[April 23, 2014] |
|
Polycom Reports First Quarter 2014 Revenue of $329 Million
SAN JOSE, Calif. --(Business Wire)--
Polycom,
Inc. (Nasdaq: PLCM) today reported first quarter 2014
revenues of $329 million, non-GAAP net income of $26 million and
non-GAAP earnings per diluted share of 18 cents. GAAP net loss for the
first quarter was $4 million, or 3 cents per share. A reconciliation of
GAAP to non-GAAP results is provided in the tables at the end of this
press release.
"We are successfully executing on our goal to improve operating
performance," said Peter Leav, Polycom President and Chief Executive
Officer. "Future earnings growth at Polycom will be driven by
improvements in processes across the organization, operational cost
containment, and the pursuit of profitable revenue growth."
"Operating margins and earnings per share were better than expected as a
result of strong execution in the first quarter," said Laura Durr, Chief
Accounting Officer and Interim Chief Financial Officer.
On a comparative basis, consolidated financial results were:
($ in millions, except per share data)
|
|
|
Q1 2014
|
|
|
Q4 2013
|
|
|
Q1 2013
|
|
|
Year- Over- Year Change
|
Revenues
|
|
|
$
|
328.5
|
|
|
|
$
|
347.9
|
|
|
|
$
|
338.8
|
|
|
-3
|
%
|
Non-GAAP Net Income
|
|
|
$
|
26.1
|
|
|
|
$
|
25.4
|
|
|
|
$
|
23.3
|
|
|
12
|
%
|
Non-GAAP EPS
|
|
|
$
|
0.18
|
|
|
|
$
|
0.16
|
|
|
|
$
|
0.13
|
|
|
38
|
%
|
GAAP Net Income (Loss)
|
|
|
$
|
(4.0
|
)
|
|
|
$
|
(2.0
|
)
|
|
|
$
|
2.6
|
|
|
-254
|
%
|
GAAP EPS
|
|
|
$
|
(0.03
|
)
|
|
|
$
|
(0.01
|
)
|
|
|
$
|
0.01
|
|
|
-400
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On a geographic basis, consolidated revenues were comprised of:
($ in millions)
|
|
|
Q1 2014
|
|
|
Q4 2013
|
|
|
Q1 2013
|
|
|
Year-Over- Year Change
|
Americas
|
|
|
$
|
163.1
|
|
|
$
|
170.6
|
|
|
$
|
171.0
|
|
|
-5%
|
% of revenues
|
|
|
|
50%
|
|
|
|
49%
|
|
|
|
51%
|
|
|
|
Europe, Middle East & Africa (EMEA)
|
|
|
|
89.0
|
|
|
|
89.2
|
|
|
|
89.1
|
|
|
0%
|
% of revenues
|
|
|
|
27%
|
|
|
|
26%
|
|
|
|
26%
|
|
|
|
Asia Pacific
|
|
|
|
76.4
|
|
|
|
88.1
|
|
|
|
78.7
|
|
|
-3%
|
% of revenues
|
|
|
|
23%
|
|
|
|
25%
|
|
|
|
23%
|
|
|
|
Totals *
|
|
|
$
|
328.5
|
|
|
$
|
347.9
|
|
|
$
|
338.8
|
|
|
-3%
|
* may not foot due to rounding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By product category, inclusive of its service component, consolidated
revenues were comprised of:
($ in millions)
|
|
|
Q1 2014
|
|
|
Q4 2013
|
|
|
Q1 2013
|
|
|
Year-Over- Year Change
|
UC Group Systems
|
|
|
$ 213.4
|
|
|
$ 218.1
|
|
|
$ 232.4
|
|
|
-8%
|
% of revenues
|
|
|
65%
|
|
|
63%
|
|
|
69%
|
|
|
|
UC Personal Devices
|
|
|
56.5
|
|
|
62.1
|
|
|
49.3
|
|
|
15%
|
% of revenues
|
|
|
17%
|
|
|
18%
|
|
|
15%
|
|
|
|
UC Platform
|
|
|
58.7
|
|
|
67.7
|
|
|
57.1
|
|
|
3%
|
% of revenues
|
|
|
18%
|
|
|
19%
|
|
|
19%
|
|
|
|
Totals *
|
|
|
$ 328.5
|
|
|
$ 347.9
|
|
|
$ 338.8
|
|
|
-3%
|
* may not foot due to rounding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In Q1 2014, Polycom generated a total of $19 million in operating cash
flow. Operating cash flow on a trailing 12 month basis was $138 million.
