SOURCE: Polycom

Polycom

January 20, 2011 16:05 ET

Polycom Reports Fourth Quarter and Fiscal Year 2010 Earnings

Q4 Revenue Growth of 27 Percent Year-Over-Year to a Record $340 Million; 2010 Revenue Growth of 26 Percent to a Record $1.2 Billion

PLEASANTON, CA--(Marketwire - January 20, 2011) - Polycom, Inc. (NASDAQ: PLCM), a global leader in unified communications (UC), today reported its earnings for the fourth quarter ended Dec. 31, 2010.

Fourth quarter 2010 consolidated net revenues were a record $340 million, compared to $268 million for the fourth quarter of 2009. GAAP net income for the fourth quarter of 2010 was $33 million, or 37 cents per diluted share, compared to $13 million, or 15 cents per diluted share, for the same period last year. Non-GAAP net income for the fourth quarter of 2010 was $43 million, or 49 cents per diluted share, compared to Non-GAAP net income of $28 million, or 33 cents per diluted share, for the fourth quarter of 2009.

For the year ended Dec. 31, 2010, net revenues were $1.2 billion, compared to $967 million for the year ended Dec. 31, 2009. GAAP net income for the year ended Dec. 31, 2010 was $68 million, or 78 cents per diluted share, compared to GAAP net income of $50 million, or 58 cents per diluted share, for the same period last year. Non-GAAP net income for the year ended Dec. 31, 2010 was $133 million, or $1.50 per diluted share, compared to $102 million, or $1.19 per diluted share, for the same period last year.

The reconciliation between GAAP net income and Non-GAAP net income is provided in the tables at the end of this release.

On a geographic basis, consolidated net revenues for the fourth quarter of 2010 were comprised of:

--  53 percent Americas, or $181 million;
--  25 percent Europe, Middle East and Africa, or $86 million; and
--  22 percent Asia Pacific, or $73 million.

On a geographic basis, consolidated net revenues for the fourth quarter of 2009 were comprised of:

--  53 percent Americas, or $143 million;
--  26 percent Europe, Middle East and Africa, or $70 million; and
--  21 percent Asia Pacific, or $55 million.

"The fourth quarter capped a transformative year for Polycom in which we successfully launched and executed an ambitious plan to seize the opportunities in UC and establish our presence as market leader and ecosystem partner of choice," said Andrew Miller, Polycom president and CEO. "These efforts yielded impressive results for 2010, including accelerating revenue growth, market gains, breakthrough innovations, new strategic partnerships and expanding margins. Importantly, our momentum continued in the fourth quarter, driven by back-to-back gains in network infrastructure sales and broad-based revenue growth in each of our geographic theatres and major product lines."

"As we turn to 2011, we believe Polycom is best positioned to deliver an intuitive UC experience at work, in the home, or while mobile. Through our Polycom Open Collaboration Network, we will continue to develop integrated UC solutions with leading platforms including Microsoft Lync, IBM Lotus Sametime, and HP Network Solutions. With the recent introduction of Polycom's Open Exchange Consortium and our partnerships with AT&T, Verizon, BT, China Unicom and many other leading service providers, we will deliver a cloud-based solution, for not just enterprise and government, but also penetrate the significant opportunity in the small-to-medium business and connected home arena as well. Finally, expect to see Polycom's UC solution present on many of the key mobile platforms as evidenced by our initial alliance with Samsung on its Galaxy Tab Android-based device."

"In summary, 2011 promises to be a year of significant revenue growth, expanding operating margins, and Polycom's delivery of what we refer to as UC Everywhere. With our customers demanding Polycom's UC solution at unprecedented levels, coupled with our strong and growing brand and channel, we believe we are best positioned to be the go-to provider of UC solutions. Looking forward, we plan to continue to deliver innovations that transform the way that individuals and organizations communicate and collaborate both professionally and socially," concluded Miller.

"We are pleased with another consecutive quarter of sharp revenue growth," said Michael Kourey, Polycom executive vice president, finance and administration, and CFO. "Driven by network infrastructure growth of 20 percent sequentially and 25 percent year-over-year and record demand for Polycom's entire solution, both gross and operating margins again expanded year-over-year. As a result of these strong operating results and effective working capital management, we generated fourth quarter positive operating cash flow of $42 million, exiting the fourth quarter with $536 million in cash and investments and no debt."

