Exhibit 99.1
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Contact: | | Michael R. Kourey, CFO |
| | Polycom, Inc. |
| | 925-924-5742 |
| | mkourey@polycom.com |
POLYCOM REPORTS SECOND QUARTER RESULTS
Revenue Growth of 35 Percent Year over Year to $133.8 Million in Q2 2004;
Record Gross Margin at 63.2 Percent
PLEASANTON, Calif. – July 22, 2004 – Polycom, Inc. (NASDAQ: PLCM), the world’s leading provider of unified collaborative communications solutions, today reported its operating results for the second quarter ended June 30, 2004.
Second quarter 2004 consolidated net revenues were $133.8 million, compared to $99.4 million recorded for the second quarter of 2003. Pro forma net income in the second quarter of 2004 was $17.0 million, or 17 cents per diluted share. This compares to pro forma net income of $8.1 million, or 8 cents per diluted share, for the second quarter of 2003. Pro forma financial measures exclude acquisition-related costs, purchased in-process research and development, amortization of purchased intangibles, restructuring costs, gain (loss) on strategic investments, income tax effect of the preceding adjustments, income (loss) from discontinued operations, net of taxes, and gain (loss) from sale of discontinued operations, net of taxes. GAAP net income for the second quarter of 2004 was $12.9 million, or 13 cents per diluted share, compared to $1.6 million, or 2 cents per diluted share, for the same period last year. Also, as previously announced, Polycom completed its acquisition of Voyant® Technologies, Inc., a leading provider of voice conferencing and collaboration network solutions on January 5, 2004.
For the six months ended June 30, 2004, net revenues were $253.0 million, compared to $192.4 million for the first six months of 2003. Pro forma net income for the period was $29.9 million, or 29 cents per diluted share, compared to $9.8 million, or 10 cents per diluted share for the first six months of 2003. GAAP net income for the six months ended June 30, 2004 was $16.2 million, or 16 cents per diluted share, compared to a GAAP net loss of $0.8 million, or a 1-cent net loss per diluted share, for the same period last year.
The reconciliation of the GAAP statement of operations amounts to the respective pro forma figures, for the three and six months ended June 30, 2004 and 2003 is set forth at the end of this press release.
On a product line basis, consolidated net revenues for the second quarter of 2004 were comprised of 53 percent video communications, or $71.2 million; 27 percent network systems, or $35.9 million; and 20 percent voice communications, or $26.7 million. This compares to the second quarter of 2003, in which consolidated net revenues were comprised of 63 percent video communications, or $63.0 million; 18 percent network systems, or $17.3 million; and 19 percent voice communications, or $19.1 million. Certain prior year revenue items have been reclassified to conform to the current year presentation.
“The adoption of voice and video over IP is becoming a powerful driver for our business,” said Robert Hagerty, president and CEO. “Our revenues and profitability continue to benefit from the rapidly-growing availability of IP bandwidth throughout enterprise, government, education, and healthcare segments. This is enabling us to deliver productivity gains to our customers through our unparalleled converged collaboration solution—capturing video, voice, web, and data through our unified architecture. Coupled with this connectivity environment, Polycom is delivering the first SIP availability—not just in our award winning SIP-based voice products and bridges, but now in our VSX video product line as well.
Our recently announced technology gains provide integration of our SoundStation VTX 1000™ and Vortex voice products with our VSX™ product line. We also now have videoconferencing in wideband stereo—the first such capability in our industry. From a partnership standpoint, we have announced interoperability with Avaya, Cisco, Juniper, and Nortel—maximizing the convergence benefits for all customers with each of these leading architectures.”
“We are pleased with our 12 percent sequential revenue growth and 35 percent year-over-year revenue growth in the second quarter,” said Michael Kourey, senior vice president, finance and administration, and CFO. “This strong revenue and resultant operating margin, coupled with our continued success in receivables and our record 8.5 inventory turns, yielded our twenty-fifth consecutive quarter of positive operating cash flow at $28.3 million.”
