e8vk
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
October 23, 2007
Date of Report
(Date of earliest event reported)
HARMONIC INC.
(Exact name of Registrant as specified in its charter)
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Delaware |
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000-25826 |
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77-0201147 |
(State or other jurisdiction of
incorporation or organization)
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Commission File Number
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(I.R.S. Employer
Identification Number) |
549 Baltic Way
Sunnyvale, CA 94089
(408) 542-2500
(Address, including zip code, and telephone number, including area code,
of Registrants 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):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o 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.
On
October 23, 2007, Harmonic Inc. (Harmonic or the
Company) issued a press release regarding its unaudited
financial results for the quarter ended September 28, 2007. In the press release, Harmonic also
announced that it would be holding a conference call on Tuesday,
October 23, 2007, to discuss its
financial results for the quarter ended September 28, 2007. 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.
Use of Non-GAAP Financial Information
In establishing operating budgets, managing its business performance, and setting internal
measurement targets, the Company excludes 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 margins, operating expense, net income
(loss) and net income (loss) per 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
non-GAAP net income/(loss) to GAAP net income/(loss) is included with the financial statements
contained in the press release furnished as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit Number |
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Description |
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99.1 |
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Press Release of Harmonic Inc., issued on October 23, 2007. |
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.
HARMONIC INC.
Date: October 23, 2007
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By: |
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/s/ Robin N. Dickson
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Robin N. Dickson
Chief Financial Officer |
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Exhibit Index
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Exhibit Number |
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Description |
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99.1 |
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Press Release of Harmonic Inc., issued on October 23, 2007. |
exv99w1
Exhibit 99.1
Harmonic Announces Third Quarter Results
Strong Growth in Sales and Earnings; Increased Revenue from Satellite Customers Worldwide;
New Products Driving New Video Delivery Solutions
SUNNYVALE, Calif. October 23, 2007Harmonic Inc. (NASDAQ: HLIT), a leading provider of broadcast
and on-demand video delivery solutions, today announced its preliminary results for the quarter and
nine months ended September 28, 2007.
For the third quarter of 2007, the Company reported net sales of $82.3 million, up 31% from $62.9
million in the third quarter of 2006. For the first nine months of 2007, net sales were $223.8
million, up 30% from $172.3 million in the same period of 2006. Results for the third quarter of
2007 included significant revenue from a growing number of satellite customers deploying an
increasingly broad range of new products and solutions. The Company also saw sequential revenue
growth in both domestic and international markets, with international sales representing 46% of
revenue in the third quarter.
Gross margins also increased sequentially from the second quarter of 2007 as a result of a larger
proportion of revenue from higher margin video processing solutions and software and services,
partially offset by a charge of approximately $1.8 million to write down excess inventory of older
products which are being replaced by the Companys new products.
GAAP net
income for the third quarter of 2007 was $9.4 million, or $0.12 per diluted share, up from
$4.0 million, or $0.05 per diluted share, for the same period of 2006. GAAP net income for the
third quarter of 2007 included a net benefit from a reduction in excess facilities reserves of
approximately $1.4 million, resulting primarily from an extension of a sub-lease. Excluding the
lease benefit and non-cash accounting charges for stock-based compensation expense, the
amortization of intangibles, and a one-time charge for acquired in-process technology from the
recent acquisition of Rhozet Corporation, the non-GAAP net income for the third quarter of 2007 was
$11.9 million, or $0.15 per diluted share, up from $7.5 million, or $0.10 per diluted share, for
the same period of 2006. See GAAP to non-GAAP Income/(Loss) Reconciliation below for further
information on the Companys non-GAAP measures.
As of September 28, 2007, the Company had cash, cash equivalents and short-term investments of
$99.0 million, up from $82.2 million as of June 29, 2007. During the third quarter of 2007, the
Company reduced its inventories by $6.2 million compared to the previous quarter.
We are very pleased with our strong sales and earnings growth, as well as our improved gross
margins and operating efficiencies, for the third quarter and for the year-to-date, said Patrick
Harshman, President and Chief Executive Officer. We believe that we have increased our market
share among domestic and international satellite operators, which has been driven by our powerful
MPEG-4 AVC high definition and standard-definition video encoders, as well as our new video
processing, video-on-demand and network management solutions.
Our
cable customers continue to deploy our industry-leading encoding, video-on-demand edge and
optical access products, and we see growing interest in our innovative new solutions for switched
digital video, time-shifted television, video-on-demand content preparation and streaming,
video-rich navigation, and higher-speed Internet data delivery. In the emerging IPTV market, our
IP-based video solutions have been winning new business with telco companies worldwide and,
increasingly, drive network expansions for existing global telco customers.
