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Harmonic Announces Fourth Quarter and Fiscal 2020 Results

Revenue up 38.6% quarter over quarter
Bookings up 105% quarter over quarter

SAN JOSE, Calif., Feb. 1, 2021  /PRNewswire/ -- Harmonic Inc. (NASDAQ: HLIT) today announced its unaudited results for the fourth quarter and fiscal year ended December 31, 2020.

"Harmonic's fourth quarter results reflect the competitive advantages and complementary strengths of our Cable Access and Video segments," said Patrick Harshman, president and chief executive officer of Harmonic. "Both segments delivered sequential and year over year growth in revenues and operating margins. Record quarterly bookings, and record backlog and deferred revenue, demonstrate strong business momentum as we enter 2021."

Q4 Financial and Business Highlights

Financial

  • Revenue: $131.5 million, up 7.7% year over year
    • Cable Access segment revenue: $45.5 million, up 5.8% year over year
    • Video segment revenue: $86.0 million, up 8.7% year over year
  • Gross margin: GAAP 54.4% and non-GAAP 55.3%, compared to GAAP 50.5% and non-GAAP 52.3% in the year ago period
    • Cable Access segment gross margin: 53.7% compared to 38.3% in the year ago period
    • Video segment gross margin: 56.2%, compared to 60.0% in the year ago period
  • Operating income: GAAP income $16.8 million and non-GAAP income $23.4 million, compared to GAAP income $6.7 million and non-GAAP income $14.8 million in the year ago period
  • Adjusted EBITDA: $26.4 million compared to $17.6 million in the year ago period
  • Net income: GAAP net income $13.5 million and non-GAAP net income $20.0 million, compared to GAAP net income $5.6 million and non-GAAP net income $12.1 million
  • EPS: GAAP net income per share of $0.13 and non-GAAP net income per share of $0.20, compared to GAAP net income per share of $0.06 and non-GAAP net income per share of $0.12 in the year ago period
  • Cash: $98.6 million, up $5.5 million year over year

Business

  • CableOS® solution commercially deployed with 44 customers, up 91% year over year
  • CableOS deployments scaled to 2.6 million served cable modems, up 149% year over year
  • 17 new VOS® streaming SaaS customers added during the quarter
  • Over 50,000 live-streaming channels deployed globally, up 15% year over year

 

Select Financial Information



GAAP


Non-GAAP

Key Financial Results


Q4 2020


Q3 2020


Q4 2019


Q4 2020


Q3 2020


Q4 2019



(in millions, except per share data)

Net revenue


$

131.5



$

94.9



$

122.2



$

131.5



$

94.9



$

122.2


Net income (loss)


$

13.5



$

(5.4)



$

5.6



$

20.0



$

2.6



$

12.1


Diluted EPS


$

0.13



$

(0.06)



$

0.06



$

0.20



$

0.03



$

0.12















Other Financial Information

Q4 2020


Q3 2020


Q4 2019


(in millions)

Adjusted EBITDA for the quarter








$

26.4



$

7.2



$

17.6


Bookings for the quarter

$

206.4



$

100.7



$

140.1


Backlog and deferred revenue as of quarter end

$

290.5



$

216.2



$

210.2


Cash and cash equivalents as of quarter end

$

98.6



$

70.8



$

93.1


Explanations regarding our use of non-GAAP financial measures and related definitions, and reconciliations of our GAAP and non-GAAP measures, are provided in the sections below entitled "Use of Non-GAAP Financial Measures" and "GAAP to Non-GAAP Reconciliations".

