HLIT
$5.25
Harmonic
$.10
1.94%
Earnings Details
1st Quarter March 2017
Monday, May 01, 2017 4:03:00 PM
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Summary

Harmonic Guides Below Estimates

Harmonic (HLIT) reported a 1st Quarter March 2017 loss of $0.18 per share on revenue of $82.9 million. The consensus estimate was a loss of $0.10 per share on revenue of $93.4 million. Revenue grew 1.4% on a year-over-year basis.

The company said it expects second quarter non-GAAP results to range from a loss of $0.04 per share to breakeven on revenue of $95.0 million to $103.0 million. The current consensus estimate is earnings of $0.02 per share on revenue of $103.2 million for the quarter ending June 30, 2017. The company said it expects 2017 earnings of $0.02 to $0.16 per share on revenue of $400.0 million to $420.0 million. The current consensus earnings estimate is $0.21 per share on revenue of $437.3 million for the year ending December 31, 2017.

Harmonic Inc designs, manufactures and sells video products and system solutions that enable service providers to efficiently deliver the next generation of broadcast and on-demand services.

Results
Reported Earnings
($0.18)
Earnings Whisper
-
Consensus Estimate
($0.10)
Reported Revenue
$82.9 Mil
Revenue Estimate
$93.4 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Harmonic Announces First Quarter 2017 Results

Harmonic Inc. (HLIT), the worldwide leader in video delivery infrastructure, announced today its unaudited results for the first quarter of 2017.

https://mma.prnewswire.com/media/455698/Harmonic_Logo.jpg

GAAP net revenue for the first quarter of 2017 was $82.9 million, compared with $113.1 million for the fourth quarter of 2016 and $81.8 million for the first quarter of 2016.

Non-GAAP net revenue for the first quarter of 2017 was $83.5 million, compared with $113.8 million for the fourth quarter of 2016 and $82.5 million for the first quarter of 2016.

Bookings for the first quarter of 2017 were $82.1 million, compared with $116.9 million for the fourth quarter of 2016 and $109.6 million for the first quarter of 2016.

The GAAP net loss for the first quarter of 2017 was $(24.0) million, or $(0.30) per diluted share, compared with a GAAP net loss for the fourth quarter of 2016 of $(10.4) million, or $(0.13) per diluted share, and a GAAP net loss of $(25.2) million, or $(0.33) per diluted share, for the first quarter of 2016.

The non-GAAP net loss for the first quarter of 2017 was $(11.2) million, or $(0.14) per diluted share, compared with non-GAAP net income for the fourth quarter of 2016 of $6.7 million, or $0.08 per diluted share, and a non-GAAP net loss of $(8.2) million, or $(0.11) per diluted share, for the first quarter of 2016. See "Use of Non-GAAP Financial Measures" and "GAAP to Non-GAAP Reconciliations" below.

Total cash, cash equivalents and short-term investments were $55.3 million at the end of the first quarter of 2017, down $7.3 million from $62.6 million at the end of the prior quarter.

"Our first quarter results were impacted by softer than expected service provider spending in the final month of the quarter," said Patrick Harshman, Harmonic’s President and Chief Executive Officer. "Looking ahead, our opportunity pipeline gives us confidence that our Video business segment will rebound and deliver on our targeted year-over-year growth. In our Cable Edge segment, first quarter CableOS trials and deployments were executed as planned and we continue to anticipate volume purchases in the second half of the year."

Business Outlook

Second Quarter 2017 GAAP Financial Guidance

For the second quarter of 2017, Harmonic anticipates:

Net revenue to be $94.5 million to $102.5 million, which includes Video revenue of $85.9 million to $90.9 million and Cable Edge revenue of $8.6 million to $11.6 million

Gross margin to be 49.5% to 50.5% which includes Video gross margin of 52.0% to 53.0% and Cable Edge gross margin of 28.5% to 30.5%

-- Operating expense to be $59.6 million to $60.6 million

-- Operating loss to be $(12.8) million to $(8.8) million

-- GAAP tax expense to be approximately $1.0 million

-- EPS to be $(0.20) to $(0.16)

Share count for EPS calculation to be approximately 81 million shares of Harmonic common stock

-- Cash and short-term investments at quarter-end to be $40 million to $45 million

