SAN JOSE, Calif., Feb. 28, 2017 /PRNewswire/ -- Harmonic Inc. (NASDAQ: HLIT), the worldwide leader in video delivery infrastructure, announced today its unaudited results for the fourth quarter and fiscal year ended December 31, 2016.

GAAP net revenue for the fourth quarter of 2016 was $113.1 million, compared with $101.4 million for the third quarter of 2016 and $86.6 million for the fourth quarter of 2015. GAAP net revenue for fiscal 2016 was $405.9 million, compared with $377.0 million for 2015.

Non-GAAP net revenue for the fourth quarter of 2016 was $113.8 million, compared with $101.7 million for the third quarter of 2016 and $86.6 million for the fourth quarter of 2015. Non-GAAP net revenue for fiscal 2016 was $408.3 million, compared with $377.0 million for 2015.

Bookings for the fourth quarter of 2016 were $116.9 million, compared with $97.3 million for the third quarter of 2016 and $101.0 million for the fourth quarter of 2015.

The GAAP net loss for the fourth quarter of 2016 was $(10.4) million, or $(0.13) per diluted share, compared with a GAAP net loss for the third quarter of 2016 of $(16.0) million, or $(0.21) per diluted share, and a GAAP net loss for the fourth quarter of 2015 of $(7.2) million, or $(0.08) per diluted share. The GAAP net loss for fiscal 2016 was $(72.3) million, or $(0.93) per diluted share, compared to a GAAP net loss of $(15.7) million, or $(0.18) per diluted share, for 2015.

Non-GAAP net income for the fourth quarter of 2016 was $6.7 million, or $0.08 per diluted share, compared with a non-GAAP net loss for the third quarter of 2016 of $(1.1) million, or $(0.01) per diluted share, and non-GAAP net income for the fourth quarter of 2015 of $0.6 million, or $0.01 per diluted share. The Non-GAAP net loss for fiscal 2016 was $(2.8) million, or $(0.04) per diluted share, compared with non-GAAP net income of $9.1 million, or $0.10 per diluted share, for 2015. See 'Use of Non-GAAP Financial Measures' and 'GAAP to Non-GAAP Reconciliations' provided below.

Total cash, cash equivalents and short-term investments were $62.6 million at the end of the fourth quarter of 2016, up $9.9 million from $52.7 million as of the end of the prior quarter. In the fourth quarter of 2016, the Company generated approximately $13.4 million of cash from operations.

'In 2016, we made significant progress with our Video operating segment as we continued our transition to software based products and services and completed the integration of Thomson Video Networks,' said Patrick Harshman, CEO of Harmonic Inc. 'We are targeting year-over-year revenue growth and double digit operating profit in 2017 for our Video business. For our Cable Edge operating segment, we look forward to a planned major roll-out of our new CableOS products and services in the second half of 2017 and the resultant operating profit.'

Fourth Quarter 2016 Highlights

  • Near record backlog and deferred revenue of $188.4 million
  • Record video segment revenue and operating margin driven by continued momentum in our software transition, aided by order timing
  • VOS software-as-a-service (SaaS) win with a leading North American media company
  • Global demand for our legacy EdgeQAM technology continued to decline and consequently the Cable Edge segment experienced its lowest revenue quarter on record
  • Declared general commercial availability for CableOS, the industry's first software-based CMTS core
  • First CableOS revenue shipments into live commercial deployments with a tier 1 service provider in Europe
  • Expanded CableOS field trial activity and pipeline
  • Completed the integration of Thomson Video Networks, realized annualized cost savings above our $20 million target

Business Outlook

First Quarter 2017 GAAP Financial Guidance

For the first quarter of 2017, Harmonic anticipates:

  • Net revenue to be $86.5 million to $94.5 million, which includes Video revenue of $79.8 million to $85.8 million and Cable Edge revenue of $6.7 million to $8.7 million
  • Gross margin to be 49.0% to 50.0%
  • Operating expense to be $58.7 million to $59.7 million
  • Operating loss to be $(16.0) million to $(12.0) million
  • EPS to be $(0.24) to $(0.19)
  • Tax expense to be approximately $0.5 million
  • Share count for EPS calculation to be approximately 80 million shares of Harmonic common stock
  • Cash and short-term investments at quarter-end to be $60 million to $65 million