Cash and investments at the end of Q1 2014 totaled $596 million. Net of
existing debt, cash and investments at the end of Q1 2014 totaled $349
million.
Earnings Call Details
Polycom will hold a conference call today, April 23, 2014, at 5:00 p.m.
ET/2:00 p.m. PT to discuss these first quarter 2014 financial results.
You may participate by listening to the webcast at www.polycom.com/investors
or, for callers in the U.S. and Canada, you may participate by calling
1.800.926.7713 and for callers outside of the U.S. and Canada, by
calling 1.212.231.2930. The pass code for the call is "Polycom." A
replay of the call will also be available at www.polycom.com
or, for callers in the U.S. and Canada, at 1.800.633.8284 and, for
callers outside of the U.S. and Canada, at 1.402.977.9140. The access
number for the replay is 21713337. A replay of the call will be
available on www.polycom.com
for at least three months.
Forward Looking Statements and Risk Factors
This release contains forward-looking statements within the meaning of
the "safe harbor" provisions of the Private Securities Litigation Reform
Act of 1995 regarding improved operating performance, earnings growth,
process improvements, operational cost containment and profitable
revenue growth. These forward-looking statements are subject to risks
and uncertainties that may cause actual results to differ materially,
including the impact of competition on our product sales and for our
customers and partners and any resulting loss of business; the impact of
increased competition due to consolidation in our industry or
competition from companies that are larger or that have greater
resources than we do; potential fluctuations in results and future
growth rates; risks associated with global economic conditions and
external market factors; the market acceptance of our products and
changing market demands, including demands for differing technologies or
product and services offerings; our ability to successfully implement
process improvements and cost containment initiatives; changes to our
strategic areas of focus; our ability to successfully integrate our
acquisitions into our business; possible delays in the development,
availability and shipment of new products due to engineering,
manufacturing or other delays; increasing costs and differing uses of
capital; changes in key personnel that may cause disruption to the
business; the impact of restructuring actions; and the impact of global
conflicts that may adversely impact our business. Many of these risks
and uncertainties are discussed in the Company's Annual Report on Form
10-K for the year ended December 31, 2013, and in other reports filed by
Polycom with the SEC. Polycom disclaims any intent or obligations to
update these forward-looking statements.
Polycom reserves the right to modify future product plans at any time.
Products and/or related specifications referenced in this press release
are not guaranteed and will be delivered on a when and if available
basis.
GAAP to non-GAAP Reconciliation
To supplement our consolidated financial statements presented on a GAAP
basis, Polycom uses non-GAAP 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 non-GAAP
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 non-GAAP
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.
About Polycom
Polycom helps organizations unleash the power of human collaboration.
More than 400,000 companies and institutions worldwide defy distance
with secure video, voice and content solutions from Polycom to increase
productivity, speed time to market, provide better customer service,
expand education and save lives. Polycom and its global partner
ecosystem provide flexible collaboration solutions for any environment
that deliver the best user experience, the broadest multi-vendor
interoperability and unmatched investment protection. Visit www.polycom.com
or connect with us on Twitter,
Facebook
and LinkedIn
to learn more.
© 2014 Polycom, Inc. All rights reserved. POLYCOM®, the Polycom logo,
and the names and marks associated with Polycom's products are
trademarks and/or service marks of Polycom, Inc. and are registered
and/or common law marks in the United States and various other
countries. All other trademarks are property of their respective owners.
