SOURCE: Harmonic Inc.

Harmonic Inc.

February 04, 2010 16:28 ET

Harmonic Announces Fourth Quarter and Year End Results

Sequential Growth in Sales and Bookings; Continued Global Diversification and Technology Leadership

SUNNYVALE, CA--(Marketwire - February 4, 2010) - Harmonic Inc. (NASDAQ: HLIT), a leading provider of broadcast and on-demand video delivery solutions, today announced its preliminary and unaudited results for the quarter and year ended December 31, 2009.

For the fourth quarter of 2009, the Company reported net sales of $86.7 million, compared to $83.9 million in the previous quarter and $96.9 million in the fourth quarter of 2008. Total bookings in the fourth quarter of 2009 were $107.6 million, up from $79.9 million in the third quarter. For the full year 2009, net sales were $319.6 million, compared to $365.0 million in 2008.

International sales represented 50% of net sales for the fourth quarter and 49% for the full year of 2009, up from 47% and 44%, respectively, for the same periods in 2008. In 2009, the Company's 10 largest customers contributed 47% of net sales, compared to 58% in 2008.

The Company reported GAAP net income for the fourth quarter of 2009 of $47 thousand, or $0.00 per diluted share, compared to net income of $13.2 million, or $0.14 per diluted share, for the same period of 2008. For the full year 2009, GAAP net loss was $24.1 million, or $0.25 per share, compared to GAAP net income of $64.0 million, or $0.67 per diluted share in 2008. The 2008 results included a tax benefit of $18.0 million resulting principally from the reversal of a valuation allowance against certain deferred tax assets. The results for the fourth quarter and full year of 2009 included charges of approximately $0.1 million and $13.1 million, respectively, related to restructuring charges and transaction costs in connection with the Scopus acquisition that closed in March 2009.

Excluding restructuring charges, purchase accounting adjustments to inventory and transaction costs related to the recent Scopus acquisition as well as non-cash accounting charges for stock-based compensation expense, the amortization of intangibles and certain tax adjustments, the non-GAAP net income for the fourth quarter of 2009 was $6.3 million, or $0.07 per diluted share, compared to non-GAAP net income of $19.0 million, or $0.20 per diluted share, for the same period of 2008. For the full year 2009, non-GAAP net income, excluding the items discussed above, was $18.0 million, or $0.19 per diluted share, compared to non-GAAP net income of $66.4 million, or $0.70 per share, for 2008. See "Use of Non-GAAP Financial Measures" and "GAAP to non-GAAP Reconciliation" below.

As of December 31, 2009, the Company had cash, cash equivalents and short-term investments of $271.1 million, up from $253.0 million as of October 2, 2009.

"We're pleased with our sequential growth in sales and bookings in the fourth quarter, driven by improving demand across our expanding global customer base and by the success of our newest products," said Patrick Harshman, President and Chief Executive Officer. "While 2009 presented considerable economic challenges, we completed a significant acquisition, continued to invest in compelling next-generation technology, maintained our strong operating efficiencies and ended the year with a much improved backlog and deferred revenue position."

"Moving into 2010, we plan to continue to extend our global reach, strengthen our technology leadership and introduce powerful new solutions for a growing array of new video applications. Although our customers face continued global economic uncertainty and we anticipate the usual seasonal slowdown in first quarter bookings, we expect to continue to grow our revenue and earnings throughout the year."

Business Outlook

Harmonic anticipates that net sales for the first half of 2010 will be in a range of $170.0 to $180.0 million. GAAP gross margins and operating expenses for the first half of 2010 are expected to be in a range of 45% to 46% and $72.5 to $74.5 million, respectively. Non-GAAP gross margins and operating expenses for the first half of 2010, which exclude charges for stock-based compensation and the amortization of intangibles, are anticipated to be in a range of 48% to 49% and $66.5 to $68.5 million, respectively.

CFO Dickson Announces Plans to Retire

Robin Dickson, the Company's Chief Financial Officer, has announced plans to retire. The Company has launched a search for a new CFO, and Mr. Dickson will continue to serve until the Company's search is complete and the smooth transition to a new CFO is accomplished. "Robin has guided Harmonic through its evolution from a private company to the global public enterprise it is today," said Patrick Harshman. "I thank him for demonstrating the highest levels of integrity, and speak for the entire organization as I wish him the best for the future."

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 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 50186233). 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 50186233).

About Harmonic Inc.

