Harmonic Announces First Quarter 2020 Results
SAN JOSE, Calif., April 27, 2020 /PRNewswire/ -- Harmonic Inc. (NASDAQ: HLIT) today announced its unaudited results for the first quarter of 2020.
"While Harmonic's financial results were impacted by Covid-19, we delivered on several key business initiatives," said Patrick Harshman, president and chief executive officer of Harmonic. "Cable Access segment revenue grew over 85% and recurring SaaS and Service revenue grew over 10% in the past year. The future impacts of the pandemic are difficult to forecast but we are well positioned for the long term, as the broadband cable access and video streaming services we enable remain vital and our core technology position remains strong. We continue to operate effectively with near-term focus on ensuring the wellbeing of our employees and support of our customers."
Q1 Financial and Business Highlights
Financial
-- Revenue: $78.4 million, down 2.1% year over year.
-- SaaS and service revenue: $30.7 million, up 10.5% year over year.
-- Gross margin: GAAP 46.8% and non-GAAP 48.9%, compared to GAAP 52.2% and
non-GAAP 54.5% in the year ago period.
-- Cable Access segment revenue: $24.0 million, up 85.6% year over year.
-- Video segment gross margin: 51.3%, compared to 57.5% in the year ago
period.
-- Operating loss: GAAP loss $18.0 million and non-GAAP loss $9.5 million,
compared to GAAP loss $8.4 million and non-GAAP loss $3.8 million in the
year ago period.
-- EPS: GAAP net loss per share 23 cents and non-GAAP net loss per share 10
cents, compared to GAAP net loss per share 13 cents and non-GAAP net
loss per share 5 cents in the year ago period.
-- Cash: $71.7 million, up $1.8 million year over year.
Business
-- CableOS solution commercially deployed with 27 customers, up over 17%
quarter over quarter.
-- CableOS deployments scaled to over 1.3 million served cable modems, up
30% quarter over quarter and 94% year over year.
-- Video SaaS customer base increased from 48 to 57 customers, up 19%
quarter over quarter and 128% year over year.
-- Over 7,300 cloud channels deployed globally, up 56% quarter over quarter
and 155% year over year.
Select Financial Information
GAAP
Non-GAAP
Key Financial Results Q1 2020 Q4 2019 Q1 2019 Q1 2020 Q4 2019 Q1 2019
(in millions, except per share data)
Net revenue $
78.4 $
122.2 $
80.1 $
78.4 $
122.2 $
80.1
Net income (loss) $
(22.0) $
5.6 $
(11.3) $
(9.8) $
12.1 $
(4.8)
Diluted EPS $
(0.23) $
0.06 $
(0.13) $
(0.10) $
0.12 $
(0.05)
Other Financial Information Q1 2020 Q4 2019 Q1 2019
(in millions)
Adjusted EBITDA $
(7.0) $
17.6 $
(1.3)
Bookings for the quarter $
76.3 $
140.1 $
81.0
Backlog and deferred revenue as of quarter end $
207.9 $
210.2 $
187.2
Cash and cash equivalents as of quarter end $
71.7 $
93.1 $
69.9
---
Explanations regarding our use of non-GAAP financial measures and related definitions, and reconciliations of our GAAP and non-GAAP measures, are provided in the sections below entitled "Use of Non-GAAP Financial Measures" and "GAAP to Non-GAAP Reconciliations".
Financial Guidance
Financial guidance for the second quarter of 2020 is set out in the tables below. Due to the economic uncertainties arising from the Covid-19 crisis, Harmonic is withdrawing its previously issued full-year 2020 guidance. The company will reassess this position based on the clarity of macroeconomic recovery at the end of the second quarter.
