Delaware | 000-25826 | 77-0201147 |
(State or other jurisdiction of incorporation or organization) | Commission File Number | (I.R.S. Employer Identification Number) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition. |
Item 9.01. | Financial Statements and Exhibits. |
(d) | Exhibits. |
Exhibit Number | Description | ||
99.1 | Press release of Harmonic Inc., issued on October 28, 2014 |
Date: October 28, 2014 | HARMONIC INC. | |||||
By: | /s/ Carolyn V. Aver | |||||
Carolyn V. Aver | ||||||
Chief Financial Officer |
Exhibit Number | Description | ||
99.1 | Press release of Harmonic Inc., issued on October 28, 2014. |
Carolyn V. Aver | Blair King |
Chief Financial Officer | Investor Relations |
Harmonic Inc. | Harmonic Inc. |
+1.408.542.2500 | +1.408.490.6172 |
September 26, 2014 | December 31, 2013 | ||||||
(In thousands, except par value amounts) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 42,028 | $ | 90,329 | |||
Short-term investments | 55,151 | 80,252 | |||||
Accounts receivable, net | 75,640 | 75,052 | |||||
Inventories | 32,512 | 36,926 | |||||
Deferred income taxes | 2,631 | 24,650 | |||||
Prepaid expenses and other current assets | 26,852 | 21,521 | |||||
Total current assets | 234,814 | 328,730 | |||||
Property and equipment, net | 30,814 | 34,945 | |||||
Goodwill, intangibles and other assets | 224,094 | 242,409 | |||||
Total assets | $ | 489,722 | $ | 606,084 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 21,377 | $ | 22,380 | |||
Income taxes payable | 307 | 331 | |||||
Deferred revenue | 35,095 | 27,020 | |||||
Accrued liabilities | 31,043 | 35,349 | |||||
Total current liabilities | 87,822 | 85,080 | |||||
Income taxes payable, long-term | 4,199 | 15,165 | |||||
Other non-current liabilities | 17,554 | 11,673 | |||||
Total liabilities | 109,575 | 111,918 | |||||
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; 88,408 and 99,413 shares issued and outstanding at September 26, 2014 and December 31, 2013, respectively | 88 | 99 | |||||
Additional paid-in capital | 2,264,422 | 2,336,275 | |||||
Accumulated deficit | (1,883,393 | ) | (1,841,999 | ) | |||
Accumulated other comprehensive loss | (970 | ) | (209 | ) | |||
Total stockholders' equity | 380,147 | 494,166 | |||||
Total liabilities and stockholders' equity | $ | 489,722 | $ | 606,084 |
Three months ended | Nine months ended | ||||||||||||||
September 26, 2014 | September 27, 2013 | September 26, 2014 | September 27, 2013 | ||||||||||||
(in thousands, except per share amounts) | |||||||||||||||
Net revenue | $ | 108,061 | $ | 122,918 | $ | 325,682 | $ | 341,718 | |||||||
Cost of revenue | 54,633 | 66,126 | 170,125 | 180,869 | |||||||||||
Gross profit | 53,428 | 56,792 | 155,557 | 160,849 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 22,803 | 24,560 | 70,176 | 75,631 | |||||||||||
Selling, general and administrative | 32,114 | 32,527 | 98,640 | 100,220 | |||||||||||
Amortization of intangibles | 1,661 | 2,001 | 5,329 | 6,099 | |||||||||||
Restructuring and related charges | 388 | 259 | 821 | 925 | |||||||||||
Total operating expenses | 56,966 | 59,347 | 174,966 | 182,875 | |||||||||||
Loss from operations | (3,538 | ) | (2,555 | ) | (19,409 | ) | (22,026 | ) | |||||||
