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

February 3, 2011

 

HARMONIC INC.

Delaware		000-25826		77-0201147
(State or other jurisdiction of incorporation or organization)		Commission File Number		(I.R.S. Employer Identification Number)

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))

 

 

Item 2.02. Results of Operations and Financial Condition.

On February 3, 2011, Harmonic Inc. (“Harmonic” or the “Company”) issued a press release regarding its unaudited financial results for the quarter and year ended December 31, 2010. In the press release, Harmonic also announced that it would be holding a conference call on February 3, 2011 to discuss its financial results for the quarter and year ended December 31, 2010. A copy of the press release is furnished as Exhibit 99.1 hereto, and the information in Exhibit 99.1 is incorporated herein by reference.

The information in this Current Report on Form 8-K and the exhibit attached hereto is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) or otherwise subject to the liabilities of that Section, and this Current Report on Form 8-K and the exhibit furnished herewith shall not be incorporated by reference into any filing by Harmonic under the Securities Act of 1933, as amended, or under the Exchange Act.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number		Description
99.1		Press release of Harmonic Inc., issued on February 3, 2011.

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: February 3, 2011

EXHIBIT INDEX

Exhibit Number		Description
99.1		Press release of Harmonic Inc., issued on February 3, 2011.

Exhibit 99.1

Harmonic Announces Fourth Quarter 2010 Results

Strong Year-over-Year Growth in Revenue and Non-GAAP Earnings

SAN JOSE, Calif.—February 3, 2011—Harmonic Inc. (NASDAQ: HLIT), a global leader in video infrastructure solutions, today announced its preliminary and unaudited results for the quarter and year ended December 31, 2010. Results for the fourth quarter of 2010 included a full quarter of contribution from Omneon Inc., acquired on September 15, 2010.

Net revenue for the fourth quarter of 2010 was $138.2 million, which excluded $0.8 million of certain deferred revenue that would otherwise have been recognized by Omneon had the acquisition not occurred, up from $86.7 million in the fourth quarter of 2009. Total bookings in the fourth quarter of 2010 were approximately $134.8 million, up from approximately $107.6 million for the fourth quarter of 2009. For the full year 2010, net revenue was $423.3 million, which excluded $2.1 million of certain deferred revenue referenced above, up from $319.6 million in 2009.

Omneon contributed $30.9 million in net revenue during the fourth quarter of 2010, which excluded certain deferred revenue referenced above. Excluding Omneon’s contribution, Harmonic’s stand-alone net revenue was $107.3 million in the fourth quarter of 2010, up 8% from the previous quarter and up 24% from the fourth quarter of 2009. For the full year 2010, Harmonic’s stand-alone net revenue was $386.8 million, up 21% from 2009.

The growth in revenues reflected continued demand across different geographies and markets, as well as year end spending by some of our customers. International sales represented 54% of Harmonic’s net revenues for the fourth quarter of 2010.

The Company reported a GAAP net loss for the fourth quarter of 2010 of $13.7 million, or $0.12 per share, compared to net income of $47 thousand, or $0.00 per diluted share, for the fourth quarter of 2009. For the full year 2010, the Company’s GAAP net loss was $4.3 million, or $0.04 per share, compared to a GAAP net loss of $24.1 million, or $0.25 per share, in 2009.

Non-GAAP net income for the fourth quarter of 2010 was $12.5 million, or $0.11 per diluted share, up from $6.3 million, or $0.07 per diluted share, for the same period of 2009. For the full year 2010, non-GAAP net income was $36.4 million, or $0.35 per diluted share, compared to $18.0 million, or $0.19 per diluted share, for 2009. See “Use of Non-GAAP Financial Measures” and “GAAP to Non-GAAP Income (Loss) Reconciliation” below.

For the fourth quarter of 2010, Harmonic had GAAP gross margins of 44% and GAAP operating margins of (2%), compared to 45% and 4%, respectively, for the same period of 2009. Non-GAAP gross margins were 51% and non-GAAP operating margins were 13% for the fourth quarter of 2010, up from 48% and 11%, respectively, for the same period of 2009.