Financial Guidance

GAAP Financial Guidance


Q1 2021


2021


Low


High


Low


High




(in millions, except percentages and per share data)

Net revenue


$

97.0



$

107.0



$

430.0



$

465.0



Video


$

61.0



$

66.0



$

260.0



$

275.0



Cable Access


$

36.0



$

41.0



$

170.0



$

190.0


Gross margin %


51.0

%


53.0

%


51.0

%


54.0

%

Operating expenses


$

58.0



$

60.0



$

231.5



$

238.5


Operating income (loss)


$

(9.0)



$

(4.0)



$

(12.5)



$

12.5


Tax expense


$

(0.7)



$

0.7



$

(2.7)



$

(2.7)


EPS


$

(0.12)



$

(0.07)



$

(0.26)



$

(0.02)


Shares


99.7



99.7



101.0



101.0


Cash


$

85.0



$

95.0



$

110.0



$

130.0


 

Non-GAAP Financial Guidance


Q1 2021


2021


Low


High


Low


High




(in millions, except percentages and per share data)

Net revenue


$

97.0



$

107.0



$

430.0



$

465.0



Video


$

61.0



$

66.0



$

260.0



$

275.0



Cable Access


$

36.0



$

41.0



$

170.0



$

190.0


Gross margin %


51.5

%


53.5

%


51.5

%


54.5

%

Operating expenses


$

49.0



$

51.0



$

206.0



$

213.0


Operating income


$

1.0



$

6.0



$

15.5



$

40.5


Adjusted EBITDA


$

4.0



$

9.0



$

27.5



$

53.0


Tax rate


10

%


10

%


10

%


10

%

EPS


$

0.00



$

0.04



$

0.09



$

0.31


Shares


102.5



102.5



103.7



103.7


Cash


$

85.0



$

95.0



$

110.0



$

130.0


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

Conference Call Information

Harmonic will host a conference call to discuss its financial results at 2:00 p.m. Pacific (5:00 p.m. Eastern) on Monday, February 1, 2021. The live webcast will be available on the Harmonic Investor Relations website at http://investor.harmonicinc.com. An audio version of the webcast will be available by calling +1.574.990.1032 or +1.800.240.9147 (conference ID 1694224). A replay will be available after 5:00 p.m. PT on the same web site or by calling +1.404.537.3406 or +1.855.859.2056 (conference ID 1694224).

About Harmonic Inc. 

Harmonic (NASDAQ: HLIT), the worldwide leader in visualized cable access and video delivery solutions, enables media companies and service providers to deliver ultra-high-quality video streaming and broadcast services to consumers globally. The Company revolutionized cable access networking via the industry's first virtualized cable access solution, enabling cable operators to more flexibly deploy gigabit internet service to consumers' homes and mobile devices. Whether simplifying OTT video delivery via innovative cloud and software platforms, or powering the delivery of gigabit internet cable services, Harmonic is changing the way media companies and service providers monetize live and on-demand content on every screen. More information is available at www.harmonicinc.com.

Legal Notice Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements related to our expectations regarding: net revenue, gross margins, operating expenses, operating income (loss), Adjusted EBITDA, tax expense and tax rate, EPS, and cash. Our expectations regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include, in no particular order, the following: the market and technology trends underlying our Video and Cable Access businesses will not continue to develop in their current direction or pace; the possibility that our products will not generate sales that are commensurate with our expectations or that our cost of revenue or operating expenses may exceed our expectations; the potential impact of the Covid-19 pandemic on our operations or the operations of our supply chain or our customers; the impact of general economic conditions on our sales and operations; the mix of products and services sold in various geographies and the effect it has on gross margins; delays or decreases in capital spending in the cable, satellite, telco, broadcast and media industries; customer concentration and consolidation; our ability to develop new and enhanced products in a timely manner and market acceptance of our new or existing products; losses of one or more key customers; risks associated with our international operations; exchange rate fluctuations of the currencies in which we conduct business; risks associated with our CableOS and VOS product solutions; dependence on market acceptance of various types of broadband services, on the adoption of new broadband technologies and on broadband industry trends; inventory management; the lack of timely availability of parts or raw materials necessary to produce our products; the impact of increases in the prices of raw materials and oil; the effect of competition, on both revenue and gross margins; difficulties associated with rapid technological changes in our markets; risks associated with unpredictable sales cycles; our dependence on contract manufacturers and sole or limited source suppliers; and the effect on our business of natural disasters. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in Harmonic's filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K for the year ended December 31, 2019, our most recent Quarterly Report on Form 10-Q and our Current Reports on Form 8-K. The forward-looking statements in this press release are based on information available to the Company as of the date hereof, and Harmonic disclaims any obligation to update any forward-looking statements.