About Polycom
Polycom, Inc. is the world’s technology leader of high-quality, easy-to-use video, voice, data and web conferencing and collaboration solutions. The Polycom Office™ is our continued commitment to make distance communications as natural and interactive as being there by providing best-in-class conferencing solutions that are interoperable, integrated and intuitive to the user. The Polycom Office is based on industry standards and supported by an open architecture that promotes interoperability in multi-vendor environments and complements leading network infrastructure platforms. For additional information call 1-800-POLYCOM (765-9266) or +1-408-526-9000, or visit the Polycom website atwww.polycom.com.
This release contains forward-looking statements regarding future events, future demand for our products, and the future performance of the Company that involve known and unknown risks and uncertainties, including the potential fluctuations in results and future growth rates, the market acceptance of Polycom’s products, possible delays in the development, availability and shipment of new products, and risks associated with changes in general economic conditions. Many of these risks and uncertainties are discussed in the Form 10-K for 2003, and other reports filed by Polycom with the SEC.
As has been noted on the Company’s web site since July 15, 2004, Polycom will hold a conference call today at 5:00 p.m. ET/2:00 p.m. PT to discuss its second quarter results. Robert Hagerty, chairman, president and CEO, and Michael Kourey, chief financial officer, will host the conference. You may participate by viewing the webcast atwww.polycom.com or, for callers in the US and Canada, call 800-728-2053; and for callers outside of the US and Canada, call 212-271-4621, with the pass code being Polycom. A replay of the call will also be available through July 29, 2004 atwww.polycom.com or, for callers in the US and Canada, at 800-633-8284; and for callers outside of the US and Canada, at 402-977-9140. The access number for the replay is 21202417. A replay of the call will also be maintained on our website atwww.polycom.com under Investor Relations – Archived Conference Calls for twelve months.
Polycom, the Polycom logo and Voyant are registered trademarks and Polycom Office, VSX and SoundStation VTX 1000 are trademarks of Polycom in the U.S. and various countries. All other trademarks are the property of their respective owners.©2004, Polycom, Inc. All rights reserved.
POLYCOM, INC.
Pro Forma Condensed Consolidated Statements of Operations
Excluding Acquisition-related costs, Purchased in-process R&D, Amortization of
purchased intangibles, Restructuring costs, Litigation settlements, Gain (loss) on strategic investments,
Income (loss) from discontinued operations and Gain (loss) from sale of discontinued operations
(In thousands, except per share amounts)
(Unaudited)
| | | | | | | | | | | | | | | | |
| | Three Months Ended
| | | Six Months Ended
| |
| | June 30, 2004
| | | June 30, 2003
| | | June 30, 2004
| | | June 30, 2003
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| | | | |
Revenues: | | | | | | | | | | | | | | | | |
Product revenues | | $ | 120,028 | | | $ | 89,916 | | | $ | 226,633 | | | $ | 173,687 | |
Service revenues | | | 13,799 | | | | 9,518 | | | | 26,341 | | | | 18,667 | |
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Total revenues | | | 133,827 | | | | 99,434 | | | | 252,974 | | | | 192,354 | |
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Cost of revenues: | | | | | | | | | | | | | | | | |
Cost of product revenues | | | 39,905 | | | | 33,681 | | | | 74,968 | | | | 65,389 | |
Cost of service revenues | | | 9,332 | | | | 6,620 | | | | 18,396 | | | | 13,545 | |
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Total cost of revenues | | | 49,237 | | | | 40,301 | | | | 93,364 | | | | 78,934 | |
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|
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Gross profit | | | 84,590 | | | | 59,133 | | | | 159,610 | | | | 113,420 | |
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|
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Operating expenses: | | | | | | | | | | | | | | | | |
