Exhibit 99.1
Harmonic Announces Third Quarter Results
Strong Year-over-Year Sales and Earnings Growth;
Maintaining Gross Margins
SUNNYVALE, Calif.—October 27, 2008—Harmonic Inc. (NASDAQ: HLIT), a leading provider of broadcast and on-demand video delivery solutions, today announced its preliminary and unaudited results for the quarter ended September 26, 2008.
For the third quarter of 2008, the Company reported net sales of $91.5 million, up 11% from $82.3 million in the third quarter of 2007. For the first nine months of 2008, net sales were $268.1 million, up 20% from $223.8 million in the same period of 2007. International sales represented 39% of revenue for the third quarter of 2008, compared to 46% in the same period of 2007. In the third quarter of 2008, Harmonic had strong bookings across the Company’s global customer base of cable, satellite, telco and other operators.
The Company maintained its gross margins in the third quarter of 2008, reflecting the continued success of its new products and solutions, as well as its sourcing strategy and product design innovations.
GAAP net income for the third quarter of 2008 was $12.0 million, or $0.12 per diluted share, up from $9.4 million, or $0.12 per diluted share, for the same period of 2007. The results for the third quarter of 2008 included a charge of approximately $0.8 million for the impairment of an investment in the unsecured debt of Lehman Brothers. Excluding this charge and non-cash accounting charges for stock-based compensation, the amortization of intangibles, excess facilities and a credit arising from the reversal of a valuation allowance against certain deferred tax assets, the non-GAAP net income for the third quarter of 2008 was $15.9 million, or $0.17 per diluted share, up from $11.9 million, or $0.15 per diluted share, for the same period of 2007. See “Use of Non-GAAP Financial Measures” and “GAAP to non-GAAP Reconciliation” below.
As of September 26, 2008, the Company had cash, cash equivalents and short-term investments of $293.4 million, up from $288.2 million as of June 27, 2008.
“We are pleased with our third quarter operating performance, bookings and momentum moving into the fourth quarter,” said Patrick Harshman, President and Chief Executive Officer. “Across different markets and geographies, video service providers continue to select our award-winning systems and solutions to expand their on-demand, high-definition and next-generation IP-based service offerings.”
“While the global economic environment creates uncertainty, we remain confident about our strong market position and long-term growth opportunities. Our technology leadership, diverse customer base and operating performance have placed us in an excellent position to further strengthen our competitive position and extend our global customer base.”
Business Outlook
The Company anticipates that net sales for the fourth quarter of 2008 will be in a range of $92 to $95 million and gross margins will be 47% to 49% on a GAAP basis. Non-GAAP gross margins for the same period, excluding charges for stock-based compensation and the amortization of intangibles, are anticipated to be in a range of 49% to 51%.
Conference Call Information
Harmonic will host a conference call today to discuss its financial results at 2:00 p.m. Pacific (5:00 p.m. Eastern). A listen-only broadcast of the conference call can be accessed on the Company’s website atwww.harmonicinc.com or by calling +1.706.634.9047 (conference identification code 30815836). The replay will be available after 6:00 p.m. Pacific at the same website address or by calling +1.706.645.9291 (conference identification code 30815836).
About Harmonic Inc.
Harmonic Inc. is a leading provider of versatile and high performance video solutions that enable service providers to efficiently deliver the next generation of broadcast and on-demand video services, including
high definition, video-on-demand, network personal video recording and time-shifted TV. Cable, satellite, broadcast and telecom service providers can utilize Harmonic’s digital video, broadband optical access and software solutions to offer consumers a compelling and personalized viewing experience.
Harmonic (NASDAQ: HLIT) is headquartered in Sunnyvale, California with R&D, sales and system integration centers worldwide. The Company’s customers, including many of the world’s largest communications providers, deliver services in virtually every country. Visitwww.harmonicinc.com for more information.