About Polycom

Polycom, Inc. (NASDAQ: PLCM) is a global leader in unified communications solutions with industry-leading telepresence, video, voice and infrastructure solutions built on open standards. Polycom powers smarter conversations, transforming lives and businesses worldwide. Please visit www.polycom.com for more information or connect with Polycom on Twitter, Facebook, and LinkedIn .

This release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 regarding future events, future demand for our products, and the future performance of the Company, including statements regarding our expectations for 2011, Polycom as being best positioned to deliver an intuitive UC experience and to be the go-to provider of UC solutions, the future development of integrated UC solutions with leading platforms, future cloud-based solutions and expansion into the small-to-medium business and home markets, future UC solutions on key mobile platforms, continued innovation, and significant revenue growth, expanding operating margins and the delivery of UCEverywhere(SM) by Polycom. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the fact that the Company's continuing strategic investment plan may not yield the intended results or may take longer than originally anticipated to achieve such results, the impact of competition on our product sales and for our customers and partners, the impact of increased competition due to consolidation in our industry or competition from companies that are larger or that have greater resources than we do, potential fluctuations in results and future growth rates, risks associated with general economic conditions and external market factors, the market acceptance of Polycom's products and changing market demands, including demands for differing technologies or product and services offerings, possible delays in the development, availability and shipment of new products, increasing costs and differing uses of capital, changes in key personnel that may cause disruption to the business, any disruptive impact to the Company that may result from the new executive hires, the impact of restructuring actions, and the impact of global conflicts that may adversely impact our business. Many of these risks and uncertainties are discussed in the Company's Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2010, and in other reports filed by Polycom with the SEC. Polycom disclaims any intent or obligations to update these forward-looking statements.

To supplement our consolidated financial statements presented on a GAAP basis, Polycom uses non-GAAP measures of operating results, net income and income per share, which are adjusted to exclude certain costs, expenses, gains and losses we believe appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our current period GAAP results are made with the intent of providing both management and investors a more complete understanding of Polycom's underlying operational results and trends and our marketplace performance. For example, the non-GAAP results are an indication of our baseline performance before gains, losses or other charges that are considered by management to be outside of our core operating results. In addition, these adjusted non-GAAP results are among the primary indicators management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or diluted net income per share prepared in accordance with generally accepted accounting principles in the United States.

Earnings Call Details

As has been noted on the Company's web site since Jan. 6, 2011, Polycom will hold a conference call today, Jan. 20, 2011, at 5 p.m. EST/2 p.m. PST to discuss its fourth quarter earnings. Andrew Miller, president and CEO, and Michael Kourey, chief financial officer, will host the conference call. You may participate by viewing the webcast at www.polycom.com/investors or, for callers in the US and Canada, by calling 800.769.7315; and for callers outside of the US and Canada, by calling 212.231.2900. The pass code for the call is "Polycom." A replay of the call will also be available at www.polycom.com or, for callers in the US and Canada, at 800.633.8284; and for callers outside of the US and Canada, at 402.977.9140. The access number for the replay is 21506809. A replay of the call will also be available on www.polycom.com for approximately 12 months.

Polycom reserves the right to modify future product plans at any time. Products and/or related specifications referenced in this press release are not guaranteed and will be delivered on a when and if available basis.

© 2011 Polycom, Inc. All rights reserved. POLYCOM®, the Polycom "Triangles" logo and the names and marks associated with Polycom's products are trademarks and/or service marks of Polycom, Inc. and are registered and/or common law marks in the United States and various other countries. All other trademarks are property of their respective owners.

                              POLYCOM, INC.
                      GAAP to Non-GAAP Reconciliation
                 (In thousands, except per share amounts)
                                (Unaudited)





                                            Three Months Ended
                                       -----------------------------
                                             December 31, 2010
                                       -----------------------------
                                         GAAP   Excluded    Non-GAAP
                                       -------- --------    --------

 Revenues:
    Product revenues                   $282,607 $      -    $282,607
    Service revenues                     57,024        -      57,024
                                       -------- --------    --------
       Total revenues                   339,631        -     339,631
                                       -------- --------    --------

 Cost of revenues:
    Cost of product revenues            109,856    4,092(a)  105,764
    Cost of service revenues             26,830      952(b)   25,878
                                       -------- --------    --------
       Total cost of revenues           136,686    5,044     131,642
                                       -------- --------    --------

 Gross profit                           202,945   (5,044)    207,989
                                       -------- --------    --------

