $(0.13) per diluted share, and a GAAP net loss of $(25.2) million, or $(0.33) per diluted share, for the first quarter of 2016.

The non-GAAP net loss for the first quarter of 2017 was $(11.2) million, or $(0.14) per diluted share, compared with non-GAAP net income for the fourth quarter of 2016 of $6.7 million, or $0.08 per diluted share, and a non-GAAP net loss of $(8.2) million, or $(0.11) per diluted share, for the first quarter of 2016. See "Use of Non-GAAP Financial Measures" and "GAAP to Non-GAAP Reconciliations" below.

Total cash, cash equivalents and short-term investments were $55.3 million at the end of the first quarter of 2017, down $7.3 million from $62.6 million at the end of the prior quarter.

"Our first quarter results were impacted by softer than expected service provider spending in the final month of the quarter," said Patrick Harshman, Harmonic's President and Chief Executive Officer. "Looking ahead, our opportunity pipeline gives us confidence that our Video business segment will rebound and deliver on our targeted year-over-year growth. In our Cable Edge segment, first quarter CableOS trials and deployments were executed as planned and we continue to anticipate volume purchases in the second half of the year."

Business Outlook

Second Quarter 2017 GAAP Financial Guidance

For the second quarter of 2017, Harmonic anticipates:

  • Net revenue to be $94.5 million to $102.5 million, which includes Video revenue of $85.9 million to $90.9 million and Cable Edge revenue of $8.6 million to $11.6 million
  • Gross margin to be 49.5% to 50.5% which includes Video gross margin of 52.0% to 53.0% and Cable Edge gross margin of 28.5% to 30.5%
  • Operating expense to be $59.6 million to $60.6 million
  • Operating loss to be $(12.8) million to $(8.8) million
  • GAAP tax expense to be approximately $1.0 million
  • EPS to be $(0.20) to $(0.16)
  • 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 $40 million to $45 million

Second Quarter 2017 Non-GAAP Financial Guidance

For the second quarter of 2017, Harmonic anticipates:

  • Net revenue to be $95 million to $103 million, which includes Video revenue of $86 million to $91 million and Cable Edge revenue of $9 million to $12 million
  • Gross margin to be 52.5% to 53.5% which includes Video gross margin of 55.0% to 56.0% and Cable Edge gross margin of 33.0% to 34.0%
  • Operating expense to be $52.5 million to $53.5 million
  • Operating loss of $(2.5) million ranging to an operating profit of $1.5 million
  • EPS of ($0.04) ranging to break-even
  • 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 $40 million to $45 million

2017 GAAP Financial Guidance

For 2017, Harmonic anticipates:

  • Net revenue to be $398.5 million to $418.5 million, which includes Video revenue of $349.7 million to $359.7 million and Cable Edge revenue of $48.8 million to $58.8 million
  • Gross margin to be 50.5% to 52.0% which includes Video gross margin of 53.0% to 54.0% and Cable Edge gross margin of 36.0% to 37.0%
  • Operating expense to be $227.7 million to $228.7 million
  • Operating loss to be $(25.6) million to $(11.6) million
  • GAAP tax expense to be approximately $3.0 million
  • EPS to be $(0.48) to $(0.33)
  • Share count for EPS calculation to be approximately 82 million shares of Harmonic common stock
  • Cash and short-term investments at quarter-end to be $50 million to $55 million

2017 Non-GAAP Financial Guidance

For 2017, Harmonic anticipates:

  • Net revenue to be $400 million to $420 million, which includes Video revenue of $350 million to $360 million and Cable Edge revenue of $50 million to $60 million
  • Gross margin to be 53.5% to 54.5% which includes Video gross margin of 56.0% to 57.0% and Cable Edge gross margin of 38.0% to 39.0%
  • Operating expense to be $206 million to $207 million
  • Operating profit to be $8 million to $22 million
  • EPS to be $0.02 to $0.16
  • Tax rate to be approximately 15%
  • Share count for EPS calculation to be approximately 82.0 million shares of Harmonic common stock
  • Cash and short-term investments at year-end to be $50.0 million to $55.0 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 Monday, May 1, 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 7203137). The replay 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 7203137).