We remain very encouraged by our strengthening position in key service provider markets. We
expect to continue to extend the breadth and depth of our products, and we
believe that our global customer base will continue to
further
leverage the power of our new solutions to expand their video service offerings in exciting
new directions.
Business Outlook
The Company anticipates that the combined net sales for the fourth quarter of 2007 and the first
quarter of 2008 will be in a range of $155 to $165 million and gross
margins will be 41% to 43% on
a GAAP basis. Non-GAAP gross margins for the same period, excluding stock-based compensation
expense and the amortization of intangibles, are anticipated to be in
a range of 45% to 47%.
Conference Call Information
Harmonic will host a conference call today to discuss its financial results at 2:00 p.m. Pacific
(5:00 p.m. Eastern). A listen-only broadcast of the conference call can be accessed on the
Companys website at www.harmonicinc.com or by calling +1.706.634.9047 (conference ID number
19970165). The replay will be available after 6:00 p.m. (Pacific) at the same website address or by
calling +1.706.645.9291 (conference ID number 19970165).
About Harmonic Inc.
Harmonic Inc. is a leading provider of versatile and high performance video solutions that enable
service providers to efficiently deliver the next generation of broadcast and on-demand services
including high definition, video-on-demand, network personal video recording and time-shifted TV.
Cable, satellite, broadcast and telecom service providers can utilize Harmonics digital video,
broadband optical access and software solutions to offer consumers a compelling and personalized
viewing experience.
Harmonic (NASDAQ: HLIT) is headquartered in Sunnyvale, California with R&D, sales and system
integration centers worldwide. The Companys customers, including many of the worlds largest
communications providers, deliver services in virtually every country. Visit
www.harmonicinc.com for more information.
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 expectation that we will experience growing cable demand for our new solutions for
switched digital video, time-shifted television, video-on-demand content preparation and streaming,
video-rich navigation, and higher-speed Internet data delivery; our expectation that we will continue to extend the breadth and depth of our products;
our expectation that our combined net sales for the fourth
quarter of 2007 and the first quarter of 2008 will be in the range of
$155 to $165 million, our
gross margins will be 41% to 43% on a GAAP basis, and our non-GAAP gross margins for the same
period, excluding stock-based compensation expense and the amortization of intangibles, will be in
a range of 45% to 47%. Our expectations and beliefs 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 that our
products will not generate sales that are commensurate with our
expectations; the mix of products sold and the effect it has on gross
margins; delays or decreases
in capital spending in the cable, satellite and telco industries; customer concentration and
consolidation; general economic conditions; market acceptance of new
or existing Harmonic products;
losses of one or more key customers; risks associated with Harmonics international
operations; inventory management; the effect of competition; difficulties associated with rapid
technological changes in Harmonics markets; the need to
introduce new and enhanced products; and
risks associated with a cyclical and unpredictable sales cycle. The forward-looking statements
contained in this press release are also subject to other risks and
uncertainties, including those
more fully described in Harmonics filings with the Securities and Exchange Commission,
including
our Annual Report filed on Form 10-K for the year ended December 31, 2006, our Quarterly Report on
Form 10-Q for the quarterly period ended June 29, 2007, and our current reports on Form 8-K.
Harmonic does not undertake to update any forward-looking statements.
EDITORS NOTE Product and company names used herein are trademarks or registered trademarks of
their respective owners.