Second Quarter 2017 Non-GAAP Financial Guidance

For the second quarter of 2017, Harmonic anticipates:

Net revenue to be $95 million to $103 million, which includes Video revenue of $86 million to $91 million and Cable Edge revenue of $9 million to $12 million

Gross margin to be 52.5% to 53.5% which includes Video gross margin of 55.0% to 56.0% and Cable Edge gross margin of 33.0% to 34.0%

-- Operating expense to be $52.5 million to $53.5 million

-- Operating loss of $(2.5) million ranging to an operating profit of $1.5 million

-- EPS of ($0.04) ranging to break-even

-- Tax rate to be approximately 15%

Share count for EPS calculation to be approximately 81 million shares of Harmonic common stock

-- Cash and short-term investments at quarter-end to be $40 million to $45 million

2017 GAAP Financial Guidance

For 2017, Harmonic anticipates:

Net revenue to be $398.5 million to $418.5 million, which includes Video revenue of $349.7 million to $359.7 million and Cable Edge revenue of $48.8 million to $58.8 million

Gross margin to be 50.5% to 52.0% which includes Video gross margin of 53.0% to 54.0% and Cable Edge gross margin of 36.0% to 37.0%

-- Operating expense to be $227.7 million to $228.7 million

-- Operating loss to be $(25.6) million to $(11.6) million

-- GAAP tax expense to be approximately $3.0 million

-- EPS to be $(0.48) to $(0.33)

Share count for EPS calculation to be approximately 82 million shares of Harmonic common stock

-- Cash and short-term investments at quarter-end to be $50 million to $55 million

2017 Non-GAAP Financial Guidance

For 2017, Harmonic anticipates:

Net revenue to be $400 million to $420 million, which includes Video revenue of $350 million to $360 million and Cable Edge revenue of $50 million to $60 million

Gross margin to be 53.5% to 54.5% which includes Video gross margin of 56.0% to 57.0% and Cable Edge gross margin of 38.0% to 39.0%

-- Operating expense to be $206 million to $207 million

-- Operating profit to be $8 million to $22 million

-- EPS to be $0.02 to $0.16

-- Tax rate to be approximately 15%

Share count for EPS calculation to be approximately 82.0 million shares of Harmonic common stock

-- Cash and short-term investments at year-end to be $50.0 million to $55.0 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 Monday, May 1, 2017. A listen-only broadcast of the conference call can be accessed either from the Company’s website at www.harmonicinc.com or by calling +1.574.990.1032 or +1.800.240.9147 (passcode 7203137). The replay will be available after 4:30 p.m. Pacific at the same website address or by calling +1.404.537.3406 or +1.855.859.2056 (passcode 7203137).

About Harmonic Inc.

Harmonic (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: GAAP net revenue, GAAP gross margins, GAAP operating expenses, GAAP operating loss, GAAP tax expense, GAAP EPS, non-GAAP revenue, non-GAAP gross margins, non-GAAP operating expenses, non-GAAP operating income (loss), non-GAAP tax rate and non-GAAP EPS for the second quarter of 2017 and for the fiscal year ended December 31, 2017, share count, as well as cash and short-term investments at the end of the second quarter of 2017. 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: 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 CableOS(TM) and VOS(TM) 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, 2016, 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, total non-operating income (expense), tax rate, net income (loss), 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 warrant amortization, 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.