First Quarter 2017 Non-GAAP Financial Guidance

For the first quarter of 2017, Harmonic anticipates:

  • Net revenue to be $87.0 million to $95.0 million, which includes Video revenue of $80.0 million to $86.0 million and Cable Edge revenue of $7.0 million to $9.0 million
  • Gross margin to be 53.0% to 54.0%
  • Operating expense to be $52.0 million to $53.0 million
  • Operating loss to be $(6.0) million to $(2.0) million
  • EPS to be $(0.08) to $(0.04)
  • Tax rate to be approximately 15%
  • Share count for EPS calculation to be approximately 81 million shares of Harmonic common stock
  • Cash and short-term investments at quarter-end to be $60 million to $65 million

See 'Use of Non-GAAP Financial Measures' and 'GAAP to Non-GAAP Reconciliations' below.

Conference Call Information

Harmonic will host a conference call to discuss its financial results at 2:00 p.m. Pacific (5:00 p.m. Eastern) on Tuesday, February 28, 2017. A listen-only broadcast of the conference call can be accessed either from the Company's website at www.harmonicinc.com or by calling +1.574.990.1032 or +1.800.240.9147 (passcode 64276801). A replay of the conference call will be available after 4:30 p.m. Pacific at the same website address or by calling +1.404.537.3406 or +1.855.859.2056 (passcode 64276801).

About Harmonic Inc.

Harmonic (NASDAQ: HLIT) is the worldwide leader in video delivery infrastructure for emerging television and video services. The Company's production-ready innovation enables content and service providers to efficiently create, prepare, and deliver differentiated services for television and new media video platforms. 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: our final results for the fourth quarter and fiscal year ended December 31, 2016; 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), non-GAAP EPS, and Non-GAAP tax rate for the first quarter of 2017, share count, as well as cash and short-term investments at the end of the first quarter of 2017. Our expectations regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include, in no particular order, the following: anticipated business opportunities and operational efficiencies for the combined company do not fully materialize; the trends toward more high-definition, on-demand and anytime, anywhere video will not continue to develop at its current pace or will expire; a strong U.S. dollar may have a negative impact on our business in certain international markets; the possibility that our products will not generate sales that are commensurate with our expectations or that our cost of revenue or operating expenses may exceed our expectations; the mix of products and services sold in various geographies and the effect it has on gross margins; delays or decreases in capital spending in the cable, satellite and telco and broadcast and media industries; customer concentration and consolidation; the impact of general economic conditions on our sales and operations; our ability to develop new and enhanced products in a timely manner and market acceptance of our new or existing products; losses of one or more key customers; risks associated with our international operations, including in Ukraine; risks associated with our CableOS™ and VOS™ product initiatives; dependence on market acceptance of various types of broadband services, on the adoption of new broadband technologies and on broadband industry trends; inventory management; the lack of timely availability of parts or raw materials necessary to produce our products; the impact of fluctuations in the prices of raw materials and oil; the effect of competition, on both revenue and gross margins; difficulties associated with rapid technological changes in our markets; risks associated with unpredictable sales cycles; our dependence on contract manufacturers and sole or limited source suppliers; the effect on our business of natural disasters; and risks associated with our outstanding convertible notes. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in Harmonic's filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K for the year ended December 31, 2015, our recent Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K. The forward-looking statements in this press release are based on information available to the Company as of the date hereof, and Harmonic disclaims any obligation to update any forward-looking statements.