Harmonic Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
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September 28, 2007 |
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December 31, 2006 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
40,993 |
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$ |
33,454 |
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Short-term investments |
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58,038 |
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58,917 |
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Accounts receivable, net |
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69,339 |
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64,674 |
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Inventories |
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36,341 |
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42,116 |
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Prepaid expenses and other current assets |
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11,911 |
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12,807 |
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Total current assets |
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216,622 |
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211,968 |
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Property and equipment, net |
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14,084 |
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14,816 |
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Intangibles and other assets |
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69,647 |
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55,178 |
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$ |
300,353 |
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$ |
281,962 |
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Liabilities and stockholders equity |
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Current liabilities: |
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Current portion of long-term debt |
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$ |
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$ |
460 |
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Accounts payable |
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15,583 |
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33,863 |
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Income taxes payable |
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726 |
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7,098 |
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Deferred revenue |
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30,794 |
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29,052 |
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Accrued liabilities |
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43,904 |
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44,097 |
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Total current liabilities |
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91,007 |
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114,570 |
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Accrued excess facilities costs |
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11,126 |
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16,434 |
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Other non-current liabilities |
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17,211 |
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5,824 |
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Total liabilities |
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119,344 |
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136,828 |
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Stockholders equity: |
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Common stock |
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2,100,140 |
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2,078,941 |
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Accumulated deficit |
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|
(1,919,025 |
) |
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|
(1,933,708 |
) |
Accumulated other comprehensive loss |
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|
(106 |
) |
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|
(99 |
) |
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Total stockholders equity |
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|
181,009 |
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|
|
145,134 |
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|
|
|
|
|
|
|
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$ |
300,353 |
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|
$ |
281,962 |
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Harmonic Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
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Three Months Ended |
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Nine Months Ended |
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September 28, 2007 |
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September 29, 2006 |
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September 28, 2007 |
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September 29, 2006 |
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Net sales |
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$ |
82,295 |
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$ |
62,856 |
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$ |
223,814 |
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$ |
172,346 |
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Cost of sales |
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|
46,652 |
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|
33,059 |
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|
130,454 |
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|
101,064 |