Harmonic Inc.
Preliminary Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except per share data)
March 31, 2017
December 31, 2016
ASSETS
Current assets:
Cash and cash equivalents
$
55,292
$
55,635
Short-term investments
--
6,923
Accounts receivable, net
69,771
86,765
Inventories
39,920
41,193
Prepaid expenses and other current assets
27,659
26,319
Total current assets
192,642
216,835
Property and equipment, net
31,733
32,164
Goodwill
237,911
237,279
Intangibles, net
27,208
29,231
Other long-term assets
41,496
38,560
Total assets
$
530,990
$
554,069
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Other debts and capital lease obligations, current
$
6,802
$
7,275
Accounts payable
22,340
28,892
Income taxes payable
1,153
1,166
Deferred revenue
59,363
52,414
Accrued and other current liabilities
52,062
55,150
Total current liabilities
141,720
144,897
Convertible debt, long-term
104,575
103,259
Other debts and capital lease obligations, long-term
13,767
13,915
Income taxes payable, long-term
2,961
2,926
Other non-current liabilities
16,559
18,431
Total liabilities
279,582
283,428
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; 80,503 and 78,456 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively 81
78
Additional paid-in capital
2,257,093
2,254,055
Accumulated deficit
(1,998,884)
(1,976,222)
Accumulated other comprehensive loss
(6,882)
(7,270)
Total stockholders’ equity
251,408
270,641
Total liabilities and stockholders’ equity
$
530,990
$
554,069
Harmonic Inc.
Preliminary Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
Three months ended
March 31, 2017
April 1, 2016
Revenue:
Product
$
50,404
$
57,644
Services
32,539
24,188
Total net revenue
$
82,943
$
81,832
Cost of revenue:
Product
26,102
27,189
Services
16,433
13,989
Total cost of revenue
42,535
41,178
Gross profit
40,408
40,654
Operating expenses:
Research and development
24,882
23,563
Selling, general and administrative
34,631
32,870
Amortization of intangibles
774
2,365
Restructuring and related charges
1,279
2,612
Total operating expenses
61,566
61,410
Loss from operations
(21,158)
(20,756)
Interest expense, net
(2,590)
(2,421)
Other expense, net
(511)
(9)
Loss on impairment of long-term investment --
(1,476)
Loss before income taxes
(24,259)
(24,662)
(Benefit from) provision for income taxes
(232)
518
Net loss
$
(24,027)
$
(25,180)
Net loss per share:
Basic and diluted
$
(0.30)
$
(0.33)
Shares used in per share calculation:
Basic and diluted
79,810
76,996
Harmonic Inc.
Preliminary Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Three months ended
March 31, 2017
April 1, 2016
Cash flows from operating activities:
Net loss
$
(24,027)
$
(25,180)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of intangibles
2,069
2,783
Depreciation
3,599
3,317
Stock-based compensation
3,251
3,094
Amortization of discount on convertible debt
1,316
1,187
Amortization of non-cash warrant
416
--
Restructuring, asset impairment and loss on retirement of fixed assets
187
1,675
Loss on impairment of long-term investment
--
1,476
Provision for excess and obsolete inventories
387
418
Allowance for doubtful accounts, returns and discounts
2,700
739
Other non-cash adjustments, net
72
--
Changes in operating assets and liabilities, net of effects of acquisition:
Accounts receivable
14,388
(10,894)
Inventories
942
(51)
Prepaid expenses and other assets
(3,441)
(6,078)
Accounts payable
(6,687)
(3,890)
Deferred revenue
5,725
24,963
Income taxes payable
6
(13)
Accrued and other liabilities
(3,999)
1,046
Net cash used in operating activities
(3,096)
(5,408)
Cash flows from investing activities:
