SOURCE: Harmonic Inc.

Harmonic Inc.

August 09, 2016 16:03 ET

Harmonic Announces Second Quarter 2016 Results

SAN JOSE, CA--(Marketwired - August 09, 2016) - Harmonic Inc. (NASDAQ: HLIT), the worldwide leader in video delivery infrastructure, announced today its preliminary and unaudited results for the second quarter of 2016.

GAAP net revenue for the second quarter of 2016 was $108.8 million, compared with $81.8 million for the first quarter of 2016 and $103.1 million for the second quarter of 2015.

Non-GAAP net revenue for the second quarter of 2016 was $109.5 million, compared with $82.5 million for the first quarter of 2016 and $103.1 million for the second quarter of 2015.

Bookings for the second quarter of 2016 were $117.3 million, compared with $109.6 million for the first quarter of 2016 and $99.3 million for the second quarter of 2015.

GAAP net loss for the second quarter of 2016 was $(20.6) million, or $(0.27) per diluted share, compared with a GAAP net loss for the first quarter of 2016 of $(25.2) million, or $(0.33) per diluted share, and a GAAP net loss of $(1.0) million, or $(0.01) per diluted share, for the second quarter of 2015.

Non-GAAP net loss for the second quarter of 2016 was $(0.2) million, or $0.00 per diluted share, compared with non-GAAP net loss for the first quarter of 2016 of $(8.2) million, or $(0.11) per diluted share, and non-GAAP net income of $4.2 million, or $0.05 per diluted share, for the second quarter of 2015. See "Use of Non-GAAP Financial Measures" and "GAAP to Non-GAAP Reconciliations" below.

Total cash, cash equivalents and short-term investments were $65.3 million at the end of the second quarter of 2016, down $11.0 million from $76.2 million at the end of the prior quarter, primarily due to the payment of certain purchase price adjustments related to the Thomson Video Networks ("TVN") acquisition and an increase in accounts receivable which reflects our sequential revenue growth and payments of restructuring and integration charges. In the second quarter of 2016, the Company used approximately $2.9 million of cash from operations.

"Our financial results for the second quarter of 2016 were at the high end of our plan for both our Video and Cable Edge segments," said Patrick Harshman, Harmonic's President and CEO. "Consequently, we enter the second half of the year with record backlog and deferred revenue. Our new CableOS products are scheduled to begin shipping in the fourth quarter of this year, and we remain on track to realize targeted synergy savings from the combination of Harmonic and TVN," concluded Mr. Harshman.

Second Quarter 2016 Highlights

  • Strong sequential and year-over-year bookings and revenue growth.
  • Backlog and deferred revenue grew to a record $190.4 million.
  • Remained on track to realize $20-$22 million of annualized cost savings from the combination of Harmonic and TVN by the end of calendar year 2016.
  • Entered into a $10 million engineering collaboration agreement that will extend into 2017.
  • Several key trials underway on our recently announced VOS Cloud and VOS 360 software-as-a-service offerings with new cloud partners and tier 1 pay TV operators.

Business Outlook

Third Quarter 2016 GAAP Financial Guidance

For the third quarter of 2016, Harmonic anticipates:

  • Net revenue to be $104.5 million to $109.5 million, which includes Video revenue of $92.5 million to $95.5 million and Cable Edge revenue of $12.0 million to $14.0 million
  • Gross margin to be 50.0% to 51.0%
  • Operating expense to be $65.5 million to $66.5 million
  • Operating loss to be $(12.5) million to $(10.5) million
  • EPS to be $(0.16) to $(0.14)
  • Share count for EPS calculation to be approximately 78 million shares of Harmonic common stock
  • Cash on hand at quarter-end to be $60.0 million to $65.0 million

2016 GAAP Financial Guidance

Harmonic's projections for full year 2016 include two fiscal quarters of financial projections for TVN, from the third quarter through the fourth quarter of 2016.