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: GAAP net revenue, GAAP gross margins, GAAP operating expenses, GAAP operating loss, GAAP tax expense, GAAP EPS, non-GAAP revenue, non-GAAP gross margins, non-GAAP operating expenses, non-GAAP operating income (loss), non-GAAP tax rate and non-GAAP EPS for the second quarter of 2017 and for the fiscal year ended December 31, 2017, share count, as well as cash and short-term investments at the end of the second 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: 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, 2016, 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), tax rate, 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 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 Condensed Consolidated Balance Sheets

(Unaudited, in thousands, except per share data)



March 31, 2017


December 31, 2016

ASSETS




Current assets:




   Cash and cash equivalents

$

55,292



$

55,635


   Short-term investments



6,923


   Accounts receivable, net

69,771



86,765


   Inventories

39,920



41,193


   Prepaid expenses and other current assets

27,659



26,319


Total current assets

192,642



216,835


Property and equipment, net

31,733



32,164


Goodwill

237,911



237,279


Intangibles, net

27,208



29,231


Other long-term assets

41,496



38,560


Total assets

$

530,990



$

554,069






LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




   Other debts and capital lease obligations, current

$

6,802



$

7,275


   Accounts payable

22,340



28,892


   Income taxes payable

1,153



1,166


   Deferred revenue

59,363



52,414


   Accrued and other current liabilities

52,062



55,150


Total current liabilities

141,720



144,897


Convertible debt, long-term

104,575



103,259


Other debts and capital lease obligations, long-term

13,767



13,915


Income taxes payable, long-term

2,961



2,926


Other non-current liabilities

16,559



18,431


Total liabilities

279,582



283,428






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; 80,503 and 78,456 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively

81



78


   Additional paid-in capital

2,257,093



2,254,055


   Accumulated deficit

(1,998,884)



(1,976,222)


   Accumulated other comprehensive loss

(6,882)



(7,270)


Total stockholders' equity

251,408



270,641


Total liabilities and stockholders' equity

$

530,990



$

554,069


 

Harmonic Inc.

Preliminary Condensed Consolidated Statements of Operations

(Unaudited, in thousands, except per share data)




Three months ended


March 31, 2017


April 1, 2016

Revenue:




Product

$

50,404



$

57,644


Services

32,539



24,188


Total net revenue

$

82,943



$

81,832


Cost of revenue:




Product

26,102



27,189


Services

16,433



13,989


Total cost of revenue

42,535



41,178


   Gross profit

40,408



40,654


Operating expenses:




   Research and development

24,882



23,563


   Selling, general and administrative

34,631



32,870


   Amortization of intangibles

774



2,365


   Restructuring and related charges

1,279



2,612


      Total operating expenses

61,566



61,410


Loss from operations

(21,158)



(20,756)


Interest expense, net

(2,590)



(2,421)


Other expense, net

(511)



(9)


Loss on impairment of long-term investment



(1,476)


Loss before income taxes

(24,259)



(24,662)


(Benefit from) provision for income taxes

(232)



518


Net loss

$

(24,027)



$

(25,180)


Net loss per share:




   Basic and diluted

$

(0.30)



$

(0.33)


Shares used in per share calculation:




   Basic and diluted

79,810



76,996


 

Harmonic Inc.

Preliminary Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)



Three months ended


March 31, 2017


April 1, 2016

Cash flows from operating activities:




Net loss

$

(24,027)



$

(25,180)


Adjustments to reconcile net loss to net cash used in operating activities:




   Amortization of intangibles

2,069



2,783


   Depreciation

3,599



3,317


   Stock-based compensation

3,251



3,094


   Amortization of discount on convertible debt

1,316



1,187


   Amortization of non-cash warrant

416




   Restructuring, asset impairment and loss on retirement of fixed assets

187



1,675


   Loss on impairment of long-term investment



1,476


   Provision for excess and obsolete inventories

387



418


   Allowance for doubtful accounts, returns and discounts

2,700



739


   Other non-cash adjustments, net

72




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




      Accounts receivable

14,388



(10,894)


      Inventories

942



(51)