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 belief that, across different markets and geographies, video service providers continue to select our award-winning systems and solutions to expand their on-demand, high-definition and next-generation IP-based service offerings; our beliefs regarding our strong market position and long-term growth opportunities; our belief that our technology leadership, diverse customer base and operating performance have placed us in an excellent position to further strengthen our competitive position and extend our global customer base; and our expectations regarding net sales, GAAP gross margins and non-GAAP gross margins for the fourth quarter of 2008. Our expectations and beliefs 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 the possibility that: the trends toward more high-definition, on-demand and anytime, anywhere video will not continue to develop at its current pace, or at all; our products will not generate sales that are commensurate with our expectations; the mix of products sold and the effect it has on gross margins; delays or decreases in capital spending in the cable, satellite and telco industries; customer concentration and consolidation; general economic conditions, including the impact of recent turmoil in the global financial markets; market acceptance of new or existing Harmonic products; losses of one or more key customers; risks associated with Harmonic’s international operations; inventory management; the effect of competition; difficulties associated with rapid technological changes in Harmonic’s markets; the need to introduce new and enhanced products and the risk that our product development is not timely or does not result in expected benefits or market acceptance; risks associated with a cyclical and unpredictable sales cycle; and risks that our international sales and support center will not provide the operational or tax benefits that we anticipate or that expenses exceed our plans. 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 annual report filed on Form 10-K for the year ended December 31, 2007, our subsequent quarterly reports on Form 10-Q, and our current reports on Form 8-K. Harmonic does not undertake to update any forward-looking statements.
EDITOR’S NOTE —Product and company names used herein are trademarks or registered trademarks of their respective owners.
Harmonic Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
| | | | | | | | |
| | September 26, 2008 | | | December 31, 2007 | |
| | | | | | | | |
Assets | | | | | | | | |
Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | 169,593 | | | $ | 129,005 | |
Short-term investments | | | 123,816 | | | | 140,255 | |
Accounts receivable, net | | | 75,949 | | | | 69,302 | |
Inventories | | | 32,530 | | | | 34,251 | |
Deferred income taxes | | | 26,964 | | | | 3,506 | |
Prepaid expenses and other current assets | | | 11,692 | | | | 17,489 | |
| | | | | | |
| | | | | | | | |
Total current assets | | | 440,544 | | | | 393,808 | |
| | | | | | | | |
Property and equipment, net | | | 14,894 | | | | 14,082 | |
| | | | | | | | |
Goodwill, intangibles and other assets | | | 84,182 | | | | 67,889 | |
| | | | | | |
|
| | $ | 539,620 | | | $ | 475,779 | |
| | | | | | |
| | | | | | | | |
Liabilities and stockholders’ equity | | | | | | | | |
Current liabilities: | | | | | | | | |
Accounts payable | | | 12,688 | | | | 20,500 | |
Income taxes payable | | | 46 | | | | 481 | |
Deferred revenue | | | 29,378 | | | | 37,865 | |
Accrued liabilities | | | 40,589 | | | | 51,686 | |
| | | | | | |
| | | | | | | | |
Total current liabilities | | | 82,701 | | | | 110,532 | |
| | | | | | | | |
Accrued excess facilities costs, long-term | | | 6,584 | | | | 9,907 | |
Income taxes payable, long-term | | | 40,773 | | | | 8,908 | |
Other non-current liabilities | | | 8,511 | | | | 12,019 | |
| | | | | | |
| | | | | | | | |
Total liabilities | | | 138,569 | | | | 141,366 | |
| | | | | | |
| | | | | | | | |
Stockholders’ equity: | | | | | | | | |
Common stock | | | 2,263,774 | | | | 2,246,969 | |
Accumulated deficit | | | (1,861,603 | ) | | | (1,912,386 | ) |
Accumulated other comprehensive loss | | | (1,120 | ) | | | (170 | ) |
| | | | | | |
| | | | | | | | |
Total stockholders’ equity | | | 401,051 | | | | 334,413 | |
| | | | | | |
| | | | | | | | |
| | $ | 539,620 | | | $ | 475,779 | |
| | | | | | |
Harmonic Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | | | | | |
| | Three Months Ended | | | Nine Months Ended | |
| | September 26, 2008 | | | September 28, 2007 | | | September 26, 2008 | | | September 28, 2007 | |
| | | | | | | | | | | | | | | | |
Net sales | | $ | 91,455 | | | $ | 82,295 | | | $ | 268,071 | | | $ | 223,814 | |
| | | | | | | | | | | | | | | | |
Cost of sales | | | 47,259 | | | | 46,652 | | | | 138,744 | | | | 130,454 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Gross profit | | | 44,196 | | | | 35,643 | | | | 129,327 | | | | 93,360 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Operating expenses: | | | | | | | | | | | | | | | | |
Research and development | | | 13,724 | | | | 11,018 | | | | 40,264 | | | | 31,615 | |
Selling, general and administrative | | | 19,254 | | | | 14,911 | | | | 56,725 | | | | 46,357 | |
Write-off of acquired in-process technology | | | — | | | | 700 | | | | — | | | | 700 | |
Amortization of intangibles | | | 160 | | | | 143 | | | | 479 | | | | 365 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Total operating expenses | | | 33,138 | | | | 26,772 | | | | 97,468 | | | | 79,037 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Income from operations | | | 11,058 | | | | 8,871 | | | | 31,859 | | | | 14,323 | |
| | | | | | | | | | | | | | | | |
Interest and other income, net | | | 836 | | | | 1,296 | | | | 5,526 | | | | 3,266 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Income before income taxes | | | 11,894 | | | | 10,167 | | | | 37,385 | | | | 17,589 | |
| | | | | | | | | | | | | | | | |
Provision for (benefit from) income taxes | | | (71 | ) | | | 750 | | | | (13,398 | ) | | | 807 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Net income | | $ | 11,965 | | | $ | 9,417 | | | $ | 50,783 | | | $ | 16,782 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Net income per share | | | | | | | | | | | | | | | | |
Basic | | $ | 0.13 | | | $ | 0.12 | | | $ | 0.54 | | | $ | 0.21 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Diluted | | $ | 0.12 | | | $ | 0.12 | | | $ | 0.53 | | | $ | 0.21 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Shares used to compute net income per share: | | | | | | | | | | | | | | | | |
Basic | | | 94,805 | | | | 80,371 | | | | 94,365 | | | | 79,570 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Diluted | | | 95,863 | | | | 81,642 | | | | 95,491 | | | | 80,743 | |
| | | | | | | | | | | | |
Harmonic Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| | | | | | | | |
| | Nine Months Ended | |
| | September 26, 2008 | | | September 28, 2007 | |
| | | | | | | | |
Cash flows from operating activities: | | | | | | | | |
Net income | | $ | 50,783 | | | $ | 16,782 | |
Adjustments to reconcile net income to cash provided by (used in) operating activities: | | | | | | | | |
Amortization of intangibles | | | 4,746 | | | | 3,661 | |
Write-off of acquired in-process technology | | | — | | | | 700 | |
Depreciation | | | 5,215 | | | | 5,089 | |
Stock-based compensation | | | 5,470 | | | | 4,475 | |
Excess tax benefits from stock-based compensation | | | (2,864 | ) | | | — | |
Loss (gain) on disposal and impairment of fixed assets | | | 22 | | | | (31 | ) |
Loss on impairment of investments | | | 845 | | | | — | |
Deferred income taxes | | | (46,249 | ) | | | — | |
Other non-cash adjustments, net | | | (2,090 | ) | | | (386 | ) |
Changes in assets and liabilities: | | | | | | | | |
Accounts receivable | | | (6,612 | ) | | | (4,234 | ) |
Inventories | | | 1,741 | | | | 5,777 | |
Prepaid expenses and other assets | | | 5,755 | | | | 1,108 | |
Accounts payable | | | (7,812 | ) | | | (18,217 | ) |
Deferred revenue | | | (6,967 | ) | | | 3,714 | |
Income taxes payable | | | 31,430 | | | | (271 | ) |
Accrued excess facilities costs | | | (4,808 | ) | | | (5,661 | ) |
Accrued and other liabilities | | | (9,939 | ) | | | (3,242 | ) |
| | | | | | |
Net cash provided by (used in) operating activities | | | 18,666 | | | | 9,264 | |
| | | | | | |
| | | | | | | | |
Cash flows from investing activities: | | | | | | | | |
Purchases of investments | | | (91,868 | ) | | | (70,507 | ) |
Proceeds from sale of investments | | | 109,363 | | | | 71,578 | |
Acquisition of property and equipment, net | | | (6,049 | ) | | | (4,193 | ) |
Acquisition of intellectual property | | | (500 | ) | | | — | |
Acquisition of Rhozet Corp., net of cash received | | | (2,828 | ) | | | (1,370 | ) |
Redemption (purchase) of Entone, Inc. convertible note | | | 2,500 | | | | (2,500 | ) |