Sales and marketing | | | 30,292 | | | | 24,245 | | | | 58,738 | | | | 50,909 | |
Research and development | | | 23,717 | | | | 17,820 | | | | 45,743 | | | | 37,640 | |
General and administrative | | | 8,771 | | | | 7,583 | | | | 16,837 | | | | 15,315 | |
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Total operating expenses | | | 62,780 | | | | 49,648 | | | | 121,318 | | | | 103,864 | |
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Operating income | | | 21,810 | | | | 9,485 | | | | 38,292 | | | | 9,556 | |
| | | | |
Interest income, net | | | 1,511 | | | | 2,071 | | | | 3,192 | | | | 4,504 | |
Other expense, net | | | (23 | ) | | | (430 | ) | | | (497 | ) | | | (624 | ) |
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Income before provision for income taxes | | | 23,298 | | | | 11,126 | | | | 40,987 | | | | 13,436 | |
Provision for income taxes | | | 6,291 | | | | 3,004 | | | | 11,067 | | | | 3,628 | |
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Pro forma net income | | $ | 17,007 | | | $ | 8,122 | | | $ | 29,920 | | | $ | 9,808 | |
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Basic net income per share | | $ | 0.17 | | | $ | 0.08 | | | $ | 0.30 | | | $ | 0.10 | |
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Diluted net income per share | | $ | 0.17 | | | $ | 0.08 | | | $ | 0.29 | | | $ | 0.10 | |
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Weighted average shares outstanding for basic net income per share | | | 99,843 | | | | 98,940 | | | | 99,855 | | | | 99,126 | |
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Weighted average shares outstanding for diluted net income per share | | | 102,154 | | | | 99,977 | | | | 102,409 | | | | 100,004 | |
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Use of Pro Forma Financial Information
To supplement our consolidated financial statements presented on a GAAP basis, Polycom uses pro forma measures of operating results, net income and income per share, which are adjusted to exclude certain costs, expenses, gains and losses we believe appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our current period GAAP results are made with the intent of providing both management and investors a more complete understanding of Polycom’s underlying operational results and trends and our marketplace performance. For example, the pro forma results are an indication of our baseline performance before gains, losses or other charges that are considered by management to be outside of our core operating results. In addition, these adjusted pro forma results are among the primary indicators management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or diluted net income per share prepared in accordance with generally accepted accounting principles in the United States.
POLYCOM, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
| | | | | | | | | | | | | | | | |
| | Three Months Ended
| | | Six Months Ended
| |
| | June 30, 2004
| | | June 30, 2003
| | | June 30, 2004
| | | June 30, 2003
| |
| | | | |
Revenues: | | | | | | | | | | | | | | | | |
Product revenues | | $ | 120,028 | | | $ | 89,916 | | | $ | 226,633 | | | $ | 173,687 | |
Service revenues | | | 13,799 | | | | 9,518 | | | | 26,341 | | | | 18,667 | |
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|
|
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|
|
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|
|
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|
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Total revenues | | | 133,827 | | | | 99,434 | | | | 252,974 | | | | 192,354 | |
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|
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|
|
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Cost of revenues: | | | | | | | | | | | | | | | | |
Cost of product revenues | | | 39,905 | | | | 33,681 | | | | 74,968 | | | | 65,389 | |
Cost of service revenues | | | 9,332 | | | | 6,620 | | | | 18,396 | | | | 13,545 | |
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|
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|
|
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|
|
| |
|
|