Use of Non-GAAP Financial Measures

In establishing operating budgets, managing its business performance, and setting internal measurement targets, we exclude a number of items required by GAAP. Management believes that these accounting charges and credits, most of which are non-cash or non-recurring in nature, are not useful in managing its operations and business. Historically, the Company has also publicly presented these supplemental non-GAAP measures in order to assist the investment community to see the Company 'through the eyes of management,' and thereby enhance understanding of its operating performance. The non-GAAP measures presented here are: revenue, gross profit, operating expenses, income (loss) from operations, total non-operating income (expense), net and net income (loss), tax rate, and net income (loss) per diluted share. The presentation of non-GAAP information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP, and is not necessarily comparable to non-GAAP results published by other companies. A reconciliation of the historical non-GAAP financial measures discussed in this press release to the most directly comparable historical GAAP financial measures is included with the financial statements provided with this press release. The types of non-GAAP adjustments described below have historically been excluded from our GAAP financial measures: acquisition accounting impacts to TVN deferred revenue and TVN inventory valuation; TVN acquisition-and integration-related costs; Cable Edge inventory charge in connection with certain product lines; restructuring and related charges; and non-cash items, such as warrant amortization, impairment of long-term investment, stock-based compensation expense, amortization of intangibles and non-cash interest expenses related to convertible debt and adjustments that normalize the tax rate.

Harmonic Inc.

Preliminary Consolidated Balance Sheets

(Unaudited, in thousands, except per share data)

December 31, 2016

December 31, 2015

ASSETS

Current assets:

Cash and cash equivalents

$

55,635

$

126,190

Short-term investments

6,923

26,604

Accounts receivable

86,765

69,515

Inventories

41,193

38,819

Prepaid expenses and other current assets

26,319

25,003

Total current assets

216,835

286,131

Property and equipment, net

32,164

27,012

Goodwill

237,279

197,781

Intangibles, net

29,231

4,097

Other long-term assets

38,560

9,936

Total assets

$

554,069

$

524,957

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Other debts and capital lease obligations, current

$

7,275

$

-

Accounts payable

28,892

19,364

Income taxes payable

1,166

307

Deferred revenues

52,414

33,856

Accrued and other current liabilities

55,150

31,354

Total current liabilities

144,897

84,881

Convertible notes, long-term

103,259

98,295

Other debts and capital lease obligations, long-term

13,915

-

Income taxes payable, long-term

2,926

3,886

Other non-current liabilities

18,431

9,727

Total liabilities

283,428

196,789

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; 78,456 and 76,015 shares issued and outstanding at December 31, 2016 and 2015, respectively

78

76

Additional paid-in capital

2,254,055

2,236,418

Accumulated deficit

(1,976,222)

(1,903,908)

Accumulated other comprehensive loss

(7,270)

(4,418)

Total stockholders' equity

270,641

328,168

Total liabilities and stockholders' equity

$

554,069

$

524,957

Harmonic Inc.

Preliminary Consolidated Statements of Operations

(Unaudited, in thousands, except per share data)

Three months ended

Year ended

December 31, 2016

December 31, 2015

December 31, 2016

December 31, 2015

Revenue:

Product

$

79,918

$

61,711

$

285,260

$

276,876

Service

33,184

24,892

120,651

100,151

Total net revenue

113,102

86,603

405,911

377,027

Cost of revenue:

Product

40,016

26,967

145,714

121,988

Service

15,393

12,568

59,447

52,327

Total cost of revenue

55,409

39,535

205,161

174,315

Total gross profit

57,693

47,068

200,750

202,712

Operating expenses:

Research and development

24,129

21,721

98,401

87,545

Selling, general and administrative

38,883

29,517

144,381

120,960

Amortization of intangibles

796

1,445

10,402

5,783

Restructuring and related charges

10,114

746

14,602

1,372

Total operating expenses

73,922

53,429

267,786

215,660

Loss from operations

(16,229)

(6,361)

(67,036)

(12,948)

Interest and other expense, net

(2,822)

(435)

(10,628)

(333)

Other income (expense), net

(26)

17

(31)

(282)

Loss on impairment of long-term investment

-

-

(2,735)

(2,505)

Loss before income taxes

(19,077)

(6,779)

(80,430)

(16,068)

Provision for (benefit from) income taxes

(8,634)

420

(8,116)

(407)

Net loss

$

(10,443)

$

(7,199)

$

(72,314)

$

(15,661)

Net loss per share:

Basic and diluted

$

(0.13)

$

(0.08)

$

(0.93)

$

(0.18)

Shares used in per share calculations:

Basic and diluted

78,389

84,932

77,705

87,514

Harmonic Inc.