Acquisition costs related to the merger of Entone Technologies, Inc. | | | — | | | | (2,466 | ) |
| | | | | | |
Net cash provided by (used in) investing activities | | | 10,618 | | | | (9,458 | ) |
| | | | | | |
|
Cash flows from financing activities: | | | | | | | | |
Repayments under bank line and term loan | | | — | | | | (460 | ) |
Repayments of capital lease obligations | | | — | | | | (65 | ) |
Proceeds from issuance of common stock, net | | | 8,367 | | | | 8,292 | |
Excess tax benefits from stock-based compensation | | | 2,864 | | | | — | |
| | | | | | |
Net cash provided by financing activities | | | 11,231 | | | | 7,767 | |
| | | | | | |
| | | | | | | | |
Effect of exchange rate changes on cash and cash equivalents | | | 73 | | | | (34 | ) |
| | | | | | |
| | | | | | | | |
Net increase in cash and cash equivalents | | | 40,588 | | | | 7,539 | |
Cash and cash equivalents at beginning of period | | | 129,005 | | | | 33,454 | |
| | | | | | |
| | | | | | | | |
Cash and cash equivalents at end of period | | $ | 169,593 | | | $ | 40,993 | |
| | | | | | |
Harmonic Inc.
Revenue Information
(In thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | | Nine Months Ended | |
| | September 26, | | | September 28, | | | September 26, | | | September 28, | |
| | 2008 | | | 2007 | | | 2008 | | | 2007 | |
|
Product | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Video Processing | | $ | 32,284 | | | | 35 | % | | $ | 38,623 | | | | 47 | % | | $ | 101,152 | | | | 38 | % | | $ | 92,790 | | | | 41 | % |
Edge & Access | | | 43,029 | | | | 47 | % | | | 29,156 | | | | 35 | % | | | 124,191 | | | | 46 | % | | | 95,891 | | | | 43 | % |
Software, Services and Other | | | 16,142 | | | | 18 | % | | | 14,516 | | | | 18 | % | | | 42,728 | | | | 16 | % | | | 35,133 | | | | 16 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 91,455 | | | | 100 | % | | $ | 82,295 | | | | 100 | % | | $ | 268,071 | | | | 100 | % | | $ | 223,814 | | | | 100 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Geography | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
United States | | $ | 55,669 | | | | 61 | % | | $ | 44,638 | | | | 54 | % | | $ | 153,565 | | | | 57 | % | | $ | 125,447 | | | | 56 | % |
International | | | 35,786 | | | | 39 | % | | | 37,657 | | | | 46 | % | | | 114,506 | | | | 43 | % | | | 98,367 | | | | 44 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 91,455 | | | | 100 | % | | $ | 82,295 | | | | 100 | % | | $ | 268,071 | | | | 100 | % | | $ | 223,814 | | | | 100 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Market | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cable | | $ | 57,953 | | | | 63 | % | | $ | 41,608 | | | | 51 | % | | $ | 166,473 | | | | 62 | % | | $ | 139,310 | | | | 62 | % |
Satellite | | | 19,824 | | | | 22 | % | | | 26,462 | | | | 32 | % | | | 53,378 | | | | 20 | % | | | 43,706 | | | | 20 | % |
Telco & Other | | | 13,678 | | | | 15 | % | | | 14,225 | | | | 17 | % | | | 48,220 | | | | 18 | % | | | 40,798 | | | | 18 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 91,455 | | | | 100 | % | | $ | 82,295 | | | | 100 | % | | $ | 268,071 | | | | 100 | % | | $ | 223,814 | | | | 100 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Use of Non-GAAP Financial Measures
In establishing operating budgets, managing its business performance, and setting internal measurement targets, the Company excludes a number of items required by GAAP. Management believes that these accounting charges and credits, 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 financial 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 financial measures presented here are gross margin, operating expense, net income and net income per 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 non-GAAP financial measures discussed in this press release to the most directly comparable GAAP financial measures is included with the financial statements contained in this press release. The non-GAAP adjustments described below have historically been excluded from our non-GAAP financial measures. These adjustments, and the basis for excluding them, are:
• | | Restructuring Activities |
| • | | Severance Costs |
|
| | | The Company has incurred severance costs in cost of sales and in operating expenses in connection with the closing of its manufacturing and research and development facilities in the UK. The Company excludes one-time costs of this nature in evaluating its ongoing operational performance. We believe that these costs do not reflect expected future expenses nor do they provide a meaningful comparison of current versus prior operating results. |