 Operating expenses:
    Sales and marketing                 104,717    5,928(b)  98,789
    Research and development             40,568    2,479(b)  38,089
    General and administrative           19,034    3,918(c)  15,116
    Amortization of purchased
     intangibles                          1,380    1,380           -
    Restructuring costs                   1,565    1,565           -
    Litigation reserves and payments          -        -           -
                                       -------- --------    --------
       Total operating expenses         167,264   15,270     151,994
                                       -------- --------    --------

 Operating income                        35,681  (20,314)     55,995

 Other income (expense), net                159        -         159
                                       -------- --------    --------

 Income before provision for income
  taxes                                  35,840  (20,314)     56,154
 Provision for income taxes               2,714  (10,200)(e)  12,914
                                       -------- --------    --------
 Net income                            $ 33,126 $(10,114)   $ 43,240
                                       ======== ========    ========

 Basic net income per share            $   0.38 $  (0.12)   $   0.50
                                       ======== ========    ========

 Diluted net income per share          $   0.37 $  (0.12)   $   0.49
                                       ======== ========    ========

 Weighted average shares outstanding
  for basic net income per share         86,189               86,189
                                       ========             ========

 Weighted average shares outstanding
  for diluted net income per share       89,148               89,148
                                       ========             ========





                                               Twelve Months Ended
                                       ----------------------------------
                                                December 31, 2010
                                       ----------------------------------
                                          GAAP     Excluded     Non-GAAP
                                       ----------  --------    ----------

 Revenues:
    Product revenues                   $1,010,955  $      -    $1,010,955
    Service revenues                      207,534         -       207,534
                                       ----------  --------    ----------
       Total revenues                   1,218,489         -     1,218,489
                                       ----------  --------    ----------

 Cost of revenues:
    Cost of product revenues              401,319    16,402(a)    384,917
    Cost of service revenues              101,220     3,940(b)     97,280
                                       ----------  --------    ----------
       Total cost of revenues             502,539    20,342       482,197
                                       ----------  --------    ----------

 Gross profit                             715,950   (20,342)      736,292
                                       ----------  --------    ----------

 Operating expenses:
    Sales and marketing                   387,208    26,586(b)    360,622
    Research and development              148,991    10,266(b)    138,725
    General and administrative             74,661    16,931(c)     57,730
    Amortization of purchased
     intangibles                            5,647     5,647             -
    Restructuring costs                     8,139     8,139             -
    Litigation reserves and payments        1,235     1,235             -
                                       ----------  --------    ----------
       Total operating expenses           625,881    68,804       557,077
                                       ----------  --------    ----------

 Operating income                          90,069   (89,146)      179,215

 Other income (expense), net               (7,772)   (5,324)(d)    (2,448)
                                       ----------  --------    ----------

 Income before provision for income
  taxes                                    82,297   (94,470)      176,767
 Provision for income taxes                13,888   (30,311)(e)    44,199
                                       ----------  --------    ----------
 Net income                            $   68,409  $(64,159)   $  132,568
                                       ==========  ========    ==========

 Basic net income per share            $     0.80  $  (0.75)   $     1.55
                                       ==========  ========    ==========

 Diluted net income per share          $     0.78  $  (0.72)   $     1.50
                                       ==========  ========    ==========

 Weighted average shares outstanding
  for basic net income per share           85,331                  85,331
                                       ==========              ==========

 Weighted average shares outstanding
  for diluted net income per share         88,185                  88,185
                                       ==========              ==========


(a) For the three months ended December 31, 2010, the excluded amount
    includes $3,351 related to the amortization of purchased intangibles 
    for core and existing technologies, $620 for stock-based compensation
    expense recorded during the period and $121 related to the effect of
    stock-based compensation on warranty expense rates. For the twelve
    months ended December 31, 2010, the excluded amount includes $13,347
    related to the amortization of purchased intangibles for core and
    existing technologies, $2,588 for stock-based compensation expense
    recorded during the period and $467 related to the effect of
    stock-based compensation on warranty expense rates.
(b) Excluded amount represents stock-based compensation expense recorded
    during the period.
(c) For the three months ended December 31, 2010, the excluded amount
    includes $3,789 for stock-based compensation expense recorded during
    the period and $129 for costs associated with the CEO transition in
    May 2010. For the twelve months ended December 31, 2010, the excluded
    amount includes $12,797 for stock-based compensation expense recorded
    during the period and $4,134 for severance, legal and other costs
    associated with the CEO transition in May 2010.
(d) For the twelve months ended December 31, 2010, the excluded amount
    represents the loss recognized during the period on preferred
    securities considered to be other than temporarily impaired, net of
    any subsequent realized gains.
(e) For the three and twelve months ended December 31, 2010, the excluded
    amount represents the tax impact on expenses which are excluded in
    items (a)-(d) above, as well as $8,008 related to a one-time provision
    true-up during the quarter.