Interest and other income (expense), net | (214 | ) | 277 | (185 | ) | 71 | |||||||||
Loss from continuing operations before income taxes | (3,752 | ) | (2,278 | ) | (19,594 | ) | (21,955 | ) | |||||||
Provision for (benefit from) income taxes | (4,830 | ) | (38,953 | ) | 21,800 | (45,723 | ) | ||||||||
Income (loss) from continuing operations | 1,078 | 36,675 | (41,394 | ) | 23,768 | ||||||||||
Income from discontinued operations, net of taxes (including gain on disposal of $14,813, net of taxes, for the nine months ended September 27, 2013) | — | 91 | — | 15,619 | |||||||||||
Net income (loss) | $ | 1,078 | $ | 36,766 | $ | (41,394 | ) | $ | 39,387 | ||||||
Basic net income (loss) per share from: | |||||||||||||||
Continuing operations | $ | 0.01 | $ | 0.36 | $ | (0.44 | ) | $ | 0.22 | ||||||
Discontinued operations | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.14 | |||||||
Net income (loss) | $ | 0.01 | $ | 0.36 | $ | (0.44 | ) | $ | 0.36 | ||||||
Diluted net income (loss) per share from: | |||||||||||||||
Continuing operations | $ | 0.01 | $ | 0.36 | $ | (0.44 | ) | $ | 0.22 | ||||||
Discontinued operations | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.14 | |||||||
Net income (loss) | $ | 0.01 | $ | 0.36 | $ | (0.44 | ) | $ | 0.36 | ||||||
Shares used in per share calculation: | |||||||||||||||
Basic | 90,618 | 101,144 | 94,113 | 108,695 | |||||||||||
Diluted | 91,800 | 102,723 | 94,113 | 109,879 |
Three months ended | Nine months ended | ||||||||||||||||||||||||||
September 26, 2014 | September 27, 2013 | September 26, 2014 | September 27, 2013 | ||||||||||||||||||||||||
(In thousands, except percentages) | |||||||||||||||||||||||||||
Product | |||||||||||||||||||||||||||
Video Products(1) | $ | 60,668 | 56 | % | $ | 78,023 | 63 | % | $ | 181,882 | 56 | % | $ | 226,905 | 66 | % | |||||||||||
Cable Edge | 23,915 | 22 | % | 20,690 | 17 | % | 77,488 | 24 | % | 51,060 | 15 | % | |||||||||||||||
Services and Support | 23,478 | 22 | % | 24,205 | 20 | % | 66,312 | 20 | % | 63,753 | 19 | % | |||||||||||||||
Total | $ | 108,061 | 100 | % | $ | 122,918 | 100 | % | $ | 325,682 | 100 | % | $ | 341,718 | 100 | % | |||||||||||
Geography | |||||||||||||||||||||||||||
Americas(2) | $ | 60,007 | 56 | % | $ | 61,674 | 50 | % | $ | 184,959 | 57 | % | $ | 179,045 | 52 | % | |||||||||||
EMEA | 27,430 | 25 | % | 37,736 | 31 | % | 83,136 | 25 | % | 105,069 | 31 | % | |||||||||||||||
APAC | 20,624 | 19 | % | 23,508 | 19 | % | 57,587 | 18 | % | 57,604 | 17 | % | |||||||||||||||
Total | $ | 108,061 | 100 | % | $ | 122,918 | 100 | % | $ | 325,682 | 100 | % | $ | 341,718 | 100 | % | |||||||||||
Market | |||||||||||||||||||||||||||
Service Provider(3) | $ | 67,497 | 62 | % | $ | 72,532 | 59 | % | $ | 214,055 | 66 | % | $ | 205,577 | 60 | % | |||||||||||
Broadcast and Media | 40,564 | 38 | % | 50,386 | 41 | % | 111,627 | 34 | % | 136,141 | 40 | % | |||||||||||||||
Total | $ | 108,061 | 100 | % | $ | 122,918 | 100 | % | $ | 325,682 | 100 | % | $ | 341,718 | 100 | % |
Nine months ended | |||||||
September 26, 2014 | September 27, 2013 | ||||||
(In thousands) | |||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | (41,394 | ) | $ | 39,387 | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Amortization of intangibles | 18,378 | 20,569 | |||||
