Harmonic Announces Fourth Quarter and Fiscal 2020 Results
SAN JOSE, Calif., Feb. 1, 2021 /PRNewswire/ -- Harmonic Inc. (NASDAQ: HLIT) today announced its unaudited results for the fourth quarter and fiscal year ended December 31, 2020.
"Harmonic's fourth quarter results reflect the competitive advantages and complementary strengths of our Cable Access and Video segments," said Patrick Harshman, president and chief executive officer of Harmonic. "Both segments delivered sequential and year over year growth in revenues and operating margins. Record quarterly bookings, and record backlog and deferred revenue, demonstrate strong business momentum as we enter 2021."
Q4 Financial and Business Highlights
Financial
-- Revenue: $131.5 million, up 7.7% year over year
-- Cable Access segment revenue: $45.5 million, up 5.8% year over year
-- Video segment revenue: $86.0 million, up 8.7% year over year
-- Gross margin: GAAP 54.4% and non-GAAP 55.3%, compared to GAAP 50.5% and
non-GAAP 52.3% in the year ago period
-- Cable Access segment gross margin: 53.7% compared to 38.3% in the
year ago period
-- Video segment gross margin: 56.2%, compared to 60.0% in the year ago
period
-- Operating income: GAAP income $16.8 million and non-GAAP income $23.4
million, compared to GAAP income $6.7 million and non-GAAP income $14.8
million in the year ago period
-- Adjusted EBITDA: $26.4 million compared to $17.6 million in the year ago
period
-- Net income: GAAP net income $13.5 million and non-GAAP net income $20.0
million, compared to GAAP net income $5.6 million and non-GAAP net
income $12.1 million
-- EPS: GAAP net income per share of $0.13 and non-GAAP net income per
share of $0.20, compared to GAAP net income per share of $0.06 and
non-GAAP net income per share of $0.12 in the year ago period
-- Cash: $98.6 million, up $5.5 million year over year
Business
-- CableOS(®) solution commercially deployed with 44 customers, up 91%
year over year
-- CableOS deployments scaled to 2.6 million served cable modems, up 149%
year over year
-- 17 new VOS(® )streaming SaaS customers added during the quarter
-- Over 50,000 live-streaming channels deployed globally, up 15% year over
year
Select Financial Information
GAAP
Non-GAAP
Key Financial Results Q4 2020 Q3 2020 Q4 2019 Q4 2020 Q3 2020 Q4 2019
(in millions, except per share data)
Net revenue $
131.5 $
94.9 $
122.2 $
131.5 $
94.9 $
122.2
Net income (loss) $
13.5 $
(5.4) $
5.6 $
20.0 $
2.6 $
12.1
Diluted EPS $
0.13 $
(0.06) $
0.06 $
0.20 $
0.03 $
0.12
Other Financial Information Q4 2020 Q3 2020 Q4 2019
(in millions)
Adjusted EBITDA for the quarter $
26.4 $
7.2 $
17.6
Bookings for the quarter $
206.4 $
100.7 $
140.1
Backlog and deferred revenue as of quarter end $
290.5 $
216.2 $
210.2
Cash and cash equivalents as of quarter end $
98.6 $
70.8 $
93.1
---
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
GAAP Financial Guidance
Q1 2021 2021
Low High Low High
(in millions, except percentages and per share data)
Net revenue $
97.0 $
107.0 $
430.0 $
465.0
Video $
61.0 $
66.0 $
260.0 $
275.0
Cable Access $
36.0 $
41.0 $
170.0 $
190.0
Gross margin % 51.0 53.0 51.0 54.0
% % % %
Operating expenses $
58.0 $
60.0 $
231.5 $
238.5
Operating income (loss) $
(9.0) $
(4.0) $
(12.5) $
12.5
Tax expense $
(0.7) $
0.7 $
(2.7) $
(2.7)
EPS $
(0.12) $
(0.07) $
(0.26) $
(0.02)
Shares 99.7 99.7 101.0 101.0
Cash $
85.0 $
95.0 $
110.0 $
130.0
---
Non-GAAP Financial Guidance
Q1 2021 2021
Low High Low High
(in millions, except percentages and per share data)
Net revenue $
97.0 $
107.0 $
430.0 $
465.0
Video $
61.0 $
66.0 $
260.0 $
275.0
Cable Access $
36.0 $
41.0 $
170.0 $
190.0
Gross margin % 51.5 53.5 51.5 54.5
% % % %
Operating expenses $
49.0 $
51.0 $
206.0 $
213.0
Operating income $
1.0 $
6.0 $
15.5 $
40.5
Adjusted EBITDA $
4.0 $
9.0 $
27.5 $
53.0
Tax rate 10 10 10 10
% % % %
EPS $
0.00 $
0.04 $
0.09 $
0.31
Shares 102.5 102.5 103.7 103.7
Cash $
85.0 $
95.0 $
110.0 $
130.0
---
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, February 1, 2021. 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 (conference ID 1694224). 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 (conference ID 1694224).