                              POLYCOM, INC.
                      GAAP to Non-GAAP Reconciliation
                 (In thousands, except per share amounts)
                                (Unaudited)





                                                 Three Months Ended
                                           ------------------------------
                                                  December 31, 2009
                                           ------------------------------
                                             GAAP    Excluded    Non-GAAP
                                           --------  --------    --------


 Revenues:
    Product revenues                       $220,840  $      -    $220,840
    Service revenues                         47,024         -      47,024
                                           --------  --------    --------
       Total revenues                       267,864         -     267,864
                                           --------  --------    --------

 Cost of revenues:
    Cost of product revenues                 92,918     3,972(a)   88,946
    Cost of service revenues                 21,743       720(b)   21,023
                                           --------  --------    --------
       Total cost of revenues               114,661     4,692     109,969
                                           --------  --------    --------

 Gross profit                               153,203    (4,692)    157,895
                                           --------  --------    --------

 Operating expenses:
    Sales and marketing                      81,707     3,472(b)   78,235
    Research and development                 32,043     2,589(c)   29,454
    General and administrative               14,138     1,724(b)   12,414
    Amortization of purchased intangibles     1,456     1,456           -
    Restructuring costs                       4,459     4,459           -
    Litigation reserves and payments              -         -           -
                                           --------  --------    --------
       Total operating expenses             133,803    13,700     120,103
                                           --------  --------    --------

 Operating income                            19,400   (18,392)     37,792

 Other expense, net                             (92)        -         (92)
                                           --------  --------    --------


 Income before provision for income taxes    19,308   (18,392)     37,700
 Provision for income taxes                   6,485    (2,797)      9,282
                                           --------  --------    --------
 Net income                                $ 12,823  $(15,595)   $ 28,418
                                           ========  ========    ========

                                           --------  --------    --------
 Basic net income per share                $   0.15  $  (0.19)   $   0.34
                                           ========  ========    ========

                                           --------  --------    --------
 Diluted net income per share              $   0.15  $  (0.18)   $   0.33
                                           ========  ========    ========

 Weighted average shares outstanding for
  basic net income per share                 84,432                84,432
                                           ========              ========

 Weighted average shares outstanding for
  diluted net income per share               86,732                86,732
                                           ========              ========





                                                 Twelve Months Ended
                                           ------------------------------
                                                  December 31, 2009
                                           ------------------------------
                                             GAAP    Excluded    Non-GAAP
                                           --------  --------    --------


 Revenues:
    Product revenues                       $791,508  $      -    $791,508
    Service revenues                        175,476         -     175,476
                                           --------  --------    --------
       Total revenues                       966,984         -     966,984
                                           --------  --------    --------

 Cost of revenues:
    Cost of product revenues                335,696    16,807(a)  318,889
    Cost of service revenues                 82,312     2,830(b)   79,482
                                           --------  --------    --------
       Total cost of revenues               418,008    19,637     398,371
                                           --------  --------    --------

 Gross profit                               548,976   (19,637)    568,613
                                           --------  --------    --------

 Operating expenses:
    Sales and marketing                     285,312    10,525(b)  274,787
    Research and development                117,575     8,019(c)  109,556
    General and administrative               54,011     7,466(b)   46,545
    Amortization of purchased intangibles     5,800     5,800           -
    Restructuring costs                      15,935    15,935           -
    Litigation reserves and payments            700       700           -
                                           --------  --------    --------
       Total operating expenses             479,333    48,445     430,888
                                           --------  --------    --------

 Operating income                            69,643   (68,082)    137,725

 Other expense, net                          (2,087)        -      (2,087)
                                           --------  --------    --------


 Income before provision for income taxes    67,556   (68,082)    135,638
 Provision for income taxes                  17,677   (16,043)     33,720
                                           --------  --------    --------
 Net income                                $ 49,879  $(52,039)   $101,918
                                           ========  ========    ========

                                           --------  --------    --------
 Basic net income per share                $   0.59  $  (0.62)   $   1.21
                                           ========  ========    ========