Harmonic Inc. is redefining video delivery with the industry's most powerful solutions for delivering live and on-demand video to TVs, PCs and mobile devices. Harmonic's 20 years of technical innovation and market leadership enable the company to offer a unique and comprehensive solution portfolio -- including encoding, transcoding, content preparation, stream processing, asset management, edge processing, and delivery. Broadcast, cable, Internet, mobile, satellite and telecom service providers around the world choose Harmonic's IP-based digital video, software, and broadband edge and access solutions. Using these award-winning and industry-leading solutions, operators can reduce costs and differentiate their services by offering consumers a higher quality, personalized multi-screen experience.

Harmonic (NASDAQ: HLIT) is headquartered in Sunnyvale, California with R&D, sales and system integration centers worldwide. The company's customers, including many of the world's 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 expectations regarding our final results for the fourth quarter and year ended December 31, 2009; our belief that our customers will face continued economic uncertainty and that we will experience a seasonal slowdown in our bookings during the first quarter of 2010; our expectation that we will grow our revenue and earnings in 2010, as well as continue to extend our global reach, strengthen our technology leadership and introduce powerful new solutions for a growing array of new video applications; our expectations regarding net sales, GAAP gross margins, GAAP operating expenses, non-GAAP gross margins and non-GAAP operating expenses for the first half of 2010; and our expectations regarding Mr. Dickson's continuing to serve the Company until the Company's search is complete and the smooth transition to a new CFO is accomplished, and expectations regarding the Company's search for a new CFO. 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 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 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, including the impact of recent turmoil in the global financial markets; 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 a cyclical and unpredictable sales cycle; the risks that our international sales and support center will not provide the operational or tax benefits that we anticipate or that expenses exceed our plans; and the uncertainty associated with the time and cost of the process to hire a new CFO and the risk that Mr. Dickson may choose to retire in advance of the Company's hiring a new CFO or in advance of completing the desired transition. 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, 2008, our quarterly report on Form 10-Q for the quarter ended October 2, 2009 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
                             (In thousands)
                               (Unaudited)

                                                December 31,  December 31,
                                                    2009          2008
                                                ------------  ------------
Assets
Current assets:
  Cash and cash equivalents                     $    152,477  $    179,891
  Short-term investments                             118,593       147,272
  Accounts receivable, net                            64,838        63,923
  Inventories                                         35,066        26,875
  Deferred income taxes                               26,503        36,384
  Prepaid expenses and other current assets           20,821        15,985
                                                ------------  ------------

    Total current assets                             418,298       470,330
Property and equipment, net                           41,671        15,428
Goodwill, intangibles and other assets               112,065        78,605
                                                ------------  ------------
                                                $    572,034  $    564,363
                                                ============  ============
Liabilities and stockholders' equity
Current liabilities:
  Accounts payable                                    22,065        13,366
  Income taxes payable                                   609         1,434
  Deferred revenue                                    32,855        29,909
  Accrued liabilities                                 37,584        50,490
                                                ------------  ------------
    Total current liabilities                         93,113        95,199
Accrued excess facilities costs, long-term                58         4,953
Income taxes payable, long-term                       43,948        41,555
Other non-current liabilities                         27,442         8,339
                                                ------------  ------------
  Total liabilities                                  164,561       150,046
                                                ------------  ------------
Stockholders' equity:
  Common stock                                     2,280,041     2,263,331
  Accumulated deficit                             (1,872,533)   (1,848,394)
  Accumulated other comprehensive loss                   (35)         (620)
                                                ------------  ------------
    Total stockholders' equity                       407,473       414,317
                                                ------------  ------------
                                                $    572,034  $    564,363
                                                ============  ============





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

                              Three Months Ended          Year Ended
                            ----------------------  ----------------------
                              December   December    December    December
                              31, 2009   31, 2008    31, 2009    31, 2008
                            ----------- ----------  ----------  ----------

Net sales                   $    86,657 $   96,891  $  319,566  $  364,963
Cost of sales                    47,308     48,685     185,206     187,430
                            ----------- ----------  ----------  ----------
Gross profit                     39,349     48,206     134,360     177,533
                            ----------- ----------  ----------  ----------
Operating expenses:
  Research and development       15,610     14,207      61,435      54,471
  Selling, general and
   administrative                19,707     26,394      81,138      83,118
  Amortization of
   intangibles                      533        160       3,822         639
                            ----------- ----------  ----------  ----------
  Total operating expenses       35,850     40,761     146,395     138,228
                            ----------- ----------  ----------  ----------
Income (loss) from
 operations                       3,499      7,445     (12,035)     39,305
Interest and other income,
 net                                429      1,138       2,300       6,664
                            ----------- ----------  ----------  ----------
Income (loss) before income
 taxes                            3,928      8,583      (9,735)     45,969
Provision for (benefit
 from) income taxes               3,881     (4,626)     14,404     (18,023)
                            ----------- ----------  ----------  ----------
Net income (loss)           $        47 $   13,209  $  (24,139) $   63,992
                            =========== ==========  ==========  ==========
Net income (loss) per share
  Basic                     $      0.00 $     0.14  $    (0.25) $     0.68
                            =========== ==========  ==========  ==========
  Diluted                   $      0.00 $     0.14  $    (0.25) $     0.67
                            =========== ==========  ==========  ==========
Shares used to compute net
 income (loss) per share:
  Basic                          96,109     95,014      95,833      94,535
                            =========== ==========  ==========  ==========
  Diluted                        96,597     95,533      95,833      95,434
                            =========== ==========  ==========  ==========