POLYCOM, INC.
|
Condensed Consolidated Statements of Operations
|
(In thousands, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
March 31,
|
|
|
|
2014
|
|
2013
|
Revenues:
|
|
|
|
|
Product revenues
|
|
$
|
231,509
|
|
|
$
|
246,129
|
|
Service revenues
|
|
|
97,015
|
|
|
|
92,623
|
|
Total revenues
|
|
|
328,524
|
|
|
|
338,752
|
|
|
|
|
|
|
|
Cost of revenues:
|
|
|
|
|
Cost of product revenues
|
|
|
97,636
|
|
|
|
101,878
|
|
Cost of service revenues
|
|
|
38,903
|
|
|
|
37,777
|
|
Total cost of revenues
|
|
|
136,539
|
|
|
|
139,655
|
|
|
|
|
|
|
|
Gross profit
|
|
|
191,985
|
|
|
|
199,097
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
Sales and marketing
|
|
|
93,968
|
|
|
|
108,715
|
|
Research and development
|
|
|
48,147
|
|
|
|
55,935
|
|
General and administrative
|
|
|
23,793
|
|
|
|
23,694
|
|
Amortization of purchased intangibles
|
|
|
2,492
|
|
|
|
2,502
|
|
Restructuring costs
|
|
|
30,343
|
|
|
|
5,423
|
|
Transaction-related costs
|
|
|
156
|
|
|
|
3,323
|
|
Total operating expenses
|
|
|
198,899
|
|
|
|
199,592
|
|
|
|
|
|
|
|
Operating loss
|
|
|
(6,914
|
)
|
|
|
(495
|
)
|
|
|
|
|
|
|
Interest expense
|
|
|
(1,474
|
)
|
|
|
(407
|
)
|
Other income (expense)
|
|
|
779
|
|
|
|
(352
|
)
|
Interest and other income (expense), net
|
|
|
(695
|
)
|
|
|
(759
|
)
|
|
|
|
|
|
|
Loss from continuing operations before benefit for income taxes
|
|
|
(7,609
|
)
|
|
|
(1,254
|
)
|
Benefit from income taxes
|
|
|
(3,618
|
)
|
|
|
(3,371
|
)
|
Loss from continuing operations
|
|
|
(3,991
|
)
|
|
|
2,117
|
|
|
|
|
|
|
|
Gain from sale of discontinued operations, net of taxes
|
|
|
-
|
|
|
|
459
|
|
Net income (loss)
|
|
$
|
(3,991
|
)
|
|
$
|
2,576
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income (loss) per share:
|
|
|
|
|
Net income (loss) per share from continuing operations
|
|
$
|
(0.03
|
)
|
|
$
|
0.01
|
|
Gain per share from sale of discontinued operations, net of taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
Net income (loss) per share from discontinued operations, net of
taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
Basic and diluted net income (loss) per share
|
|
$
|
(0.03
|
)
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of shares used in computation of net income (loss) per share:
|
|
|
|
|
Basic
|
|
|
136,795
|
|
|
|
176,079
|
|
Diluted
|
|
|
136,795
|
|
|
|
179,140
|
|
|
|
|
|
|
|
Note:
|
|
|
|
|
|
|
Earnings per share amounts for continuing operations,
discontinued operations and net income (loss), as presented above,
are calculated individually and may not sum due to rounding
differences. *
|
|
*
|
|
As a result of the net loss from continuing operations for all
periods presented, all potentially issuable common shares have
been excluded from the diluted shares used in the computation of
net income (loss) per share from continuing operations as their
effect is anti-dilutive.
|
|
|
|
|
POLYCOM, INC.