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Total cost of revenues | | | 49,237 | | | | 40,301 | | | | 93,364 | | | | 78,934 | |
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| |
|
|
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|
|
| |
|
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Gross profit | | | 84,590 | | | | 59,133 | | | | 159,610 | | | | 113,420 | |
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Operating expenses: | | | | | | | | | | | | | | | | |
Sales and marketing | | | 30,292 | | | | 24,245 | | | | 58,738 | | | | 50,909 | |
Research and development | | | 23,717 | | | | 17,820 | | | | 45,743 | | | | 37,640 | |
General and administrative | | | 8,771 | | | | 7,583 | | | | 16,837 | | | | 15,315 | |
Acquisition-related costs | | | 356 | | | | 115 | | | | 1,181 | | | | 188 | |
Purchased in-process research and development | | | — | | | | — | | | | 4,600 | | | | — | |
Amortization of purchased intangibles | | | 5,717 | | | | 4,397 | | | | 12,080 | | | | 8,795 | |
Restructuring costs | | | — | | | | 4,326 | | | | — | | | | 5,029 | |
Litigation settlements | | | — | | | | 65 | | | | — | | | | 65 | |
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Total operating expenses | | | 68,853 | | | | 58,551 | | | | 139,179 | | | | 117,941 | |
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|
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|
|
|
Operating income (loss) | | | 15,737 | | | | 582 | | | | 20,431 | | | | (4,521 | ) |
| | | | |
Interest income, net | | | 1,511 | | | | 2,071 | | | | 3,192 | | | | 4,504 | |
Gain (loss) on strategic investments | | | (6 | ) | | | 101 | | | | 3 | | | | (114 | ) |
Other expense, net | | | (23 | ) | | | (430 | ) | | | (497 | ) | | | (624 | ) |
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Income (loss) from continuing operations before provision for (benefit from) income taxes | | | 17,219 | | | | 2,324 | | | | 23,129 | | | | (755 | ) |
Provision for (benefit from) income taxes | | | 4,556 | | | | 660 | | | | 7,410 | | | | (178 | ) |
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Income (loss) from continuing operations | | | 12,663 | | | | 1,664 | | | | 15,719 | | | | (577 | ) |
| | | | |
Income (loss) from discontinued operations, net of taxes | | | 145 | | | | — | | | | 296 | | | | (676 | ) |
Gain (loss) from sale of discontinued operations, net of taxes | | | 113 | | | | (70 | ) | | | 219 | | | | 427 | |
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Net income (loss) | | $ | 12,921 | | | $ | 1,594 | | | $ | 16,234 | | | $ | (826 | ) |
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Basic net income (loss) per share: | | | | | | | | | | | | | | | | |
Income (loss) per share from continuing operations | | $ | 0.13 | | | $ | 0.02 | | | $ | 0.16 | | | $ | (0.01 | ) |
Income (loss) per share from discontinued operations, net | | | — | | | | — | | | | — | | | | (0.01 | ) |
Gain (loss) per share from sale of discontinued operations, net | | | — | | | | — | | | | — | | | | 0.01 | |
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Basic net income (loss) per share | | $ | 0.13 | | | $ | 0.02 | | | $ | 0.16 | | | $ | (0.01 | ) |
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Diluted net income (loss) per share: | | | | | | | | | | | | | | | | |
Income (loss) per share from continuing operations | | $ | 0.13 | | | $ | 0.02 | | | $ | 0.16 | | | $ | (0.01 | ) |
Income (loss) per share from discontinued operations, net | | | — | | | | — | | | | — | | | | (0.01 | ) |
Gain (loss) per share from sale of discontinued operations, net | | | — | | | | — | | | | — | | | | 0.01 | |
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Diluted net income (loss) per share | | $ | 0.13 | | | $ | 0.02 | | | $ | 0.16 | | | $ | (0.01 | ) |
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Weighted average shares outstanding for basic net income (loss) per share | | | 99,843 | | | | 98,940 | | | | 99,855 | | | | 99,126 | |
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Weighted average shares outstanding for diluted net income (loss) per share | | | 102,154 | | | | 99,977 | | | | 102,409 | | | | 99,126 | |
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POLYCOM, INC.