Acquisition of business, net of cash acquired
--
(69,532)
Proceeds from maturities and sale of investments
6,898
7,394
Purchases of property and equipment
(3,217)
(2,664)
Net cash provided by (used in) investing activities
3,681
(64,802)
Cash flows from financing activities:
Payment of convertible debt issuance costs
--
(582)
Proceeds from other debts and capital leases
--
262
Repayment of other debts and capital leases
(953)
(114)
Proceeds from common stock issued to employees
2,114
2,074
Payment of tax withholding obligations related to net share settlements of restricted stock units (2,383)
(955)
Net cash (used in) provided by financing activities
(1,222)
685
Effect of exchange rate changes on cash and cash equivalents
294
330
Net decrease in cash and cash equivalents
(343)
(69,195)
Cash and cash equivalents at beginning of period
55,635
126,190
Cash and cash equivalents at end of period
$
55,292
$
56,995
Harmonic Inc.
Preliminary Revenue Information
(Unaudited, in thousands, except percentages)
Three months ended
March 31, 2017
December 31, 2016
April 1, 2016
GAAP
Adjust-ments(1) Non-GAAP
GAAP
Adjust-ments(1) Non-GAAP
GAAP(2)
Adjust-ments(1) Non-GAAP(2)
Product
Video Products
$
45,518
$
--
$
45,518
55%
$
75,151
$
--
$
75,151
67%
$
44,212
$
355
$
44,567
54%
Cable Edge
4,886
191
5,077
6%
4,767
295
5,062
4%
13,432
--
13,432
16%
Services and Support 32,539
336
32,875
39%
33,184
378
33,562
29%
24,188
268
24,456
30%
Total
$
82,943
$
527
$
83,470
100%
$
113,102
$
673
$
113,775
100%
$
81,832
$
623
$
82,455
100%
Geography
Americas
$
37,906
$
416
$
38,322
46%
$
52,736
$
474
$
53,210
47%
$
48,977
$
81
$
49,058
59%
EMEA
25,439
111
25,550
31%
41,036
77
41,113
36%
19,855
401
20,256
25%
APAC
19,598
--
19,598
23%
19,330
122
19,452
17%
13,000
141
13,141
16%
Total
$
82,943
$
527
$
83,470
100%
$
113,102
$
673
$
113,775
100%
$
81,832
$
623
$
82,455
100%
Market
Service Provider
$
48,028
$
416
$
48,444
58%
$
69,426
$
568
$
69,994
62%
$
51,270
$
150
$
51,420
62%
Broadcast and Media
34,915
111
35,026
42%
43,676
105
43,781
38%
30,562
473
31,035
38%
Total
$
82,943
$
527
$
83,470
100%
$
113,102
$
673
$
113,775
100%
$
81,832
$
623
$
82,455
100%
(1) Non-GAAP revenue for the three months ended March 31, 2017, December 31, 2016 and April 1, 2016 include $0.1 million, $0.2 million and $0.6 million adjustments relating to TVN deferred revenue as a result of acquisition accounting, respectively. In addition, non-GAAP revenue for the three months ended March 31, 2017 and December 31, 2016 each includes $0.4 million adjustment related to the amortization of Comcast warrant.
(2) Excludes TVN revenues prior to March 1, 2016.
Harmonic Inc.
Preliminary Segment Information
(Unaudited, in thousands, except percentages)
Three months ended March 31, 2017
Video
Cable Edge
Total Segment Measures
Adjustments (1)
Consolidated GAAP Measures
Net revenue
$
74,453
$
9,017
$
83,470
$
(527)
$
82,943
Gross profit
40,884
2,626
43,510
(3,102)
40,408
Gross margin%
54.9
%
29.1
%
52.1
%
48.7
%
Operating loss
(5,725)
(5,664)
(11,389)
(9,769)
(21,158)
Operating margin%
(7.7)
%
(62.8)%
(13.6)
%
(25.5)
%
Three months ended December 31, 2016
Video
Cable Edge
Total Segment Measures
Adjustments (1)
Consolidated GAAP Measures
Net revenue
$
104,779
$
8,996
$
113,775
$
(673)
$
113,102
Gross profit
60,443
3,330
63,773
(6,080)
57,693
Gross margin%
57.7
%
37.0
%
56.1
%
51.0
%
Operating income (loss) 14,145
(4,579)
9,566
(25,795)
(16,229)
Operating margin%
13.5
%
(50.9)
%
8.4
%
(14.3)
%
Three months ended April 1, 2016 (2)
Video
Cable Edge
Total Segment Measures
Adjustments (1)
Consolidated GAAP Measures
Net revenue
$
65,631
$