GAAP Financial Guidance
Q2 2020
Low
High
(in millions, except percentages and per share data)
Net Revenue $
62.0 $
77.0
Video $
42.0 $
50.0
Cable Access $
20.0 $
27.0
Gross Margin % 46.0 47.0
% %
Operating Expenses $
49.5 $
51.5
Operating Loss $
(23.0) $
(13.0)
Tax Expense $
(0.6) $
(0.6)
EPS $
(0.28) $
(0.17)
Shares 96.8 96.8
Cash $
60.0 $
70.0
---
Non-GAAP Financial
Guidance
Q2 2020
Low
High
(in millions, except percentages and per share data)
Net Revenue $
62.0 $
77.0
Video $
42.0 $
50.0
Cable Access $
20.0 $
27.0
Gross Margin % 47.0 48.0
% %
Operating Expenses $
45.0 $
47.0
Operating Loss $
(18.0) $
(8.0)
Adjusted EBITDA $
(15.5) $
(5.5)
Tax rate 10 10
% %
EPS $
(0.18) $
(0.09)
Shares 96.8 96.8
Cash $
60.0 $
70.0
---
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, April 27, 2020. The live webcast will be available on the Harmonic Investor Relations website at http://investor.harmonicinc.com. An audio version of the webcast will be available by calling +1.574.990.1032 or +1.800.240.9147 (passcode 6576215). A replay will be available after 5:00 p.m. PT on the same web site or by calling +1.404.537.3406 or +1.855.859.2056 (passcode 6576215).
About Harmonic Inc.
Harmonic (NASDAQ: HLIT), the worldwide leader in video delivery technology and services, enables media companies and service providers to deliver ultra-high-quality broadcast and OTT video services to consumers globally. The Company has also revolutionized cable access networking via the industry's first virtualized cable access solution, enabling cable operators to more flexibly deploy gigabit internet service to consumers' homes and mobile devices. Whether simplifying OTT video delivery via innovative cloud and software-as-a-service (SaaS) technologies, or powering the delivery of gigabit internet cable services, Harmonic is changing the way media companies and service providers monetize live and VOD content on every screen. 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 income (loss), GAAP tax expense, GAAP EPS, non-GAAP revenue, non-GAAP gross margins, non-GAAP operating expenses, non-GAAP operating income (loss), Adjusted EBITDA, non-GAAP tax rate and non-GAAP EPS and cash. 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 market and technology trends underlying our Video and Cable Access businesses will not continue to develop in their current direction or pace; 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 potential impact of the Covid-19 pandemic on our operations or the operations of our supply chain or our customers; the impact of general economic conditions on our sales and operations; 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, telco, broadcast and media industries; customer concentration and consolidation; 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; exchange rate fluctuations of the currencies in which we conduct business; risks associated with our CableOS® and VOS® product solutions; 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 increases 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; and the effect on our business of natural disasters. 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, 2019, our most recent Quarterly Report 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
The Company reports its financial results in accordance with accounting principles generally accepted in the United States ("GAAP" or referred to herein as "reported"). However, management believes that certain non-GAAP financial measures provide management and other users with additional meaningful financial information that should be considered when assessing our ongoing performance. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business, establish operating budgets, set internal measurement targets and make operating decisions.
These non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. The Company believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Harmonic's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Harmonic's results of operations in conjunction with the corresponding GAAP measures.
The Company believes that the presentation of non-GAAP measures when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and its historical and projected results of operations. Non-GAAP financial measures should be viewed in addition to, and not as an alternative to, the Company's reported results prepared in accordance with GAAP.
The non-GAAP measures presented here are: revenue, segment revenue, gross profit, operating expenses, income (loss) from operations, non-operating expenses and net income (loss) (including those amounts as a percentage of revenue), Adjusted EBITDA 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 non-GAAP adjustments described below have historically been excluded from our GAAP financial measures.
Our non-GAAP financial measures reflect adjustments based on the following items, as well as the related income tax effects:
Cable Access inventory charge - Harmonic from time to time incurs inventory impairment charges associated with material business shifts, such as the repositioning of our Cable Access segment. We exclude these items, because we do not believe they are reflective of our ongoing long-term business and operating results.
Stock-based compensation - Although stock-based compensation is a key incentive offered to our employees, we continue to evaluate our business performance excluding stock-based compensation expenses. We believe that management is limited in its ability to project the impact stock-based compensation would have on our operating results. In addition, for comparability purposes, we believe it is useful to provide a non-GAAP financial measure that excludes stock-based compensation in order to better understand the long-term performance of our core business and to facilitate the comparison of our results to the results of our peer companies.
Amortization of intangibles - A portion of the purchase price of our acquisitions is generally allocated to intangible assets, and is subject to amortization. However, Harmonic does not acquire businesses on a predictable cycle. Additionally, the amount of an acquisition's purchase price allocated to intangible assets and the term of its related amortization can vary significantly and is unique to each acquisition. Therefore, we believe that the presentation of non-GAAP financial measures that adjust for the amortization of intangible assets provides investors and others with a consistent basis for comparison across accounting periods.
