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Harmonic Announces Record Third Quarter Results
Business Wire - October 20, 1999 16:15
SUNNYVALE, Calif.--(BUSINESS WIRE)--Oct. 20, 1999--Harmonic Inc. (Nasdaq: HLIT) today announced its results for the quarter ended October 1, 1999.
For the third quarter of 1999, Harmonic reported net sales of $52.6 million, up 135% from $22.4 million for the third quarter of 1998. Net income for the third quarter of 1999 was $7.7 million or $0.23 per diluted share on 32,836,000 shares outstanding, compared to a net loss of $831,000 or ($0.04) per diluted share on 23,348,000 shares outstanding for the same period of the previous year. All shares outstanding and earnings per share data have been restated to reflect the Company's two-for-one stock split effective October 14, 1999.
For the first nine months of 1999, Harmonic reported net sales of $120.8 million, up 113% from $56.8 million for the same period of 1998. Net income for the first nine months was $12.9 million or $0.43 per diluted share, compared to a net loss of $22.1 million or ($0.95) per diluted share for the same period of the previous year. The loss for the first nine months of 1998 included a charge of $14.0 million or $0.60 per diluted share, resulting from the acquisition of Harmonic Data Systems Ltd. (HDS), previously named New Media Communication Ltd.
Harmonic experienced increased demand for its fiber optic products across its worldwide base of cable customers during the third quarter. Domestic sales increased 226% and international sales increased 30% from the third quarter of 1998. The Company continued to ship more of its METROLink(TM) dense wave division multiplexing systems to AT&T and a wide range of other customers. During the third quarter, Harmonic also shipped over 100 new multiplexing nodes for AT&T's LightWire(TM) field trial in Salt Lake City.
Harmonic continued to extend its digital product line, and introduced the MID 8000 for transmission of MPEG-2 video over IP and the IPG 8000 for the integration of IP data delivery in an MPEG-2 environment.
"We are very pleased with our growth in sales and profitability in the third quarter," said Anthony J. Ley, Chairman, President and Chief Executive Officer. "Domestic cable operators, backed by stronger financial resources and robust subscriber demand for bandwidth, continue to systematically and cost-effectively upgrade their networks to offer video-on-demand, high-speed Internet access, telephony and other advanced services."
"To capitalize on the strong growth in domestic cable industry spending, we continue to enhance our fiber optic and digital product lines. Growing interest in METROLink and the rapid development of our multiplexing node further demonstrates that Harmonic remains on the cutting edge of more powerful and cost-effective architectures for broadband communications."
About Harmonic Inc.
Harmonic designs, manufactures and markets digital and fiber optic systems for delivering video, voice and data over cable, satellite and wireless networks. These advanced solutions enable cable television and other network operators to provide a range of broadcast and interactive broadband services that include high-speed Internet access, telephony, and video-on-demand.
Harmonic is headquartered in Sunnyvale, Calif., where it also operates an R&D center and a manufacturing facility. The company also operates its Harmonic Data Systems subsidiary and an R&D center in Israel. In addition, the company maintains several sales and support centers worldwide. Harmonic is ISO 9001-certified and employs approximately 400 people. For more information about Harmonic please visit the Company's website at www.harmonicinc.com.
This press release contains forward-looking statements regarding increased demand for METROLink systems and other fiber optic products, the continued upgrade of cable networks and continued industry spending. Forward-looking statements involve a number of risks and uncertainties including, but not limited to, dependence on cable television and communications industry capital spending, in particular, that of AT&T, our largest customer; regulatory developments; rapid technological change; the highly competitive nature of the broadband communications industry; the Company's ability to successfully develop, manufacture and gain widespread market acceptance of new products, in particular its digital TRANsend product line, CyberStream, and scaleable node products; dependence on the evolution of wireless and satellite broadband services and other factors more fully described in the Company's reports to the Securities and Exchange Commission, including but not limited to, the reports on Form 10-K for the year ended December 31, 1998 and quarterly reports on Form 10-Q. Actual results may differ materially. The Company does not undertake to update any oral or written forward-looking statements that may be made by or on behalf of the Company.
Harmonic Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three months ended Nine months ended
October 1, October 2, October 1, October 2,
1999 1998 1999 1998
Net sales $ 52,624 $ 22,382 $120,789 $ 56,760
Cost of sales 29,528 13,948 69,326 36,574
-------- -------- -------- --------
Gross profit 23,096 8,434 51,463 20,186
-------- -------- -------- --------
Operating expenses:
Research and development 4,798 3,507 11,971 10,173
Sales and marketing 6,437 4,436 17,723 13,305
General and
administrative 2,536 1,535 6,248 5,234
Acquired in-process
technology -- -- -- 14,000
-------- -------- -------- --------
Total operating expenses 13,771 9,478 35,942 42,712
-------- -------- -------- --------
Income (loss) from
operations 9,325 (1,044) 15,521 (22,526)
Interest and other
income, net 931 213 1,674 445
-------- -------- -------- --------
Income (loss) before
income taxes 10,256 (831) 17,195 (22,081)
Provision for income taxes 2,564 -- 4,299 --
-------- -------- -------- --------
Net income (loss) $ 7,692 $ (831) $ 12,896 $(22,081)
======== ======== ======== ========
Net income (loss) per
share
Basic $ 0.25 $ (0.04) $ 0.47 $ (0.95)
======== ======== ======== ========
Diluted $ 0.23 $ (0.04) $ 0.43 $ (0.95)
======== ======== ======== ========
Weighted average shares
Basic 30,179 23,348 27,592 23,146
======== ======== ======== ========
Diluted 32,836 23,348 30,264 23,146
======== ======== ======== ========
Harmonic Inc.
Condensed Consolidated Balance Sheets
(In thousands)
October 1, December 31,
1999 1998
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 18,163 $ 9,178
Short-term investments 34,656 --
Accounts receivable, net 35,239 17,646
Inventories 30,496 22,385
Prepaid expenses and other assets 2,842 1,175
--------- ---------
Total current assets 121,396 50,384
Long-term marketable investments 22,839 --
Property and equipment, net 13,163 10,726
Intangibles and other assets 1,090 1,314
--------- ---------
$ 158,488 $ 62,424
========= =========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 15,075 $ 7,534
Accrued liabilities 18,171 10,355
Current portion of long term debt -- 177
--------- ---------
Total current liabilities 33,246 18,066
--------- ---------
Long term debt, less current portion -- 400
Other non-current liabilities 535 484
Stockholders' equity:
Common stock 139,151 70,936
Accumulated deficit (14,576) (27,472)
Accumulated other comprehensive income 132 10
--------- ---------
Total stockholders' equity 124,707 43,474
--------- ---------
$ 158,488 $ 62,424
========= =========
CONTACT: Harmonic Inc.
Robin N. Dickson, 408/542-2500 (CFO)
or
StreetConnect
Michael Newman, 408/542-2760 (IR)
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