For 2016, Harmonic anticipates:

  • Net revenue to be $408.0 million to $418.0 million, which includes Video revenue of $348.0 million to $353.0 million and Cable Edge revenue of $60.0 million to $65.0 million
  • Gross margin to be 50.0% to 51.0%
  • Operating expense to be $257.5 million to $261.5 million
  • Operating loss to be $(55.0) million to $(50.0) million
  • EPS to be $(0.69) to $(0.64)
  • Share count for EPS calculation to be 78 million to 79 million shares of Harmonic common stock
  • Capital expenditures to be $14.0 million to $16.0 million
  • Cash on hand at year-end to be $65.0 million to $70.0 million

Third Quarter 2016 Non-GAAP Financial Guidance

For the third quarter of 2016, Harmonic anticipates:

  • Net revenue to be $105.0 million to $110.0 million, which includes Video revenue of $93.0 million to $96.0 million and Cable Edge revenue of $12.0 million to $14.0 million
  • Gross margin to be 53.0% to 54.0%
  • Operating expense to be $54.0 million to $55.0 million
  • Operating income to be $2.0 million to $4.0 million
  • EPS to be $0.01 to $0.03
  • Tax rate to be approximately 15%
  • Share count for EPS calculation to be approximately 78 million shares of Harmonic common stock
  • Cash on hand at quarter-end to be $60.0 million to $65.0 million

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

2016 Non-GAAP Financial Guidance

For 2016, Harmonic anticipates:

  • Net revenue to be $410.0 million to $420.0 million, which includes Video revenue of $350.0 million to $355.0 million and Cable Edge revenue of $60.0 million to $65.0 million
  • Gross margin to be 53.0% to 54.0%
  • Operating expense to be $212.0 million to $216.0 million
  • EPS to be $0.01 to $0.06
  • Tax rate to be approximately 15%
  • Share count for EPS calculation to be 78 million to 79 million shares of Harmonic common stock
  • Capital expenditures to be $14.0 million to $16.0 million
  • Cash on hand at year-end to be $65.0 million to $70.0 million

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

Conference Call Information

Harmonic will host a conference call to discuss its financial results at 2:00 p.m. Pacific (5:00 p.m. Eastern) on Tuesday, August 9, 2016. A listen-only broadcast of the conference call can be accessed either from the Company's website at www.harmonicinc.com or by calling +1.847.585.4405 or +1.888.771.4371 (passcode 42982000). The replay will be available after 4:30 p.m. Pacific at the same website address or by calling +1.630.652.3042 or +1.888.843.7419 (passcode 42982000#).

About Harmonic Inc.

Harmonic (NASDAQ: HLIT) is the worldwide leader in video delivery infrastructure for emerging television and video services. Harmonic enables customers to produce, deliver, and monetize amazing video experiences, with unequalled business agility and operational efficiency, by providing market-leading innovation, high-quality service, and compelling total-cost-of-ownership. More information is available at www.harmonicinc.com.

Legal Notice Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements related to our expectations regarding: our final results for the second quarter ended July 1, 2016 and our expectations concerning quarter-on-quarter growth; GAAP net revenue, GAAP gross margins, GAAP operating expenses, GAAP operating income (loss), GAAP EPS, non-GAAP revenue, non-GAAP gross margins, non-GAAP operating expenses, non-GAAP operating income (loss), non-GAAP EPS, and tax rate and capital expenditures for the third quarter of 2016 and fiscal year ended December 31, 2016, as well as cash on hand at the end of the third quarter of 2016 and at December 31, 2016. Our expectations regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include, in no particular order, the following: unexpected delays, difficulties and/or costs relating to integrating TVN with Harmonic; anticipated business opportunities and operational efficiencies for the combined company do not fully materialize; the trends toward more high-definition, on-demand and anytime, anywhere video will not continue to develop at its current pace or will expire; a strong U.S. dollar may have a negative impact on our business in certain international markets; the possibility that our products will not generate sales that are commensurate with our expectations or that our cost of revenue or operating expenses may exceed our expectations; the 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 on our sales and operations; our ability to develop new and enhanced products in a timely manner and market acceptance of our new or existing products; losses of one or more key customers; risks associated with our international operations, including in Ukraine; risks associated with our CCAP and VOS™ product initiatives; dependence on market acceptance of various types of broadband services, on the adoption of new broadband technologies and on broadband industry trends; inventory management; the lack of timely availability of parts or raw materials necessary to produce our products; the impact of fluctuations in the prices of raw materials and oil; the effect of competition, on both revenue and gross margins; difficulties associated with rapid technological changes in our markets; risks associated with unpredictable sales cycles; our dependence on contract manufacturers and sole or limited source suppliers; the effect on our business of natural disasters; and risks associated with our outstanding convertible notes. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in Harmonic's filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K for the year ended December 31, 2015, our recent Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K. The forward-looking statements in this press release are based on information available to the Company as of the date hereof, and Harmonic disclaims any obligation to update any forward-looking statements.