Restructuring and related charges - Harmonic from time to time incurs restructuring charges which primarily consist of employee severance, one-time termination benefits related to the reduction of its workforce, lease exit costs, and other costs. These charges are associated with material business shifts. We exclude these items because we do not believe they are reflective of our ongoing long-term business and operating results.
Non-cash interest expense and other expenses related to convertible notes - We record the accretion of the debt discount related to the equity component and amortization of issuance costs as non-cash interest expense. We believe that excluding these costs provides meaningful supplemental information regarding operational performance and liquidity, along with enhancing investors' ability to view the Company's results from management's perspective. In addition, we believe excluding these costs from the non-GAAP measures facilitates comparisons to our historical operating results and comparisons to peer company operating results.
Accounting impact related to warrant amortization - We issued a warrant to a customer, Comcast Corporation, in September 2016 pursuant to which Comcast may purchase up to 7.8 million shares of Harmonic common stock. In July 2019, in connection with Comcast's election of enterprise license pricing for the Company's CableOS software, all warrant shares were fully vested as of July 1, 2019. As a result of Comcast's election of enterprise license pricing, we no longer excluded the effect of warrant amortization in our non-GAAP financial measures beginning with the third quarter of fiscal 2019.
Discrete tax items and tax effect of non-GAAP adjustments - The income tax effect of non-GAAP adjustments relates to the tax effect of the adjustments that we incorporate into non-GAAP financial measures in order to provide a more meaningful measure of non-GAAP net income.
Harmonic Inc.
Preliminary Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except per share data)
March 27, 2020 December 31, 2019
---
ASSETS
Current assets:
Cash and cash equivalents $
71,712 $
93,058
Accounts receivable, net 93,058 88,500
Inventories, net 34,854 29,042
Prepaid expenses and other
current assets 32,001 40,762
Total current assets 231,625 251,362
Property and equipment, net 37,091 22,928
Operating lease right-of-use
assets 26,281 27,491
Goodwill 238,614 239,780
Intangibles, net 2,789 4,461
Other long-term assets 39,875 41,305
Total assets $
576,275 $
587,327
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Other debts and finance lease
obligations, current $
6,343 $
6,713
Accounts payable 45,159 40,933
Income taxes payable 419 1,226
Deferred revenue 48,719 37,117
Accrued and other current
liabilities 52,080 62,535
Convertible notes, short-term 44,008 43,375
Total current liabilities 196,728 191,899
Convertible notes, long-term 89,832 88,629
Other debts and finance lease
obligations, long-term 10,048 10,511
Income taxes payable, long-
term 180 178
Other non-current liabilities 41,388 41,254
Total liabilities $
338,176 $
332,471
Convertible notes 1,777 2,410
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;
96,566 and 91,875 shares
issued and outstanding at
March 27, 2020 and December
31, 2019, respectively 97 92
Additional paid-in capital 2,336,459 2,327,359
Accumulated deficit (2,093,894) (2,071,940
Accumulated other comprehensive
loss (6,340) (3,065)
Total stockholders' equity 236,322 252,446
Total liabilities and
stockholders' equity $
576,275 $
587,327
Harmonic Inc.
Preliminary Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
Three months ended
March 27, 2020 March 29, 2019
---
Revenue:
Appliance and
integration $
47,752 $
52,365
SaaS and service 30,665 27,741
Total net revenue 78,417 80,106
Cost of revenue:
Appliance and
integration 26,287 27,054
SaaS and service 15,392 11,203
Total cost of
revenue 41,679 38,257
Total gross profit 36,738 41,849
Operating expenses:
Research and
development 22,123 21,401
Selling, general and
administrative 31,218 28,011
Amortization of
intangibles 770 788
Restructuring and
related charges 676 57
Total operating
expenses 54,787 50,257
Loss from operations (18,049) (8,408)
Interest expense,
net (2,903) (2,906)
Other expense, net (273) (311)
Loss before income
taxes (21,225) (11,625)
Provision for
(benefit from)
income taxes 729 (319)
Net loss $
(21,954) $
(11,306)
Net loss per share:
Basic and diluted $
(0.23) $
(0.13)
Shares used in per share
calculations:
Basic and diluted 95,575 88,165
Harmonic Inc.