16,824
$
82,455
$
(623)
$
81,832
Gross profit
34,892
7,248
42,140
(1,486)
40,654
Gross margin%
53.2
%
43.1
%
51.1
%
49.7
%
Operating loss
(6,535)
(1,853)
(8,388)
(12,368)
(20,756)
Operating margin%
(10.0)
%
(11.0)
%
(10.2)
%
(25.4)
%
(1) See "Use of Non-GAAP Financial Measures" and "GAAP to Non-GAAP Reconciliations" below.
(2) Excludes TVN results prior to March 1, 2016.
Harmonic Inc.
GAAP to Non-GAAP Reconciliations (Unaudited)
(In thousands, except percentages and per share data)
Three months ended
March 31, 2017
Revenue
Gross Profit
Total Operating Expense Loss from Operations
Total Non-operating Expense, net Net Loss
GAAP
$
82,943
$
40,408
$
61,566
$
(21,158)
$
(3,101)
$
(24,027)
Cable Edge inventory charge
--
(15)
--
(15)
--
(15)
Acquisition accounting impact related to TVN deferred revenue
111
111
--
111
--
111
Accounting impact related to warrant amortization
416
416
--
416
--
416
Stock-based compensation in cost of revenue
--
445
--
445
--
445
Stock-based compensation in research and development
--
--
(977)
977
--
977
Stock-based compensation in selling, general and administrative
--
--
(1,829)
1,829
--
1,829
Amortization of intangibles
--
1,295
(774)
2,069
--
2,069
Restructuring and related charges
--
508
(1,279)
1,787
--
1,787
TVN acquisition-and integration-related costs
--
342
(1,808)
2,150
--
2,150
Non-cash interest expenses related to convertible notes
--
--
--
--
1,316
1,316
Discrete tax items and tax effect of non-GAAP adjustments
--
--
--
--
--
1,744
Total adjustments
527
3,102
(6,667)
9,769
1,316
12,829
Non-GAAP
$
83,470
$
43,510
$
54,899
$
(11,389)
$
(1,785)
$
(11,198)
As a % of revenue (GAAP)
48.7
%
74.2
%
(25.5)%
(3.7)%
(29.0)%
As a % of revenue (Non-GAAP)
52.1
%
65.8
%
(13.6)%
(2.1)%
(13.4)%
Diluted net loss per share:
Diluted net loss per share-GAAP
$
(0.30)
Diluted net loss per share-Non-GAAP
$
(0.14)
Shares used to compute diluted net loss per share:
GAAP and Non-GAAP
79,810
Three months ended
December 31, 2016
Revenue
Gross Profit
Total Operating Expense Income (Loss) from Operations Total Non-operating Expense, net Net Income (Loss)
GAAP
$
113,102
$
57,693
$
73,922
$
(16,229)
$
(2,848)
$
(10,443)
Cable Edge inventory charge
--
(327)
--
(327)
(327)
Acquisition accounting impact related to TVN deferred revenue
239
239
--
239
--
239
Accounting impact related to warrant amortization
434
434
--
434
--
434
Stock-based compensation in cost of revenue
--
543
--
543
--
543
Stock-based compensation in research and development
--
--
(1,130)
1,130
--
1,130
Stock-based compensation in selling, general and administrative
--
--
(2,845)
2,845
--
2,845
Amortization of intangibles
--
1,328
(797)
2,125
--
2,125
Restructuring and related charges
--
3,975
(11,519)
15,494
--
15,494
Gain on pension curtailment
--
(551)
1,404
(1,955)
--
(1,955)
TVN acquisition-and integration-related costs
--
439
(4,828)
5,267
(98)
5,169
Non-cash interest expenses related to convertible notes
--
--
--
--
1,295
1,295
Discrete tax items and tax effect of non-GAAP adjustments
--
--
--
--
--
(9,821)
Total adjustments
673
6,080
(19,715)
25,795
1,197
17,171
Non-GAAP
$
113,775
$
63,773
$
54,207
$
9,566
$
(1,651)
$
6,728
As a % of revenue (GAAP)
51.0
%
65.4
%
(14.3)
%
(2.5)
%
(9.2)
%
As a % of revenue (Non-GAAP)
56.1
%
47.6
%
8.4
%
(1.5)
%
5.9
%
Diluted net loss per share:
Diluted net loss per share-GAAP
$
(0.13)
Diluted net income per share-Non-GAAP
$
0.08
Shares used to compute diluted net income (loss) per share:
GAAP
78,389
Non-GAAP
80,112
Three months ended
April 1, 2016
Revenue
Gross Profit
Total Operating Expense Loss from Operations
Total Non-operating Expense, net Net Loss