About Harmonic Inc.
Harmonic (NASDAQ: HLIT), the worldwide leader in visualized cable access and video delivery solutions, enables media companies and service providers to deliver ultra-high-quality video streaming and broadcast services to consumers globally. The Company 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 platforms, or powering the delivery of gigabit internet cable services, Harmonic is changing the way media companies and service providers monetize live and on-demand 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: net revenue, gross margins, operating expenses, operating income (loss), Adjusted EBITDA, tax expense and tax rate, 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:
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.
Loss on convertible debt extinguishment/conversion - In the fourth quarter of fiscal 2020, we recorded a loss of $0.5 million resulting from the conversion and settlement of the remaining $8.1 million of our convertible notes due in December 2020. In the second quarter of fiscal 2020, we recorded a debt extinguishment loss of $0.8 million resulting from the exchange of $37.7 million in aggregate principal amount of our convertible notes due in 2020 for $37.7 million in aggregate principal amount of convertible notes due in 2022. In the third quarter of fiscal 2019, we recorded a debt extinguishment loss of $5.7 million resulting from refinancing a portion of our convertible notes due in 2020. We have excluded these losses from our non-GAAP financial measures because we do not believe the losses are reflective of our ongoing long-term business and operating results.
Non-cash interest expense and other expenses related to convertible notes and other debt - 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.
Depreciation - Depreciation expense, along with interest, tax and stock-based compensation expense, restructuring charges and amortization of intangible assets, is excluded from Adjusted EBITDA because we do not believe depreciation and the other items relate to the ordinary course of our business or are reflective of our underlying business performance.
Harmonic Inc.
Preliminary Consolidated Balance Sheets
(Unaudited, in thousands, except per share data)
December 31, 2020 December 31, 2019
---
ASSETS
Current assets:
Cash and cash equivalents $
98,645 $
93,058
Accounts receivable, net 66,227 88,500
Inventories 35,031 29,042
Prepaid expenses and other current assets 38,132 40,762
Total current assets 238,035 251,362
Property and equipment, net 43,141 22,928
Operating lease right-of-use assets 27,556 27,491
Other long-term assets 38,609 41,305
Intangibles, net 508 4,461
Goodwill 243,674 239,780
Total assets $
591,523 $
587,327
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $
23,543 $
40,933
Accrued other current liabilities 57,687 63,761
Deferred revenue 54,294 37,117
Convertible notes, short-term - 43,375
Other debts and finance lease obligations, current 11,771 6,713
Total current liabilities 147,295 191,899
Convertible notes, long-term 129,507 88,629
Other debts and finance lease obligations, long-term 10,086 10,511
Other non-current liabilities 46,333 41,432
Total liabilities 333,221 332,471
Convertible notes - 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; 98,204 and 91,875 shares 98 92
issued and outstanding at December 31, 2020 and 2019, respectively
Additional paid-in capital 2,353,559 2,327,359
Accumulated deficit (2,101,211) (2,071,940)
Accumulated other comprehensive income (loss) 5,856 (3,065)
Total stockholders' equity 258,302 252,446
Total liabilities and stockholders' equity $
591,523 $
587,327
Harmonic Inc.