As of December 31, 2010, the Company had cash, cash equivalents and short-term investments of $120.4 million, up from $110.1 million as of October 1, 2010.

“Throughout 2010, Harmonic significantly expanded its leadership position in enabling the new video economy,” said Patrick Harshman, President and Chief Executive Officer. “Our traditional business grew by 21%, driven by the growing worldwide investment in video services, and by our strong competitive position and expanding international sales organization. The September acquisition of Omneon further expanded the breadth of our solutions, our global broadcast and media customer base and our international presence.

“Moving into 2011, we expect broadcasters, media companies and video service providers around the globe to continue to invest in producing and delivering high-value video programming and services. You

can expect us to continue to introduce innovative video technologies that enable this dynamic video marketplace. We’re excited about our expanding opportunities for growth in 2011 and beyond.”

Business Outlook

Harmonic anticipates net revenue in a range of $129 million to $132 million for the first quarter of 2011. GAAP gross margins and operating expenses for the first quarter of 2011 are expected to be in the range of 45% to 47% and $61 to $62 million, respectively. Non-GAAP gross margins and operating expenses for the first quarter of 2011, which will exclude charges for stock-based compensation and the amortization of intangibles, are anticipated to be in the range of 50% to 52% and $53 to $54 million, respectively.

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 Company’s website at www.harmonicinc.com or by calling +1.706.634.9047 (conference identification code 50192422). The replay will be available after 6:00 P.M. Pacific at the same website address or by calling +1.706.645.9291 (conference identification code 50192422).

About Harmonic Inc.

Harmonic Inc. offers a comprehensive, innovative and market-leading portfolio of video infrastructure solutions, spanning content production to multi-screen video delivery. Harmonic customers can efficiently create, prepare and deliver differentiated video services over broadcast, cable, Internet, mobile, satellite and telecom networks, while simplifying end-to-end asset management, reducing costs and streamlining workflows.

Harmonic (NASDAQ: HLIT) is headquartered in San Jose, California, with R&D, sales and system integration centers worldwide. The company’s customers—including each of the top 20 Fortune 2000 media companies—choose Harmonic to enable their high quality video services delivered to consumers 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 expectations regarding our final results for the fourth quarter ended December 31, 2010; our expectation that, with the addition of Omneon in September 2010, we will further expand the breadth of our solutions, our customer base of global broadcast and media companies and our international presence; our expectation that broadcasters, media companies and video service providers will invest in high-value video programming and services; our expectation that we will introduce innovative video tech-nologies that enable the dynamic video marketplace; our expectations about expanded opportunities for growth; and our expectations regarding net revenue, GAAP gross margins, GAAP operating expenses, non-GAAP gross margins and non-GAAP operating expenses for the first quarter of 2011. 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, in no particular order, that: we will not be able to integrate Omneon into our business as effectively or efficiently as expected; Omneon does not provide Harmonic with the benefits that we expect from the acquisition; the trends toward more high-definition, on-demand and anytime, anywhere video will not continue to develop at its current pace, or at all; the possibility that our products will not generate sales that are commensurate with our expectations; the mix of products and services sold in various geographies and the effect it has on gross margins; delays or decreases in capital spending in the cable, satellite and telco and broadcast and media industries; customer concentration and consolidation; the impact of general economic conditions, including recent turmoil in the global financial markets, particularly on international sales and operations; market acceptance of new or existing Harmonic products; losses of one or more key customers; risks

associated with Harmonic’s international operations; inventory management; the effect of competition; difficulties associated with rapid technological changes in Harmonic’s markets; the need to introduce new and enhanced products and the risk that our product development is not timely or does not result in expected benefits or market acceptance; risks associated with unpredictable sales cycles; our dependence on contract manufacturers; and the risks that our international sales and support center will not provide the operational or tax benefits that we anticipate or that its expenses exceed our plans. 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 annual report filed on Form 10-K for the year ended December 31, 2009, our Form 10-Q for the quarter ended October 1, 2010 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.

EDITOR’S NOTE — Product and company names used herein are trademarks or registered trademarks of their respective owners.