GAAP to Pro Forma Reconciliation
(In thousands, except per share amounts)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
| | | Six Months Ended
| |
| | June 30, 2004
| | | June 30, 2004
| |
| | GAAP
| | | Excluded
| | | Pro Forma
| | | GAAP
| | | Excluded
| | | Pro forma
| |
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | |
Product revenues | | $ | 120,028 | | | $ | — | | | $ | 120,028 | | | $ | 226,633 | | | $ | — | | | $ | 226,633 | |
Service revenues | | | 13,799 | | | | — | | | | 13,799 | | | | 26,341 | | | | — | | | | 26,341 | |
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Total revenues | | | 133,827 | | | | — | | | | 133,827 | | | | 252,974 | | | | — | | | | 252,974 | |
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Cost of revenues: | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of product revenues | | | 39,905 | | | | — | | | | 39,905 | | | | 74,968 | | | | — | | | | 74,968 | |
Cost of service revenues | | | 9,332 | | | | — | | | | 9,332 | | | | 18,396 | | | | — | | | | 18,396 | |
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Total cost of revenues | | | 49,237 | | | | — | | | | 49,237 | | | | 93,364 | | | | — | | | | 93,364 | |
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Gross profit | | | 84,590 | | | | — | | | | 84,590 | | | | 159,610 | | | | — | | | | 159,610 | |
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Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Sales and marketing | | | 30,292 | | | | — | | | | 30,292 | | | | 58,738 | | | | — | | | | 58,738 | |
Research and development | | | 23,717 | | | | — | | | | 23,717 | | | | 45,743 | | | | — | | | | 45,743 | |
General and administrative | | | 8,771 | | | | — | | | | 8,771 | | | | 16,837 | | | | — | | | | 16,837 | |
Acquisition-related costs | | | 356 | | | | 356 | | | | — | | | | 1,181 | | | | 1,181 | | | | — | |
Purchased in-process research and development | | | — | | | | — | | | | — | | | | 4,600 | | | | 4,600 | | | | — | |
Amortization of purchased intangibles | | | 5,717 | | | | 5,717 | | | | — | | | | 12,080 | | | | 12,080 | | | | — | |
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Total operating expenses | | | 68,853 | | | | 6,073 | | | | 62,780 | | | | 139,179 | | | | 17,861 | | | | 121,318 | |
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Operating income | | | 15,737 | | | | (6,073 | ) | | | 21,810 | | | | 20,431 | | | | (17,861 | ) | | | 38,292 | |
| | | | | | |
Interest income, net | | | 1,511 | | | | — | | | | 1,511 | | | | 3,192 | | | | — | | | | 3,192 | |
Gain (loss) on strategic investments | | | (6 | ) | | | (6 | ) | | | — | | | | 3 | | | | 3 | | | | — | |
Other expense, net | | | (23 | ) | | | — | | | | (23 | ) | | | (497 | ) | | | — | | | | (497 | ) |
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Income from continuing operations before provision for income taxes | | | 17,219 | | | | (6,079 | ) | | | 23,298 | | | | 23,129 | | | | (17,858 | ) | | | 40,987 | |
Provision for income taxes | | | 4,556 | | | | (1,735 | ) | | | 6,291 | | | | 7,410 | | | | (3,657 | ) | | | 11,067 | |
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Income from continuing operations | | | 12,663 | | | | (4,344 | ) | | | 17,007 | | | | 15,719 | | | | (14,201 | ) | | | 29,920 | |
Income from discontinued operations, net of taxes | | | 145 | | | | 145 | | | | — | | | | 296 | | | | 296 | | | | — | |
Gain from sale of discontinued operations, net of taxes | | | 113 | | | | 113 | | | | — | | | | 219 | | | | 219 | | | | — | |
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Net income | | $ | 12,921 | | | $ | (4,086 | ) | | $ | 17,007 | | | $ | 16,234 | | | $ | (13,686 | ) | | $ | 29,920 | |
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Basic net income per share: | | | | | | | | | | | | | | | | | | | | | | | | |
Income per share from continuing operations | | $ | 0.13 | | | $ | (0.04 | ) | | $ | 0.17 | | | $ | 0.16 | | | $ | (0.14 | ) | | $ | 0.30 | |
Income per share from discontinued operations, net | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Gain per share from sale of discontinued operations, net | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
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Basic net income per share | | $ | 0.13 | | | $ | (0.04 | ) | | $ | 0.17 | | | $ | 0.16 | | | $ | (0.14 | ) | | $ | 0.30 | |
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Diluted net income per share: | | | | | | | | | | | | | | | | | | | | | | | | |
Income per share from continuing operations | | $ | 0.13 | | | $ | (0.04 | ) | | $ | 0.17 | | | $ | 0.16 | | | $ | (0.13 | ) | | $ | 0.29 | |
Income per share from discontinued operations, net | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Gain per share from sale of discontinued operations, net | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
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Diluted net income per share | | $ | 0.13 | | | $ | (0.04 | ) | | $ | 0.17 | | | $ | 0.16 | | | $ | (0.13 | ) | | $ | 0.29 | |
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Weighted average shares outstanding for basic net income per share | | | 99,843 | | | | | | | | 99,843 | | | | 99,855 | | | | | | | | 99,855 | |
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Weighted average shares outstanding for diluted net income per share | | | 102,154 | | | | | | | | 102,154 | | | | 102,409 | | | | | | | | 102,409 | |
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POLYCOM, INC.