Preliminary Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
Three months ended
Year ended
December 31, December 31, December 31, December 31,
2020 2019 2020 2019
---
Revenue:
Appliance and integration $
98,787 $
85,933 $
252,014 $
275,797
SaaS and service 32,741 36,245 126,817 127,077
Total net revenue 131,528 122,178 378,831 402,874
Cost of revenue:
Appliance and integration 45,795 47,107 126,948 130,284
SaaS and service 14,171 13,376 56,886 49,578
Total cost of revenue 59,966 60,483 183,834 179,862
Total gross profit 71,562 61,695 194,997 223,012
Operating expenses:
Research and development 20,667 21,703 82,494 84,614
Selling, general and administrative 32,615 30,557 119,611 119,035
Amortization of intangibles 755 782 3,019 3,139
Restructuring and related charges 750 1,947 2,322 3,141
Total operating expenses 54,787 54,989 207,446 209,929
Income (loss) from operations 16,775 6,706 (12,449) 13,083
Interest expense, net (2,737) (2,789) (11,509) (11,651)
Loss on convertible debt extinguishment/conversion (528) (1,362) (5,695)
Other expense, net (84) (897) (2,333)
Income (loss) before income taxes 13,426 3,917 (26,217) (6,596)
Provision for (benefit from) income taxes (39) (1,653) 3,054 (672)
Net income (loss) $
13,465 $
5,570 $
(29,271) $
(5,924)
Net income (loss) per share:
Basic $
0.14 $
0.06 $
(0.30) $
(0.07)
Diluted $
0.13 $
0.06 $
(0.30) $
(0.07)
Shares used in per share calculations:
Basic 97,938 91,124 96,971 89,575
Diluted 100,316 97,499 96,971 89,575
Harmonic Inc.
Preliminary Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Year ended
December 31, December 31,
2020 2019
---
Cash flows from operating activities:
Net loss $
(29,271) $
(5,924)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation 11,737 11,287
Amortization of intangibles 3,970 8,319
Stock-based compensation 18,040 12,074
Amortization of discount on convertible and other debt 7,058 6,756
Amortization of non-cash warrant 1,746 13,576
Foreign currency adjustments 6,391 (290)
Loss on convertible debt extinguishment/conversion 1,362 5,695
Deferred income taxes, net (105) (2,076)
Provision for doubtful accounts and returns 1,666 1,500
Provision for excess and obsolete inventories 1,847 1,479
Other non-cash adjustments, net 409 1,349
Changes in operating assets and liabilities:
Accounts receivable 21,186 (8,388)
Inventories (8,195) (4,819)
Prepaid expenses and other assets 11,556 (3,347)
Accounts payable (18,173) 5,086
Deferred revenues 19,751 (3,436)
Accrued and other liabilities (11,812) (7,546)
Net cash provided by operating activities 39,163 31,295
Cash flows from investing activities:
Purchases of property and equipment (32,205) (10,328)
Net cash used in investing activities (32,205) (10,328)
Cash flows from financing activities:
Proceeds from convertible debt - 115,500
Payments of convertible debt (7,999) (109,603)
Payment of convertible debt issuance costs (672) (4,277)
Proceeds from other debts 9,398 4,684
Repayment of other debts and finance leases (6,646) (6,913)
Proceeds from common stock issued to employees 5,472 8,406
Payment of tax withholding obligations related to net share settlements of restricted stock units (1,662) (1,492)
Net cash (used in) provided by financing activities (2,109) 6,305
Effect of exchange rate changes on cash and cash equivalents 738 (203)
Net increase in cash and cash equivalents 5,587 27,069
Cash and cash equivalents, beginning of the year 93,058 65,989
Cash and cash equivalents, end of the year $
98,645 $
93,058
Harmonic Inc.