      Prepaid expenses and other assets

(3,441)



(6,078)


      Accounts payable

(6,687)



(3,890)


      Deferred revenue

5,725



24,963


      Income taxes payable

6



(13)


      Accrued and other liabilities

(3,999)



1,046


Net cash used in operating activities

(3,096)



(5,408)


Cash flows from investing activities:




Acquisition of business, net of cash acquired



(69,532)


   Proceeds from maturities and sale of investments

6,898



7,394


   Purchases of property and equipment

(3,217)



(2,664)


Net cash provided by (used in) investing activities

3,681



(64,802)


Cash flows from financing activities:




Payment of convertible debt issuance costs



(582)


Proceeds from other debts and capital leases



262


Repayment of other debts and capital leases

(953)



(114)


   Proceeds from common stock issued to employees

2,114



2,074


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

(2,383)



(955)


Net cash (used in) provided by financing activities

(1,222)



685


Effect of exchange rate changes on cash and cash equivalents

294



330


Net decrease in cash and cash equivalents

(343)



(69,195)


Cash and cash equivalents at beginning of period

55,635



126,190


Cash and cash equivalents at end of period

$

55,292



$

56,995


 

Harmonic Inc.

Preliminary Revenue Information

(Unaudited, in thousands, except percentages)



Three months ended


March 31, 2017


December 31, 2016


April 1, 2016


GAAP

Adjust-ments(1)

Non-GAAP


GAAP

Adjust-ments(1)

Non-GAAP


GAAP(2)

Adjust-ments(1)

Non-GAAP(2)

Product















Video Products

$

45,518


$


$

45,518


55%


$

75,151


$


$

75,151


67%


$

44,212


$

355


$

44,567


54%

Cable Edge

4,886


191


5,077


6%


4,767


295


5,062


4%


13,432



13,432


16%

Services and Support

32,539


336


32,875


39%


33,184


378


33,562


29%


24,188


268


24,456


30%

Total

$

82,943


$

527


$

83,470


100%


$

113,102


$

673


$

113,775


100%


$

81,832


$

623


$

82,455


100%
















Geography















Americas

$

37,906


$

416


$

38,322


46%


$

52,736


$

474


$

53,210


47%


$

48,977


$

81


$

49,058


59%

EMEA

25,439


111


25,550


31%


41,036


77


41,113


36%


19,855


401


20,256


25%

APAC

19,598



19,598


23%


19,330


122


19,452


17%


13,000


141


13,141


16%

Total

$

82,943


$

527


$

83,470


100%


$

113,102


$

673


$

113,775


100%


$

81,832


$

623


$

82,455


100%
















Market















Service Provider

$

48,028


$

416


$

48,444


58%


$

69,426


$

568


$

69,994


62%


$

51,270


$

150


$

51,420


62%

Broadcast and Media

34,915


111


35,026


42%


43,676


105


43,781


38%


30,562


473


31,035


38%

Total

$

82,943


$

527


$

83,470


100%


$

113,102


$

673


$

113,775


100%


$

81,832


$

623


$

82,455


100%


(1) Non-GAAP revenue for the three months ended March 31, 2017, December 31, 2016 and April 1, 2016 include $0.1 million, $0.2 million and $0.6 million adjustments relating to TVN deferred revenue as a result of acquisition accounting, respectively. In addition, non-GAAP revenue for the three months ended March 31, 2017 and December 31, 2016 each includes $0.4 million adjustment related to the amortization of Comcast warrant.


(2) Excludes TVN revenues prior to March 1, 2016.

 

Harmonic Inc.