GAAP to Pro Forma Reconciliation
(In thousands, except per share amounts)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
| | | Six Months Ended
| |
| | June 30, 2003
| | | June 30, 2003
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| | GAAP
| | | Excluded
| | | Pro Forma
| | | GAAP
| | | Excluded
| | | Pro forma
| |
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | |
Product revenues | | $ | 89,916 | | | $ | — | | | $ | 89,916 | | | $ | 173,687 | | | $ | — | | | $ | 173,687 | |
Service revenues | | | 9,518 | | | | — | | | | 9,518 | | | | 18,667 | | | | — | | | | 18,667 | |
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Total revenues | | | 99,434 | | | | — | | | | 99,434 | | | | 192,354 | | | | — | | | | 192,354 | |
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Cost of revenues: | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of product revenues | | | 33,681 | | | | — | | | | 33,681 | | | | 65,389 | | | | — | | | | 65,389 | |
Cost of service revenues | | | 6,620 | | | | — | | | | 6,620 | | | | 13,545 | | | | — | | | | 13,545 | |
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Total cost of revenues | | | 40,301 | | | | — | | | | 40,301 | | | | 78,934 | | | | — | | | | 78,934 | |
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Gross profit | | | 59,133 | | | | — | | | | 59,133 | | | | 113,420 | | | | — | | | | 113,420 | |
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Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Sales and marketing | | | 24,245 | | | | — | | | | 24,245 | | | | 50,909 | | | | — | | | | 50,909 | |
Research and development | | | 17,820 | | | | — | | | | 17,820 | | | | 37,640 | | | | — | | | | 37,640 | |
General and administrative | | | 7,583 | | | | — | | | | 7,583 | | | | 15,315 | | | | — | | | | 15,315 | |
Acquisition-related costs | | | 115 | | | | 115 | | | | — | | | | 188 | | | | 188 | | | | — | |
Purchased in-process research and development | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Amortization of purchased intangibles | | | 4,397 | | | | 4,397 | | | | — | | | | 8,795 | | | | 8,795 | | | | — | |
Restructuring costs | | | 4,326 | | | | 4,326 | | | | — | | | | 5,029 | | | | 5,029 | | | | — | |
Litigation settlement | | | 65 | | | | 65 | | | | — | | | | 65 | | | | 65 | | | | — | |
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Total operating expenses | | | 58,551 | | | | 8,903 | | | | 49,648 | | | | 117,941 | | | | 14,077 | | | | 103,864 | |
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Operating income (loss) | | | 582 | | | | (8,903 | ) | | | 9,485 | | | | (4,521 | ) | | | (14,077 | ) | | | 9,556 | |
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Interest income, net | | | 2,071 | | | | — | | | | 2,071 | | | | 4,504 | | | | — | | | | 4,504 | |
Gain (loss) on strategic investments | | | 101 | | | | 101 | | | | — | | | | (114 | ) | | | (114 | ) | | | — | |
Other expense, net | | | (430 | ) | | | — | | | | (430 | ) | | | (624 | ) | | | — | | | | (624 | ) |