Preliminary Revenue Information
(Unaudited, in thousands, except percentages)
Three months ended
December 31, 2020
September 25, 2020
December 31, 2019
GAAP Adjustment(1) Non-GAAP GAAP Adjustment(1) Non-GAAP GAAP Adjustment(1) Non-GAAP
---
Geography
Americas $
84,916
$ $
84,916 65% $
54,521
$ $
54,521 58% $
68,869
$ $
68,869 56%
EMEA 34,825 34,825 26% 29,771 29,771 31% 39,874 39,874 33%
APAC 11,787 11,787 9% 10,600 10,600 11% 13,435 13,435 11%
---
Total $
131,528
$ $
131,528 100% $
94,892
$ $
94,892 100% $
122,178
$ $
122,178 100%
===
Market
Service Provider $
66,673
$ $
66,673 51% $
59,083
$ $
59,083 62% $
83,976
$ $
83,976 69%
Broadcast and Media 64,855 64,855 49% 35,809 35,809 38% 38,202 38,202 31%
---
Total $
131,528
$ $
131,528 100% $
94,892
$ $
94,892 100% $
122,178
$ $
122,178 100%
===
Twelve months ended
December 31, 2020
December 31, 2019
---
GAAP Adjustment(1) Non-GAAP GAAP Adjustment(1) Non-GAAP
---
Geography
Americas $
219,394
$ $
219,394 58% $
224,193 $
48 $
224,241 56%
EMEA 117,126 117,126 31% 117,477 117,477 29%
APAC 42,311 42,311 11% 61,204 61,204 15%
---
Total $
378,831
$ $
378,831 100% $
402,874 $
48 $
402,922 100%
===
Market
Service Provider $
211,684
$ $
211,684 56% $
249,512 $
48 $
249,560 62%
Broadcast and Media 167,147 167,147 44% 153,362 153,362 38%
---
Total $
378,831
$ $
378,831 100% $
402,874 $
48 $
402,922 100%
===
(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 December 31, 2020
Video Cable Access Total Segment Adjustments (1) Consolidated GAAP
Measures Measures
(non-GAAP)
---
Net revenue $
86,044 $
45,484 $
131,528
$ $
131,528
Gross profit 48,336 24,437 72,773 (1,211) 71,562
Gross margin% 56.2 53.7 55.3 54.4
%
%
%
%
Operating income 13,529 9,918 23,447 (6,672) 16,775
Operating margin% 15.7 21.8 17.8 12.8
%
%
%
%
Three months ended September 25, 2020
Video Cable Access Total Segment Adjustments (1) Consolidated GAAP
Measures Measures
(non-GAAP)
---
Net revenue $
54,641 $
40,251 $
94,892
$ $
94,892
Gross profit 29,825 19,682 49,507 (583) 48,924
Gross margin% 54.6 48.9 52.2 51.6
%
%
%
%
Operating income (loss) (1,699) 5,876 4,177 (5,798) (1,621)
Operating margin% (3.1) 14.6 4.4 (1.7)
%
%
%
%
Three months ended December 31, 2019
Video Cable Access Total Segment Adjustments (1) Consolidated GAAP
Measures 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 margin% 14.0 8.5 12.1 5.5
%
%
% %
Twelve months ended December 31, 2020
Video Cable Access Total Segment Adjustments (1) Consolidated GAAP
Measures Measures
(non-GAAP)
---
Net revenue $
242,510 $
136,321 $
378,831
$ $
378,831
Gross profit 132,092 66,661 198,753 (3,756) 194,997
Gross margin% 54.5 48.9 52.5 51.5
%
%
%
%
Operating income 1,326 11,651 12,977 (25,426) (12,449)
Operating margin% 0.5 8.5 3.4 (3.3)
%
%
%
%
Twelve months ended December 31, 2019
Video Cable Access Total Segment Adjustments (1) Consolidated GAAP
Measures Measures
(non-GAAP)
---
Net revenue $
278,028 $
124,894 $
402,922 $
(48) * $
402,874
Gross profit 162,156 68,596 230,752 (7,740) 223,012
Gross margin% 58.3 54.9 57.3 55.4
%
%
%
%
Operating income 15,837 22,219 38,056 (24,973) 13,083
Operating margin% 5.7 17.8 9.4 3.2
%
%
% %
(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 relates 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 twelve months ended December 31, 2019 was $124,846.