Use of Non-GAAP Financial Measures

In establishing operating budgets, managing its business performance, and setting internal measurement targets, we exclude 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: revenue, gross profit, operating expenses, income (loss) from operations and net income (loss) (including those amounts as a percentage of revenue), and net income (loss) per diluted share. The presentation of non-GAAP information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP, and is not necessarily comparable to non-GAAP results published by other companies. A reconciliation of the historical non-GAAP financial measures discussed in this press release to the most directly comparable historical GAAP financial measures is included with the financial statements provided with this press release. The types of non-GAAP adjustments described below have historically been excluded from our GAAP financial measures: acquisition accounting impacts to TVN deferred revenue and TVN inventory valuation; TVN acquisition-and integration-related costs; Cable Edge inventory charge in connection with certain product lines; restructuring and related charges; and non-cash items, such as impairment of long-term investment, stock-based compensation expense, amortization of intangibles and non-cash interest expenses related to convertible debt and adjustments that normalize the tax rate. With respect to our expectations under "Business Outlook" above, reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available without unreasonable efforts on a forward-looking basis due to the high variability and low visibility with respect to the charges which are excluded from these non-GAAP measures. The effects of stock-based compensation expense specific to common stock options are directly impacted by unpredictable fluctuations in our stock price. We expect the variability of the above charges to have a significant impact on our GAAP financial results.

 
Harmonic Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except per share data)
 
   July 1, 2016   December 31, 2015  
ASSETS           
Current assets:           
 Cash and cash equivalents  $51,516   $126,190  
 Short-term investments   13,760    26,604  
 Accounts receivable, net   102,668    69,515  
 Inventories   36,624    38,819  
 Prepaid expenses and other current assets   44,210    25,003  
Total current assets   248,778    286,131  
Property and equipment, net   36,517    27,012  
Goodwill   235,369    197,781  
Intangibles, net   39,638    4,097  
Other long-term assets   28,635    9,936  
Total assets  $588,937   $524,957  
            
LIABILITIES AND STOCKHOLDERS' EQUITY           
Current liabilities:           
 Other debts and capital lease obligations, current  $7,829   $-  
 Accounts payable   35,794    19,364  
 Income taxes payable   139    307  
 Deferred revenue   63,518    33,856  
 Accrued liabilities   52,346    31,354  
Total current liabilities   159,626    84,881  
Convertible debt, long-term   100,712    98,295  
Other debts and capital lease obligations, long-term   16,190    -  
Income taxes payable, long-term   3,980    3,886  
Deferred tax liabilities, long-term   957    -  
Other non-current liabilities   15,341    9,727  
Total liabilities   296,806    196,789  
            
Stockholders' equity:           
 Preferred stock, $0.001 par value, 5,000 shares authorized; no shares issued or outstanding   -    -  
 Common stock, $0.001 par value, 150,000 shares authorized; 78,015 and 76,015 shares issued and outstanding at July 1, 2016 and December 31, 2015, respectively   78    76  
 Additional paid-in capital   2,245,120    2,236,418  
 Accumulated deficit   (1,949,715 )  (1,903,908 )
 Accumulated other comprehensive loss   (3,352 )  (4,418 )
Total stockholders' equity   292,131    328,168  
Total liabilities and stockholders' equity  $588,937   $524,957  
         