Preliminary Segment Information

(Unaudited, in thousands, except percentages)



Three months ended March 31, 2017


Video


Cable Edge


Total Segment Measures


Adjustments (1)


Consolidated GAAP Measures

Net revenue

$

74,453



$

9,017



$

83,470



$

(527)



$

82,943


Gross profit

40,884



2,626



43,510



(3,102)



40,408


Gross margin%

54.9

%


29.1

%


52.1

%




48.7

%

Operating loss

(5,725)



(5,664)



(11,389)



(9,769)



(21,158)


Operating margin%

(7.7)

%


(62.8)%



(13.6)

%




(25.5)

%












Three months ended December 31, 2016


Video


Cable Edge


Total Segment Measures


Adjustments (1)


Consolidated GAAP Measures

Net revenue

$

104,779



$

8,996



$

113,775



$

(673)



$

113,102


Gross profit

60,443



3,330



63,773



(6,080)



57,693


Gross margin%

57.7

%


37.0

%


56.1

%




51.0

%

Operating income (loss)

14,145



(4,579)



9,566



(25,795)



(16,229)


Operating margin%

13.5

%


(50.9)

%


8.4

%




(14.3)

%












Three months ended April 1, 2016 (2)


Video


Cable Edge


Total Segment Measures


Adjustments (1)


Consolidated GAAP Measures

Net revenue

$

65,631



$

16,824



$

82,455



$

(623)



$

81,832


Gross profit

34,892



7,248



42,140



(1,486)



40,654


Gross margin%

53.2

%


43.1

%


51.1

%




49.7

%

Operating loss

(6,535)



(1,853)



(8,388)



(12,368)



(20,756)


Operating margin%

(10.0)

%


(11.0)

%


(10.2)

%




(25.4)

%


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


(2) Excludes TVN results prior to March 1, 2016.

 

Harmonic Inc.

GAAP to Non-GAAP Reconciliations (Unaudited)

(In thousands, except percentages and per share data)



Three months ended


March 31, 2017


Revenue

Gross Profit

Total Operating Expense

Loss from Operations

Total Non-operating Expense, net

Net Loss

GAAP

$

82,943


$

40,408


$

61,566


$

(21,158)


$

(3,101)


$

(24,027)


  Cable Edge inventory charge


(15)



(15)



(15)


  Acquisition accounting impact related to TVN deferred revenue

111


111



111



111


  Accounting impact related to warrant amortization

416


416



416



416


  Stock-based compensation in cost of revenue


445



445



445


  Stock-based compensation in research and development



(977)


977



977


  Stock-based compensation in selling, general and administrative



(1,829)


1,829



1,829


  Amortization of intangibles


1,295


(774)


2,069



2,069


  Restructuring and related charges


508


(1,279)


1,787



1,787


  TVN acquisition-and integration-related costs


342


(1,808)


2,150



2,150


  Non-cash interest expenses related to convertible notes





1,316


1,316


  Discrete tax items and tax effect of non-GAAP adjustments






1,744


Total adjustments

527


3,102


(6,667)


9,769


1,316


12,829









Non-GAAP

$

83,470


$

43,510


$

54,899


$

(11,389)


$

(1,785)


$

(11,198)


As a % of revenue (GAAP)


48.7

%

74.2

%

(25.5)%


(3.7)%


(29.0)%


As a % of revenue (Non-GAAP)


52.1

%

65.8

%

(13.6)%


(2.1)%


(13.4)%


Diluted net loss per share:







  Diluted net loss per share-GAAP






$

(0.30)


  Diluted net loss per share-Non-GAAP






$

(0.14)


Shares used to compute diluted net loss per share:







  GAAP and Non-GAAP






79,810










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 net loss per share:







  Diluted net loss per share-GAAP






$

(0.13)


  Diluted net income per share-Non-GAAP






$

0.08


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







  GAAP






78,389


  Non-GAAP






80,112










Three months ended


April 1, 2016


Revenue

Gross Profit

Total Operating Expense

Loss from Operations

Total Non-operating Expense, net

Net Loss

GAAP

$

81,832


$

40,654


$

61,410


$

(20,756)


$

(3,906)


$

(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


  Loss on impairment of long-term investment





1,476


1,476


  Non-cash interest expenses related to convertible notes





1,187


1,187


  Discrete tax items and tax effect of non-GAAP adjustments






1,963


Total adjustments

623


1,486


(10,882)


12,368


2,663


16,994









Non-GAAP

$

82,455


$

42,140


$

50,528


$

(8,388)


$

(1,243)


$

(8,186)


As a % of revenue (GAAP)


49.7

%

75.0

%

(25.4)

%

(4.8)

%

(30.8)

%

As a % of revenue (Non-GAAP)


51.1

%

61.3

%

(10.2)

%

(1.5)

%

(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 and Non-GAAP






76,996


 


Harmonic Inc.