Harmonic Inc.
GAAP to Non-GAAP Reconciliations (Unaudited)
(in thousands, except percentages and per share data)
Three months ended December 31, 2020
Revenue Gross Profit Total Income from Total Non- Net Income
Operating Operations operating
Expense Expense, net
---
GAAP $
131,528 $
71,562 $
54,787 $
16,775 $
(3,349) $
13,465
Stock-based compensation - 348 (3,955) 4,303 4,303
Amortization of intangibles - (756) 756 756
Restructuring and related charges - 863 (750) 1,613 1,613
Loss on convertible debt extinguishment/conversion - 528 528
Non-cash interest and other expenses related to convertible notes - 1,607 1,607
and other debt
Discrete tax items and tax effect of non-GAAP adjustments - (2,262)
Total adjustments - 1,211 (5,461) 6,672 2,135 6,545
Non-GAAP $
131,528 $
72,773 $
49,326 $
23,447 $
(1,214) $
20,010
As a % of revenue (GAAP) 54.4 41.7 12.8 (2.5) 10.2
%
%
%
% %
As a % of revenue (Non-GAAP) 55.3 37.5 17.8 (0.9) 15.2
%
%
%
% %
Diluted net income per share:
Diluted net income per share-GAAP $
0.13
Diluted net income per share-Non-GAAP $
0.20
Shares used to compute diluted net income per share:
GAAP and Non-GAAP 100,316
Three months ended September 25, 2020
Revenue Gross Profit Total Income Total Non- Net Income
Operating| (Loss) from operating (Loss)
Expense Operations Expense, net
GAAP $
94,892 $
48,924 $
50,545 $
(1,621) $
(2,974) $
(5,381)
Stock-based compensation 281 (3,649) 3,930 3,930
Amortization of intangible (752) 752 752
Restructuring and related charges 302 (814) 1,116 1,116
Non-cash interest expenses and other expenses related to 1,666 1,666
convertible notes and other debt
Discrete tax items and tax effect of non-GAAP adjustments 499
Total adjustments 583 (5,215) 5,798 1,666 7,963
Non-GAAP $
94,892 $
49,507 $
45,330 $
4,177 $
(1,308) $
2,582
As a % of revenue (GAAP) 51.6 53.3 (1.7) (3.1) (5.7)
%
% % % %
As a % of revenue (Non-GAAP) 52.2 47.8 4.4 (1.4)
%
%
%
% % 2.7
Diluted net income (loss) per share:
Diluted net loss per share-GAAP $
(0.06)
Diluted net income per share-Non-GAAP $
0.03
Shares used to compute diluted net income (loss) per share:
GAAP 97,563
Non-GAAP 98,361
Three months ended December 31, 2019
Revenue Gross Profit Total Income from Total Non- Net Income
Operating Operations operating
Expense Expense, net
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 expenses and other expenses related to 1,796 1,796
convertible notes and other debt
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
Twelve months ended December 31, 2020
Revenue Gross Profit Total Income Total Non- Net Income
Operating (Loss) from operating (Loss)
Expense Operations Expense, net
GAAP $
378,831 $
194,997 $
207,446 $
(12,449) $
(13,768) $
(29,271)
Stock-based compensation 1,712 (16,328) 18,040 18,040
Amortization of intangibles 950 (3,020) 3,970 3,970
Restructuring and related charges 1,094 (2,322) 3,416 3,416
Loss on convertible debt extinguishment/conversion 1,362 1,362