Harmonic Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

		December 31,
		2010				2009
		(In thousands)
ASSETS
Current assets:
Cash and cash equivalents		$	96,533			$	152,477
Short-term investments			23,838				118,593
Accounts receivable, net			101,652				64,838
Inventories			58,065				35,066
Deferred income taxes			39,849				26,503
Prepaid expenses and other current assets			28,614				20,821
Total current assets			348,551				418,298
Property and equipment, net			39,825				25,941
Goodwill, intangibles and other assets			332,010				112,065
Total assets		$	720,386			$	556,304
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	26,300			$	22,065
Income taxes payable			6,791				609
Deferred revenue			46,279				32,855
Accrued liabilities			51,283				37,584
Total current liabilities			130,653				93,113
Income taxes payable, long-term			48,883				43,948
Financing liability, long-term			—				6,908
Deferred income taxes, long-term			14,849				—
Other non-current liabilities			5,798				4,862
Total liabilities			200,183				148,831
Stockholders’ equity:
Common stock			2,397,783				2,280,041
Accumulated deficit			(1,876,868	)			(1,872,533	)
Accumulated other comprehensive loss			(712	)			(35	)
Total stockholders’ equity			520,203				407,473
Total liabilities and stockholders’ equity		$	720,386			$	556,304

Harmonic Inc.
Condensed Consolidated Statements of Operations
(Unaudited)

		Three months ended December 31,								Year ended December 31,
		2010				2009				2010				2009
						(In thousands, except per share amounts)
Net revenue		$	138,194			$	86,657			$	423,344			$	319,566
Cost of revenue			76,813				47,308				227,943				185,206
Gross profit			61,381				39,349				195,401				134,360
Operating expenses:
Research and development			24,252				15,610				77,197				61,435
Selling, general and administrative			37,232				19,707				108,150				81,138
Amortization of intangibles			2,885				533				4,912				3,822
Total operating expenses			64,369				35,850				190,259				146,395
Income (loss) from operations			(2,988	)			3,499				5,142				(12,035	)
Interest and other income, net			225				429				297				2,300
Income (loss) before income taxes			(2,763	)			3,928				5,439				(9,735	)
Provision for income taxes			10,975				3,881				9,774				14,404
Net income (loss)		$	(13,738	)		$	47			$	(4,355	)		$	(24,139	)
Net income (loss) per share:
Basic		$	(0.12	)		$	0.00			$	(0.04	)		$	(0.25	)
Diluted		$	(0.12	)		$	0.00			$	(0.04	)		$	(0.25	)
Weighted average shares:
Basic			112,062				96,109				101,487				95,833
Diluted			112,062				96,597				101,487				95,833

Harmonic Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)

		Year ended December 31,
		2010				2009
		(In thousands)
Cash flows from operating activities:
Net income (loss)		$	(4,335	)		$	(24,139	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of intangibles			17,425				11,904
Depreciation			9,990				8,655
Stock-based compensation			15,539				10,579
Net loss on disposal of fixed assets			162				198
Deferred income taxes			(248	)			11,818
Other non-cash adjustments, net			1,529				2,594
Changes in assets and liabilities, net of effect of acquisitions:
Accounts receivable, net			(19,744	)			5,426
Inventories			(11,979	)			7,726
Prepaid expenses and other assets			(5,445	)			(2,313	)
Accounts payable			(3,080	)			5,735
Deferred revenue			5,086				2,072
Income taxes payable			11,017				1,389
Accrued excess facility costs			(2,412	)			(6,044	)
Accrued and other liabilities			4,332				(24,512	)
Net cash provided by operating activities			17,837				11,088
Cash flows from investing activities:
Purchases of investments			(51,457	)			(129,202	)
Proceeds from sales and maturities of investments			144,230				157,881
Acquisition of property and equipment			(35,624	)			(8,086	)
Acquisition of Scopus, net of cash received			—				(63,053	)
Acquisition of Omneon, net of cash received			(153,254	)			—
Other acquisitions			(250	)			(452	)
Net cash used in investing activities			(96,355	)			(42,912	)
Cash flows from financing activities:
Building improvement allowance from landlord			18,833				—
Proceeds from issuance of common stock, net			3,859				4,243
Net cash provided by financing activities			22,692				4,243
Effect of exchange rate changes on cash and cash equivalents			(118	)			167
Net decrease in cash and cash equivalents			(55,944	)			(27,414	)
Cash and cash equivalents at beginning of period			152,477				179,891
Cash and cash equivalents at end of period		$	96,533			$	152,477