                                           --------  --------    --------
 Diluted net income per share              $   0.58  $  (0.61)   $   1.19
                                           ========  ========    ========

 Weighted average shares outstanding for
  basic net income per share                 84,000                84,000
                                           ========              ========

 Weighted average shares outstanding for
  diluted net income per share               85,559                85,559
                                           ========              ========


(a) For the three months ended December 31, 2009, the excluded amount
    includes $3,404 related to the amortization of purchased intangibles
    for core and existing technologies, $449 for stock-based compensation
    expense recorded during the period and $119 related to the effect of
    stock-based compensation on warranty expense rates.  For the twelve
    months ended December 31, 2009, the excluded amount includes $13,472
    related to the amortization of purchased intangibles for core and
    existing technologies, $1,050 related to past license fees claims,
    $1,886 for stock-based compensation expense recorded during the period
    and $399 related to the effect of stock-based compensation on warranty
    expense rates.
(b) Excluded amount represents stock-based compensation expense recorded
    during the period.
(c) For the three months endeded December 31, 2009, the excluded amount
    includes $2,220 related to stock-based compensation expense recorded
    during the period and $369 related to severance, legal and other
    benefits due under the Severance Agreement and Release between the
    Company and Sunil K. Bhalla dated November 25, 2009.  For the twelve
    months ended December 31, 2009, the excluded amount includes $7,650
    related to stock based compensation expense recorded during the period
    and $369 related to severance, legal and other benefits due under the
    Severance Agreement and Release between the Company and Sunil K. Bhalla
    dated November 25, 2009.



                              POLYCOM, INC.
                  Condensed Consolidated Balance Sheets
                              (In thousands)
                                (Unaudited)





                                                December 31,  December 31,
                                                    2010          2009
                                                ------------- -------------

 ASSETS
 Current assets
    Cash and cash equivalents                   $     324,188 $     331,098
    Investments                                       170,154       123,686
    Trade receivables, net                            154,507       132,813
    Inventories                                       113,994        76,863
    Deferred taxes                                     32,357        23,824
    Prepaid expenses and other current assets          41,884        24,299
                                                ------------- -------------
       Total current assets                           837,084       712,583

 Property and equipment, net                          110,321        81,252
 Long-term investments                                 41,316        12,687
 Goodwill                                             493,105       495,299
 Purchased intangibles, net                            26,580        46,255
 Deferred taxes                                        18,388        23,943
 Other assets                                          20,611        13,882
                                                ------------- -------------
       Total assets                             $   1,547,405 $   1,385,901
                                                ============= =============



 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities
    Accounts payable                            $      90,890 $      87,233
    Accrued payroll and related liabilities            35,222        23,707
    Taxes payable                                           -           617
    Deferred revenue                                  104,919        79,504
    Other accrued liabilities                          54,651        52,360
                                                ------------- -------------
       Total current liabilities                      285,682       243,421

 Non-current liabilities
 Deferred revenue                                      55,292        46,787
 Taxes payable                                         16,690        27,111
 Deferred taxes                                         2,057         2,702
 Other long-term liabilities                           12,714        12,027
                                                ------------- -------------
       Total liabilities                              372,435       332,048

 Stockholders' equity                               1,174,970     1,053,853
                                                ------------- -------------
       Total liabilities and stockholders'
        equity                                  $   1,547,405 $   1,385,901
                                                ============= =============



                              POLYCOM, INC.
              Condensed Consolidated Statements of Operations
                 (In thousands, except per share amounts)
                                (Unaudited)





                              Three Months Ended      Twelve Months Ended
                            ----------------------- ----------------------
                             December    December    December    December
                                31,         31,         31,         31,
                               2010        2009        2010        2009
                            ----------- ----------  ----------  ----------


 Revenues:
    Product revenues        $   282,607 $  220,840  $1,010,955  $  791,508
    Service revenues             57,024     47,024     207,534     175,476
                            ----------- ----------  ----------  ----------
       Total revenues           339,631    267,864   1,218,489     966,984
                            ----------- ----------  ----------  ----------

 Cost of revenues:
    Cost of product
     revenues                   109,856     92,918     401,319     335,696
    Cost of service
     revenues                    26,830     21,743     101,220      82,312
                            ----------- ----------  ----------  ----------
       Total cost of
        revenues                136,686    114,661     502,539     418,008
                            ----------- ----------  ----------  ----------

