Monday June 26, 4:35 pm Eastern Time
Company Press Release
Harmonic Announces Preliminary Second Quarter Results
SUNNYVALE, Calif.--(BUSINESS WIRE)--June 26, 2000--Harmonic Inc. (Nasdaq:HLIT - news) today announced preliminary results for the quarter ending June 30, 2000. The Company expects to report revenue of $74 million to $82 million for the second quarter. Excluding the effects of customary purchase accounting adjustments for such items as amortization of goodwill and other intangibles from the acquisition of the DiviCom division of C-Cube Microsystems Inc., which closed on May 3, 2000, the Company expects earnings per diluted share will range from $0.12 to $0.16 for the quarter.
Including purchase accounting adjustments, the Company expects to report a net loss for the quarter of $87 million to $90 million or $1.83 to $1.87 per share. These estimates include approximately two months of results of operations for the DiviCom business of C-Cube Microsystems Inc. These results are preliminary and not final and the Company expects to announce actual results on or about July 19, 2000.
Following the acquisition, the Company organized its operations into two product divisions, Broadband Access Networks (BAN) and Convergent Systems (CS), and a Worldwide Sales and Service division. The BAN division designs, manufactures and markets the Company's fiber optic products which are used extensively in hybrid-fiber coax and other broadband networks. The CS division designs, manufactures and markets digital headend systems, including substantially all of the products of the DiviCom business as well as the TRANsend(TM) and CyberStream(TM) product lines. The Worldwide Sales and Services division combines all of the Company's sales and customer service organizations and also includes DiviCom's system integration capability.
The Company anticipates that the BAN division will achieve revenue of $54 million to $58 million, compared to pro forma divisional revenue of $36.4 million in the second quarter of 1999. The BAN division's expected revenue for the second quarter of 2000 reflects reduced sales to AT&T, which have continued to decline from record levels in the third quarter of 1999. AT&T remains a major customer for the BAN division, and sales to BAN's other cable customers are expected to continue to increase in the second quarter from levels in the previous quarter.
The Company anticipates that the CS division will achieve revenue of $20 million to $24 million, which includes the DiviCom business from May 3, 2000. The level of the CS division's revenues currently anticipated is due to a number of factors including reduced spending by satellite operators, which have historically constituted a majority of the division's revenues. While several cable operators are evaluating CS's complete digital headend product line, sales were slower than anticipated in the quarter. In addition, the Company believes that organizational changes caused by DiviCom's separation from C-Cube Microsystems Inc. and subsequent merger with Harmonic have contributed to lower than anticipated sales.
The Company's reported results of operations for the second quarter and future periods will be impacted by the effects of purchase accounting arising from the acquisition of the DiviCom business. The most significant impact will arise from non-cash charges for amortization of goodwill and other intangibles, acquired in-process technology which will be charged to operations in the second quarter, and certain other customary purchase accounting adjustments.
``Except for reduced sales to AT&T, our core fiber optic business continues to grow across our worldwide base of cable customers,'' said Anthony J. Ley, Chairman, President and Chief Executive Officer. We are also seeing a growing interest by cable operators in our digital headend solutions. We believe our digital systems will become increasingly important for providing the channel capacity and bandwidth management required to offer digital video, high-speed data and other advanced services to a growing number of subscribers.``
``We have made significant progress in organizing the combined operations along our fiber optic and digital product lines. We continue to integrate our worldwide sales and customer support organizations to best meet the needs of our customers, and we are working hard to realize the expected synergies of the merger on the sales and product development fronts. While we expect revenue growth for our CS division to be modest in the second half of this year, the recent introduction of our NODEcmts product underlines the long-term strategic value of the merger. We remain very excited about the merger and emerging market opportunities before us.''
A live Internet broadcast of Harmonic's preliminary second quarter conference call (2:00 P.M. Pacific/5:00 P.M. Eastern) will be available today at www.harmonicinc.com under ``Investor Relations.''
About Harmonic Inc.
Harmonic is a leading provider of innovative broadband solutions that deliver video, voice and data to communications providers around the world. Harmonic's technically advanced fiber optic, digital video and IP data delivery systems enable network operators to provide a range of interactive and advanced digital services that include high-speed Internet access, telephony, digital video, HDTV, video & audio streaming, and video-on-demand.
Headquartered in Sunnyvale, Calif., Harmonic employs approximately 950 people and operates more than 15 R&D and sales and system integration centers globally. Harmonic's customer base includes the world's largest communications providers. Harmonic's stock is traded on the Nasdaq stock market under the symbol ``HLIT.'' For more information, check the company's website at www.harmonicinc.com.
The anticipated results described in the above paragraphs constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to a number of risks and uncertainties which would cause actual results to differ materially from those projected, including final determination of revenue, actual costs and expenses incurred during the quarter and decisions regarding reserves and allowances made in the normal course of the accounting close for the quarter, which at this time is not yet complete. This release contains other forward-looking statements, including statements concerning sales of digital headend products to cable operators, revenue trends for the Convergent Systems division and the ongoing integration of combined operations. These forward-looking statements are also subject to risks and uncertainties which would cause actual results to differ materially from those projected. Those risks include competitive conditions, market acceptance of new or existing products, unpredictable sales cycles, cable and satellite industry capital spending, and difficulties associated with integrating operations in a timely manner. Additionally, risks are detailed in the Company's filings with the Securities and Exchange Commission, including its 1999 Annual Report on Form 10-K and 10-K/A and Quarterly Report on Form 10-Q for the quarter ended March 31, 2000. The Company may, from time to time, make additional written and oral forward-looking statements, including statements contained in the Company's filings with the Securities and Exchange Commission and its reports to shareholders. The Company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the Company. |