Use of Non-GAAP Financial Measures

The Company reports its financial results in accordance with accounting principles generally accepted in the United States ("GAAP" or referred to herein as "reported"). However, management believes that certain non-GAAP financial measures provide management and other users with additional meaningful financial information that should be considered when assessing our ongoing performance. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business, establish operating budgets, set internal measurement targets and make operating decisions.

These non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. The Company believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Harmonic's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Harmonic's results of operations in conjunction with the corresponding GAAP measures.

The Company believes that the presentation of non-GAAP measures when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and its historical and projected results of operations. Non-GAAP financial measures should be viewed in addition to, and not as an alternative to, the Company's reported results prepared in accordance with GAAP.

The non-GAAP measures presented here are: revenue, segment revenue, gross profit, operating expenses, income (loss) from operations, non-operating expenses and net income (loss) (including those amounts as a percentage of revenue), Adjusted EBITDA, and net income (loss) per diluted share. The presentation of non-GAAP information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP, and is not necessarily comparable to non-GAAP results published by other companies. A reconciliation of the historical non-GAAP financial measures discussed in this press release to the most directly comparable historical GAAP financial measures is included with the financial statements provided with this press release. The non-GAAP adjustments described below have historically been excluded from our GAAP financial measures.

Our non-GAAP financial measures reflect adjustments based on the following items, as well as the related income tax effects:

Stock-based compensation - Although stock-based compensation is a key incentive offered to our employees, we continue to evaluate our business performance excluding stock-based compensation expenses. We believe that management is limited in its ability to project the impact stock-based compensation would have on our operating results. In addition, for comparability purposes, we believe it is useful to provide a non-GAAP financial measure that excludes stock-based compensation in order to better understand the long-term performance of our core business and to facilitate the comparison of our results to the results of our peer companies. 

Amortization of intangibles - A portion of the purchase price of our acquisitions is generally allocated to intangible assets, and is subject to amortization. However, Harmonic does not acquire businesses on a predictable cycle. Additionally, the amount of an acquisition's purchase price allocated to intangible assets and the term of its related amortization can vary significantly and is unique to each acquisition. Therefore, we believe that the presentation of non-GAAP financial measures that adjust for the amortization of intangible assets provides investors and others with a consistent basis for comparison across accounting periods. 

Restructuring and related charges - Harmonic from time to time incurs restructuring charges which primarily consist of employee severance, one-time termination benefits related to the reduction of its workforce, lease exit costs, and other costs.  These charges are associated with material business shifts. We exclude these items because we do not believe they are reflective of our ongoing long-term business and operating results. 

Loss on convertible debt extinguishment/conversion - In the fourth quarter of fiscal 2020, we recorded a loss of $0.5 million resulting from the conversion and settlement of the remaining $8.1 million of our convertible notes due in December 2020. In the second quarter of fiscal 2020, we recorded a debt extinguishment loss of $0.8 million resulting from the exchange of $37.7 million in aggregate principal amount of our convertible notes due in 2020 for $37.7 million in aggregate principal amount of convertible notes due in 2022. In the third quarter of fiscal 2019, we recorded a debt extinguishment loss of $5.7 million resulting from refinancing a portion of our convertible notes due in 2020. We have excluded these losses from our non-GAAP financial measures because we do not believe the losses are reflective of our ongoing long-term business and operating results.

Non-cash interest expense and other expenses related to convertible notes and other debt - We record the accretion of the debt discount related to the equity component and amortization of issuance costs as non-cash interest expense. We believe that excluding these costs provides meaningful supplemental information regarding operational performance and liquidity, along with enhancing investors' ability to view the Company's results from management's perspective. In addition, we believe excluding these costs from the non-GAAP measures facilitates comparisons to our historical operating results and comparisons to peer company operating results. 