 
Harmonic Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share amounts)
 
   Three months ended   Six months ended  
   July 1, 2016   July 3, 2015   July 1, 2016(1)   July 3, 2015  
      
Net revenue  $108,759   $103,103   $190,591   $207,119  
Cost of revenue   57,667    48,718    98,845    97,706  
 Gross profit   51,092    54,385    91,746    109,413  
Operating expenses:                     
 Research and development   26,507    21,816    50,070    44,145  
 Selling, general and administrative   36,516    31,281    69,386    62,477  
 Amortization of intangibles   4,232    1,446    6,597    2,892  
 Restructuring and asset impairment charges   1,903    185    4,515    229  
  Total operating expenses   69,158    54,728    130,568    109,743  
Loss from operations   (18,066 )  (343 )  (38,822 )  (330 )
Interest (expense) income, net   (2,651 )  17    (5,072 )  72  
Other income (expense), net   332    59    323    (447 )
Loss on impairment of long-term investment   -    -    (1,476 )  (2,505 )
Loss before income taxes   (20,385 )  (267 )  (45,047 )  (3,210 )
Provision for income taxes   242    727    760    441  
Net loss  $(20,627 ) $(994 ) $(45,807 ) $(3,651 )
Net loss per share:                     
 Basic and diluted  $(0.27 ) $(0.01 ) $(0.59 ) $(0.04 )
Shares used in per share calculation:                     
 Basic and diluted   77,342    88,426    77,168    88,541  
                  
(1) On February 29, 2016, Harmonic closed the acquisition of TVN and as a result, our 2016 results for the six months ended July 1, 2016 include TVN results beginning on February 29, 2016.
 
  
Harmonic Inc. 
Condensed Consolidated Statements of Cash Flows 
(Unaudited, in thousands) 
  
   Six months ended  
   July 1, 2016   July 3, 2015  
Cash flows from operating activities:           
Net loss  $(45,807 ) $(3,651 )
 Adjustments to reconcile net loss to net cash provided by operating activities:           
 Amortization of intangibles   8,322    3,439  
 Depreciation   7,737    6,930  
 Stock-based compensation   5,862    8,018  
 Amortization of discount on convertible debt   2,417    -  
 Restructuring, asset impairment and loss on retirement of fixed assets   1,687    252  
 Loss on impairment of long-term investment   1,476    2,505  
 Deferred income taxes   38    -  
 Provision for excess and obsolete inventories   5,203    843  
 Allowance for doubtful accounts, returns and discounts   697    (713 )
 Excess tax benefits from stock-based compensation   -    (22 )
 Other non-cash adjustments, net   144    -  
 Changes in assets and liabilities, net of effects of acquisition:           
  Accounts receivable   (16,000 )  (1,222 )
  Inventories   3,158    (595 )
  Prepaid expenses and other assets   (5,039 )  (11,635 )
  Accounts payable   2,168    6,415  
  Deferred revenue   26,795    9,833  
  Income taxes payable   (122 )  (815 )
  Accrued and other liabilities   (7,029 )  (5,994 )
Net cash (used in) provided by operating activities   (8,293 )  13,588  
Cash flows from investing activities:           
 Acquisition of business, net of cash acquired   (72,989 )  -  
 Purchases of investments   -    (12,986 )
 Proceeds from sales and maturities of investments   12,842    15,744  
 Purchases of property and equipment   (7,708 )  (7,505 )
 Purchases of long-term investments   -    (85 )
Net cash used in investing activities   (67,855 )  (4,832 )
Cash flows from financing activities:           
 Payment of convertible debt issuance costs   (582 )  -  
 Increase in other debts and capital leases   5,972    -  
 Repayment of other debts and capital leases   (6,524 )  -  
 Payments for repurchase of common stock   -    (12,171 )
 Proceeds from common stock issued to employees   3,737    9,133  
 Payment of tax withholding obligations related to net share settlements of restricted stock units   (1,034 )  (2,642 )
 Excess tax benefits from stock-based compensation   -    22  
Net cash provided by (used in) financing activities   1,569    (5,658 )
Effect of exchange rate changes on cash and cash equivalents   (95 )  (81 )
Net (decrease) increase in cash and cash equivalents   (74,674 )  3,017  
Cash and cash equivalents at beginning of period   126,190    73,032  
Cash and cash equivalents at end of period  $51,516   $76,049  
         