Preliminary Consolidated Statements of Cash Flows

(Unaudited, in thousands)

Year ended

December 31, 2016

December 31, 2015

Cash flows from operating activities:

Net loss

$

(72,314)

$

(15,661)

Adjustments to reconcile net loss to net cash provided by operating activities:

Amortization of intangibles

14,836

6,502

Depreciation

18,819

13,241

Stock-based compensation

13,060

15,582

Amortization of discount on convertible debt

4,964

216

Provision for non-cash warrant

434

-

Restructuring, asset impairment and (gain) loss on retirement of fixed assets

2,305

641

Loss on impairment of long-term investment

2,735

2,505

Gain on pension curtailment

(1,955)

-

Deferred income taxes, net

(10,085)

(512)

Provision for doubtful accounts, returns and discounts

2,589

2,034

Provision for excess and obsolete inventories

6,871

1,585

Other non-cash adjustments, net

408

-

Changes in operating assets and liabilities, net of effects of acquisition:

Accounts receivable

(2,563)

2,595

Inventories

(4,107)

(5,954)

Prepaid expenses and other assets

(1,892)

(8,206)

Accounts payable

5,793

4,683

Deferred revenues

18,106

(4,541)

Income taxes payable

(133)

(1,637)

Accrued and other liabilities

2,567

(6,722)

Net cash provided by operating activities

438

6,351

Cash flows from investing activities:

Acquisition of business, net of cash acquired

(75,669)

-

Purchases of investments

-

(25,261)

Proceeds from maturities of investments

19,707

30,379

Purchases of property and equipment

(15,107)

(14,356)

Purchases of long-term investments

-

(85)

Restricted cash

591

(1,091)

Net cash used in investing activities

(70,478)

(10,414)

Cash flows from financing activities:

Proceeds from convertible debt

-

128,250

Payment of convertible debt issuance cost

(582)

(3,527)

Proceeds from other debts and capital leases

5,968

-

Repayment of other debts and capital leases

(8,338)

-

Proceeds from common stock issued to employees

4,444

9,222

Payment of tax withholding obligations related to net share settlements of restricted stock units

(1,644)

(3,549)

Payments for repurchases of common stock

-

(72,863)

Net cash (used in) provided by financing activities

(152)

57,533

Effect of exchange rate changes on cash and cash equivalents

(363)

(312)

Net (decrease) increase in cash and cash equivalents

(70,555)

53,158

Cash and cash equivalents at beginning of period

126,190

73,032

Cash and cash equivalents at end of period

$

55,635

$

126,190

Harmonic Inc.

Revenue Information

(Unaudited, in thousands, except percentages)

