SOURCE: Harmonic Inc.

Harmonic Inc.

February 03, 2011 16:34 ET

Harmonic Announces Fourth Quarter 2010 Results

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

SAN JOSE, CA--(Marketwire - 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 technologies 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       Year ended
                                    December 31,         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 $  (4,335) $ (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              Three months ended
                  December 31, 2010               December 31, 2009
            ------------------------------- -------------------------------
                                    Net
              Gross   Operating    Income     Gross   Operating     Net
             Margin    Expense     (Loss)    Margin    Expense     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                    Year ended
                   December 31, 2010              December 31, 2009
            ------------------------------- -------------------------------
                                    Net                             Net
              Gross   Operating    Income     Gross   Operating    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
                 ------------- -------------- -------------- --------------
                             (In thousands, except percentages)
PRODUCT
Harmonic
Video Processing $ 35,664  53% $  38,297  47% $  39,880  48% $  48,813  56%
Production and
 Playout                -   0%         -   0%         -   0%         -   0%
Edge and Access    24,243  36%    32,216  40%    32,673  39%    28,223  33%
Services and
 Support            7,848  11%    10,780  13%    11,308  13%     9,621  11%
                 -------- ---  --------- ---  --------- ---  --------- ---
Total            $ 67,755 100% $  81,293 100% $  83,861 100% $  86,657 100%
Omneon
Video Processing $      -   0% $       -   0% $       -   0% $       -   0%
Production and
 Playout           25,356  89%    21,773  86%    20,102  86%    24,165  86%
Edge and Access         -   0%         -   0%         -   0%         -   0%
Services and
 Support            2,982  11%     3,518  14%     3,266  14%     3,834  14%
                 -------- ---  --------- ---  --------- ---  --------- ---
Total            $ 28,338 100% $  25,291 100% $  23,368 100% $  27,999 100%
Consolidated
Video Processing $ 35,664  37% $  38,297  36% $  39,880  37% $  48,813  43%
Production and
 Playout           25,356  26%    21,773  20%    20,102  19%    24,165  21%
Edge and Access    24,243  25%    32,216  30%    32,673  30%    28,223  24%
Services and
 Support           10,830  12%    14,298  14%    14,574  14%    13,455  12%
                 -------- ---  --------- ---  --------- ---  --------- ---
Total            $ 96,093 100% $ 106,584 100% $ 107,229 100% $ 114,656 100%
                 ========      =========      =========      =========

GEOGRAPHY
Harmonic
United States    $ 32,118  47% $  46,532  57% $  40,282  48% $  43,091  50%
International      35,637  53%    34,761  43%    43,579  52%    43,566  50%
                 -------- ---  --------- ---  --------- ---  --------- ---
Total            $ 67,755 100% $  81,293 100% $  83,861 100% $  86,657 100%
Omneon
United States    $ 11,590  41% $   7,012  28% $   7,438  32% $   8,974  32%
International      16,748  59%    18,279  72%    15,930  68%    19,025  68%
                 -------- ---  --------- ---  --------- ---  --------- ---
Total            $ 28,338 100% $  25,291 100% $  23,368 100% $  27,999 100%
Consolidated
United States    $ 43,708  45% $  53,544  50% $  47,720  45% $  52,065  45%
International      52,385  55%    53,040  50%    59,509  55%    62,591  55%
                 -------- ---  --------- ---  --------- ---  --------- ---
Total            $ 96,093 100% $ 106,584 100% $ 107,229 100% $ 114,656 100%
                 ========      =========      =========      =========