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

              
   Three months
ended
  Three months
ended
  Three months ended  
   July 1, 2016   April 1, 2016   July 3, 2015  
   GAAP  Adjustment
(1)
 Non-GAAP   GAAP(2)  Adjustment
(1)
 Non-GAAP(2)   GAAP and Non-GAAP(3)  
Product                                         
Video Products  $62,158  $205  $62,363  57 % $44,212  $355  $44,567  54 % $56,096  54 %
Cable Edge   15,751   -   15,751  14 %  13,432   -   13,432  16 %  21,351  21 %
Services and Support   30,850   575   31,425  29 %  24,188   268   24,456  30 %  25,656  25 %
Total  $108,759  $780  $109,539  100 % $81,832  $623  $82,455  100 % $103,103  100 %
                                          
Geography                                         
Americas  $57,681  $150  $57,831  53 % $48,977  $81  $49,058  59 % $60,342  58 %
EMEA   33,456   488   33,944  31 %  19,855   401   20,256  25 %  27,360  27 %
APAC   17,622   142   17,764  16 %  13,000   141   13,141  16 %  15,401  15 %
Total  $108,759  $780  $109,539  100 % $81,832  $623  $82,455  100 % $103,103  100 %
                                          
Market                                         
Service Provider  $64,921  $329  $65,250  60 % $51,270  $150  $51,420  62 % $64,041  62 %
Broadcast and Media   43,838   451   44,289  40 %  30,562   473   31,035  38 %  39,062  38 %
Total  $108,759  $780  $109,539  100 % $81,832  $623  $82,455  100 % $103,103  100 %
                               
(1) Non-GAAP revenue for the three months ended July 1, 2016 and April 1, 2016 include $0.8 million and $0.6 million adjustments relating to TVN deferred revenue as a result of acquisition accounting, respectively.
 
(2) Excludes TVN revenue prior to March 1, 2016.
 
(3) There is no revenue adjustment for the three months ended July 3, 2015.
 
 
Harmonic Inc.
GAAP to Non-GAAP Reconciliations (Unaudited)
(In thousands, except percentages and per share data)
      
   Three months ended  
   July 1, 2016  
   Revenue  Gross
Profit
  Total
Operating
Expense
  Income
(loss) from
Operations
  Net loss  
GAAP  $108,759  $51,092   $69,158   $(18,066 ) $(20,627 )
Cable Edge inventory charge   -   4,519    -    4,519    4,519  
Acquisition accounting impact related to TVN deferred revenue   780   780    -    780    780  
 Stock-based compensation in cost of revenue   -   424    -    424    424  
 Stock-based compensation in research and development   -   -    (841 )  841    841  
 Stock-based compensation in selling, general and administrative   -   -    (1,503 )  1,503    1,503  
 Amortization of intangibles   -   1,307    (4,232 )  5,539    5,539  
 Restructuring and related charges   -   6    (1,903 )  1,909    1,909  
 TVN acquisition-and integration-related costs   -   433    (2,970 )  3,403    3,403  
 Non-cash interest expenses related to convertible notes   -   -    -    -    1,233  
 Discrete tax items and tax effect of non-GAAP adjustments   -   -    -    -    278  
Non-GAAP  $109,539  $58,561   $57,709   $852   $(198 )
As a % of revenue (GAAP)       47.0 %  63.6 %  (16.6 )%  (19.0 )%
As a % of revenue (Non-GAAP)       53.5 %  52.7 %  0.8 %  (0.2 )%
Diluted net loss per share:                         
 Diluted net loss per share-GAAP                     $(0.27 )
 Diluted net loss per share-Non-GAAP                     $0.00  
Shares used to compute diluted net loss per share:                         
 GAAP                      77,342  
 Non-GAAP                      77,342  
                          