Harmonic Inc.
Revenue Information
(Unaudited)

		Three months ended December 31,																Year ended December 31,
		2010								2009								2010								2009
										(In thousands, except percentages)
Product
Video Processing		$	63,005				46	%		$	48,813				56	%		$	202,898				48	%		$	162,654				51	%
Production and Playout			27,699				20	%			—				0	%			32,579				8	%			—				0	%
Edge and Access			30,787				22	%			28,223				33	%			135,306				32	%			117,355				37	%
Services and Support			16,703				12	%			9,621				11	%			52,561				12	%			39,557				12	%
Total		$	138,194				100	%		$	86,657				100	%		$	423,344				100	%		$	319,566				100	%
Geography
United States		$	63,194				46	%		$	43,091				50	%		$	209,583				50	%		$	162,023				51	%
International			75,000				54	%			43,566				50	%			213,761				50	%			157,543				49	%
Total		$	138,194				100	%		$	86,657				100	%		$	423,344				100	%		$	319,566				100	%
Market
Cable		$	65,806				48	%		$	53,836				62	%		$	238,000				56	%		$	192,941				60	%
Satellite and Telco			28,363				20	%			23,741				27	%			94,435				22	%			91,603				29	%
Broadcast and Media			44,025				32	%			9,080				11	%			90,909				22	%			35,022				11	%
Total		$	138,194				100	%		$	86,657				100	%		$	423,344				100	%		$	319,566				100	%

NOTE:

We have revised our product categories to move software products into the Video Processing category. In addition, we have revised our market categories to combine the Telco revenue with the Satellite category. The data for prior periods has been revised to conform with this presentation.

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 and net income 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 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 contained in this press release. Management has excluded expenses incurred as a result of acquisitions made by the Company and restructuring activities, such as severance, charges incurred for excess facilities, an anticipated litigation settlement and losses on product discontinuances, as these are the result of infrequent events or have arisen outside of the ordinary course of the Company’s continuing operations. Additionally, management has excluded non-cash charges for stock-based compensation expense, the fair value write up of acquired inventories sold, and the amortization of intangibles related to acquisitions made by the Company. Finally, management has excluded certain discrete tax adjustments, as these do not reflect future expected tax provisions or effective rates, nor does the inclusion of this information in calculating our net income provide a meaningful comparison of current versus prior period net income.

Harmonic Inc.
GAAP to Non-GAAP Net Income (Loss) Reconciliation
(Unaudited)

		Three months ended December 31, 2010												Three months ended December 31, 2009
		Gross				Operating				Net Income				Gross				Operating
		Margin				Expense				(Loss)				Margin				Expense				Net Income
		(In thousands, except per share amounts)
GAAP		$	61,381			$	64,369			$	(13,738	)		$	39,349			$	35,850			$	47
Purchase accounting fair value adjustments related to inventory			2,061				—				2,061				—				—				—
Cost of revenue related to stock-based compensation expense			676				—				676				431				—				431
Cost of revenue related to severance costs			63				—				63				85				—				85
Research and development expense related to stock-based compensation expense			—				(1,578	)			1,578				—				(1,075	)			1,075
Research and development expense related to severance costs			—				(47	)			47				—				—				—
Selling, general and administrative expense related to stock-based compensation expense			—				(3,105	)			3,105				—				(1,435	)			1,435
Selling, general and administrative expense related to excess facility costs			—				(2,973	)			2,973				—				(71	)			71
Selling, general and administrative expense related to anticipated litigation settlement			—				(863	)			863				—				—				—
Selling, general and administrative expense related to severance costs							(508	)			508				—				—				—
Selling, general and administrative expense related to restructuring costs			—				—				—				—				(46	)			46
Acquisition costs related to Omneon			—				(175	)			175				—				—				—
Amortization of intangibles			5,636				(2,885	)			8,521				2,149				(533	)			2,682
Discrete tax items and adjustments			—				—				5,633				—				—				467
Non-GAAP		$	69,817			$	52,235			$	12,465			$	42,014			$	32,690			$	6,339
GAAP net income (loss) per share — basic										$	(0.12	)										$	0.00
GAAP net income (loss) per share — diluted										$	(0.12	)										$	0.00
Non-GAAP net income per share — basic										$	0.11											$	0.07
Non-GAAP net income per share — diluted										$	0.11											$	0.07
Shares used in per share calculation — basic											112,062												96,109
Shares used in per share calculation — diluted, GAAP											112,062												96,597
Shares used in per share calculation — diluted, Non-GAAP											113,670												96,597