Depreciation | 12,641 | 12,365 | |||||
Stock-based compensation | 12,720 | 11,953 | |||||
Gain on sale of discontinued operations, net of tax | — | (14,813 | ) | ||||
Loss on impairment of fixed assets | — | 149 | |||||
Deferred income taxes | 31,782 | (10,647 | ) | ||||
Provision for excess and obsolete inventories | 2,013 | 2,813 | |||||
Allowance for doubtful accounts, returns and discounts | (116 | ) | 1,161 | ||||
Excess tax benefits from stock-based compensation | (194 | ) | — | ||||
Other non-cash adjustments, net | 1,108 | 1,220 | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | (472 | ) | (310 | ) | |||
Inventories | 2,401 | 10,509 | |||||
Prepaid expenses and other assets | (5,321 | ) | 8,522 | ||||
Accounts payable | (786 | ) | (5,418 | ) | |||
Deferred revenue | 7,770 | 5,127 | |||||
Income taxes payable | (8,292 | ) | (39,209 | ) | |||
Accrued and other liabilities | (4,717 | ) | (8,244 | ) | |||
Net cash provided by operating activities | 27,521 | 35,134 | |||||
Cash flows from investing activities: | |||||||
Purchases of investments | (26,599 | ) | (54,773 | ) | |||
Proceeds from sales and maturities of investments | 50,644 | 82,187 | |||||
Purchases of property and equipment | (8,859 | ) | (11,249 | ) | |||
Purchases of long-term investments | (5,867 | ) | — | ||||
Proceeds from sale of discontinued operations, net of selling costs | — | 43,527 | |||||
Net cash provided by investing activities | 9,319 | 59,692 | |||||
Cash flows from financing activities: | |||||||
Payments for repurchase of common stock | (86,407 | ) | (103,496 | ) | |||
Net proceeds from common stock issued to employees | 1,241 | 5,355 | |||||
Excess tax benefits from stock-based compensation | 194 | — | |||||
Net cash used in financing activities | (84,972 | ) | (98,141 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (169 | ) | (25 | ) | |||
Net decrease in cash and cash equivalents | (48,301 | ) | (3,340 | ) | |||
Cash and cash equivalents at beginning of period | 90,329 | 96,670 | |||||
Cash and cash equivalents at end of period | $ | 42,028 | $ | 93,330 |
Three months ended | ||||||||||||
September 26, 2014 | ||||||||||||
Gross Profit | Total Operating Expense | Income (Loss) from Operations | Net Income | |||||||||
GAAP from continuing operations | $ | 53,428 | $ | 56,966 | $ | (3,538 | ) | $ | 1,078 | |||
Stock-based compensation in cost of revenue | 612 | — | 612 | 612 | ||||||||
Stock-based compensation in research and development | — | (1,219 | ) | 1,219 | 1,219 | |||||||
Stock-based compensation in selling, general and administrative | — | (2,521 | ) | 2,521 | 2,521 | |||||||
Amortization of intangibles | 3,851 | (1,661 | ) | 5,512 | 5,512 | |||||||
Restructuring and related charges | 15 | (388 | ) | 403 | 403 | |||||||
Discrete tax items and tax effect of non-GAAP adjustments | — | — | — | (6,198 | ) | |||||||
Non-GAAP from continuing operations | $ | 57,906 | $ | 51,177 | $ | 6,729 | $ | 5,147 | ||||
As a % of revenue (GAAP) | 49.4 | % | 52.7 | % | (3.3 | )% | 1.0 | % | ||||
As a % of revenue (Non-GAAP) | 53.6 | % | 47.4 | % | 6.2 | % | 4.8 | % | ||||
Diluted net income per share from continuing operations: | ||||||||||||