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Income (loss) from continuing operations before provision for (benefit from) income taxes | | | 2,324 | | | | (8,802 | ) | | | 11,126 | | | | (755 | ) | | | (14,191 | ) | | | 13,436 | |
Provision for (benefit from) income taxes | | | 660 | | | | (2,344 | ) | | | 3,004 | | | | (178 | ) | | | (3,806 | ) | | | 3,628 | |
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Income (loss) from continuing operations | | | 1,664 | | | | (6,458 | ) | | | 8,122 | | | | (577 | ) | | | (10,385 | ) | | | 9,808 | |
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Loss from discontinued operations, net of taxes | | | — | | | | — | | | | — | | | | (676 | ) | | | (676 | ) | | | — | |
Gain (loss) from sale of discontinued operations, net of taxes | | | (70 | ) | | | (70 | ) | | | — | | | | 427 | | | | 427 | | | | — | |
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Net income (loss) | | $ | 1,594 | | | $ | (6,528 | ) | | $ | 8,122 | | | $ | (826 | ) | | $ | (10,634 | ) | | $ | 9,808 | |
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Basic net income (loss) per share: | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) per share from continuing operations | | $ | 0.02 | | | $ | (0.06 | ) | | $ | 0.08 | | | $ | (0.01 | ) | | $ | (0.11 | ) | | $ | 0.10 | |
Loss per share from discontinued operations, net | | | — | | | | — | | | | — | | | | (0.01 | ) | | | (0.01 | ) | | | — | |
Gain (loss) per share from sale of discontinued operations, net | | | — | | | | — | | | | — | | | | 0.01 | | | | 0.01 | | | | — | |
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Basic net income (loss) per share | | $ | 0.02 | | | $ | (0.06 | ) | | $ | 0.08 | | | $ | (0.01 | ) | | $ | (0.11 | ) | | $ | 0.10 | |
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Diluted net income (loss) per share: | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) per share from continuing operations | | $ | 0.02 | | | $ | (0.06 | ) | | $ | 0.08 | | | $ | (0.01 | ) | | $ | (0.11 | ) | | $ | 0.10 | |
Loss per share from discontinued operations, net | | | — | | | | — | | | | — | | | | (0.01 | ) | | | (0.01 | ) | | | — | |
Gain (loss) per share from sale of discontinued operations, net | | | — | | | | — | | | | — | | | | 0.01 | | | | 0.01 | | | | — | |
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Diluted net income (loss) per share | | $ | 0.02 | | | $ | (0.06 | ) | | $ | 0.08 | | | $ | (0.01 | ) | | $ | (0.11 | ) | | $ | 0.10 | |
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Weighted average shares outstanding for basic net income (loss) per share | | | 98,940 | | | | | | | | 98,940 | | | | 99,126 | | | | | | | | 99,126 | |
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Weighted average shares outstanding for diluted net income (loss) per share | | | 99,977 | | | | | | | | 99,977 | | | | 99,126 | | | | | | | | 100,004 | |
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POLYCOM, INC.