GAAP to Non-GAAP Reconciliations on Business Outlook

(In millions, except percentages and per share data)



Q2-2017 Financial Guidance


Revenue

Gross Profit

Total Operating Expense

Income(loss) from Operations

Total Non-operating Expense, net

Net Income(loss)

GAAP

$94.5 to

 $102.5

$46.8 to

 $51.8

$59.6 to

 $60.6

$(12.8) to

 $(8.8)

$(2.8)

($16.6) to

 ($13.2)

  Acquisition accounting impact related to TVN deferred revenue

0.1

0.1

0.1

0.1

  Accounting impact related to warrant amortization

0.4

0.4

0.4

0.4

  Stock-based compensation expense

1.1

(5.7)

6.8

6.8

  Amortization of intangibles

1.3

(0.8)

2.1

2.1

  Restructuring and related charges and TVN integration costs

0.3

(0.6)

0.9

0.9

  Non-cash interest expense related to convertible notes

1.4

1.4

  Discrete tax items and tax effect of non-GAAP adjustments

1.5

Total adjustments

0.5

3.2

(7.1)

10.3

1.4

13.2








Non-GAAP

$95.0 to $103.0

$50.0 to

 $55.0

$52.5 to

 $53.5

$(2.5) to

 $1.5

$(1.4)

$(3.4) to

 $0.0

As a % of revenue (GAAP)


49.5% to 50.5%

59.0% to 63.0%

(13.5)% to (8.5)%

(3.0%)

(17.5)% to (13.0)%

As a % of revenue (Non-GAAP)


52.5% to 53.5%

52.0% to 55.0%

(2.5)% to 1.5%

(1.5%)

(3.5)% to 0%

Diluted loss per share:







  Diluted net loss per share-GAAP






$(0.20) to $(0.16)

  Diluted net loss per share-Non-GAAP






$(0.04) to break-even

Shares used to compute diluted loss per share:







  GAAP and Non-GAAP






81.0

 

Harmonic Inc.

GAAP to Non-GAAP Reconciliations on Business Outlook

(In millions, except percentages and per share data)



2017 Financial Guidance


Revenue

Gross Profit

Total Operating Expense

Income(loss) from Operations

Total Non-operating Expense, net

Net Income(loss)

GAAP

$398.5 to

 $418.5

$202.1 to

 $217.1

$227.7 to

 $228.7

$(25.6) to

 $(11.6)

$(11.6)

$(39.1) to

 $(27.1)

  Acquisition accounting impact related to TVN deferred revenue

0.3

0.3

0.3

0.3

  Accounting impact related to warrant amortization

1.2

1.2

1.2

1.2

  Stock-based compensation expense

2.7

(16.1)

18.8

18.8

  Amortization of intangibles

5.2

(3.1)

8.3

8.3

  Restructuring and related charges and TVN integration costs

2.5

(2.5)

5.0

5.0

  Non-cash interest expense related to convertible notes

5.5

5.5

  Discrete tax items and tax effect of non-GAAP adjustments

1.5

Total adjustments

1.5

11.9

(21.7)

33.6

5.5

40.6








Non-GAAP

$400.0 to $420.0

$214.0 to

 $229.0

$206.0 to

 $207.0

$8.0 to

 $22.0

$(6.1)

$1.5 to $13.5

As a % of revenue (GAAP)


50.5% to 52.0%

54.5%

 to 57.0%

(6.5)% to (3.0)%

(3.0%)

(10.0)% to (6.5)%

As a % of revenue (Non-GAAP)


53.5% to 54.5%

49.5%

to 51.5%

2.0% to 5%

(1.5%)

0.5% to 3.0%

Diluted income (loss) per share:







  Diluted net loss per share-GAAP






$(0.48) to $(0.33)

  Diluted net income per share-Non-GAAP






$0.02 to

$0.16

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







  GAAP and Non-GAAP






82.0

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/harmonic-announces-first-quarter-2017-results-300448904.html

SOURCE Harmonic Inc.

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