Three months ended

December 31, 2016

September 30, 2016

December 31, 2015

GAAP

Adjustment

Non-GAAP

GAAP

Adjustment

Non-GAAP

GAAP and Non-GAAP

Product

Video Products

$

75,151

$

-

$

75,151

67%

$

63,288

$

-

$

63,288

62%

$

50,293

58%

Cable Edge

4,767

295

5,062

4%

6,997

-

6,997

7%

11,418

13%

Services and Support

33,184

378

33,562

29%

31,121

325

31,446

31%

24,892

29%

Total

$

113,102

$

673

$

113,775

100%

$

101,406

$

325

$

101,731

100%

$

86,603

100%

Geography

Americas

$

52,736

$

474

$

53,210

47%

$

47,856

$

166

$

48,022

47%

$

46,782

54%

EMEA

41,036

77

41,113

36%

32,405

106

32,511

32%

21,120

24%

APAC

19,330

122

19,452

17%

21,145

53

21,198

21%

18,701

22%

Total

$

113,102

$

673

$

113,775

100%

$

101,406

$

325

$

101,731

100%

$

86,603

100%

Market

Service Provider

$

69,426

$

568

$

69,994

62%

$

53,459

$

97

$

53,556

53%

$

52,057

60%

Broadcast and Media

43,676

105

43,781

38%

47,947

228

48,175

47%

34,546

40%

Total

$

113,102

$

673

$

113,775

100%

$

101,406

$

325

$

101,731

100%

$

86,603

100%

Twelve months ended

December 31, 2016

December 31, 2015

GAAP

Adjustment

Non-GAAP

GAAP and Non-GAAP

Product

Video Products

$

244,313

$

560

$

244,873

60%

$

203,732

54%

Cable Edge

40,947

295

41,242

10%

73,144

19%

Services and Support

120,651

1,546

122,197

30%

100,151

27%

Total

$

405,911

$

2,401

$

408,312

100%

$

377,027

100%

Geography

Americas

$

207,249

$

864

$

208,113

51%

$

212,568

56%

EMEA

126,752

1,051

127,803

31%

92,422

25%

APAC

71,910

486

72,396

18%

72,037

19%

Total

$

405,911

$

2,401

$

408,312

100%

$

377,027

100%

Market

Service Provider

$

239,888

$

1,143

$

241,031

59%

$

230,523

61%

Broadcast and Media

166,023

1,258

167,281

41%

146,504

39%

Total

$

405,911

$

2,401

$

408,312

100%

$

377,027

100%

(1) Non-GAAP revenue for the three months ended December 31, 2016 and September 30, 2016, and for the twelve months ended December 31, 2016 include $0.2 million, $0.3 million and $2.0 million adjustments relating to TVN deferred revenue as a result of acquisition accounting, respectively. Non-GAAP revenue for the three and twelve months ended December 31, 2016 also includes $0.4 million adjustment related to the amortization of Comcast warrant.

(2) There is no revenue adjustment for the three and twelve months ended December 31, 2015.

Harmonic Inc.

Segment Revenue and Operating Income (Loss)

(Unaudited, in thousands)

Three months ended

December 31, 2016

September 30, 2016

December 31, 2015

GAAP

Adjustments(1)

Non-GAAP

GAAP

Adjustments(1)

Non-GAAP

GAAP

Adjustments(1)

Non-GAAP

Net revenue:

Video

$

104,540

$

239

$

104,779

$

91,353

$

325

$

91,678

$

72,401

$

-

$

72,401

Cable Edge

8,562

434

8,996

10,053

-

10,053

14,202

-

14,202

Total consolidated net revenue

$

113,102

$

673

$

113,775

$

101,406

$

325

$

101,731

$

86,603

$

-

$

86,603

Operating income (loss):

Video

$

13,906

$

239

$

14,145

$

4,886

$

325

$

5,211

$

5,143

$

-

$

5,143

Cable Edge

(5,013)

434

(4,579)

(4,767)

-

(4,767)

(4,181)

-

(4,181)

Total segment operating income (loss)

8,893

673

9,566

119

325

444

962

-

962

Unallocated corporate expenses

(18,479)

18,479

-

(4,983)

4,983

-

(2,055)

2,055

-

Stock-based compensation

(4,518)

4,518

-

(2,680)

2,680

-

(3,737)

3,737

-

Amortization of intangibles

(2,125)

2,125

-

(4,389)

4,389

-

(1,531)

1,531

-

Income (loss) from operations

(16,229)

25,795

9,566

(11,933)

12,377

444

(6,361)

7,323

962

Non-operating (expense) income, net

(2,848)

1,197

(1,651)

(4,321)

2,609

(1,712)

(418)

184

(234)

Income (loss) before income taxes

$

(19,077)

$

26,992

$

7,915

$

(16,254)

$

14,986

$

(1,268)

$

(6,779)

$

7,507

$

728

Twelve months ended

December 31, 2016

December 31, 2015

GAAP

Adjustments

Non-GAAP

GAAP

Adjustments

Non-GAAP

Net revenue:

Video

$

351,489

$

1,967

$

353,456

$

291,779

$

-

$

291,779

Cable Edge

54,422

434

54,856

85,248

-

85,248

Total consolidated net revenue

$

405,911

$

2,401

$

408,312

$

377,027

$

-

$

377,027

Operating income (loss):

Video

$

11,963

$

2,156

$

14,119

$

13,529

$

-

$

13,529

Cable Edge

(12,131)

434

(11,697)

(1,599)

-

(1,599)

Total segment operating income (loss)

(168)

2,590

2,422

11,930

-

11,930

Unallocated corporate expenses

(38,972)

38,972

-

(2,794)

2,794

-

Stock-based compensation

(13,060)

13,060

-

(15,582)

15,582

-

Amortization of intangibles

(14,836)

14,836

-

(6,502)

6,502

-

Income (loss) from operations

(67,036)

69,458

2,422

(12,948)

24,878

11,930

Non-operating (expense) income, net

(13,394)

7,702

(5,692)

(3,120)

2,689

(431)

Income (loss) before income taxes

$

(80,430)

$

77,160

$

(3,270)

$

(16,068)

$

27,567

$

11,499

(1) See 'Use of Non-GAAP Financial Measures' and 'GAAP to Non-GAAP Reconciliations' below.