Condensed Consolidated Balance Sheets
(In thousands)
| | | | | | |
| | June 30, 2004
| | December31, 2003
|
| | |
| | (Unaudited) | | |
ASSETS | | | | | | |
Current assets | | | | | | |
Cash and cash equivalents | | $ | 208,491 | | $ | 212,562 |
Short-term investments | | | 24,258 | | | 15,703 |
Trade receivables, net | | �� | 52,015 | | | 42,836 |
Inventories | | | 23,066 | | | 24,845 |
Deferred taxes | | | 24,927 | | | 20,589 |
Prepaid expenses and other current assets | | | 20,262 | | | 19,472 |
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Total current assets | | | 353,019 | | | 336,007 |
| | |
Property and equipment, net | | | 38,067 | | | 28,493 |
Long-term investments | | | 299,004 | | | 368,020 |
Goodwill | | | 356,766 | | | 289,508 |
Purchased intangibles, net | | | 35,357 | | | 15,236 |
Deferred taxes | | | 41,982 | | | 56,513 |
Other assets | | | 10,231 | | | 10,013 |
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Total assets | | $ | 1,134,426 | | $ | 1,103,790 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | |
Current liabilities | | | | | | |
Accounts payable | | $ | 35,345 | | $ | 36,247 |
Accrued payroll and related liabilities | | | 16,094 | | | 12,644 |
Taxes payable | | | 52,949 | | | 49,417 |
Deferred revenue | | | 26,754 | | | 20,524 |
Other accrued liabilities | | | 36,790 | | | 26,846 |
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Total current liabilities | | | 167,932 | | | 145,678 |
| | |
Long-term liabilities | | | 11,059 | | | 28,833 |
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Total liabilities | | | 178,991 | | | 174,511 |
| | |
Stockholders’ equity | | | 955,435 | | | 929,279 |
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Total liabilities and stockholders’ equity | | $ | 1,134,426 | | $ | 1,103,790 |
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POLYCOM, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| | | | | | | | |
| | Six Months Ended
| |
| | June 30, 2004
| | | June 30, 2003
| |
| | |
Cash flows from operating activities: | | | | | | | | |
Net income (loss) | | $ | 16,234 | | | $ | (826 | ) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | | | | | | | | |
Gain from sale of discontinued operations, net of taxes | | | (219 | ) | | | (427 | ) |
Depreciation and amortization | | | 9,659 | | | | 7,763 | |
Amortization of purchased intangibles | | | 12,080 | | | | 8,795 | |
Provision for doubtful accounts | | | (210 | ) | | | 521 | |
Provision for excess and obsolete inventories | | | 1,768 | | | | 1,136 | |
Tax benefit from exercise of stock options | | | 2,675 | | | | 496 | |
(Gain) loss on strategic investments | | | (3 | ) | | | 114 | |
Amortization of unearned stock-based compensation | | | 115 | | | | 182 | |
Purchase of in-process research and development | | | 4,600 | | | | — | |
| | |
Changes in assets and liabilities, net of the effect of acquisitions: | | | | | | | | |
Trade receivables | | | (6,777 | ) | | | 16,290 | |
Inventories | | | 3,382 | | | | 6,722 | |
Prepaid expenses and other assets | | | 2,549 | | | | (4,149 | ) |
Accounts payable | | | (2,013 | ) | | | 1,760 | |
Taxes payable | | | 2,684 | | | | (846 | ) |
Other accrued liabilities | | | 382 | | | | (5,777 | ) |
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Net cash provided by operating activities | | | 46,906 | | | | 31,754 | |
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Cash flows from investing activities: | | | | | | | | |
Purchase of property and equipment | | | (9,511 | ) | | | (8,111 | ) |
Purchase of licensed technology | | | — | | | | (3,528 | ) |
Purchases of investments | | | (442,474 | ) | | | (452,040 | ) |
Proceeds from sale and maturity of investments | | | 500,896 | | | | 477,228 | |
Proceeds from sale of discontinued operations | | | 345 | | | | 1,200 | |
Purchase of convertible note receivable | | | — | | | | (522 | ) |
Net cash paid in purchase acquisitions | | | (95,060 | ) | | | — | |
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Net cash provided by (used in) investing activities | | | (45,804 | ) | | | 14,227 | |
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Cash flows from financing activities: | | | | | | | | |
Proceeds from issuance of common stock under employee option and stock purchase plans | | | 7,959 | | | | 3,107 | |
Repurchase of common stock | | | (13,132 | ) | | | (6,915 | ) |
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Net cash used in financing activities | | | (5,173 | ) | | | (3,808 | ) |
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Net increase (decrease) in cash and cash equivalents | | | (4,071 | ) | | | 42,173 | |
Cash and cash equivalents, beginning of period | | | 212,562 | | | | 155,191 | |
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Cash and cash equivalents, end of period | | $ | 208,491 | | | $ | 197,364 | |
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