		Year ended December 31, 2010												Year ended December 31, 2009
		Gross				Operating				Net Income				Gross				Operating				Net Income
		Margin				Expense				(Loss)				Margin				Expense				(Loss)
										(In thousands, except per share amounts)
GAAP		$	195,401			$	190,259			$	(4,335	)		$	134,360			$	146,395			$	(24,139	)
Purchase accounting fair value adjustments related to inventory			2,473				—				2,473				1,142				—				1,142
Cost of revenue related to stock-based compensation expense			2,197				—				2,197				1,517				—				1,517
Cost of revenue related to Scopus product discontinuance			—				—				—				5,965				—				5,965
Cost of revenue related to severance costs			63				—				63				907				—				907
Research and development expense related to stock-based compensation expense			—				(5,013	)			5,013				—				(3,846	)			3,846
Research and development expense related to restructuring costs			—				—				—				—				(712	)			712
Research and development expense related to severance costs			—				(47	)			47				—				—				—
Selling, general and administrative expense related to stock-based compensation expense			—				(8,329	)			8,329				—				(5,215	)			5,215
Selling, general and administrative expense related to excess facility costs			—				(2,748	)			2,748				—				(494	)			494
Selling, general and administrative expense related to restructuring costs			—				—				—				—				(2,337	)			2,337
Selling, general and administrative expense related to severance costs			—				(1,503	)			1,503				—				—				—
Selling, general and administrative expense related to anticipated litigation settlement			—				(863	)			863				—				—				—
Acquisition costs related to Omneon			—				(5,867	)			5,867				—				—				—
Acquisition costs related to Scopus			—				—				—				—				(3,367	)			3,367
Amortization of intangibles			12,513				(4,912	)			17,425				8,042				(3,822	)			11,864
Discrete tax items and adjustments			—				—				(5,816	)			—				—				4,732
Non-GAAP		$	212,647			$	160,977			$	36,377			$	151,933			$	126,602			$	17,959
GAAP net income (loss) per share — basic										$	(0.04	)										$	(0.25	)
GAAP net income (loss) per share — diluted										$	(0.04	)										$	(0.25	)
Non-GAAP net income per share — basic										$	0.36											$	0.19
Non-GAAP net income per share — diluted										$	0.35											$	0.19
Shares used in per share calculation — basic											101,487												95,833
Shares used in per share calculation — diluted, GAAP											101,487												95,833
Shares used in per share calculation — diluted, Non-GAAP											102,512												96,354

Harmonic Inc.
Proforma Revenue Information
(Unaudited)