MARKET
Harmonic
Cable            $ 38,214  56% $  53,645  66% $  47,246  56% $  53,836  62%
Satellite and
 Telco             23,048  34%    18,897  23%    25,917  31%    23,741  27%
Broadcast and
 Media              6,493  10%     8,751  11%    10,698  13%     9,080  11%
                 -------- ---  --------- ---  --------- ---  --------- ---
Total            $ 67,755 100% $  81,293 100% $  83,861 100% $  86,657 100%
Omneon
Cable            $    407   1% $     364   1% $     336   1% $     403   1%
Satellite and
 Telco              3,918  14%     3,508  14%     3,233  14%     3,879  14%
Broadcast and
 Media             24,013  85%    21,419  85%    19,799  85%    23,717  85%
                 -------- ---  --------- ---  --------- ---  --------- ---
Total            $ 28,338 100% $  25,291 100% $  23,368 100% $  27,999 100%
Consolidated
Cable            $ 38,621  40% $  54,009  51% $  47,582  44% $  54,239  47%
Satellite and
 Telco             26,966  28%    22,405  21%    29,150  27%    27,620  24%
Broadcast and
 Media             30,506  32%    30,170  28%    30,497  29%    32,797  29%
                 -------- ---  --------- ---  --------- ---  --------- ---
Total            $ 96,093 100% $ 106,584 100% $ 107,229 100% $ 114,656 100%
                 ========      =========      =========      =========



                     2009           2010Q1         2010Q2
                 -------------- -------------- --------------
                     (In thousands, except percentages)
PRODUCT
Harmonic
Video Processing $ 162,654  51% $  38,890  46% $  49,998  52%
Production and
 Playout                 -   0%         -   0%         -   0%
Edge and Access    117,355  37%    35,544  42%    34,263  36%
Services and
 Support            39,557  12%    10,388  12%    11,283  12%
                 --------- ---  --------- ---  --------- ---
Total            $ 319,566 100% $  84,822 100% $  95,544 100%
Omneon
Video Processing $       -   0% $       -   0% $       -   0%
Production and
 Playout            91,396  87%    24,828  88%    26,589  83%
Edge and Access          -   0%         -   0%         -   0%
Services and
 Support            13,600  13%     3,389  12%     5,340  17%
                 --------- ---  --------- ---  --------- ---
Total            $ 104,996 100% $  28,217 100% $  31,929 100%
Consolidated
Video Processing $ 162,654  38% $  38,890  34% $  49,998  39%
Production and
 Playout            91,396  22%    24,828  22%    26,589  21%
Edge and Access    117,355  28%    35,544  32%    34,263  27%
Services and
 Support            53,157  12%    13,777  12%    16,623  13%
                 --------- ---  --------- ---  --------- ---
Total            $ 424,562 100% $ 113,039 100% $ 127,473 100%
                 =========      =========      =========

GEOGRAPHY
Harmonic
United States    $ 162,023  51% $  42,592  50% $  49,259  52%
International      157,543  49%    42,230  50%    46,285  48%
                 --------- ---  --------- ---  --------- ---
Total            $ 319,566 100% $  84,822 100% $  95,544 100%
Omneon
United States    $  35,014  33% $   7,040  25% $  16,197  51%
International       69,982  67%    21,177  75%    15,732  49%
                 --------- ---  --------- ---  --------- ---
Total            $ 104,996 100% $  28,217 100% $  31,929 100%
Consolidated
United States    $ 197,037  46% $  49,632  44% $  65,456  51%
International      227,525  54%    63,407  56%    62,017  49%
                 --------- ---  --------- ---  --------- ---
Total            $ 424,562 100% $ 113,039 100% $ 127,473 100%
                 =========      =========      =========

MARKET
Harmonic
Cable            $ 192,941  60% $  56,017  66% $  53,106  56%
Satellite and
 Telco              91,603  29%    19,798  23%    32,403  34%
Broadcast and
 Media              35,022  11%     9,007  11%    10,035  10%
                 --------- ---  --------- ---  --------- ---
Total            $ 319,566 100% $  84,822 100% $  95,544 100%
Omneon
Cable            $   1,510   1% $     424   1% $     449   1%
Satellite and
 Telco              14,538  14%     5,232  19%     3,815  12%
Broadcast and
 Media              88,948  85%    22,561  80%    27,665  87%
                 --------- ---  --------- ---  --------- ---
Total            $ 104,996 100% $  28,217 100% $  31,929 100%
Consolidated
Cable            $ 194,451  46% $  56,441  50% $  53,555  42%
Satellite and
 Telco             106,141  25%    25,030  22%    36,218  28%
Broadcast and
 Media             123,970  29%    31,568  28%    37,700  30%
                 --------- ---  --------- ---  --------- ---
Total            $ 424,562 100% $ 113,039 100% $ 127,473 100%
                 =========      =========      =========