Harmonic Inc.

GAAP to Non-GAAP Reconciliations (Unaudited)

(in thousands, except percentages and per share data)

Three months ended

December 31, 2016

Revenue

Gross Profit

Total Operating Expense

Income (loss) from Operations

Total Non-operating expense, net

Net Income(Loss)

GAAP

$

113,102

$

57,693

$

73,922

$

(16,229)

$

(2,848)

$

(10,443)

Cable Edge inventory charge

-

(327)

-

(327)

-

(327)

Acquisition accounting impact related to TVN deferred revenue

239

239

-

239

-

239

Accounting impact related to warrant amortization

434

434

-

434

-

434

Stock-based compensation in cost of revenue

-

543

-

543

-

543

Stock-based compensation in research and development

-

-

(1,130)

1,130

-

1,130

Stock-based compensation in selling, general and administrative

-

-

(2,845)

2,845

-

2,845

Amortization of intangibles

-

1,328

(797)

2,125

-

2,125

Restructuring and related charges

-

3,975

(11,519)

15,494

-

15,494

Gain on pension curtailment

-

(551)

1,404

(1,955)

-

(1,955)

TVN acquisition-and integration-related costs

-

439

(4,828)

5,267

(98)

5,169

Non-cash interest expenses related to convertible notes

-

-

-

-

1,295

1,295

Discrete tax items and tax effect of non-GAAP adjustments

-

-

-

-

-

(9,821)

Total adjustments

673

6,080

(19,715)

25,795

1,197

17,171

Non-GAAP

$

113,775

$

63,773

$

54,207

$

9,566

$

(1,651)

$

6,728

As a % of revenue (GAAP)

51.0

%

65.4

%

(14.3)%

(2.5)%

(9.2)%

As a % of revenue (Non-GAAP)

56.1

%

47.6

%

8.4

%

(1.5)%

5.9

%

Diluted income (loss) per share:

Diluted net loss per share-GAAP

$

(0.13)

Diluted net income per share-Non-GAAP

$

0.08

Shares used to compute net income (loss) per share:

GAAP

78,389

Non-GAAP

80,112

Three months ended

September 30, 2016

Revenue

Gross Profit

Total Operating Expense

Income (loss) from Operations

Total Non-operating expense, net

Net loss

GAAP

$

101,406

$

51,363

$

63,296

$

(11,933)

$

(4,321)

$

(16,012)

Cable Edge inventory charge

-

(159)

-

(159)

-

(159)

Acquisition accounting impact related to TVN deferred revenue

325

325

-

325

-

325

Stock-based compensation in cost of revenue

-

360

-

360

-

360

Stock-based compensation in research and development

-

-

(771)

771

-

771

Stock-based compensation in selling, general and administrative

-

-

(1,549)

1,549

-

1,549

Amortization of intangibles

-

1,380

(3,009)

4,389

-

4,389

Restructuring and related charges

-

(1)

27

(28)

-

(28)

TVN acquisition-and integration-related costs

-

119

(5,051)

5,170

98

5,268

Loss on impairment of long-term investment

-

-

-

-

1,259

1,259

Non-cash interest expenses related to convertible notes

-

-

-

-

1,252

1,252

Discrete tax items and tax effect of non-GAAP adjustments

-

-

-

-

-

(52)

Total adjustments

325

2,024

(10,353)

12,377

2,609

14,934

Non-GAAP

$

101,731

$

53,387

$

52,943

$

444

$

(1,712)

$

(1,078)

As a % of revenue (GAAP)

50.7

%

62.4

%

(11.8)%

(4.3)%

(15.8)%

As a % of revenue (non-GAAP)