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Gross profit |
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|
35,643 |
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|
29,797 |
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|
93,360 |
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|
71,282 |
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Operating expenses: |
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Research and development |
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11,018 |
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10,021 |
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31,615 |
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|
29,554 |
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Selling, general and
administrative |
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14,911 |
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16,931 |
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46,357 |
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|
48,623 |
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Write-off of
acquired in-process technology |
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|
700 |
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700 |
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Amortization of intangibles |
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143 |
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45 |
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365 |
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179 |
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Total operating expenses |
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26,772 |
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26,997 |
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|
79,037 |
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|
78,356 |
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Income (loss) from operations |
|
|
8,871 |
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|
|
2,800 |
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|
14,323 |
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(7,074 |
) |
Interest and other income, net |
|
|
1,296 |
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|
|
1,319 |
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|
|
3,266 |
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|
|
3,522 |
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Income (loss) before income taxes |
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|
10,167 |
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|
|
4,119 |
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|
|
17,589 |
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|
|
(3,552 |
) |
Provision for income taxes |
|
|
750 |
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|
|
103 |
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|
|
807 |
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|
|
482 |
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Net income (loss) |
|
$ |
9,417 |
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$ |
4,016 |
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$ |
16,782 |
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$ |
(4,034 |
) |
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Net income (loss) per share |
|
|
|
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Basic |
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$ |
0.12 |
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|
$ |
0.05 |
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$ |
0.21 |
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$ |
(0.05 |
) |
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Diluted |
|
$ |
0.12 |
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$ |
0.05 |
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$ |
0.21 |
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$ |
(0.05 |
) |
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Shares used
to compute net income (loss) per share: |
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Basic |
|
|
80,371 |
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|
|
74,588 |
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|
|
79,570 |
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|
|
74,286 |
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Diluted |
|
|
81,642 |
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|
75,050 |
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|
80,743 |
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|
74,286 |
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Harmonic Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
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Nine Months Ended |
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September 28, |
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September 29, |
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2007 |
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|
2006 |
|
Cash flows from operating activities: |
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Net income (loss) |
|
$ |
16,782 |
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|
$ |
(4,034 |
) |
Adjustments to reconcile net income (loss) to cash provided
by (used in) operating activities: |
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|
|
|
|
|
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Amortization of intangibles |
|
|
3,661 |
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|
|
672 |
|
Write-off of acquired in-process technology |
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|
700 |
|
|
|
|
|
Depreciation |
|
|
5,089 |
|
|
|
5,719 |
|
Stock-based compensation |
|
|
4,475 |
|
|
|
4,376 |
|
Gain (loss) on disposal and impairment of fixed assets |
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|
(31 |
) |
|
|
55 |
|
Changes in assets and liabilities: |
|
|
|
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|
|
|
|
Accounts receivable |
|
|
(4,234 |
) |
|
|
(9,314 |
) |
Inventories |
|
|
5,777 |
|
|
|