		2009Q1								2009Q2								2009Q3								2009Q4								2009								2010Q1								2010Q2								2010Q3								2010Q4								2010
		(In thousands, except percentages)
PRODUCT
Harmonic
Video Processing		$	35,664				53	%		$	38,297				47	%		$	39,880				48	%		$	48,813				56	%		$	162,654				51	%		$	38,890				46	%		$	49,998				52	%		$	51,005				51	%		$	63,005				59	%		$	202,898				52	%
Production and Playout			—				0	%			—				0	%			—				0	%			—				0	%			—				0	%			—				0	%			—				0	%			—				0	%			—				0	%			—				0	%
Edge and Access			24,243				36	%			32,216				40	%			32,673				39	%			28,223				33	%			117,355				37	%			35,544				42	%			34,263				36	%			34,712				35	%			30,787				29	%			135,306				35	%
Services and Support			7,848				11	%			10,780				13	%			11,308				13	%			9,621				11	%			39,557				12	%			10,388				12	%			11,283				12	%			13,453				14	%			13,485				12	%			48,609				13	%
Total		$	67,755				100	%		$	81,293				100	%		$	83,861				100	%		$	86,657				100	%		$	319,566				100	%		$	84,822				100	%		$	95,544				100	%		$	99,170				100	%		$	107,277				100	%		$	386,813				100	%
Omneon
Video Processing		$	—				0	%		$	—				0	%		$	—				0	%		$	—				0	%		$	—				0	%		$	—				0	%		$	—				0	%		$	—				0	%		$	—				0	%		$	—				0	%
Production and Playout			25,356				89	%			21,773				86	%			20,102				86	%			24,165				86	%			91,396				87	%			24,828				88	%			26,589				83	%			26,024				86	%			27,699				87	%			105,140				86	%
Edge and Access			—				0	%			—				0	%			—				0	%			—				0	%			—				0	%			—				0	%			—				0	%			—				0	%			—				0	%			—				0	%
Services and Support			2,982				11	%			3,518				14	%			3,266				14	%			3,834				14	%			13,600				13	%			3,389				12	%			5,340				17	%			4,307				14	%			4,029				13	%			17,065				14	%
Total		$	28,338				100	%		$	25,291				100	%		$	23,368				100	%		$	27,999				100	%		$	104,996				100	%		$	28,217				100	%		$	31,929				100	%		$	30,331				100	%		$	31,728				100	%		$	122,205				100	%
Consolidated
Video Processing		$	35,664				37	%		$	38,297				36	%		$	39,880				37	%		$	48,813				43	%		$	162,654				38	%		$	38,890				34	%		$	49,998				39	%		$	51,005				39	%		$	63,005				45	%		$	202,898				40	%
Production and Playout			25,356				26	%			21,773				20	%			20,102				19	%			24,165				21	%			91,396				22	%			24,828				22	%			26,589				21	%			26,024				20	%			27,699				20	%			105,140				21	%
Edge and Access			24,243				25	%			32,216				30	%			32,673				30	%			28,223				24	%			117,355				28	%			35,544				32	%			34,263				27	%			34,712				27	%			30,787				22	%			135,306				26	%
Services and Support			10,830				12	%			14,298				14	%			14,574				14	%			13,455				12	%			53,157				12	%			13,777				12	%			16,623				13	%			17,760				14	%			17,514				13	%			65,674				13	%
Total		$	96,093				100	%		$	106,584				100	%		$	107,229				100	%		$	114,656				100	%		$	424,562				100	%		$	113,039				100	%		$	127,473				100	%		$	129,501				100	%		$	139,005				100	%		$	509,018				100	%
GEOGRAPHY
Harmonic
United States		$	32,118				47	%		$	46,532				57	%		$	40,282				48	%		$	43,091				50	%		$	162,023				51	%		$	42,592				50	%		$	49,259				52	%		$	51,895				52	%		$	54,065				50	%		$	197,811				51	%
International			35,637				53	%			34,761				43	%			43,579				52	%			43,566				50	%			157,543				49	%			42,230				50	%			46,285				48	%			47,275				48	%			53,212				50	%			189,002				49	%
Total		$	67,755				100	%		$	81,293				100	%		$	83,861				100	%		$	86,657				100	%		$	319,566				100	%		$	84,822				100	%		$	95,544				100	%		$	99,170				100	%		$	107,277				100	%		$	386,813				100	%