Preliminary Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Three months ended
March 27, 2020 March 29, 2019
---
Cash flows from operating activities:
Net loss $
(21,954) $
(11,306)
Adjustments to reconcile net loss to
net cash provided by (used in)
operating activities:
Amortization of
intangibles 1,655 2,083
Depreciation 2,843 2,846
Stock-based
compensation 6,259 2,113
Amortization of
discount on
convertible debt 1,835 1,605
Amortization of non-
cash warrant 434 25
Restructuring, asset
impairment and loss
on retirement of
fixed assets 8 103
Foreign currency
adjustments (2,066) (638)
Deferred income
taxes, net 653 (538)
Provision for
doubtful accounts,
returns and
discounts 331 417
Provision for excess
and obsolete
inventories 234 254
Other non-cash
adjustments, net 113 287
Changes in operating assets and
liabilities:
Accounts receivable (5,068) 22,351
Inventories (6,281) (4,157)
Prepaid expenses and
other assets 10,579 1,417)
Accounts payable (242) (8,177)
Deferred revenues 12,477 4,750
Income taxes payable (768) (192)
Accrued and other
liabilities (12,083) (9,027)
Net cash provided by
(used in )
operating
activities (11,041) 4,216
Cash flows from investing activities:
Purchases of
property and
equipment (11,224) (1,674)
Net cash used in
investing
activities (11,224) (1,674)
Cash flows from financing activities:
Payment of
convertible debt
issuance costs (35)
Proceeds from other
debts and finance
leases - 160
Repayment of other
debts and finance
leases (406) (97)
Proceeds from common
stock issued to
employees 3,000 2,012
Payment of tax
withholding
obligations related
to net share
settlements of
restricted stock
units (829) (657)
Net cash provided by
financing
activities 1,730 1,418
Effect of exchange
rate changes on
cash, cash
equivalents and
restricted cash (811) (33)
Net increase
(decrease) in cash,
cash equivalents
and restricted cash (21,346) 3,927
Cash, cash
equivalents and
restricted cash,
beginning of the
year 93,058 65,989
Cash, cash
equivalents and
restricted cash,
end of the year $
71,712 $
69,916
Harmonic Inc.
Preliminary Revenue Information
(Unaudited, in thousands, except percentages)
Three months ended
March 27, 2020
December 31, 2019
March 29, 2019
GAAP Adjustment(1) Non-GAAP GAAP Adjustment(1) Non-GAAP GAAP Adjustment(1) Non-GAAP
Geography
Americas $
37,650
$ $
37,650 48% $
68,869
$ $
68,869 56% $
34,188 $
25 $
34,213 43%
EMEA 27,816 27,816 35% 39,874 39,874 33% 28,078 28,078 35%
APAC 12,951 12,951 17% 13,435 13,435 11% 17,840 17,840 22%
---
Total $
78,417
$ $
78,417 100% $
122,178
$ $
122,178 100% $
80,106 $
25 $
80,131 100%
===
Market
Service
Provider $
43,759
$ $
43,759 56% $
83,976
$ $
83,976 69% $
44,212 $
25 $
44,237 55%
Broadcast and
Media 34,658 34,658 44% 38,202 38,202 31% 35,894 35,894 45%
---
Total $
78,417
$ $
78,417 100% $
122,178
$ $
122,178 100% $
80,106 $
25 $
80,131 100%
===
(1) See "Use of Non-GAAP Financial
Measures" above and "GAAP to Non-GAAP
Reconciliations" below.
Harmonic Inc.