52.5

%

52.0

%

0.4

%

(1.7)%

(1.1)%

Diluted loss per share:

Diluted net loss per share-GAAP

$

(0.21)

Diluted net loss per share-Non-GAAP

$

(0.01)

Shares used to compute diluted loss per share:

GAAP and Non-GAAP

78,092

Three months ended

December 31, 2015

Revenue

Gross Profit

Total Operating Expense

Income (loss) from Operations

Total Non-operating expense, net

Net Income (loss)

GAAP

$

86,603

$

47,068

$

53,429

$

(6,361)

$

(418)

$

(7,199)

Stock-based compensation in cost of revenue

-

479

-

479

-

479

Stock-based compensation in research and development

-

-

(1,186)

1,186

-

1,186

Stock-based compensation in selling, general and administrative

-

-

(2,072)

2,072

-

2,072

Amortization of intangibles

-

86

(1,445)

1,531

-

1,531

Restructuring and related charges

-

-

(746)

746

-

746

Loss on impairment of long-term investment

-

-

-

-

-

-

TVN acquisition costs

-

-

(1,309)

1,309

-

1,309

Non-cash interest expenses related to convertible note

-

-

-

-

184

184

Discrete tax items and tax effect of non-GAAP adjustments

-

-

-

-

-

266

Total adjustments

-

565

(6,758)

7,323

184

7,773

Non-GAAP

$

86,603

$

47,633

$

46,671

$

962

$

(234)

$

574

As a % of revenue (GAAP)

54.3

%

61.7

%

(7.3)%

(0.5)%

(8.3)%

As a % of revenue (Non-GAAP)

55.0

%

53.9

%

1.1

%

(0.3)%

0.7

%

Diluted income (loss) per share:

Diluted net loss per share-GAAP

$

(0.08)

Diluted net income per share-Non-GAAP

$

0.01

Shares used to compute diluted income (loss) per share:

GAAP

84,932

Non-GAAP

85,629

Year ended

December 31, 2016

Revenue

Gross Profit

Total Operating Expense

Income (loss) from Operations

Total Non-operating expense, net

Net loss

GAAP

$

405,911

$

200,750

$

267,786

$

(67,036)

$

(13,394)

$

(72,314)

Cable Edge inventory charge

-

4,033

-

4,033

-

4,033

Acquisition accounting impact related to TVN deferred revenue

1,967

1,967

-

1,967

-

1,967

Accounting impact related to warrant amortization

434

434

-

434

-

434

Acquisition accounting impacts related to TVN fair value of inventory

-

189

-

189

-

189

Stock-based compensation in cost of revenue

-

1,554

-

1,554

-

1,554

Stock-based compensation in research and development

-

-

(3,711)

3,711

-

3,711

Stock-based compensation in selling, general and administrative

-

-

(7,795)

7,795

-

7,795

Amortization of intangibles

-

4,433

(10,403)

14,836

-

14,836

Restructuring and related charges

-

3,951

(16,007)

19,958

-

19,958

Gain on pension curtailment

-

(551)

1,404

(1,955)

-

(1,955)

TVN acquisition-and integration-related costs

-

1,049

(15,887)

16,936

-

16,936

Loss on impairment of long-term investment

-

-

-

-

2,735

2,735

Non-cash interest expenses related to convertible notes

-

-

-

-

4,967

4,967

Discrete tax items and tax effect of non-GAAP adjustments

-

-

-

-

-

(7,624)

Total adjustments

2,401

17,059

(52,399)

69,458

7,702

69,536

Non-GAAP

$

408,312

$

217,809

$

215,387

$

2,422

$

(5,692)

$

(2,778)

As a % of revenue (GAAP)

49.5

%

66.0

%

(16.5)%

(3.3)%

(17.8)%

As a % of revenue (Non-GAAP)

53.3

%

52.8

%

0.6

%

(1.4)%

(0.7)%

Diluted loss per share:

Diluted net loss per share-GAAP

$

(0.93)

Diluted net loss per share-Non-GAAP

$

(0.04)

Shares used to compute diluted loss per share:

