EXHIBIT 99.1
[HARMONIC LETTERHEAD]
FOR IMMEDIATE RELEASE PRESS RELEASE
CONTACTS: Robin N. Dickson Michael Newman
Chief Financial Officer Investor Relations
Harmonic Inc. StreetConnect
(408) 542-2500 (408) 542-2760
HARMONIC ANNOUNCES FIRST QUARTER RESULTS
SUNNYVALE, CALIF. - APRIL 24, 2003 - Harmonic Inc. (Nasdaq: HLIT) today
announced its results for the quarter ended March 28, 2003.
For the first quarter of 2003, Harmonic reported net sales of $37.0 million,
compared to $39.3 million in the previous quarter and $54.0 million in the first
quarter of 2002. Domestic sales represented approximately 73% of total sales for
the first quarter of 2003.
The CS division, which designs, manufactures and markets digital headend systems
for a number of markets, had divisional net sales of $24.0 million, up from
$21.0 million in the previous quarter. During the first quarter, the Company saw
increased shipments to its satellite customers, including sales to major
domestic operators as well as a number of international customers.
The BAN division, which designs, manufactures and markets fiber optic products
for broadband cable networks, had divisional net sales of approximately $13.0
million, compared to $18.3 million in the previous quarter. The decrease in BAN
sales was primarily due to unexpected delays in orders from certain customers
and general capital spending concerns in light of current conditions in the
financial markets. Despite challenging business conditions, Harmonic believes
that it has continued to maintain its competitive position in the worldwide
cable market.
"Capital spending remained slow worldwide and some of our major domestic cable
customers moved even more cautiously than expected in the first quarter," said
Anthony J. Ley, Chairman, President and Chief Executive Officer. "Despite the
current market uncertainty, we believe cable operators will need to continue
their network upgrade programs in order to keep pace with subscriber growth and
the demand for more digital video, high-speed data, video-on-demand and HDTV. We
are also seeing satellite operators renew their expansion into new markets and
extend their local channel and HDTV services. Harmonic remains well-positioned
to capitalize on the long-term opportunities across a wide range of broadband
markets."
The GAAP net loss for the first quarter of 2003 was $11.7 million or $0.19 per
share, compared to $14.0 million or $0.24 per share for the same period of 2002.
The GAAP net loss for the first quarter of 2003 includes a non-cash charge for
the amortization of intangibles of $3.5 million and a credit relating to the
sale of previously reserved inventory of $1.1 million. Excluding the above
charge and credit, the non-GAAP loss for the quarter was $9.3 million, or $0.15
per share, compared to a non-GAAP loss of $8.2 million, or $0.14 per share for
the first quarter of 2002. A reconciliation between GAAP and non-GAAP net loss
is provided in the accompanying tables. At March 28, 2003, the Company had
cash, cash equivalents and short-term investments of $43.5 million, compared to
$49.2 million at the end of the previous quarter.
As previously announced, the Company will host a conference call to discuss its
first quarter financial results today 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 at: www.harmonicinc.com or by calling +1-212-748-2800 (Reservation No.
21090931). The replay will be available at the same website address or by
calling +1-402-977-9140 (Reservation No. 21090931).
ABOUT HARMONIC INC.
Harmonic Inc. is a leading provider of digital video, broadband optical
networking and IP delivery systems to cable, satellite, telecom and broadcast
network operators. Harmonic's open standards-based solutions for the headend
through the last mile enable customers to develop new revenue sources and a
competitive advantage by offering powerful interactive video, voice and data
services such as video-on-demand, high definition digital television, telephony
and Internet access.
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. Visit www.harmonicinc.com for more information.
This press release contains forward-looking statements within the meaning of
Section 27(a) of the Securities Act of 1933 and Section 21(e) of the Securities
Exchange Act of 1934, including statements related to our competitive position
in the worldwide cable market, our belief that our customers will need to
upgrade their networks in order to keep pace with subscriber growth and the
demand for more digital video, high-speed data, video-on-demand and HDTV, our
expectation that satellite operators will expand into new markets and expand
their local channel and HDTV services, and our belief that we remain
well-positioned to capitalize on long-term opportunities across a wide range of
broadband markets. 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 delays or decreases in capital spending in the
cable and satellite industry, customer concentration and consolidation, general
economic conditions, market acceptance of new or existing Harmonic products,
losses of one or more key customers, risks associated with Harmonic's
international operations, inventory management problems, the effect of
competition, difficulties associated with rapid technological changes in
Harmonic's markets, the need to introduce new and enhanced products, and risks
associated with a cyclical and unpredictable sales cycle. 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 its Annual Report filed on Form
10-K for the year ended December 31, 2002 and its subsequent quarterly reports
on Form 10-Q and current reports on Form 8-K. Harmonic does not undertake to
update any forward-looking statements.