Accounting impact related to warrant amortization - We issued a warrant to a customer, Comcast Corporation, in September 2016 pursuant to which Comcast may purchase up to 7.8 million shares of Harmonic common stock. In July 2019, in connection with Comcast's election of enterprise license pricing for the Company's CableOS software, all warrant shares were fully vested as of July 1, 2019. As a result of Comcast's election of enterprise license pricing, we no longer excluded the effect of warrant amortization in our non-GAAP financial measures beginning with the third quarter of fiscal 2019.

Discrete tax items and tax effect of non-GAAP adjustments - The income tax effect of non-GAAP adjustments relates to the tax effect of the adjustments that we incorporate into non-GAAP financial measures in order to provide a more meaningful measure of non-GAAP net income.

Depreciation - Depreciation expense, along with interest, tax and stock-based compensation expense, restructuring charges and  amortization of intangible assets, is excluded from Adjusted EBITDA because we do not believe depreciation and the other items relate to the ordinary course of our business or are reflective of our underlying business performance.

Harmonic Inc.
Preliminary Consolidated Balance Sheets
(Unaudited, in thousands, except per share data)



December 31, 2020


December 31, 2019

ASSETS




Current assets:




   Cash and cash equivalents

$

98,645



$

93,058


   Accounts receivable, net

66,227



88,500


   Inventories

35,031



29,042


   Prepaid expenses and other current assets

38,132



40,762


Total current assets

238,035



251,362


Property and equipment, net

43,141



22,928


Operating lease right-of-use assets

27,556



27,491


Other long-term assets

38,609



41,305


Intangibles, net

508



4,461


Goodwill

243,674



239,780


Total assets

$

591,523



$

587,327






LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Accounts payable

$

23,543



$

40,933


Accrued other current liabilities

57,687



63,761


Deferred revenue

54,294



37,117


Convertible notes, short-term



43,375


Other debts and finance lease obligations, current

11,771



6,713


Total current liabilities

147,295



191,899


Convertible notes, long-term

129,507



88,629


Other debts and finance lease obligations, long-term

10,086



10,511


Other non-current liabilities

46,333



41,432


Total liabilities

333,221



332,471






Convertible notes



2,410


Stockholders' equity:




   Preferred stock, $0.001 par value, 5,000 shares authorized; no shares issued or outstanding




   Common stock, $0.001 par value, 150,000 shares authorized; 98,204 and 91,875 shares
issued and outstanding at December 31, 2020 and 2019, respectively

98



92


   Additional paid-in capital

2,353,559



2,327,359


   Accumulated deficit

(2,101,211)



(2,071,940)


   Accumulated other comprehensive income (loss)

5,856



(3,065)


Total stockholders' equity

258,302



252,446


Total liabilities and stockholders' equity

$

591,523



$

587,327


 

Harmonic Inc.
Preliminary Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)



Three months ended


Year ended


December 31,
2020


December 31,
2019


December 31,
2020


December 31,
2019

Revenue:








     Appliance and integration

$

98,787



$

85,933



$

252,014



$

275,797


     SaaS and service

32,741



36,245



126,817



127,077


Total net revenue

131,528



122,178



378,831



402,874


Cost of revenue:








     Appliance and integration

45,795



47,107



126,948



130,284


     SaaS and service

14,171



13,376



56,886



49,578


Total cost of revenue

59,966



60,483



183,834



179,862


Total gross profit

71,562



61,695



194,997



223,012


Operating expenses:








   Research and development

20,667



21,703



82,494



84,614


   Selling, general and administrative

32,615



30,557



119,611



119,035


   Amortization of intangibles

755



782



3,019



3,139


   Restructuring and related charges

750



1,947



2,322



3,141


Total operating expenses

54,787



54,989



207,446



209,929


Income (loss) from operations

16,775



6,706



(12,449)