Non-cash interest expenses and other expenses related to 7,058 7,058
convertible notes and other debt
Discrete tax items and tax effect of non-GAAP adjustments 2,291
Total adjustments 3,756 (21,670) 25,426 8,420 36,137
Non-GAAP $
378,831 $
198,753 $
185,776 $
12,977 $
(5,348) $
6,866
As a % of revenue (GAAP) 51.5 54.8 (3.3) (3.6) (7.7)
%
%
%
%
%
As a % of revenue (Non-GAAP) 52.5 49.0 3.4 (1.4) 1.8
%
%
%
%
%
Diluted net income (loss) per share:
Diluted net loss per share-GAAP $
(0.30)
Diluted net income per share-Non-GAAP $
0.07
Shares used to compute diluted net income (loss) per share:
GAAP 96,971
Non-GAAP 98,633
Twelve months ended December 31, 2019
Revenue Gross Profit Total Income from Total Non- Net Income
Operating Operations operating (Loss)
Expense Expense, net
GAAP $
402,874 $
223,012 $
209,929 $
13,083 $
(19,679) $
(5,924)
Accounting impact related to warrant amortization 48 48 48 48
Stock-based compensation 1,121 (10,953) 12,074 12,074
Amortization of intangibles 5,180 (3,139) 8,319 8,319
Restructuring and related charges 1,391 (3,141) 4,532 4,532
Loss on convertible debt extinguishment/conversion 5,695 5,695
Non-cash interest expenses and other expenses related to 7,683 7,683
convertible notes
Discrete tax items and tax effect of non-GAAP adjustments (4,482)
Total adjustments 48 7,740 (17,233) 24,973 13,378 33,869
Non-GAAP $
402,922 $
230,752 $
192,696 $
38,056 $
(6,301) $
27,945
As a % of revenue (GAAP) 55.4 52.1 3.2 (4.9) (1.5)
%
%
%
%
%
As a % of revenue (Non-GAAP) 57.3 47.8 9.4 (1.6) 6.9
%
%
%
%
%
Diluted net income (loss) per share:
Diluted net loss per share-GAAP $
(0.07)
Diluted net income per share-Non-GAAP $
0.30
Shares used to compute diluted net income (loss) per share:
GAAP 89,575
Non-GAAP 93,830
Harmonic Inc.
Preliminary Adjusted EBITDA Reconciliation (Unaudited)
(In thousands)
Three months ended
December September December
31, 2020 25, 2020 31, 2019
---
Net Income (Loss) - GAAP $
13,465 $
(5,381) $
5,570
Provision for (benefit from) income taxes (39) 786 (1,653)
Interest expense, net 2,737 2,807 2,789
Depreciation 3,054 3,148 2,807
Amortization of intangibles 756 752 2,077
EBITDA 19,973 2,112 11,590
Adjustments
Stock-based compensation 4,303 3,930 3,356
Loss on convertible debt extinguishment/conversion 528
Restructuring and related charges 1,613 1,116 2,615
Adjusted EBITDA $
26,417 $
7,158 $
17,561
Twelve months ended
December December
31, 2020 31, 2019
Net Loss - GAAP $
(29,271) $
(5,924)
Provision for (benefit from) income taxes 3,054 (672)
Interest expense, net 11,509 11,651
Depreciation 11,737 11,287
Amortization of intangibles 3,970 8,319
EBITDA 999 24,661
Adjustments
Accounting impact related to warrant amortization 48
Stock-based compensation 18,040 12,074
Loss on convertible debt extinguishment/conversion 1,362 5,695
Non-cash expenses related to convertible notes 927
Restructuring and related charges 3,416 4,532
Adjusted EBITDA $
23,817 $
47,937
Harmonic Inc.