Preliminary Segment Information
(Unaudited, in thousands, except percentages)
Three months ended March 27, 2020
Video Cable Access Total Segment Adjustments Consolidated GAAP
Measures (1) Measures
(non-GAAP)
---
Net revenue $
54,372 $
24,045 $
78,417
$
$
78,417
Gross profit 27,907 10,414 38,321 (1,583) 36,738
Gross margin% 51.3 43.3
%
%
%
% 48.9 46.8
Operating loss (6,267) (3,265) (9,532) (8,517) (18,049)
Operating (11.5) (13.6)
margin%
%
%
% % (12.2) (23.0)
Three months ended December 31, 2019
Video Cable Access Total Segment Adjustments Consolidated GAAP
Measures (1) Measures
(non-GAAP)
---
Net revenue $
79,172 $
43,006 $
122,178
$ $
122,178
Gross profit 47,463 16,492 63,955 (2,260) 61,695
Gross margin% 60.0 38.3
%
%
%
% 52.3 50.5
Operating
income 11,105 3,649 14,754 (8,048) 6,706
Operating 14.0 8.5 12.1 5.5
margin%
%
%
%
%
Three months ended March 29, 2019
Video Cable Access Total Segment Adjustments Consolidated GAAP
Measures (1) Measures
(non-GAAP)
---
Net revenue $
67,176 $
12,955 $
80,131 $
(25) * $
80,106
Gross profit 38,602 5,093 43,695 (1,846) 41,849
Gross margin% 57.5 39.3
%
%
%
% 54.5 52.2
Operating
income (loss) 1,968 (5,797) (3,829) (4,579) (8,408)
Operating 2.9 (44.7)
margin%
%
%
%
% (4.8) (10.5)
(1) See "Use of Non-GAAP Financial
Measures" above and "GAAP to Non-GAAP
Reconciliations" below.
* This non-GAAP adjustment is for
warrant amortization and relate to our
Cable Access segment. After applying
this adjustment to the non-GAAP
revenue for the Cable Access segment,
our GAAP revenue for the Cable Access
segment for the three months ended
March 29, 2019 was $12,930.
Harmonic Inc.
GAAP to Non-GAAP Reconciliations (Unaudited)
(in thousands, except percentages and per share data)
Three months ended March 27, 2020
Revenue Gross Profit Total Operating Loss from Total Non-
Expense Operations operating
expense, net Net Loss
---
GAAP $
78,417 $
36,738 $
54,787 $
(18,049) $
(3,176) $
(21,954)
Stock-based
compensation - 771 (5,488) 6,259 6,259
Amortization of
intangibles - 885 (770) 1,655 1,655
Restructuring and
related charges - (73) (676) 603 603
Non-cash interest
and other expenses
related to
convertible notes - 1,835 1,835
Discrete tax items
and tax effect of
non-GAAP
adjustments - 1,816
Total adjustments - 1,583 (6,934) 8,517 1,835 12,168
Non-GAAP $
78,417 $
38,321 $
47,853 $
(9,532) $
(1,341) $
(9,786)
As a % of revenue (GAAP) 46.8 69.9 (23.0) (4.1) (28.0)
%
% % % %
As a % of revenue (Non-GAAP) 48.9 61.0 (12.2) (1.7) (12.5)
%
% % % %
Diluted net income per share:
Diluted net loss per share-GAAP $
(0.23)
Diluted net loss per share-Non-GAAP $
(0.10)
Shares used to compute diluted net
income per share:
GAAP and Non-GAAP 95,575
Three months ended December 31, 2019
Revenue Gross Profit Total Operating Income from Total Non-
Expense Operations operating
expense, net Net Income
---
GAAP $
122,178 $
61,695 $
54,989 $
6,706 $
(2,789) $
5,570
Stock-based
compensation - 297 (3,059) 3,356 3,356
Amortization of
intangibles - 1,295 (782) 2,077 2,077
Restructuring and
related charges - 668 (1,947) 2,615 2,615
Non-cash interest
and other expenses
related to
convertible notes - 1,796 1,796
Discrete tax items
and tax effect of
non-GAAP
adjustments - (3,303)
Total adjustments - 2,260 (5,788) 8,048 1,796 6,541
Non-GAAP $
122,178 $
63,955 $
49,201 $
14,754 $
(993) $
12,111
As a % of revenue (GAAP) 50.5 45.0 5.5 (2.3)
%
%
%
% % 4.6
As a % of revenue (Non-GAAP) 52.3 40.3 12.1 (0.8)
%
%
%
% % 9.9
Diluted net income per share:
Diluted net income per share-GAAP $
0.06
Diluted net income per share-Non-
GAAP $
0.12
Shares used to compute diluted net
income per share:
GAAP and Non-GAAP 97,499
Three months ended March 29, 2019
Revenue Gross Profit Total Operating Loss from Total Non-
Expense Operations operating
expense, net Net Loss
---
GAAP $
80,106 $
41,849 $
50,257 $
(8,408) $
(3,217) $
(11,306)
Accounting impact
related to warrant
amortization 25 25 25 25
Stock-based
compensation - 225 (1,888) 2,113 2,113
Amortization of
intangibles - 1,295 (788) 2,083 2,083
Restructuring and
related charges - 301 (57) 358 358
Non-cash interest
expenses related to
convertible notes - 1,606 1,606
Discrete tax items
and tax effect of
non-GAAP
adjustments - 334
Total adjustments 25 1,846 (2,733) 4,579 1,606 6,519
Non-GAAP $
80,131 $
43,695 $
47,524 $
(3,829) $
(1,611) $
(4,787)
As a % of revenue (GAAP) 52.2 62.7 (10.5) (4.0) (14.1)
%
% % % %
As a % of revenue (Non-GAAP) 54.5 59.3 (4.8) (2.0)
%
%
%
% % (6.0)
Diluted net loss per share:
Diluted net loss per share-GAAP $
(0.13)
Diluted net loss per share-Non-GAAP $
(0.05)
Shares used to compute diluted net
income per share:
GAAP and Non-GAAP 88,165
Harmonic Inc.