   Three months ended  
   April 1, 2016  
    Revenue   Gross
Profit
   Total
Operating
Expense
   Loss from Operations    Net Loss  
GAAP  $81,832  $40,654   $61,410   $(20,756 ) $(25,180 )
Acquisition accounting impacts related to TVN deferred revenue   623   623    -    623    623  
Acquisition accounting impacts related to TVN fair value of inventory   -   189    -    189    189  
 Stock-based compensation in cost of revenue   -   227    -    227    227  
 Stock-based compensation in research and development   -   -    (969 )  969    969  
 Stock-based compensation in selling, general and administrative   -   -    (1,898 )  1,898    1,898  
 Amortization of intangibles   -   418    (2,365 )  2,783    2,783  
 Restructuring and related charges   -   (29 )  (2,612 )  2,583    2,583  
 TVN acquisition-and integration-related costs   -   58    (3,038 )  3,096    3,096  
 Impairment of long-term investment   -   -    -    -    1,476  
 Non-cash interest expenses related to convertible notes   -   -    -    -    1,187  
 Discrete tax items and tax effect of non-GAAP adjustments   -   -    -    -    1,963  
Non-GAAP  $82,455  $42,140   $50,528   $(8,388 ) $(8,186 )
As a % of revenue (GAAP)       49.7 %  75.0 %  (25.4 )%  (30.8 )%
As a % of revenue (Non-GAAP)       51.1 %  61.3 %  (10.2 )%  (9.9 )%
Diluted net loss per share:                         
 Diluted net loss per share-GAAP                     $(0.33 )
 Diluted net loss per share-Non-GAAP                     $(0.11 )
Shares used to compute diluted net loss per share:                         
 GAAP                      76,996  
 Non-GAAP                      76,996  
                          
   Three months ended  
   July 3, 2015  
    Revenue   Gross
Profit
   Total
Operating
Expense
   Income
(Loss) from Operations
   Net
Income (Loss)
 
GAAP  $103,103  $54,385   $54,728   $(343 ) $(994 )
Stock-based compensation in cost of revenue   -   422    -    422    422  
 Stock-based compensation in research and development   -   -    (1,027 )  1,027    1,027  
 Stock-based compensation in selling, general and administrative   -   -    (2,435 )  2,435    2,435  
 Amortization of intangibles   -   86    (1,446 )  1,532    1,532  
 Restructuring and related charges   -   -    (185 )  185    185  
 Discrete tax items and tax effect of non-GAAP adjustments   -   -    -    -    (393 )
Non-GAAP  $103,103  $54,893   $49,635   $5,258   $4,214  
As a % of revenue (GAAP)       52.7 %  53.1 %  (0.3 )%  (1.0 )%
As a % of revenue (Non-GAAP)       53.2 %  48.1 %  5.1 %  4.1 %
Diluted net income (loss) per share:                         
 Diluted net loss per share-GAAP                     $(0.01 )
 Diluted net income per share-Non-GAAP                     $0.05  
Shares used to compute diluted net income (loss) per share:                         
 GAAP                      88,426  
 Non-GAAP                      89,444  
                     

Harmonic Inc.
GAAP to Non-GAAP Reconciliations on Business Outlook
(In millions, except percentages and per share data)