                     2010Q3         2010Q4         2010
                 -------------- -------------- --------------
                     (In thousands, except percentages)
PRODUCT
Harmonic
Video Processing $  51,005  51% $  63,005  59% $ 202,898  52%
Production and
 Playout                 -   0%         -   0%         -   0%
Edge and Access     34,712  35%    30,787  29%   135,306  35%
Services and
 Support            13,453  14%    13,485  12%    48,609  13%
                 --------- ---  --------- ---  --------- ---
Total            $  99,170 100% $ 107,277 100% $ 386,813 100%
Omneon
Video Processing $       -   0% $       -   0% $       -   0%
Production and
 Playout            26,024  86%    27,699  87%   105,140  86%
Edge and Access          -   0%         -   0%         -   0%
Services and
 Support             4,307  14%     4,029  13%    17,065  14%
                 --------- ---  --------- ---  --------- ---
Total            $  30,331 100% $  31,728 100% $ 122,205 100%
Consolidated
Video Processing $  51,005  39% $  63,005  45% $ 202,898  40%
Production and
 Playout            26,024  20%    27,699  20%   105,140  21%
Edge and Access     34,712  27%    30,787  22%   135,306  26%
Services and
 Support            17,760  14%    17,514  13%    65,674  13%
                 --------- ---  --------- ---  --------- ---
Total            $ 129,501 100% $ 139,005 100% $ 509,018 100%
                 =========      =========      =========

GEOGRAPHY
Harmonic
United States    $  51,895  52% $  54,065  50% $ 197,811  51%
International       47,275  48%    53,212  50%   189,002  49%
                 --------- ---  --------- ---  --------- ---
Total            $  99,170 100% $ 107,277 100% $ 386,813 100%
Omneon
United States    $  10,520  35% $  10,165  32% $  43,922  36%
International       19,811  65%    21,563  68%    78,283  64%
                 --------- ---  --------- ---  --------- ---
Total            $  30,331 100% $  31,728 100% $ 122,205 100%
Consolidated
United States    $  62,415  48% $  64,230  46% $ 241,733  47%
International       67,086  52%    74,775  54%   267,285  53%
                 --------- ---  --------- ---  --------- ---
Total            $ 129,501 100% $ 139,005 100% $ 509,018 100%
                 =========      =========      =========

MARKET
Harmonic
Cable            $  62,993  64% $  65,019  61% $ 237,135  61%
Satellite and
 Telco              24,745  25%    27,212  25%   104,158  27%
Broadcast and
 Media              11,432  11%    15,046  14%    45,520  12%
                 --------- ---  --------- ---  --------- ---
Total            $  99,170 100% $ 107,277 100% $ 386,813 100%
Omneon
Cable            $     426   1% $     798   2% $   2,097   2%
Satellite and
 Telco               3,467  11%     1,243   4%    13,757  11%
Broadcast and
 Media              26,438  88%    29,687  94%   106,351  87%
                 --------- ---  --------- ---  --------- ---
Total            $  30,331 100% $  31,728 100% $ 122,205 100%
Consolidated
Cable            $  63,419  49% $  65,817  47% $ 239,232  47%
Satellite and
 Telco              28,212  22%    28,455  21%   117,915  23%
Broadcast and
 Media              37,870  29%    44,733  32%   151,871  30%
                 --------- ---  --------- ---  --------- ---
Total            $ 129,501 100% $ 139,005 100% $ 509,018 100%
                 =========      =========      =========


NOTE: Data includes a full quarter proforma revenue for Omneon for the periods shown, including certain deferred revenue excluded in reported results. 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.

Contact Information

  • CONTACTS:
    Carolyn V. Aver
    Chief Financial Officer
    Harmonic Inc.
    (408) 542-2500

    Michael Newman
    Investor Relations
    StreetConnect
    (408) 542-2760