Harmonic Announces Fourth Quarter and Fiscal 2020 Results

SAN JOSE, Calif., Feb. 1, 2021  /PRNewswire/ -- Harmonic Inc. 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 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

issued and outstanding at December 31, 2020 and 2019, respectively

98





92



   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,

2020



December 31,

2019



December 31,

2020



December 31,

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,

2020



December 31,

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

Measures

(non-GAAP)



Adjustments (1)



Consolidated GAAP

Measures

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

Measures

(non-GAAP)



Adjustments (1)



Consolidated GAAP

Measures

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

Measures

(non-GAAP)



Adjustments (1)



Consolidated GAAP

Measures

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

Measures

(non-GAAP)



Adjustments (1)



Consolidated GAAP

Measures

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

Measures

(non-GAAP)



Adjustments (1)



Consolidated GAAP

Measures

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

Operating

Expense

Income from

Operations

Total Non-

operating

Expense, net

Net Income

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

    and other debt









1,607



1,607



  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

Operating|

Expense

Income

(Loss) from

Operations

Total Non-

operating

Expense, net

Net Income

(Loss)

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

    convertible notes and other debt









1,666



1,666



  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

Operating

Expense

Income from

Operations

Total Non-

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 expenses and other expenses related to

    convertible notes and other debt









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



 



Twelve months ended December 31, 2020



Revenue

Gross Profit

Total

Operating

Expense

Income

(Loss) from

Operations

Total Non-

operating

Expense, net

Net Income

(Loss)

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

    convertible notes and other debt









7,058



7,058



  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

Operating

Expense

Income from

Operations

Total Non-

operating

Expense, net

Net Income

(Loss)

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

    convertible notes









7,683



7,683



  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

31, 2020

September

25, 2020

December

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

31, 2020

December

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

Operating

Expense

Income

(Loss) from

Operations

Total Non-

operating

Expense, net

Net Income

(Loss)

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

Operating

Expense

Income

(Loss) from

Operations

Total Non-

operating

Expense, net

Net Income

(Loss)

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

Guidance

2021 Financial

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

 

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/harmonic-announces-fourth-quarter-and-fiscal-2020-results-301219286.html

SOURCE Harmonic Inc.

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