2,877 |
|
Prepaid expenses and other assets |
|
|
799 |
|
|
|
(8,133 |
) |
Accounts payable |
|
|
(18,217 |
) |
|
|
3,486 |
|
Deferred revenue |
|
|
3,714 |
|
|
|
2,474 |
|
Income taxes payable |
|
|
(271 |
) |
|
|
366 |
|
Accrued excess facilities costs |
|
|
(5,661 |
) |
|
|
683 |
|
Accrued and other liabilities |
|
|
(3,242 |
) |
|
|
764 |
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities |
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|
9,341 |
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|
|
(9 |
) |
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Cash flows from investing activities: |
|
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Purchases of investments |
|
|
(70,584 |
) |
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|
(58,061 |
) |
Proceeds from sale of investments |
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|
71,578 |
|
|
|
71,030 |
|
Purchase of Entone, Inc. convertible note |
|
|
(2,500 |
) |
|
|
|
|
Acquisition of property and equipment, net |
|
|
(4,193 |
) |
|
|
(3,677 |
) |
Acquisition of Rhozet Corporation, net of cash received |
|
|
(1,370 |
) |
|
|
|
|
Acquisition
costs related to the merger of Entone Technologies, Inc. |
|
|
(2,466 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities |
|
|
(9,535 |
) |
|
|
9,292 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Repayments under bank line and term loan |
|
|
(460 |
) |
|
|
(615 |
) |
Repayments of capital lease obligations |
|
|
(65 |
) |
|
|
(61 |
) |
Proceeds from issuance of common stock, net |
|
|
8,292 |
|
|
|
4,017 |
|
|
|
|
|
|
|
|
Net cash provided by financing activities |
|
|
7,767 |
|
|
|
3,341 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
(34 |
) |
|
|
(38 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents |
|
|
7,539 |
|
|
|
12,586 |
|
Cash and cash equivalents at beginning of period |
|
|
33,454 |
|
|
|
37,818 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
40,993 |
|
|
$ |
50,404 |
|
|
|
|
|
|
|
|
Harmonic Inc.
Revenue Information
(In thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 28, |
|
September 29, |
|
September 28, |
|
September 29, |
|
|
2007 |
|
2006 |
|
2007 |
|
2006 |
Product |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Video Processing |
|
$ |
38,623 |
|
|
|
47 |
% |
|
$ |
26,116 |
|
|
|
42 |
% |
|
$ |
92,790 |
|
|
|
41 |
% |
|
$ |
66,363 |
|
|
|
38 |
% |
Edge & Access |
|
|
29,156 |
|
|
|
35 |
% |
|
|
25,143 |
|
|
|
40 |
% |
|
|
95,891 |
|
|
|
43 |
% |
|
|
77,029 |
|
|
|
45 |
% |
Software,
Services and Other |
|
|
14,516 |
|
|
|
18 |
% |
|
|
11,597 |
|
|
|
18 |
% |
|
|
35,133 |
|
|
|
16 |
% |
|
|
28,954 |
|
|
|
17 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
82,295 |
|
|
|
100 |
% |
|
$ |
62,856 |
|
|
|
100 |
% |
|
$ |
223,814 |
|
|
|
100 |
% |
|
$ |
172,346 |
|
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geography |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
44,638 |
|
|
|
54 |
% |
|
$ |
29,265 |
|
|
|
47 |
% |
|
$ |
125,665 |
|
|
|
56 |
% |
|
$ |
81,968 |
|
|
|
48 |
% |
International |
|
|
37,657 |
|
|
|
46 |
% |
|
|
33,591 |
|
|
|
53 |
% |
|
|
98,149 |
|
|
|
44 |
% |
|
|
90,378 |
|
|
|
52 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
82,295 |
|
|
|
100 |
% |
|
$ |
62,856 |
|
|
|
100 |
% |
|
$ |
223,814 |
|
|
|
100 |
% |
|
$ |
172,346 |
|
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cable |
|
$ |
41,608 |
|
|
|
51 |
% |
|
$ |
39,060 |
|
|
|
62 |
% |
|
$ |
139,310 |
|
|
|
62 |
% |
|
$ |
102,500 |
|
|
|
60 |
% |
Satellite |
|
|
26,462 |
|
|
|
32 |
% |
|
|
5,421 |
|
|
|
9 |
% |
|
|
43,706 |
|
|
|
20 |
% |
|
|
17,784 |
|
|
|
10 |
% |
Telco & Other |
|
|
14,225 |
|
|
|
17 |
% |
|
|
18,375 |
|
|
|
29 |
% |
|
|
40,798 |
|
|
|
18 |
% |
|
|
52,062 |
|
|
|
30 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
82,295 |
|
|
|
100 |
% |
|
$ |
62,856 |
|
|
|
100 |
% |
|
$ |
223,814 |
|
|
|
100 |
% |
|
$ |
172,346 |
|
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Use of Non-GAAP Financial Measures
In establishing operating budgets, managing its business performance, and setting internal
measurement targets, the Company excludes 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 margins, operating expense, net income
(loss) and net income (loss) per 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
non-GAAP net income/(loss) to GAAP net income/(loss) is included with the financial statements
contained in this press release. The non-GAAP adjustments described below have historically been
excluded from our non-GAAP measures. These adjustments, and the basis for excluding them, are:
|
|
Restructuring Activities |
|
|
|
Severance Costs |
|
|
|
|
The Company has incurred severance costs in cost of sales and in operating expenses in
connection with the closing of its manufacturing and research and development facilities in
the UK. In addition, severance costs were incurred due to a reorganization of its senior
management following the appointment of a new Chief Executive Officer. The Company excludes
one-time costs of this nature in evaluating its ongoing operational performance. We believe
that these costs do not reflect expected future expenses nor do they provide a meaningful
comparison of current versus prior operating results. |
|
|
|
Excess Facilities |
|
|
|
|
The Company has incurred excess facilities charges and credits in operating expenses due to
adjustments related to vacating and subleasing portions of its Sunnyvale campus and to the
closing of its manufacturing and research and development facilities in the UK. The Company
excludes one-time costs of this nature in evaluating its ongoing operational performance. We
believe that these charges and credits do not reflect expected future expenses nor do they
provide a meaningful comparison of current versus prior operating results. |
|
|
|
Product Discontinuance |
|
|
|
|
In connection with the restructuring of its operations in the UK, the Company recorded
charges for excess inventory in connection with discontinued products. The Company excludes
one-time costs of this nature in evaluating its ongoing operational performance. We believe