Preliminary Adjusted EBITDA Reconciliation (Unaudited)
(In thousands)
Three months ended
March 27, 2020 December 31,
2019 March 29, 2019
---
Net income (loss) -
GAAP $
(21,954) $
5,570 $
(11,306)
Provision for
(benefit from)
income taxes 729 (1,653) (319)
Interest expense,
net 2,903 2,789 2,906
Depreciation 2,843 2,807 2,846
Amortization of
intangibles 1,655 2,077 2,083
EBITDA (13,824) 11,590 (3,790)
Adjustments
Accounting impact
related to warrant
amortization - 25
Stock-based
compensation 6,259 3,356 2,113
Restructuring and
related charges 603 2,615 358
Adjusted EBITDA $
(6,962) $
17,561 $
(1,294)
Harmonic Inc.
GAAP to Non-GAAP Reconciliations on Financial Guidance
(In millions, except percentages and per share data)
Q2 2020 Financial Guidance
Revenue
Gross Profit Total Operating Expense
Loss from Operations Total Non-operating Expense, net
Net Loss
---
GAAP
$62.0 to $77.0
$28.5 to $36.3
$49.5 to $51.5
$(23.0) to $(13.0) $(3.2)
$(26.6) to $(16.8)
Stock-based
compensation - 0.2 (3.4) 3.6 3.6
Amortization of
intangibles - 0.1 (0.7) 0.8 0.8
Restructuring and
related charges - 0.2 (0.2) 0.4 0.4
Non-cash interest
and other expenses
related to
convertible notes - 1.9 1.9
Tax effect of non-
GAAP adjustments -
$1.5 to $2.5
Total adjustments - 0.5 (4.3) 4.8 1.9
$8.2 to $9.2
Non-GAAP
$62.0 to $77.0
$29.0 to $36.8
$45.0 to $47.0
$(18.0) to $(8.0) $(1.3)
$(17.4) to $(8.6)
===
As a % of revenue (GAAP) 46.0% to 47.0% 64.0% to 82.7% (36.8)% to (16.9)% (4.2)% to (5.2)% (43.0)% to (21.9)%
As a % of revenue (Non-GAAP) 47.0% to 48.0% 58.4% to 75.8% (29.0)% to (10.6)% (1.7)% to (2.1)% (28.1)% to (11.2)%
Diluted net loss per share:
Diluted net loss per share-
GAAP
$(0.28) to $(0.17)
Diluted net loss per share-
Non-GAAP
$(0.18) to $(0.09)
Shares used to compute diluted
net loss per share:
GAAP and Non-GAAP 96,777
Harmonic Inc.
Adjusted EBITDA Reconciliation on
Financial Guidance
(In millions)
Q2 2020
Financial
Guidance
Net loss -GAAP
$(26.6) to $(16.8)
Provision for
income taxes 0.6
Interest
expense, net 2.9
Depreciation 2.9
Amortization of
intangibles 0.8
EBITDA
$(19.4) to $(9.6)
Adjustments
Stock-based
compensation 3.6
Restructuring
and related
charges 0.4
Adjusted EBITDA
$(15.5) to $(5.5)
CONTACT:
Sanjay Kalra
Chief Financial Officer
Harmonic Inc.
+1.408.490.6031
Michael Smiley
Investor Relations
Harmonic Inc.
+1.408.490.6176
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SOURCE Harmonic Inc.
