Harmonic Inc. · NASDAQ:HLIT
Harmonic — Q4 2011 Earnings Presentation
21 slides from Harmonic's earnings presentation, Jan 31, 2012
Slide 1: Fourth Quarter and Year End 2011 Earnings Conference Call
Fourth Quarter and Year End 2011 Earnings Conference Call January 31, 2012 Patrick Harshman, President & CEO Carolyn Aver, Chief Financial Officer www.harmonicinc.com ©2011 Harmonic, Inc. All rights reserved worldwide.
Slide 2: Forward Looking Statements
Forward Looking Statements During the course of this presentation, we will provide projections and other forward looking statements regarding future events or the future financial performance of Harmonic, including expectations concerning our 2012 business strategy and our Q1 2012 financial outlook.
Slide 3: Strong Fourth Quarter Results
Strong Fourth Quarter Results Revenue $143.6M – 4% growth from Q4 2010 – 57% international; 43% domestic – No single 10% customer; top 10 customers = 34% of total revenue Bookings $142.0M – New customer wins across geographies and markets – No significant “budget flush” Operating performance – Gross
Slide 4: Strong 2011 Performance
Strong 2011 Performance Revenue $549.3M (GAAP) – 8% pro forma* revenue growth from 2010 – 55% international; 45% domestic – Top 10 customers = 35% of total revenue Operating performance – Gross margin 51% (non-GAAP) – Operating margin 12% (non-GAAP) – EPS $0.41 (non-GAAP) – Cash generated $41M *Incl
Slide 5: 2011 Strategic Review
2011 Strategic Review International opportunity Broadcast & Media opportunity New video applications and services – Traditional networks – Over-the-top www.harmonicinc.com ©2011 Harmonic, Inc. All rights reserved worldwide. 5
Slide 6: 2011 Business Highlights: Strong International growth
2011 Business Highlights Strong International growth – International revenue up 14% over 2010 pro forma* revenue – 55% of total 2011 revenue – Competitive momentum across product categories and geographies – Expanding worldwide opportunities • High definition production and delivery • New on-demand
Slide 7: 2011 Business Highlights: Strong Broadcast & Media growth
2011 Business Highlights Strong Broadcast & Media growth – Broadcast & Media revenue up 17% from 2010 pro forma* revenue – 32% of total 2011 revenue – Wins span traditional and new media applications • Video Processing technology breadth and leadership • Omneon customer relationships and technology
Slide 8: 2011 Business Highlights: New applications growth – traditional video networks
2011 Business Highlights New applications growth – traditional video networks – Video processing revenue up 17% from 2010 • High definition • IPTV • In-home multiscreen – EdgeQAM market leadership, with 40% share* • Next-generation dense QAM technology • VOD, nPVR and modular CMTS wins – Services an
Slide 9: 2011 Business Highlights: New applications growth – over-the-top video
2011 Business Highlights New applications growth – over-the-top video – Strategic wins with leading media and service provider companies • Transcoding for leading movie streaming services • Cloud transcoding for major Hollywood studio • Live streaming of top-tier sports programming – Newest products
Slide 10: 2012 Strategic Focus
2012 Strategic Focus Exploiting global growth opportunities – Greater share in growing International markets – Deeper relationships with leading media companies – Expanded relationships with leading service providers Extending technology leadership position – Video production, post-production and co
Slide 11: Fourth Quarter and Year End 2011 Earnings Conference Call
Fourth Quarter and Year End 2011 Earnings Conference Call January 31, 2012 Carolyn Aver, CFO www.harmonicinc.com ©2011 Harmonic, Inc. All rights reserved worldwide.
Slide 12: Q4 2011 Financial Highlights
Q4 2011 Financial Highlights $Millions Q4 Q3 Q4 Q4/Q3 Q4 Y/Y (except GM, OM and EPS) 2011 2011 2010 Change Change Total Net Revenue $143.6 $138.9 $138.2 3% 4% Gross Margin % - Non-GAAP 51% 51% 51% 20 bp 30 bp Gross Margin % - GAAP 47% 46% 44% 50 bp 220 bp Operating Expense - Non-GAAP $53.9 $53.7 $52
Slide 13: Quarterly GAAP Revenue and Backlog
Quarterly GAAP Revenue and Backlog $Millions Revenue Backlog/Deferred Revenue 150 125 100 75 50 25 0 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 www.harmonicinc.comOmneon contributed from completion of acquisition ©2011 Harmonic, Inc. All rights reserved worldwide. on September 1
Slide 14: 2011 Revenue Mix and Key Drivers – Pro Forma
2011 Revenue Mix and Key Drivers – Pro Forma GEOGRAPHY PRODUCTS MARKETS International U.S. Edge & Access Production & Playout Cable Satellite & Telco Video Processing Services Broadcast & Media 13% 26% 23% 45% 18% 45% 55% 32% 43% $ Millions International $ Millions Video Processing $ Millions Broadc
Slide 15: Balance Sheet and Cap-Ex Highlights
Balance Sheet and Cap-Ex Highlights $Millions Cash $161.8 Up $41.5M Y/Y Accounts Receivable $109.9 70 days Inventories $70.6 4.0 turns Debt $0 Capital Expenditures $4.9 $17.3M for 2011 www.harmonicinc.com ©Harmonic ©2011 Inc.Inc. Harmonic, All All rights reserved rights reservedworldwide. worldwide.
Slide 16: Q1 2012 Financial Guidance
Q1 2012 Financial Guidance Metric Q1 Revenue $132M - $142M Non-GAAP Gross Margin* 50% - 52% Non-GAAP Operating Expenses* $55M - $57M Non-GAAP Tax Rate** 25% *Excludes charges for stock-based compensation and the amortization of intangibles. **Assumes no extension to the R&D tax credit www.harmonicin
Slide 17: Fourth Quarter and Year End 2011 Earnings Conference Call
Fourth Quarter and Year End 2011 Earnings Conference Call January 31, 2012 Patrick Harshman, President & CEO Carolyn Aver, Chief Financial Officer www.harmonicinc.com ©2011 Harmonic, Inc. All rights reserved worldwide.
Slide 18: Use of Non-GAAP Financial Measures
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, most of which are non-cash or non
Slide 19: GAAP to Non-GAAP Reconciliation—Q4 2011
GAAP to Non-GAAP Reconciliation—Q4 2011 Quar t er end ed D ecemb er 3 1, 2 0 11 2 0 10 N et Gr o ss Op er at ing N et Gr o ss Op er at ing Inco me Pr o f it Exp ense Inco me Pr o f it Exp ense ( Lo ss) ( In t ho usand s, excep t p er shar e amo unt s) GA A P $ 66,870 $ 60,243 $ 4,327 $ 61,381 $ 64,3
Slide 20: Historic Pro Forma Revenue Information
Historic Pro Forma Revenue Information (Unaudited) (In thousands, except percentages) 2010Q1 2010Q2 2010Q3 2010Q4 2010 Product Video Processing $ 38,890 34% $ 49,998 39% $ 51,005 39% $ 63,005 45% $ 202,898 40% Production and Playout 24,828 22% 26,589 21% 26,024 20% 27,699 20% 105,140 21% Edge and Ac
Slide 21: Fourth Quarter and Year End 2011 Earnings Conference Call
Fourth Quarter and Year End 2011 Earnings Conference Call January 31, 2012 Patrick Harshman, President & CEO Carolyn Aver, Chief Financial Officer www.harmonicinc.com ©2011 Harmonic, Inc. All rights reserved worldwide.