GAAP and Non-GAAP

77,705

Year ended

December 31, 2015

Revenue

Gross Profit

Total Operating Expense

Income (loss) from Operations

Total Non-operating expense, net

Net Income (loss)

GAAP

$

377,027

$

202,712

$

215,660

$

(12,948)

$

(3,120)

$

(15,661)

Stock-based compensation in cost of revenue

-

1,862

-

1,862

-

1,862

Stock-based compensation in research and development

-

-

(4,435)

4,435

-

4,435

Stock-based compensation in selling, general and administrative

-

-

(9,285)

9,285

-

9,285

Amortization of intangibles

-

719

(5,783)

6,502

-

6,502

Restructuring and related charges

-

113

(1,372)

1,485

-

1,485

Loss on impairment of long-term investment

-

-

-

-

2,505

2,505

TVN acquisition costs

-

-

(1,309)

1,309

-

1,309

Non-cash interest expenses related to convertible note

-

-

-

-

184

184

Discrete tax items and tax effect of non-GAAP adjustments

-

-

-

-

-

(2,823)

Total adjustments

-

2,694

(22,184)

24,878

2,689

24,744

Non-GAAP

$

377,027

$

205,406

$

193,476

$

11,930

$

(431)

$

9,083

As a % of revenue (GAAP)

53.8

%

57.2

%

(3.4)%

(0.8)%

(4.2)%

As a % of revenue (Non-GAAP)

54.5

%

51.3

%

3.2

%

(0.1)%

2.4

%

Diluted income (loss) per share:

Diluted net loss per share-GAAP

$

(0.18)

Diluted net income per share-Non-GAAP

$

0.10

Shares used to compute diluted income (loss) per share:

GAAP

87,514

Non-GAAP

88,476

Harmonic Inc.

GAAP to Non-GAAP Reconciliations on Business Outlook

(In millions, except percentages and per share data)

Q1-2017 Financial Guidance

Revenue

Gross Profit

Total Operating Expense

Loss from Operations

Total Non-operating expense, net

Net Loss

GAAP

$86.5 to
$94.5

$42.7 to
$47.7

$58.7 to
$59.7

$(16.0) to
$(12.0)

$(2.7)

$(19.1) to
$(15.6)

Acquisition accounting impact related to TVN deferred revenue

0.2

0.2

-

0.2

-

0.2

Accounting impact related to warrant amortization

0.3

0.3

-

0.3

-

0.3

Stock-based compensation expense

-

0.5

(3.6)

4.1

-

4.1

Amortization of intangibles

-

1.3

(0.8)

2.1

-

2.1

Restructuring and related charges and TVN integration costs

-

1.0

(2.3)

3.3

-

3.3

Non-cash interest expense related to convertible notes

-

-

-

-

1.3

1.3

Discrete tax items and tax effect of non-GAAP adjustments

-

-

-

-

-

1.3

Total adjustments

0.5

3.3

(6.7)

10.0

1.3

12.6

Non-GAAP

$87.0 to $95.0

$46.0 to
$51.0

$52.0 to
$53.0

$(6.0) to
$(2.0)

$(1.4)

$(6.5) to
$(3.0)

As a % of revenue (GAAP)

49% to 50%

63% to 68%

(18)% to (14)%

(3%)

(22)% to (16)%

As a % of revenue (Non-GAAP)

53% to 54%

56% to 60%

(6)% to (3)%

(1%)

(7)% to (3)%

Diluted income (loss) per share:

Diluted net loss per share-GAAP

$(0.24) to $(0.19)

Diluted net loss per share-Non-GAAP

$(0.08) to $(0.04)

Shares used to compute diluted income (loss) per share:

GAAP

80.0

Non-GAAP

81.0

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/harmonic-announces-fourth-quarter-and-fiscal-2016-results-300415260.html

SOURCE Harmonic Inc.

Harold Covert, Chief Financial Officer, Harmonic Inc., +1.408.542.2500; or Blair King, Investor Relations, +1.408.490.6172

Harmonic Inc. published this content on 28 February 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 28 February 2017 22:40:17 UTC.

Original documenthttp://phx.corporate-ir.net/phoenix.zhtml?c=90244&p=irol-newsArticle&ID=2250322

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