GAAP to Non-GAAP Reconciliations on Financial Guidance (Unaudited)
(In millions, except percentages and per share data)
Q1 2021 Financial Guidance
Revenue
Gross Profit
Total
Income
Total Non-
Net Income
Operating (Loss) from operating (Loss)
Expense Operations Expense, net
---
GAAP
$97.0 to $107.0
$49.2 to $56.4
$58.0 to $60.0
$(9.0) to $(4.0) $(2.8)
$(12.4) to $(7.2)
Stock-based compensation - 0.6 (8.4) 9.0 9.0
Amortization of intangibles - (0.5) 0.5 0.5
Restructuring and related charges - 0.2 (0.2) 0.4 0.4
Non-cash interest and other expenses related to convertible notes and other debt - 1.8 1.8
Tax effect of non-GAAP adjustments -
$0.2 to $0.7
Total adjustments - 0.8 (9.1) 9.9 1.8
$11.6 to $12.4
Non-GAAP
$97.0 to $107.0
$50.0 to $57.2
$49.0 to $51.0
$1.0 to $6.0 $(1.0)
$0.0 to $4.4
===
As a % of revenue (GAAP) 51.0% to 53.0% 59.9% to 56.2% (9.2)% to (3.5)% (2.6)% to (2.9)% (12.8)% to (6.7)%
As a % of revenue (Non-GAAP) 51.5% to 53.5% 50.5% to 47.7% 1.0% to 5.8% (1.0)% to (1.0)% 0.0% to 4.1%
Diluted net income (loss) per share:
Diluted net loss per share-GAAP
$(0.12) to $(0.07)
Diluted net income per share-Non-GAAP
$0.00 to $0.04
Shares used to compute diluted net loss per share:
GAAP 99.7
Shares used to compute diluted net income per share:
Non-GAAP 102.5
2021 Financial Guidance
Revenue
Gross Profit
Total
Income
Total Non-
Net Income
Operating (Loss) from operating (Loss)
Expense Operations Expense, net
---
GAAP
$430.0 to $465.0
$219.0 to $250.9
$231.5 to $238.5
$(12.5) to $12.5 $(11.4)
$(26.6) to $(1.7)
Stock-based compensation expense - 1.7 (24.2) 25.9 25.9
Amortization of intangibles - (0.5) 0.5 0.5
Restructuring and related charges - 0.8 (0.8) 1.6 1.6
Non-cash interest expense related to convertible notes and other debt - 6.2 6.2
Tax effect of non-GAAP adjustments -
$(0.8) to $1.7
Total adjustments - 2.5 (25.5) 28.0 6.2
$33.4 to $35.9
Non-GAAP
$430.0 to $465.0
$221.5 to $253.4
$206.0 to $213.0
$15.5 to $40.5 $(5.2)
$9.3 to $31.7
===
As a % of revenue (GAAP) 51.0% to 54.0% 53.8% to 51.3% (2.9)% to 2.7% (2.5)% to (2.7)% (6.2)% to (0.4)%
As a % of revenue (Non-GAAP) 51.5% to 54.5% 47.9% to 45.8% 3.6% to 8.7% (1.1)% to (1.2)% 2.2% to 6.8%
Diluted net income (loss) per share:
Diluted net loss per share-GAAP
$(0.26) to $(0.02)
Diluted net income per share-Non-GAAP
$0.09 to $0.31
Shares used to compute diluted net loss per share:
GAAP 101.0
Shares used to compute diluted net income per share:
Non-GAAP 103.7
Harmonic Inc.
Adjusted EBITDA Reconciliation on Financial Guidance (Unaudited)
(In millions)
Q1 2021 Financial 2021 Financial
Guidance Guidance
---
Net Loss - GAAP
$(12.4) to $(7.2)
$(26.6) to $(1.7)
Provision for income taxes 0.7 2.7
Interest expense, net 2.5 10.2
Depreciation 3.4 14.0
Amortization of intangibles 0.5 0.5
EBITDA
$(5.3) to $(0.1)
$0.8 to $25.7
Adjustments
Stock-based compensation 9.0 25.9
Restructuring and related charges 0.4 1.6
Adjusted EBITDA
$4.0 to $9.0
$27.5 to $53.0
===
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SOURCE Harmonic Inc.