GAAP
$
81,832
$
40,654
$
61,410
$
(20,756)
$
(3,906)
$
(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
Loss on impairment of long-term investment
--
--
--
--
1,476
1,476
Non-cash interest expenses related to convertible notes
--
--
--
--
1,187
1,187
Discrete tax items and tax effect of non-GAAP adjustments
--
--
--
--
--
1,963
Total adjustments
623
1,486
(10,882)
12,368
2,663
16,994
Non-GAAP
$
82,455
$
42,140
$
50,528
$
(8,388)
$
(1,243)
$
(8,186)
As a % of revenue (GAAP)
49.7
%
75.0
%
(25.4)
%
(4.8)
%
(30.8)
%
As a % of revenue (Non-GAAP)
51.1
%
61.3
%
(10.2)
%
(1.5)
%
(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 and Non-GAAP
76,996
Harmonic Inc.
GAAP to Non-GAAP Reconciliations on Business Outlook
(In millions, except percentages and per share data)
Q2-2017 Financial Guidance
Revenue
Gross Profit
Total Operating Expense Income(loss) from Operations Total Non-operating Expense, net Net Income(loss)
GAAP
$94.5 to
$46.8 to
$59.6 to
$(12.8) to
$(2.8)
($16.6) to
$102.5
$51.8
$60.6
$(8.8)
($13.2)
Acquisition accounting impact related to TVN deferred revenue 0.1
0.1
--
0.1
--
0.1
Accounting impact related to warrant amortization
0.4
0.4
--
0.4
--
0.4
Stock-based compensation expense
--
1.1
(5.7)
6.8
--
6.8
Amortization of intangibles
--
1.3
(0.8)
2.1
--
2.1
Restructuring and related charges and TVN integration costs
--
0.3
(0.6)
0.9
--
0.9
Non-cash interest expense related to convertible notes
--
--
--
--
1.4
1.4
Discrete tax items and tax effect of non-GAAP adjustments
--
--
--
--
--
1.5
Total adjustments
0.5
3.2
(7.1)
10.3
1.4
13.2
Non-GAAP
$95.0 to $103.0 $50.0 to
$52.5 to
$(2.5) to
$(1.4)
$(3.4) to
$55.0
$53.5
$1.5
$0.0
As a % of revenue (GAAP)
49.5% to 50.5% 59.0% to 63.0%
(13.5)% to (8.5)%
(3.0%)
(17.5)% to (13.0)%
As a % of revenue (Non-GAAP)
52.5% to 53.5% 52.0% to 55.0%
(2.5)% to 1.5%
(1.5%)
(3.5)% to 0%
Diluted loss per share:
Diluted net loss per share-GAAP
$(0.20) to $(0.16)
Diluted net loss per share-Non-GAAP
$(0.04) to break-even
Shares used to compute diluted loss per share:
GAAP and Non-GAAP
81.0
Harmonic Inc.
GAAP to Non-GAAP Reconciliations on Business Outlook
(In millions, except percentages and per share data)
2017 Financial Guidance
Revenue
Gross Profit
Total Operating Expense Income(loss) from Operations Total Non-operating Expense, net Net Income(loss)
GAAP
$398.5 to
$202.1 to
$227.7 to
$(25.6) to
$(11.6)
$(39.1) to
$418.5
$217.1
$228.7
$(11.6)
$(27.1)
Acquisition accounting impact related to TVN deferred revenue 0.3
0.3
--
0.3
--
0.3
Accounting impact related to warrant amortization
1.2
1.2
--
1.2
--
1.2
Stock-based compensation expense
--
2.7
(16.1)
18.8
--
18.8
Amortization of intangibles
--
5.2
(3.1)
8.3
--
8.3
Restructuring and related charges and TVN integration costs
--
2.5
(2.5)
5.0
--
5.0
Non-cash interest expense related to convertible notes
--
--
--
--
5.5
5.5
Discrete tax items and tax effect of non-GAAP adjustments
--
--
--
--
--
1.5
Total adjustments
1.5
11.9
(21.7)
33.6
5.5
40.6
Non-GAAP
$400.0 to $420.0 $214.0 to
$206.0 to
$8.0 to
$(6.1)
$1.5 to $13.5
$229.0
$207.0
$22.0
As a % of revenue (GAAP)
50.5% to 52.0% 54.5%
(6.5)% to (3.0)%
(3.0%)
(10.0)% to (6.5)%
to 57.0%
As a % of revenue (Non-GAAP)
53.5% to 54.5% 49.5%
2.0% to 5%
(1.5%)
0.5% to 3.0%
to 51.5%
Diluted income (loss) per share:
Diluted net loss per share-GAAP
$(0.48) to $(0.33)
Diluted net income per share-Non-GAAP
$0.02 to
$0.16
Shares used to compute diluted income (loss) per share:
GAAP and Non-GAAP
82.0

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SOURCE Harmonic Inc.

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