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

                                                         Year Ended
                                                  ------------------------
                                                  December 31, December 31,
                                                      2009         2008
                                                  -----------  -----------
Cash flows from operating activities:
  Net income (loss)                               $   (24,139) $    63,992
  Adjustments to reconcile net income to cash
   provided by operating activities:
  Amortization of intangibles                          11,904        6,275
  Depreciation                                          8,655        7,014
  Stock-based compensation                             10,579        7,806
  Loss on disposal of fixed assets                        198          185
  Deferred income taxes                                11,818      (55,859)
  Other non-cash adjustments, net                       2,594        1,409
Changes in assets and liabilities:
    Accounts receivable, net                            5,426        6,529
    Inventories                                         7,726        7,388
    Prepaid expenses and other assets                  (2,313)       3,278
    Accounts payable                                    5,735       (7,134)
    Deferred revenue                                    2,072       (6,433)
    Income taxes payable                                1,389       33,657
    Accrued excess facilities costs                    (6,044)      (4,638)
    Accrued and other liabilities                     (24,512)      (3,342)
                                                  -----------  -----------
      Net cash provided by operating activities        11,088       60,127
                                                  -----------  -----------
Cash flows from investing activities:
  Purchases of investments                           (129,202)    (132,813)
  Proceeds from sale/maturity of investments          157,881      124,237
  Acquisition of property and equipment, net           (8,086)      (8,546)
  Acquisition of intellectual property                      -         (500)
  Acquisition of Scopus                               (63,052)           -
  Acquisition of Rhozet                                  (453)      (2,830)
  Redemption of Entone, Inc. convertible note               -        2,500
                                                  -----------  -----------
      Net cash used in investing activities           (42,912)     (17,952)
                                                  -----------  -----------
Cash flows from financing activities:
Proceeds from issuance of common stock, net             4,243        8,463
                                                  -----------  -----------
      Net cash provided by financing activities         4,243        8,463
                                                  -----------  -----------
Effect of exchange rate changes on cash and cash
 equivalents                                              167          248
                                                  -----------  -----------
Net increase (decrease) in cash and cash
 equivalents                                          (27,414)      50,886
Cash and cash equivalents at beginning of period      179,891      129,005
                                                  -----------  -----------
Cash and cash equivalents at end of period        $   152,477  $   179,891
                                                  ===========  ===========




                              Harmonic Inc.
                            Revenue Information
                              (In thousands)
                                (Unaudited)

                      Three Months Ended               Year Ended
                  --------------------------- -----------------------------
                   December 31,  December 31,  December 31,   December  31,
                       2009          2008          2009           2008
                  ------------- ------------- -------------- --------------

Product
Video Processing  $ 39,788  46% $ 37,165  38% $ 135,034  42% $ 137,390  38%
Edge & Access       28,908  33%   40,719  42%   117,355  37%   165,246  45%
Software, Services
 and Other          17,961  21%   19,007  20%    67,177  21%    62,327  17%
                  -------- ---  -------- ---  --------- ---  --------- ---
  Total           $ 86,657 100% $ 96,891 100% $ 319,566 100% $ 364,963 100%
                  ========      ========      =========      =========

Geography
United States     $ 43,091  50% $ 51,596  53% $ 162,023  51% $ 205,162  56%
International       43,566  50%   45,295  47%   157,543  49%   159,801  44%
                  -------- ---  -------- ---  --------- ---  --------- ---
  Total           $ 86,657 100% $ 96,891 100% $ 319,566 100% $ 364,963 100%
                  ========      ========      =========      =========

Market
Cable             $ 53,836  62% $ 60,929  63% $ 192,941  60% $ 227,402  62%
Satellite           17,248  20%   20,301  21%    61,539  19%    73,679  20%
Telco & Other       15,573  18%   15,661  16%    65,086  21%    63,882  18%
                  -------- ---  -------- ---  --------- ---  --------- ---
  Total           $ 86,657 100% $ 96,891 100% $ 319,566 100% $ 364,963 100%
                  ========      ========      =========      =========