|
| • | | Excess Facilities |
|
| | | The Company has incurred excess facilities charges and credits in operating expenses due to adjustments related to vacating portions of its Sunnyvale campus, estimating income from subleases of buildings, and to the closing of its manufacturing and research and development facilities in the UK. The Company excludes one-time charges and credits of this nature in evaluating its ongoing operational performance. We believe that these charges and credits do not reflect expected future expenses nor do they provide a meaningful comparison of current versus prior operating results. |
|
| • | | Product Discontinuance |
|
| | | In connection with the restructuring of its operations in the UK, the Company recorded charges for excess inventory in connection with discontinued products. The Company excludes one-time costs of this nature in evaluating its ongoing operational performance. We believe that these costs do not reflect expected future expenses nor do they provide a meaningful comparison of current versus prior operating results. |
| • | | Stock-Based Compensation Expense |
|
| | | The Company has incurred stock-based compensation expense in cost of sales and operating expenses as required under FAS 123R. The Company excludes stock-based compensation expense because it believes that this measure is not relevant in evaluating its core operating performance, either for internal measurement purposes or for period-to-period comparisons and benchmarking against other companies. |
|
| • | | Amortization of Intangibles |
|
| | | The Company has incurred amortization of intangibles related to acquisitions made by the Company. Management excludes these items when it evaluates its core operating performance. We believe that eliminating these expenses is useful to investors when comparing historical and prospective results and comparing such results to other companies because these expenses will vary if and when the Company makes additional acquisitions. |
|
| • | | Impairment of a Marketable Security |
|
| | | The fair value of the Company’s investment in the unsecured debt of Lehman Brothers Holdings, Inc. has been substantially reduced because of the bankruptcy of the issuer. As a result, we recorded an “other-than-temporary” impairment charge to reduce the carrying value of this investment. This impairment charge has been excluded from our non-GAAP net income because we expect the impairment charge to be a non-recurring item. As such, we believe that its inclusion in our calculation of non-GAAP net income would not provide a meaningful comparison of current versus prior net income. |
|
| • | | Reversal of Valuation Allowance for Certain Deferred Tax Assets |
|
| | | The Company has reversed a valuation allowance against certain deferred tax assets, resulting in a credit to its provision for income taxes. Management has excluded the discrete benefit from this reversal from its calculation of the Company’s non-GAAP net income because it believes that it is of a one-time nature and does not reflect future expected tax provisions nor does it provide a meaningful comparison of current versus prior net income. |
Harmonic Inc.
GAAP to non-GAAP Income Reconciliation
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 26, 2008 | | | Three Months Ended September 28, 2007 | |
| | | | | | Operating | | | | | | | | | | | Operating | | | | | |
(In thousands) | | Gross Margin | | | Expense | | | Net Income | | | Gross Margin | | | Expense | | Net Income | |
| | | | | | |
|
GAAP | | $ | 44,196 | | | $ | 33,138 | | | $ | 11,965 | | | $ | 35,643 | | | $ | 26,772 | | | $ | 9,417 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Cost of sales related to stock based compensation expense | | | 325 | | | | | | | | 325 | | | | 255 | | | | | | | | 255 | |
Research and development expense related to stock based compensation expense | | | | | | | (785 | ) | | | 785 | | | | | | | | (563 | ) | | | 563 | |
Selling, general and administrative expense related to stock based compensation expense | | | | | | | (1,110 | ) | | | 1,110 | | | | | | | | (870 | ) | | | 870 | |
Selling, general and administrative expense related to excess facilities expense | | | | | | | (283 | ) | | | 283 | | | | | | | | 1,384 | | | | (1,384 | ) |