13,083


Interest expense, net

(2,737)



(2,789)



(11,509)



(11,651)


Loss on convertible debt extinguishment/conversion

(528)





(1,362)



(5,695)


Other expense, net

(84)





(897)



(2,333)


Income (loss) before income taxes

13,426



3,917



(26,217)



(6,596)


Provision for (benefit from) income taxes

(39)



(1,653)



3,054



(672)


Net income (loss)

$

13,465



$

5,570



$

(29,271)



$

(5,924)


Net income (loss) per share:








   Basic

$

0.14



$

0.06



$

(0.30)



$

(0.07)


   Diluted

$

0.13



$

0.06



$

(0.30)



$

(0.07)


Shares used in per share calculations:








   Basic

97,938



91,124



96,971



89,575


   Diluted

100,316



97,499



96,971



89,575


 

Harmonic Inc.
Preliminary Consolidated Statements of Cash Flows
(Unaudited, in thousands)



Year ended


December 31,
2020


December 31,
2019

Cash flows from operating activities:




Net loss

$

(29,271)



$

(5,924)


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




Depreciation

11,737



11,287


Amortization of intangibles

3,970



8,319


   Stock-based compensation

18,040



12,074


   Amortization of discount on convertible and other debt

7,058



6,756


   Amortization of non-cash warrant

1,746



13,576


   Foreign currency adjustments

6,391



(290)


   Loss on convertible debt extinguishment/conversion

1,362



5,695


   Deferred income taxes, net

(105)



(2,076)


   Provision for doubtful accounts and returns

1,666



1,500


   Provision for excess and obsolete inventories

1,847



1,479


   Other non-cash adjustments, net

409



1,349


   Changes in operating assets and liabilities:




      Accounts receivable

21,186



(8,388)


      Inventories

(8,195)



(4,819)


      Prepaid expenses and other assets

11,556



(3,347)


      Accounts payable

(18,173)



5,086


      Deferred revenues

19,751



(3,436)


      Accrued and other liabilities

(11,812)



(7,546)


Net cash provided by operating activities

39,163



31,295


Cash flows from investing activities:




   Purchases of property and equipment

(32,205)



(10,328)


Net cash used in investing activities

(32,205)



(10,328)


Cash flows from financing activities:




   Proceeds from convertible debt



115,500


   Payments of convertible debt

(7,999)



(109,603)


   Payment of convertible debt issuance costs

(672)



(4,277)


   Proceeds from other debts

9,398



4,684


   Repayment of other debts and finance leases

(6,646)



(6,913)


   Proceeds from common stock issued to employees

5,472



8,406


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

(1,662)



(1,492)


Net cash (used in) provided by financing activities

(2,109)



6,305


Effect of exchange rate changes on cash and cash equivalents

738



(203)


Net increase in cash and cash equivalents

5,587



27,069


Cash and cash equivalents, beginning of the year

93,058



65,989


Cash and cash equivalents, end of the year

$

98,645



$

93,058


 

Harmonic Inc.
Preliminary Revenue Information
(Unaudited, in thousands, except percentages)



Three months ended


December 31, 2020


September 25, 2020


December 31, 2019


GAAP

Adjustment(1)

Non-GAAP


GAAP

Adjustment(1)

Non-GAAP


GAAP

Adjustment(1)

Non-GAAP

Geography















Americas

$

84,916


$


$

84,916


65%


$

54,521


$


$

54,521


58%


$

68,869


$


$

68,869


56%

EMEA

34,825



34,825


26%


29,771



29,771


31%


39,874



39,874


33%

APAC

11,787



11,787


9%


10,600



10,600


11%


13,435



13,435


11%

Total

$

131,528


$


$

131,528


100%


$

94,892


$


$

94,892


100%


$

122,178


$


$

122,178


100%
















Market















Service Provider

$

66,673


$


$

66,673


51%


$

59,083


$


$

59,083


62%


$

83,976


$


$

83,976


69%

Broadcast and Media

64,855



64,855


49%


35,809



35,809


38%


38,202



38,202


31%

Total

$

131,528


$


$

131,528


100%


$

94,892


$


$

94,892


100%


$

122,178


$


$

122,178


100%

 