    
   Q3 2016 Financial Guidance
   Revenue  Gross Profit  Total
Operating
Expense
 Income (loss)
from
Operations
 Net
Income (loss)
GAAP  $104.5 to $109.5  $53.0 to $56.0  $65.5 to $66.5  $(12.5) to $(10.5)  ($12.5) to ($10.5)
 Acquisition accounting impact related to TVN deferred revenue  Approx. $0.5  Approx. $0.5  -  Approx. $0.5  Approx. $0.5
 Stock-based compensation expense  -  Approx. $0.5  Approx. ($3.0)  Approx. $3.5  Approx. $3.5
 Amortization of intangibles  -  Approx. $1.5  Approx. ($3.5)  Approx. $5.0  Approx. $5.0
 Restructuring and related charges and TVN acquisition/integration costs  -  Approx. $0.5  Approx. ($5.0)  Approx. $5.5  Approx. $5.5
 Non-cash interest expense related to convertible notes  -  -  -  -  Approx. $1.0
 Discrete tax items and tax effect of non-GAAP adjustments  -  -  -  -  Approx. ($2.5)
   Approx. $0.5  Approx. $3.0  Approx. ($11.5)  Approx. $14.5  Approx. $13.0
                
Non-GAAP  $105.0 to $110.0  $56.0 to $59.0  $54.0 to $55.0  $2.0 to $4.0  $0.5 to $2.5
As a % of revenue (GAAP)     50% to 51%  61% to 63%  (12)% to (9)%  (12)% to (10)%
As a % of revenue (Non-GAAP)     53% to 54%  50% to 52%  2% to 4%  0% to 2%
Diluted income (loss) per share:               
 Diluted net loss per share-GAAP              $(0.16) to $(0.14)
 Diluted net income per share-Non-GAAP              $0.01 to $0.03
Shares used to compute diluted income (loss) per share:               
 GAAP and Non-GAAP              78.0
                
   2016 Financial Guidance
   Revenue  Gross Profit  Total
Operating
Expense
 Income (loss)
from
Operations
 Net
Income (loss)
GAAP  $408.0 to $418.0  $202.5 to $211.5  $257.5 to $261.5  $(55.0) to $(50.0)  $(54.0) to $(50.0)
 Acquisition accounting impact related to TVN deferred revenue  Approx. $2.0  Approx. $2.0  -  Approx. $2.0  Approx. $2.0
 Acquisition accounting impact related to TVN fair value of inventory  -  Approx. $0.2  -  Approx. $0.2  Approx. $0.2
 Stock-based compensation expense  -  Approx. $2.0  Approx. ($12.0)  Approx. $14.0  Approx. $14.0
 Amortization of intangibles  -  Approx. $4.3  Approx. ($11.0)  Approx. $15.3  Approx. $15.3
 Restructuring and related charges and TVN acquisition/integration costs  -  Approx. $1.5  Approx. ($22.5)  Approx. $24.0  Approx. $24.0
 Cable Edge inventory charge  -  Approx. $4.5  -  Approx. $4.5  Approx. $4.5
 Non-cash interest expense related to convertible notes  -  -  -  -  Approx. $4.5
 Discrete tax items and tax effect of non-GAAP adjustments  -  -  -  -  Approx. ($10.0)
   Approx. $2.0  Approx. $14.5  Approx. ($45.5)  Approx. $60.0  Approx. $54.5
                
Non-GAAP  $410.0 to $420.0  $217.0 to $226.0  $212.0 to $216.0  $5.0 to $10.0  $0.5 to $4.5
As a % of revenue (GAAP)     50% to 51%  62% to 63%  (13)% to (12)%  (13)% to (12)%
As a % of revenue (Non-GAAP)     53% to 54%  51% to 52%  1% to 2%  0% to 1%
Diluted income (loss) per share:               
 Diluted net loss per share-GAAP              $(0.69) to $(0.64)
 Diluted net income per share-Non-GAAP              $0.01 to $0.06
Shares used to compute diluted income (loss) per share:            
 GAAP and Non-GAAP              78 to 79
            

Contact Information

  • CONTACTS:
    Harold Covert
    Chief Financial Officer
    Harmonic Inc.
    +1.408.542.2500

    Blair King
    Director, Investor Relations
    Harmonic Inc.
    +1.408.490.6172