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HARMONIC INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
MARCH 28, 2003 DECEMBER 31, 2002
-------------- -----------------
(UNAUDITED)
Assets
Current assets:
Cash and cash equivalents $ 27,075 $ 21,542
Short-term investments 16,452 27,616
Accounts receivable, net 29,424 25,380
Inventories 22,768 25,904
Prepaid expenses and other assets 4,625 5,494
----------- -----------
Total current assets 100,344 105,936
Property and equipment, net 29,752 32,456
Intangibles and other assets 31,853 35,362
----------- -----------
$ 161,949 $ 173,754
=========== ===========
Liabilities and stockholders' equity
Current liabilities:
Current portion of long-term debt $ 1,671 $ 1,862
Accounts payable 11,390 7,258
Income taxes payable 6,893 6,900
Accrued liabilities 54,653 58,670
----------- -----------
Total current liabilities 74,607 74,690
----------- -----------
Long-term debt, less current portion 598 710
Accrued excess facilities costs 33,783 34,754
Other non-current liabilities 1,459 1,417
----------- -----------
Total liabilities 110,447 111,571
----------- -----------
Stockholders' equity:
Common stock 1,964,174 1,963,294
Accumulated deficit (1,912,791) (1,901,125)
Accumulated other comprehensive income 119 14
----------- -----------
Total stockholders' equity 51,502 62,183
----------- -----------
$ 161,949 $ 173,754
=========== ===========
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HARMONIC INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED
------------------------------
MARCH 28, 2003 MARCH 29, 2002
-------------- --------------
Net sales $ 37,041 $ 54,032
Cost of sales 26,294 38,269
-------- --------
Gross profit 10,747 15,763
-------- --------
Operating expenses:
Research and development 8,503 11,119
Selling, general and administrative 12,063 15,321
Amortization of intangibles 1,933 2,828
-------- --------
Total operating expenses 22,499 29,268
-------- --------
Loss from operations (11,752) (13,505)
Interest and other income (expense), net 185 (7)
-------- --------
Loss before income taxes (11,567) (13,512)
Provision for income taxes 100 500
Net loss $(11,667) $(14,012)
======== ========
Net loss per share
Basic and diluted $ (0.19) $ (0.24)
======== ========
Weighted average shares
Basic and diluted 60,456 59,476
======== ========
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HARMONIC INC.
NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (1)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED
-------------------------------
MARCH 28, 2003 MARCH 29, 2002
-------------- --------------
Net sales $ 37,041 $ 54,032
Cost of sales 25,811 35,247
-------- --------
Gross profit 11,230 18,785
-------- --------
Operating expenses:
Research and development 8,503 11,119
Selling, general and administrative 12,063 15,321
-------- --------
Total operating expenses 20,566 26,440
-------- --------
Loss from operations (9,336) (7,655)
Interest and other income (expense), net 185 (7)
-------- --------
Loss before income taxes (9,151) (7,662)
Provision for income taxes 100 500
-------- --------
Net loss $ (9,251) $ (8,162)
======== ========
Net loss per share
Basic and diluted $ (0.15) $ (0.14)
======== ========
Weighted average shares
Basic and diluted 60,456 59,476
======== ========
(1) The Non-GAAP Condensed Consolidated Statements of Operations exclude the
impact of the amortization of intangibles and the realized margin on
products sold during the quarter that were reserved for in prior years.
See Non-GAAP to GAAP loss reconciliation below.
HARMONIC INC.
NON-GAAP TO GAAP LOSS RECONCILIATION
(IN THOUSANDS)
(UNAUDITED)
THREE MONTHS ENDED
-------------------------------
MARCH 28, 2003 MARCH 29, 2002
-------------- --------------
Non-GAAP net loss $ (9,251) $ (8,162)
Items charged to cost of sales:
Amortization of intangibles (1,540) (3,022)
Realized margin on reserved product sold 1,057 --
Items charged to operating expenses:
Amortization of intangibles (1,933) (2,828)
-------- --------
GAAP net loss $(11,667) $(14,012)
======== ========
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