 Gross profit                   202,945    153,203     715,950     548,976
                            ----------- ----------  ----------  ----------

 Operating expenses:
    Sales and marketing         104,717     81,707     387,208     285,312
    Research and
     development                 40,568     32,043     148,991     117,575
    General and
     administrative              19,034     14,138      74,661      54,011
    Amortization of
     purchased intangibles        1,380      1,456       5,647       5,800
    Restructuring costs           1,565      4,459       8,139      15,935
    Litigation reserves and
     payments                         -          -       1,235         700
                            ----------- ----------  ----------  ----------
       Total operating
        expenses                167,264    133,803     625,881     479,333
                            ----------- ----------  ----------  ----------

 Operating income                35,681     19,400      90,069      69,643

 Other income (expense),
  net                               159        (92)     (7,772)     (2,087)
                            ----------- ----------  ----------  ----------

 Income before provision
  for income taxes               35,840     19,308      82,297      67,556
 Provision for income taxes       2,714      6,485      13,888      17,677
                            ----------- ----------  ----------  ----------
 Net income                 $    33,126 $   12,823  $   68,409  $   49,879
                            =========== ==========  ==========  ==========

                            ----------- ----------  ----------  ----------
 Basic net income per share $      0.38 $     0.15  $     0.80  $     0.59
                            =========== ==========  ==========  ==========

                            ----------- ----------  ----------  ----------
 Diluted net income per
  share                     $      0.37 $     0.15  $     0.78  $     0.58
                            =========== ==========  ==========  ==========

 Weighted average shares
  outstanding for basic
  net income per share           86,189     84,432      85,331      84,000
                            =========== ==========  ==========  ==========

 Weighted average shares
  outstanding for diluted
  net income per share           89,148     86,732      88,185      85,559
                            =========== ==========  ==========  ==========



              Condensed Consolidated Statements of Cash Flows
                              (In thousands)
                                (Unaudited)

                                                          Twelve Months
                                                              Ended
                                                        ------------------
                                                        December  December
                                                           31,       31,
                                                          2010      2009
                                                        --------  --------


   Cash flows from operating activities:
   Net income                                           $ 68,409  $ 49,879
   Adjustments to reconcile net income
    to net cash provided by operating activities:
      Depreciation and amortization                       41,440    34,075
      Amortization of purchased intangibles               18,994    19,268
      Provision for doubtful accounts                          -       247
      Provision for excess and obsolete inventories        5,712     3,830
      Non-cash stock-based compensation                   56,177    30,358
      Excess tax benefits from stock-based compensation  (11,618)   (3,082)
      Write down of investments other than temporarily
       impaired                                            6,530         -
      Loss on disposals of property and equipment            143       706

      Changes in assets and liabilities:
          Trade receivables                              (21,694)   (6,563)
          Inventories                                    (42,843)    9,037
          Deferred taxes                                  (3,537)    2,223
          Prepaid expenses and other assets              (29,537)    8,474
          Accounts payable                                 3,657    29,502
          Taxes payable                                    2,770     2,222
          Other accrued liabilities                       48,797       588
                                                        --------  --------
   Net cash provided by operating activities             143,400   180,764
                                                        --------  --------

   Cash flows from investing activities:
       Purchase of property and equipment                (69,331)  (37,766)
       Purchases of investments                         (374,946) (538,440)
       Proceeds from sale of investments                 102,079   332,518
       Proceeds from maturity of investments             199,622   224,213
                                                        --------  --------
   Net cash used in investing activities                (142,576)  (19,475)
                                                        --------  --------

   Cash flows from financing activities:
       Proceeds from issuance of common stock
         under employee option and stock purchase plans   64,854    36,497
       Repurchase of common stock                        (84,206)  (35,439)
       Excess tax benefits from stock-based
        compensation                                      11,618     3,082
                                                        --------  --------
   Net cash provided by (used in) financing activities    (7,734)    4,140
                                                        --------  --------

   Net increase (decrease) in cash and cash equivalents   (6,910)  165,429
   Cash and cash equivalents, beginning of period        331,098   165,669
                                                        --------  --------
   Cash and cash equivalents, end of period             $324,188  $331,098
                                                        ========  ========

Contact Information

  • Investor Contact:
    Investor Relations
    Polycom, Inc.
    925-924-5907
    Email Contact

    Press Contact:
    Caroline Japic
    Polycom, Inc.
    408-474-2265
    Email Contact