Twelve months ended


December 31, 2020


December 31, 2019


GAAP


Adjustment(1)

Non-GAAP


GAAP


Adjustment(1)

Non-GAAP

Geography












Americas

$

219,394



$


$

219,394


58%


$

224,193



$

48


$

224,241


56%

EMEA

117,126




117,126


31%


117,477




117,477


29%

APAC

42,311




42,311


11%


61,204




61,204


15%

Total

$

378,831



$


$

378,831


100%


$

402,874



$

48


$

402,922


100%













Market












Service Provider

$

211,684



$


$

211,684


56%


$

249,512



$

48


$

249,560


62%

Broadcast and Media

167,147




167,147


44%


153,362




153,362


38%

Total

$

378,831



$


$

378,831


100%


$

402,874



$

48


$

402,922


100%


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

 

Harmonic Inc.
Preliminary Segment Information
(Unaudited, in thousands, except percentages)



Three months ended December 31, 2020


Video


Cable Access


Total Segment
Measures

(non-GAAP)


Adjustments (1)


Consolidated GAAP
Measures

Net revenue

$

86,044



$

45,484



$

131,528



$



$

131,528


Gross profit

48,336



24,437



72,773



(1,211)



71,562


Gross margin%

56.2

%


53.7

%


55.3

%




54.4

%

Operating income

13,529



9,918



23,447



(6,672)



16,775


Operating margin%

15.7

%


21.8

%


17.8

%




12.8

%












Three months ended September 25, 2020


Video


Cable Access


Total Segment
Measures

(non-GAAP)


Adjustments (1)


Consolidated GAAP
Measures

Net revenue

$

54,641



$

40,251



$

94,892



$



$

94,892


Gross profit

29,825



19,682



49,507



(583)



48,924


Gross margin%

54.6

%


48.9

%


52.2

%




51.6

%

Operating income (loss)

(1,699)



5,876



4,177



(5,798)



(1,621)


Operating margin%

(3.1)

%


14.6

%


4.4

%




(1.7)

%












Three months ended December 31, 2019


Video


Cable Access


Total Segment
Measures

(non-GAAP)


Adjustments (1)


Consolidated GAAP
Measures

Net revenue

$

79,172



$

43,006



$

122,178



$



$

122,178


Gross profit

47,463



16,492



63,955



(2,260)



61,695


Gross margin%

60.0

%


38.3

%


52.3

%




50.5

%

Operating income

11,105



3,649



14,754



(8,048)



6,706


Operating margin%

14.0

%


8.5

%


12.1

%




5.5

%












Twelve months ended December 31, 2020


Video


Cable Access


Total Segment
Measures

(non-GAAP)


Adjustments (1)


Consolidated GAAP
Measures

Net revenue

$

242,510



$

136,321



$

378,831



$



$

378,831


Gross profit

132,092



66,661



198,753



(3,756)



194,997


Gross margin%

54.5

%


48.9

%


52.5

%




51.5

%

Operating income

1,326



11,651



12,977



(25,426)



(12,449)


Operating margin%

0.5

%


8.5

%


3.4

%




(3.3)

%












Twelve months ended December 31, 2019


Video


Cable Access


Total Segment
Measures

(non-GAAP)


Adjustments (1)


Consolidated GAAP
Measures

Net revenue

$

278,028



$

124,894



$

402,922



$

(48)


*

$

402,874


Gross profit

162,156



68,596



230,752



(7,740)



223,012


Gross margin%

58.3

%


54.9

%


57.3

%




55.4

%

Operating income

15,837



22,219



38,056



(24,973)



13,083


Operating margin%

5.7

%


17.8

%


9.4

%




3.2

%


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


* This non-GAAP adjustment is for warrant amortization and relates to our Cable Access segment. After
applying this adjustment to the non-GAAP revenue for the Cable Access segment, our GAAP revenue for
the Cable Access segment for the twelve months ended December 31, 2019 was $124,846.

