Harmonic Announces Record Fourth Quarter and Year-end Results
SUNNYVALE, Calif.--(BUSINESS WIRE)--Jan. 19, 2000--Harmonic Inc.
(Nasdaq: HLIT) today announced its results for the quarter and year
ended December 31, 1999.
For the fourth quarter of 1999, Harmonic reported net sales of
$63.3 million, up 134% from $27.1 million for the fourth quarter of
1998. Net income for the fourth quarter of 1999 was $10.8 million or
$0.33 per diluted share on 33,074,000 shares outstanding, compared to
net income of $628,000 or $0.02 per diluted share on 25,250,000 shares
outstanding for the same period of the previous year.
For 1999, Harmonic reported net sales of $184.1 million, up 119%
from $83.9 million for 1998. Net income for 1999 was $23.7 million or
$0.76 per diluted share, compared to a net loss of $21.5 million or
($0.92) per diluted share for 1998. The loss for 1998 included a
charge of $14.0 million or $0.60 per diluted share resulting from the
acquisition of Harmonic Data Systems.
Harmonic experienced strong demand for its fiber optic products
across its worldwide base of cable customers during the fourth
quarter. Domestic sales increased 197% from the fourth quarter of
1998. While AT&T continued to be the Company's largest single
customer, Harmonic's shipments to other major domestic cable operators
grew strongly during the quarter. International sales increased across
all regions, up 47% from the fourth quarter of 1998.
During the quarter, Harmonic announced a definitive agreement to
acquire the DiviCom business of C-Cube Microsystems (Nasdaq: CUBE).
DiviCom is a leading developer of standards-based MPEG-2 encoding
systems for digital video. The combination will position Harmonic as a
leading supplier of open-system solutions for delivering video, voice
and data over a variety of network architectures. The transaction is
currently expected to close by the end of March, 2000.
"This was a great year for Harmonic," said Anthony J. Ley,
Chairman, President and Chief Executive Officer. "We are very pleased
with our growth in sales and profitability, and our continued
development and roll out of exciting new systems. Backed by stronger
financial resources and subscriber demand for bandwidth, cable
operators continued to upgrade their networks to offer
video-on-demand, high-speed Internet access, telephony and other
advanced services."
"In 2000, we intend to continue to develop advanced fiber optic
and digital systems, expand our worldwide sales and marketing effort,
and complete the acquisition and integration of DiviCom. The
combination with DiviCom will double the size of our company and allow
us to offer more complete solutions for cable operators, as well as
expand our penetration into telecommunications, satellite, wireless
and other emerging broadband markets. We expect that combining
DiviCom's strengths in digital compression and our strengths in fiber
optics will significantly enhance Harmonic's position in the broadband
market."
A live Internet broadcast of Harmonic's fourth quarter conference
call (2:00 PM Pacific/5:00 PM Eastern) will be available today at
www.harmonicinc.com under "Investor Relations."
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 450 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 fiber optic products, the continued upgrade of
cable networks and continued industry spending, Harmonic's continued
development and deployment of new fiber optic and digital systems, the
expansion of Harmonic's sales and marketing efforts, and expectations
regarding the market impact of Harmonic's proposed acquisition of the
DiviCom business of C-Cube Microsystems. 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 scalable node
products; dependence on the evolution of wireless and satellite
broadband services; the timely completion of the acquisition of
DiviCom; the successful integration of the products, customers,
suppliers and employees of DiviCom 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)
Three months ended
(Unaudited)
December 31, December 31,
1999 1998
Net sales $ 63,286 $ 27,097
Cost of sales 34,144 16,728
Gross profit 29,142 10,369
Operating expenses:
Research and development 5,310 3,351
Sales and marketing 7,309 4,857
General and administrative 3,027 1,578
Acquired in-process
technology - -
--------------- ----------------
Total operating expenses 15,646 9,786
Income (loss) from operations 13,496 583
Interest and other income, net 882 45
Income (loss) before
income taxes 14,378 628
Provision for income taxes 3,594 -
--------------- ----------------
Net income (loss) $ 10,784 $ 628
Net income (loss) per share
Basic $ 0.35 $ 0.03
Diluted $ 0.33 $ 0.02
Weighted average shares
Basic 30,387 23,393
Diluted 33,074 25,250
Year ended
December 31, December 31,
1999 1998
Net sales $ 184,075 $ 83,857
Cost of sales 103,470 53,302
Gross profit 80,605 30,555
Operating expenses:
Research and development 17,281 13,524
Sales and marketing 25,032 18,162
General and administrative 9,275 6,812
Acquired in-process
technology - 14,000
Total operating expenses 51,588 52,498
Income (loss) from operations 29,017 (21,943)
Interest and other income, net 2,556 490
Income (loss) before
income taxes 31,573 (21,453)
Provision for income taxes 7,893 -
---------------- ----------------
Net income (loss) $ 23,680 $ (21,453)
================ ================
Net income (loss) per share
Basic $ 0.84 $ (0.92)
================ ================
Diluted $ 0.76 $ (0.92)
================ ================
Weighted average shares
Basic 28,290 23,244
Diluted 30,967 23,244
Harmonic Inc.
Condensed Consolidated Balance Sheets
(In thousands)
December 31, December 31,
1999 1998
Assets
Current assets:
Cash and cash equivalents $ 24,822 $ 9,178
Short-term investments 64,877 -
Accounts receivable, net 35,421 17,646
Inventories 35,310 22,385
Prepaid expenses and other assets 3,792 1,175
Total current assets 164,222 50,384
Property and equipment, net 14,931 10,726
Intangibles and other assets 1,062 1,314
$ 180,215 $ 62,424
Liabilities and stockholders'
equity
Current liabilities:
Accounts payable $ 18,946 $ 7,534
Income taxes payable 5,031 151
Accrued liabilities 19,073 10,204
Current portion of
long-term debt - 177
Total current liabilities 43,050 18,066
Long term debt, less
current portion - 400
Other non-current liabilities 521 484
Stockholders' equity:
Common stock 140,338 70,936
Accumulated deficit (3,792) (27,472)
Accumulated other
comprehensive income 98 10
Total stockholders' equity 136,644 43,474
$ 180,215 $ 62,424
*T
CONTACT:
Harmonic Inc.
Robin N. Dickson, 408/542-2500
Chief Financial Officer
or
StreetConnect
Michael Newman, 408/542-2760
Investor Relations
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