Amortization of intangibles from acquisitions | | | 1,356 | | | | (160 | ) | | | 1,516 | | | | 1,337 | | | | (843 | ) | | | 2,180 | |
Impairment on Lehman Brothers investment | | | | | | | | | | | 845 | | | | | | | | | | | | | |
Income tax valuation allowance adjustment | | | | | | | | | | | (970 | ) | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Non-GAAP | | $ | 45,877 | | | $ | 30,800 | | | $ | 15,859 | | | $ | 37,235 | | | $ | 25,880 | | | $ | 11,901 | |
| | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
GAAP per share — basic | | | | | | | | | | $ | 0.13 | | | | | | | | | | | $ | 0.12 | |
| | | | | | | | | | | | | | | | | | | | | | |
GAAP per share — diluted | | | | | | | | | | $ | 0.12 | | | | | | | | | | | $ | 0.12 | |
| | | | | | | | | | | | | | | | | | | | | | |
Non-GAAP income per share — basic | | | | | | | | | | $ | 0.17 | | | | | | | | | | | $ | 0.15 | |
| | | | | | | | | | | | | | | | | | | | | | |
Non-GAAP income per share — diluted | | | | | | | | | | $ | 0.17 | | | | | | | | | | | $ | 0.15 | |
| | | | | | | | | | | | | | | | | | | | | | |
Shares used in per-share calculation — basic | | | | | | | | | | | 94,805 | | | | | | | | | | | | 80,371 | |
| | | | | | | | | | | | | | | | | | | | | | |
Shares used in per-share calculation — diluted | | | | | | | | | | | 95,863 | | | | | | | | | | | | 81,642 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Nine Months Ended September 26, 2008 | | | Nine Months Ended September 28, 2007 | |
| | | | | | Operating | | | | | | | | | | | Operating | | | | | |
| | Gross Margin | | | Expense | | | Net Income | | | Gross Margin | | | Expense | | Net Income | |
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GAAP | | $ | 129,327 | | | $ | 97,468 | | | $ | 50,783 | | | $ | 93,360 | | | $ | 79,037 | | | $ | 16,782 | |
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Cost of sales related to severance costs | | | | | | | | | | | | | | | 188 | | | | | | | | 188 | |
Cost of sales related to stock based compensation expense | | | 819 | | | | | | | | 819 | | | | 719 | | | | | | | | 719 | |
Cost of sales related to product discontinuance | | | | | | | | | | | | | | | 772 | | | | | | | | 772 | |
Research and development expense related to severance costs | | | | | | | | | | | | | | | | | | | (334 | ) | | | 334 | |
Research and development expense related to stock based compensation expense | | | | | | | (2,021 | ) | | | 2,021 | | | | | | | | (1,439 | ) | | | 1,439 | |
Selling, general and administrative expense related to severance costs | | | | | | | | | | | | | | | | | | | (131 | ) | | | 131 | |
Selling, general and administrative expense related to stock based compensation expense | | | | | | | (2,630 | ) | | | 2,630 | | | | | | | | (2,317 | ) | | | 2,317 | |
Selling, general and administrative expense related to excess facilities expense | | | | | | | (1,738 | ) | | | 1,738 | | | | | | | | 813 | | | | (813 | ) |
Amortization of intangibles from acquisitions | | | 4,151 | | | | (479 | ) | | | 4,630 | | | | 3,266 | | | | (1,065 | ) | | | 4,331 | |
Impairment on Lehman Brothers investment | | | | | | | | | | | 845 | | | | | | | | | | | | | |
Income tax valuation allowance adjustment | | | | | | | | | | | (16,068 | ) | | | | | | | | | | | | |
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Non-GAAP | | $ | 134,297 | | | $ | 90,600 | | | $ | 47,398 | | | $ | 98,305 | | | $ | 74,564 | | | $ | 26,200 | |
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GAAP per share — basic | | | | | | | | | | $ | 0.54 | | | | | | | | | | | $ | 0.21 | |
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GAAP per share — basic | | | | | | | | | | $ | 0.53 | | | | | | | | | | | $ | 0.21 | |
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Non-GAAP income per share — basic | | | | | | | | | | $ | 0.50 | | | | | | | | | | | $ | 0.33 | |
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Non-GAAP income per share — diluted | | | | | | | | | | $ | 0.50 | | | | | | | | | | | $ | 0.32 | |
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Shares used in per-share calculation — basic | | | | | | | | | | | 94,365 | | | | | | | | | | | | 79,570 | |
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Shares used in per-share calculation — diluted | | | | | | | | | | | 95,491 | | | | | | | | | | | | 80,743 | |
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