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, 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 financial measures presented here are gross margin, 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. The non-GAAP adjustments described below have historically been excluded from our non-GAAP financial 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 integration of its
     acquisition of Scopus in March 2009, as well as other severance costs
     related to headcount reduction actions in response to the global
     economic slowdown. 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 portions
     of its Sunnyvale campus and estimating income from subleases of
     buildings. Similar facilities charges have been incurred in connection
     with vacating certain buildings leased by Scopus which are no longer
     required. The Company excludes one-time charges and credits of this
     nature in evaluating its ongoing operational performance. We believe
     that these charges and credits do not reflect expected future expenses
     nor does their inclusion in calculating our results of operations
     provide a meaningful comparison of current versus prior operating
     results.

   - Product Discontinuance
     In connection with the rationalization of product lines following
     the acquisition of Scopus, the Company recorded charges for excess
     inventory in connection with products which have been discontinued
     or which are excess to requirements as they are expected to be sold
     on a very limited basis. 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 does
     their inclusion in calculating our results of operations provide a
     meaningful comparison of current versus prior operating results.

-- Acquisition Fees and Expenses

     In accordance with the requirements of new business combination
     accounting standards, which the Company adopted on January 1, 2009,
     fees and expenses paid to professional advisers in connection with
     the acquisition of Scopus in March 2009 have been expensed. These
     acquisition-related costs are of a one-time nature and the Company
     excludes costs of this nature in evaluating its ongoing operational
     performance. We believe that these costs do not reflect expected
     future expenses nor does their inclusion in calculating our results
     of operations provide a meaningful comparison of current versus
     prior operating results.

-- Litigation Settlement Costs

     The Company has incurred charges in connection with the settlement
     of litigation and related expenses. The Company excludes one-time
     costs of this nature in evaluating its ongoing operating performance
     as it is difficult to estimate the amount or timing of these items
     in advance. Generally, in the case of legal settlements, these gains
     or losses are recorded in the period in which the matter is concluded
     or resolved even though the subject matter of such litigation
     originated several years prior to the applicable settlement. We
     believe that these costs do not reflect future expenses nor do they
     provide a meaningful comparison of current versus prior operating
     results.

-- Non-Cash Items

   - Stock-Based Compensation Expense
     The Company has incurred stock-based compensation expense in cost of
     sales and operating expenses. 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 companies.

   - Amortization of Intangibles
     The Company has incurred a charge for amortization of intangibles
     related to acquisitions made by the Company. The Company 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 companies because these expenses will vary if and
     when the Company makes additional acquisitions.

   - Purchase Accounting Fair Value Adjustments Related to Inventory
     The Company has incurred a charge related to the fair value write-up
     of acquired inventory sold. GAAP purchase accounting rules require
     that inventory we acquired in connection with the acquisition of
     Scopus be written-up to estimated fair market value. Management
     believes that the charge arising from the fair value write-up of
     acquired inventory sold does not reflect the actual inventory costs
     incurred by Scopus prior to the acquisition and does not reflect
     expected future inventory costs nor does the inclusion of this
     information in calculating our results of operations provide a
     meaningful comparison of current versus prior operating results.

   - Provision/Benefit for Income Taxes
     In 2008, the Company reversed a valuation allowance against certain
     deferred tax assets, resulting in a credit to its provision for
     income taxes. The Company has excluded the discrete benefit from
     this reversal from its calculation of the Company's non-GAAP net
     income because it believes that it is of a one-time nature and does
     not reflect future expected tax provisions nor does the inclusion
     of this information in calculating our net income provide a 
     meaningful comparison of current versus prior net income.

     Additionally, in 2009, the Company has assumed an effective tax rate
     of 35% for non-GAAP purposes because management believes that the
     35% effective tax rate is reflective of a current normalized tax
     rate for Harmonic and its consolidated subsidiaries on a global
     basis. Management believes that this rate i) more appropriately
     reflects a provision for income taxes based on computed and expected
     amounts of non-GAAP pre-tax income, and ii)  excludes the impact of
     certain discrete events which can cause quarterly tax provisions to
     be volatile. Certain discrete items are required by GAAP to be
     recorded in the current period but 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 net income.