Diluted net income per share from continuing operations-GAAP | $ | 0.01 | ||||||||||
Diluted net income per share from continuing operations-Non-GAAP | $ | 0.06 | ||||||||||
Shares used to compute diluted net income per share from continuing operations: | ||||||||||||
GAAP | 91,800 | |||||||||||
Non-GAAP | 91,800 | |||||||||||
Three months ended | ||||||||||||
June 27, 2014 | ||||||||||||
Gross Profit | Total Operating Expense | Income (Loss) from Operations | Net Income (Loss) | |||||||||
GAAP from continuing operations | $ | 49,817 | $ | 58,466 | $ | (8,649 | ) | $ | (37,062 | ) | ||
Stock-based compensation in cost of revenue | 623 | — | 623 | 623 | ||||||||
Stock-based compensation in research and development | — | (1,269 | ) | 1,269 | 1,269 | |||||||
Stock-based compensation in selling, general and administrative | — | (2,669 | ) | 2,669 | 2,669 | |||||||
Amortization of intangibles | 4,482 | (1,718 | ) | 6,200 | 6,200 | |||||||
Restructuring and related charges | — | (284 | ) | 284 | 284 | |||||||
Discrete tax items and tax effect of non-GAAP adjustments | — | — | — | 27,863 | ||||||||
Non-GAAP from continuing operations | $ | 54,922 | $ | 52,526 | $ | 2,396 | $ | 1,846 | ||||
As a % of revenue (GAAP) | 45.5 | % | 53.4 | % | (7.9 | )% | (33.8 | )% | ||||
As a % of revenue (Non-GAAP) | 50.1 | % | 47.9 | % | 2.2 | % | 1.7 | % | ||||
Diluted net income (loss) per share from continuing operations: | ||||||||||||
Diluted net loss per share from continuing operations-GAAP | $ | (0.39 | ) | |||||||||
Diluted net income per share from continuing operations-Non-GAAP | $ | 0.02 | ||||||||||
Shares used to compute diluted net income (loss) per share from continuing operations: | ||||||||||||
GAAP | 93,966 | |||||||||||
Non-GAAP | 95,294 | |||||||||||
Three months ended | ||||||||||||
September 27, 2013 | ||||||||||||
Gross Profit | Total Operating Expense | Income (Loss) from Operations | Net Income | |||||||||
GAAP from continuing operations | $ | 56,792 | $ | 59,347 | $ | (2,555 | ) | $ | 36,675 | |||
Stock-based compensation in cost of revenue | 605 | — | 605 | 605 | ||||||||
Stock-based compensation in research and development | — | (1,076 | ) | 1,076 | 1,076 | |||||||
Stock-based compensation in selling, general and administrative | — | (2,264 | ) | 2,264 | 2,264 | |||||||
Amortization of intangibles | 4,763 | (2,001 | ) | 6,764 | 6,764 | |||||||
Restructuring and related charges | 324 | (259 | ) | 583 | 583 | |||||||
Discrete tax items and tax effect of non-GAAP adjustments | — | — | — | (40,846 | ) | |||||||
Non-GAAP from continuing operations | $ | 62,484 | $ | 53,747 | $ | 8,737 | $ | 7,121 | ||||
As a % of revenue (GAAP) | 46.2 | % | 48.3 | % | (2.1 | )% | 29.8 | % | ||||
As a % of revenue (Non-GAAP) | 50.8 | % | 43.7 | % | 7.1 | % | 5.8 | % | ||||
Diluted net income per share from continuing operations: | ||||||||||||
Diluted net income per share from continuing operations-GAAP | $ | 0.36 | ||||||||||
Diluted net income per share from continuing operations-Non-GAAP | $ | 0.07 | ||||||||||
Shares used to compute diluted net income per share from continuing operations: | ||||||||||||
GAAP | 102,723 | |||||||||||
Non-GAAP | 102,723 |
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