 

Harmonic Inc.
GAAP to Non-GAAP Reconciliations (Unaudited)
(in thousands, except percentages and per share data)



Three months ended December 31, 2020


Revenue

Gross Profit

Total
Operating
Expense

Income from
Operations

Total Non-
operating
Expense, net

Net Income

GAAP

$

131,528


$

71,562


$

54,787


$

16,775


$

(3,349)


$

13,465


  Stock-based compensation


348


(3,955)


4,303



4,303


  Amortization of intangibles



(756)


756



756


  Restructuring and related charges


863


(750)


1,613



1,613


  Loss on convertible debt extinguishment/conversion





528


528


  Non-cash interest and other expenses related to convertible notes
    and other debt





1,607


1,607


  Discrete tax items and tax effect of non-GAAP adjustments






(2,262)


Total adjustments


1,211


(5,461)


6,672


2,135


6,545


Non-GAAP

$

131,528


$

72,773


$

49,326


$

23,447


$

(1,214)


$

20,010


As a % of revenue (GAAP)


54.4

%

41.7

%

12.8

%

(2.5)

%

10.2

%

As a % of revenue (Non-GAAP)


55.3

%

37.5

%

17.8

%

(0.9)

%

15.2

%

Diluted net income per share:







  Diluted net income per share-GAAP






$

0.13


  Diluted net income per share-Non-GAAP






$

0.20


Shares used to compute diluted net income per share:







  GAAP and Non-GAAP






100,316


 


Three months ended September 25, 2020


Revenue

Gross Profit

Total
Operating|
Expense

Income
(Loss) from
Operations

Total Non-
operating
Expense, net

Net Income
(Loss)

GAAP

$

94,892


$

48,924


$

50,545


$

(1,621)


$

(2,974)


$

(5,381)


  Stock-based compensation


281


(3,649)


3,930



3,930


  Amortization of intangible



(752)


752



752


  Restructuring and related charges


302


(814)


1,116



1,116


  Non-cash interest expenses and other expenses related to
    convertible notes and other debt





1,666


1,666


  Discrete tax items and tax effect of non-GAAP adjustments






499


Total adjustments


583


(5,215)


5,798


1,666


7,963


Non-GAAP

$

94,892


$

49,507


$

45,330


$

4,177


$

(1,308)


$

2,582


As a % of revenue (GAAP)


51.6

%

53.3

%

(1.7)

%

(3.1)

%

(5.7)

%

As a % of revenue (Non-GAAP)


52.2

%

47.8

%

4.4

%

(1.4)

%

2.7

%

Diluted net income (loss) per share:







  Diluted net loss per share-GAAP






$

(0.06)


  Diluted net income per share-Non-GAAP






$

0.03


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







  GAAP






97,563


  Non-GAAP






98,361


 


Three  months ended December 31, 2019


Revenue

Gross Profit

Total
Operating
Expense

Income from
Operations

Total Non-
operating
Expense, net

Net Income

GAAP

$

122,178


$

61,695


$

54,989


$

6,706


$

(2,789)


$

5,570


  Stock-based compensation


297


(3,059)


3,356



3,356


  Amortization of intangibles


1,295


(782)


2,077



2,077


  Restructuring and related charges


668


(1,947)


2,615



2,615


  Non-cash interest expenses and other expenses related to
    convertible notes and other debt





1,796


1,796


  Discrete tax items and tax effect of non-GAAP adjustments






(3,303)


Total adjustments


2,260


(5,788)


8,048


1,796


6,541


Non-GAAP

$

122,178


$

63,955


$

49,201


$

14,754


$

(993)


$

12,111


As a % of revenue (GAAP)


50.5

%

45.0

%

5.5

%

(2.3)