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

                       Three Months Ended           Three Months Ended
                       December 31, 2009            December 31, 2008
                   ---------------------------  --------------------------
                                        Net                          Net
                    Gross   Operating  Income    Gross   Operating  Income
(In thousands)      Margin   Expense   (loss)    Margin   Expense   (loss)
                   -------- --------  --------  -------- --------  -------
GAAP               $ 39,349 $ 35,850  $     47  $ 48,206 $ 40,761  $13,209
Cost of sales
 related to
 severance costs         85                 85
Cost of sales
 related to stock
 based compensation
 expense                431                431       318               318
Research and
 development expense
 related to stock
 based compensation
 expense                      (1,075)    1,075               (824)     824
Selling, general
 and administrative
 expense related
 to stock based
 compensation
 expense                      (1,435)    1,435             (1,194)   1,194
Selling, general
 and administrative
 expense related to
 excess facilities
 expense                         (71)       71                (96)      96
Selling, general
 and administrative
 expense related
 to restructuring
 costs                           (46)       46
Selling, general
 and administrative
 expense related
 to litigation
 settlements                                               (5,189)   5,189
Amortization of
 intangibles from
 acquisitions         2,149     (533)    2,682     1,350     (160)   1,510
Discrete tax items
 and adjustments                           467                      (3,326)
                   -------- --------  --------  -------- --------  -------
Non-GAAP           $ 42,014 $ 32,690  $  6,339  $ 49,874 $ 33,298  $19,014
                   ======== ========  ========  ======== ========  =======
GAAP income per
 share - basic                        $   0.00                     $  0.14
                                      ========                     =======
GAAP income per
 share - diluted                      $   0.00                     $  0.14
                                      ========                     =======
Non-GAAP income
 per share - basic                    $   0.07                     $  0.20
                                      ========                     =======
Non-GAAP income per
 share - diluted                      $   0.07                     $  0.20
                                      ========                     ======= 
Shares used in
 per-share
 calculation -
 basic                                  96,109                      95,014
                                      ========                     =======
Shares used in
 per-share
 calculation -
 diluted                                96,597                      95,533
                                      ========                     =======


                            Year Ended                   Year Ended
                        December 31, 2009            December 31, 2008
                   ---------------------------  --------------------------
                                        Net                          Net
                    Gross   Operating  Income    Gross   Operating  Income
(In thousands)      Margin   Expense   (loss)    Margin   Expense   (loss)
                   -------- --------  --------  -------- --------  -------
GAAP               $134,360 $146,395  $(24,139) $177,533 $138,228  $63,992
Cost of sales
 related to
 severance costs        907                907
Cost of sales
 related to Scopus
 product
 discontinuance       5,965              5,965
Purchase
 accounting fair
 value adjustments
 related to
 inventory            1,142              1,142
Cost of sales
 related to stock
 based
 compensation
 expense              1,517              1,517     1,137             1,137
Research and
 development
 expense related
 to restructuring
 costs                          (712)      712
Research and
 development
 expense related
 to stock based
 compensation
 expense                      (3,846)    3,846             (2,845)   2,845
Selling, general
 and administrative
 expense related
 to restructuring
 costs                        (2,337)    2,337
Selling, general
 and administrative
 expense related
 to stock based
 compensation
 expense                      (5,215)    5,215             (3,824)   3,824
Selling, general
 and administrative
 expense related
 to excess
 facilities
 expense                        (494)      494             (1,834)   1,834
Selling, general
 and administrative
 expense related
 to litigation
 settlements                                               (5,189)   5,189
Acquisition costs
 related to Scopus            (3,367)    3,367
Amortization of
 intangibles          8,042   (3,822)   11,864     5,501     (639)   6,140
Impairment on
 Lehman Brothers
 investment                                                            845
Discrete tax items
 and adjustments                         4,732                     (19,394)
                   -------- --------  --------  -------- --------  -------
Non-GAAP           $151,933 $126,602  $ 17,959  $184,171 $123,897  $66,412
                   ======== ========  ========  ======== ========  =======
GAAP income (loss)
 per share - basic                    $  (0.25)                    $  0.68
                                      ========                     =======
GAAP income (loss)
 per share - diluted                  $  (0.25)                    $  0.67
                                      ========                     =======
Non-GAAP income
 per share - basic                    $   0.19                     $  0.70
                                      ========                     =======
Non-GAAP income
 per share - diluted                  $   0.19                     $  0.70
                                      ========                     =======
Shares used in
 per-share
 calculation - basic                    95,833                      94,535
                                      ========                     =======
Shares used in
 per-share
 calculation -
 diluted, GAAP                          95,833                      95,434
                                      ========                     =======
Shares used in
 per-share
 calculation -
 diluted, non-GAAP                      96,354                      95,434
                                      ========                     =======

Contact Information


  • CONTACTS:
    Robin N. Dickson
    Chief Financial Officer
    Harmonic Inc.
    (408) 542-2500

    Michael Newman
    Investor Relations
    StreetConnect
    (408) 542-2760