Omneon
United States		$	11,590				41	%		$	7,012				28	%		$	7,438				32	%		$	8,974				32	%		$	35,014				33	%		$	7,040				25	%		$	16,197				51	%		$	10,520				35	%		$	10,165				32	%		$	43,922				36	%
International			16,748				59	%			18,279				72	%			15,930				68	%			19,025				68	%			69,982				67	%			21,177				75	%			15,732				49	%			19,811				65	%			21,563				68	%			78,283				64	%
Total		$	28,338				100	%		$	25,291				100	%		$	23,368				100	%		$	27,999				100	%		$	104,996				100	%		$	28,217				100	%		$	31,929				100	%		$	30,331				100	%		$	31,728				100	%		$	122,205				100	%
Consolidated
United States		$	43,708				45	%		$	53,544				50	%		$	47,720				45	%		$	52,065				45	%		$	197,037				46	%		$	49,632				44	%		$	65,456				51	%		$	62,415				48	%		$	64,230				46	%		$	241,733				47	%
International			52,385				55	%			53,040				50	%			59,509				55	%			62,591				55	%			227,525				54	%			63,407				56	%			62,017				49	%			67,086				52	%			74,775				54	%			267,285				53	%
Total		$	96,093				100	%		$	106,584				100	%		$	107,229				100	%		$	114,656				100	%		$	424,562				100	%		$	113,039				100	%		$	127,473				100	%		$	129,501				100	%		$	139,005				100	%		$	509,018				100	%
MARKET
Harmonic
Cable		$	38,214				56	%		$	53,645				66	%		$	47,246				56	%		$	53,836				62	%		$	192,941				60	%		$	56,017				66	%		$	53,106				56	%		$	62,993				64	%		$	65,019				61	%		$	237,135				61	%
Satellite and Telco			23,048				34	%			18,897				23	%			25,917				31	%			23,741				27	%			91,603				29	%			19,798				23	%			32,403				34	%			24,745				25	%			27,212				25	%			104,158				27	%
Broadcast and Media			6,493				10	%			8,751				11	%			10,698				13	%			9,080				11	%			35,022				11	%			9,007				11	%			10,035				10	%			11,432				11	%			15,046				14	%			45,520				12	%
Total		$	67,755				100	%		$	81,293				100	%		$	83,861				100	%		$	86,657				100	%		$	319,566				100	%		$	84,822				100	%		$	95,544				100	%		$	99,170				100	%		$	107,277				100	%		$	386,813				100	%
Omneon
Cable		$	407				1	%		$	364				1	%		$	336				1	%		$	403				1	%		$	1,510				1	%		$	424				1	%		$	449				1	%		$	426				1	%		$	798				2	%		$	2,097				2	%
Satellite and Telco			3,918				14	%			3,508				14	%			3,233				14	%			3,879				14	%			14,538				14	%			5,232				19	%			3,815				12	%			3,467				11	%			1,243				4	%			13,757				11	%
Broadcast and Media			24,013				85	%			21,419				85	%			19,799				85	%			23,717				85	%			88,948				85	%			22,561				80	%			27,665				87	%			26,438				88	%			29,687				94	%			106,351				87	%
Total		$	28,338				100	%		$	25,291				100	%		$	23,368				100	%		$	27,999				100	%		$	104,996				100	%		$	28,217				100	%		$	31,929				100	%		$	30,331				100	%		$	31,728				100	%		$	122,205				100	%
Consolidated
Cable		$	38,621				40	%		$	54,009				51	%		$	47,582				44	%		$	54,239				47	%		$	194,451				46	%		$	56,441				50	%		$	53,555				42	%		$	63,419				49	%		$	65,817				47	%		$	239,232				47	%
Satellite and Telco			26,966				28	%			22,405				21	%			29,150				27	%			27,620				24	%			106,141				25	%			25,030				22	%			36,218				28	%			28,212				22	%			28,455				21	%			117,915				23	%
Broadcast and Media			30,506				32	%			30,170				28	%			30,497				29	%			32,797				29	%			123,970				29	%			31,568				28	%			37,700				30	%			37,870				29	%			44,733				32	%			151,871				30	%
Total		$	96,093				100	%		$	106,584				100	%		$	107,229				100	%		$	114,656				100	%		$	424,562				100	%		$	113,039				100	%		$	127,473				100	%		$	129,501				100	%		$	139,005				100	%		$	509,018				100	%