%

4.6

%

As a % of revenue (Non-GAAP)


52.3

%

40.3

%

12.1

%

(0.8)

%

9.9

%

Diluted net income per share:







  Diluted net income per share-GAAP






$

0.06


  Diluted net income per share-Non-GAAP






$

0.12


Shares used to compute diluted net income per share:







  GAAP and Non-GAAP






97,499


 


Twelve months ended December 31, 2020


Revenue

Gross Profit

Total
Operating
Expense

Income
(Loss) from
Operations

Total Non-
operating
Expense, net

Net Income
(Loss)

GAAP

$

378,831


$

194,997


$

207,446


$

(12,449)


$

(13,768)


$

(29,271)


  Stock-based compensation


1,712


(16,328)


18,040



18,040


  Amortization of intangibles


950


(3,020)


3,970



3,970


  Restructuring and related charges


1,094


(2,322)


3,416



3,416


  Loss on convertible debt extinguishment/conversion





1,362


1,362


  Non-cash interest expenses and other expenses related to
    convertible notes and other debt





7,058


7,058


  Discrete tax items and tax effect of non-GAAP adjustments






2,291


Total adjustments


3,756


(21,670)


25,426


8,420


36,137


Non-GAAP

$

378,831


$

198,753


$

185,776


$

12,977


$

(5,348)


$

6,866


As a % of revenue (GAAP)


51.5

%

54.8

%

(3.3)

%

(3.6)

%

(7.7)

%

As a % of revenue (Non-GAAP)


52.5

%

49.0

%

3.4

%

(1.4)

%

1.8

%

Diluted net income (loss) per share:







  Diluted net loss per share-GAAP






$

(0.30)


  Diluted net income per share-Non-GAAP






$

0.07


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







  GAAP






96,971


  Non-GAAP






98,633


 


Twelve months ended December 31, 2019


Revenue

Gross Profit

Total
Operating
Expense

Income from
Operations

Total Non-
operating
Expense, net

Net Income
(Loss)

GAAP

$

402,874


$

223,012


$

209,929


$

13,083


$

(19,679)


$

(5,924)


  Accounting impact related to warrant amortization

48


48



48



48


  Stock-based compensation


1,121


(10,953)


12,074



12,074


  Amortization of intangibles


5,180


(3,139)


8,319



8,319


  Restructuring and related charges


1,391


(3,141)


4,532



4,532


  Loss on convertible debt extinguishment/conversion





5,695


5,695


  Non-cash interest expenses and other expenses related to

    convertible notes





7,683


7,683


  Discrete tax items and tax effect of non-GAAP adjustments






(4,482)


Total adjustments

48


7,740


(17,233)


24,973


13,378


33,869


Non-GAAP

$

402,922


$

230,752


$

192,696


$

38,056


$

(6,301)


$

27,945


As a % of revenue (GAAP)


55.4

%

52.1

%

3.2

%

(4.9)

%

(1.5)

%

As a % of revenue (Non-GAAP)


57.3

%

47.8

%

9.4

%

(1.6)

%

6.9

%

Diluted net income (loss) per share:







  Diluted net loss per share-GAAP






$

(0.07)


  Diluted net income per share-Non-GAAP






$

0.30


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







  GAAP






89,575


  Non-GAAP






93,830


 

Harmonic Inc.
Preliminary Adjusted EBITDA Reconciliation (Unaudited)
(In thousands)



Three months ended


December
31, 2020

September
25, 2020

December
31, 2019

Net Income (Loss) - GAAP

$

13,465


$

(5,381)


$

5,570


Provision for (benefit from) income taxes

(39)


786


(1,653)


Interest expense, net

2,737


2,807


2,789


Depreciation

3,054


3,148


2,807


Amortization of intangibles

756


752


2,077


EBITDA

19,973


2,112


11,590






Adjustments




Stock-based compensation

4,303


3,930


3,356


Loss on convertible debt extinguishment/conversion

528




Restructuring and related charges