that these costs do not reflect expected future expenses nor do they provide a meaningful
comparison of current versus prior operating results. |
|
|
|
Stock-Based Compensation Expense |
|
|
|
|
Harmonic has incurred stock-based compensation expense in cost of sales and operating
expenses as required under FAS 123R. The Company excludes stock-based compensation expense
because it believes that this measure is not relevant in evaluating its core operating
performance, either for internal measurement purposes or for period-to-period comparisons
and benchmarking against other public companies. |
|
|
|
Amortization of Intangibles and Charge for Acquired In-Process Technology |
|
|
|
|
The Company has incurred amortization of intangibles and has taken a charge for acquired
in-process technology related to acquisitions the Company has made. Management excludes
these items when it evaluates its core operating performance. We believe that eliminating
these expenses is useful to investors when comparing historical and prospective results and
comparing such results to other public companies because these expenses will vary if and
when the Company makes additional acquisitions. |
Harmonic Inc.
GAAP to Non-GAAP Income (Loss) Reconciliation
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 28, 2007 |
|
Three Months Ended September 29, 2006 |
|
|
|
|
|
|
Operating |
|
|
|
|
|
|
|
|
|
Operating |
|
|
(In thousands) |
|
Gross Margin |
|
Expense |
|
Net Income |
|
Gross Margin |
|
Expense |
|
Net Income |
GAAP |
|
$ |
35,643 |
|
|
$ |
26,772 |
|
|
$ |
9,417 |
|
|
$ |
29,797 |
|
|
$ |
26,997 |
|
|
$ |
4,016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost sales related to stock based compensation expense |
|
|
255 |
|
|
|
|
|
|
|
255 |
|
|
|
184 |
|
|
|
|
|
|
|
184 |
|
Research and development expense related to stock based
compensation expense |
|
|
|
|
|
|
(563 |
) |
|
|
563 |
|
|
|
|
|
|
|
(331 |
) |
|
|
331 |
|
Selling, general and administrative expense related to
excess facilities expense |
|
|
|
|
|
|
1,384 |
|
|
|
(1,384 |
) |
|
|
|
|
|
|
(2,058 |
) |
|
|
2,058 |
|
Selling, general and administrative expense related to
stock based compensation expense |
|
|
|
|
|
|
(870 |
) |
|
|
870 |
|
|
|
|
|
|
|
(729 |
) |
|
|
729 |
|
Amortization and write-off of intangibles from acquisitions |
|
|
1,337 |
|
|
|
(843 |
) |
|
|
2,180 |
|
|
|
169 |
|
|
|
(45 |
) |
|
|
214 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
|
$ |
37,235 |
|
|
$ |
25,880 |
|
|
$ |
11,901 |
|
|
$ |
30,150 |
|
|
$ |
23,834 |
|
|
$ |
7,532 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
|
$ |
0.15 |
|
|
|
|
|
|
|
|
|
|
$ |
0.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
|
|
|
|
|
|
|
$ |
0.15 |
|
|
|
|
|
|
|
|
|
|
$ |
0.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
|
$ |
0.12 |
|
|
|
|
|
|
|
|
|
|
$ |
0.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
|
|
|
|
|
|
|
$ |
0.12 |
|
|
|
|
|
|
|
|
|
|
$ |
0.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per-share calculation basic |
|
|
|
|
|
|
|
|
|
|
80,371 |
|
|
|
|
|
|
|
|
|
|
|
74,588 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per-share calculation diluted |
|
|
|
|
|
|
|
|
|
|
81,642 |
|
|
|
|
|
|
|
|
|
|
|
75,050 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 28, 2007 |
|
Nine Months Ended September 29, 2006 |
|
|
|
|
|
|
Operating |
|
|
|
|
|
|
|
|
|
Operating |
|
|
|
|
Gross Margin |
|
Expense |
|
Net Income |
|
Gross Margin |
|
Expense |
|
Net Income (Loss) |
GAAP |
|
$ |
93,360 |
|
|
$ |
79,037 |
|
|
$ |
16,782 |
|
|
$ |
71,282 |
|
|
$ |
78,356 |
|
|
$ |
(4,034 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales related to severance costs |
|
|
188 |
|
|
|
|
|
|
|
188 |
|
|
|
300 |
|
|
|
|
|
|
|
300 |
|
Cost of sales related to stock based compensation expense |
|
|
719 |
|
|
|
|
|
|
|
719 |
|
|
|
727 |
|
|
|
|
|
|
|
727 |
|
Cost of sales related to product discontinuance |
|
|
772 |
|
|
|
|
|
|
|
772 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expense related to severance costs |
|
|
|
|
|
|
(334 |
) |
|
|
334 |
|
|
|
|
|
|
|
(12 |
) |
|
|
12 |
|
Research and development expense related to stock based
compensation expense |
|
|
|
|
|
|
(1,439 |
) |
|
|
1,439 |
|
|
|
|
|
|
|
(1,304 |
) |
|
|
1,304 |
|
Selling, general and administrative expense related to
severance costs |
|
|
|
|
|
|
(131 |
) |
|
|
131 |
|
|
|
|
|
|
|
(650 |
) |
|
|
650 |
|
Selling, general and administrative expense related to
excess facilities expense |
|
|
|
|
|
|
813 |
|
|
|
(813 |
) |
|
|
|
|
|
|
(2,058 |
) |
|
|
2,058 |
|
Selling, general and administrative expense related to
stock based compensation expense |
|
|
|
|
|
|
(2,317 |
) |
|
|
2,317 |
|
|
|
|
|
|
|
(2,342 |
) |
|
|
2,342 |
|
Amortization and write-off of intangibles from acquisitions |
|
|
3,266 |
|
|
|
(1,065 |
) |
|
|
4,331 |
|
|
$ |
493 |
|
|
$ |
(179 |
) |
|
$ |
672 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP |
|
$ |
98,305 |
|
|
$ |
74,564 |
|
|
$ |
26,200 |
|
|
$ |
72,802 |
|
|
$ |
71,811 |
|
|
$ |
4,031 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
|
$ |
0.33 |
|
|
|
|
|
|
|
|
|
|
$ |
0.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
|
|
|
|
|
|
|
$ |
0.32 |
|
|
|
|
|
|
|
|
|
|
$ |
0.05 |
|
|
|
|
|
|
|
|
|
|
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|
GAAP (loss) per share |
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|
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|
Basic |
|
|
|
|
|
|
|
|
|
$ |
0.21 |
|
|
|
|
|
|
|
|
|
|
$ |
(0.05 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
|
|
|
|
|
|
|
$ |
0.21 |
|
|
|
|
|
|
|
|
|
|
$ |
(0.05 |
) |
|
|
|
|
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|
Shares used in per-share calculation basic |
|
|
|
|
|
|
|
|
|
|
79,570 |
|
|
|
|
|
|
|
|
|
|
|
74,286 |
|
|
|
|
|
|
|
|
|
|
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|
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|
|
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|
|
|
|
|
|
|
|
Shares used in per-share calculation diluted |
|
|
|
|
|
|
|
|
|
|
80,743 |
|
|
|
|
|
|
|
|
|
|
|
74,726 |
|
|
|
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|
|
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|