|
Reconciliation of GAAP to Non-GAAP Net Income (Loss)
|
(In thousands, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
March 31,
|
|
|
2014
|
|
2013
|
|
|
|
|
|
GAAP net income (loss)
|
|
$
|
(3,991
|
)
|
|
$
|
2,576
|
|
|
|
|
|
|
Gain from sale of discontinued operations, net of taxes
|
|
|
-
|
|
|
|
(459
|
)
|
Amortization of purchased intangibles
|
|
|
3,333
|
|
|
|
3,750
|
|
Restructuring costs
|
|
|
30,343
|
|
|
|
5,423
|
|
Transaction-related expenses
|
|
|
156
|
|
|
|
3,323
|
|
Stock-based compensation expense
|
|
|
5,647
|
|
|
|
17,771
|
|
Effect of stock-based compensation on warranty rates
|
|
|
129
|
|
|
|
157
|
|
Costs associated with CEO separation and related SEC investigation
|
|
|
610
|
|
|
|
-
|
|
Income tax effect of non-GAAP exclusions
|
|
|
(10,140
|
)
|
|
|
(9,205
|
)
|
|
|
|
|
|
Non-GAAP net income
|
|
$
|
26,087
|
|
|
$
|
23,336
|
|
|
|
|
|
|
GAAP net income (loss) per share
|
|
|
|
|
Basic
|
|
$
|
(0.03
|
)
|
|
$
|
0.01
|
|
Diluted
|
|
$
|
(0.03
|
)
|
|
$
|
0.01
|
|
|
|
|
|
|
Non-GAAP net income per share
|
|
|
|
|
Basic
|
|
$
|
0.19
|
|
|
$
|
0.13
|
|
Diluted
|
|
$
|
0.18
|
|
|
$
|
0.13
|
|
|
|
|
|
|
Number of shares used in computation of GAAP net income (loss) per
share:
|
|
|
|
|
Basic and diluted
|
|
|
136,795
|
|
|
|
176,079
|
|
|
|
|
|
|
Number of shares used in computation of non-GAAP net income per
share:
|
|
|
|
|
Basic
|
|
|
136,795
|
|
|
|
176,079
|
|
Diluted
|
|
|
142,165
|
|
|
|
179,140
|
|
|
|
|
|
|
Note: As a result of the GAAP net loss from continuing operations
for all periods presented, all potentially issuable common shares
have been excluded from the diluted shares used in the computation
of net income (loss) per share from continuing operations as their
effect is anti-dilutive.
|
|
POLYCOM, INC.
|
Condensed Consolidated Balance Sheets
|
(In thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
2014
|
|
2013
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current assets
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
380,214
|
|
$
|
392,629
|
Short-term investments
|
|
|
149,890
|
|
|
134,684
|
Trade receivables, net
|
|
|
184,239
|
|
|
183,369
|
Inventories
|
|
|
103,280
|
|
|
103,309
|
Deferred taxes
|
|
|
37,079
|
|
|
37,085
|
Prepaid expenses and other current assets
|
|
|
58,982
|
|
|
50,352
|
Total current assets
|
|
|
913,684
|
|
|
901,428
|
|
|
|
|
|
Property and equipment, net
|
|
|
109,146
|
|
|
115,157
|
Long-term investments
|
|
|
65,835
|
|
|
56,372
|
Goodwill and purchased intangibles, net
|
|
|
593,340
|
|
|
596,918
|
Deferred taxes
|
|
|
44,425
|
|
|
51,398
|
Other assets
|
|
|
27,654
|
|
|
27,757
|
Total assets
|
|
$
|
1,754,084
|
|
$
|
1,749,030
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
Current liabilities
|
|
|
|
|
Accounts payable
|
|
$
|
92,616
|
|
$
|
84,640
|
Accrued payroll and related liabilities
|
|
|
32,051
|
|
|
40,162
|
Taxes payable
|
|
|
3,797
|
|
|
5,389
|
Deferred revenue
|
|
|
172,703
|
|
|
172,408
|
Current portion of long-term debt
|
|
|
6,250
|
|
|
6,250
|
Other accrued liabilities
|
|
|
76,841
|
|
|
77,744
|
Total current liabilities
|
|
|
384,258
|
|
|
386,593
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
Long-term deferred revenue
|
|
|
86,078
|
|
|
87,467
|
Taxes payable
|
|
|
12,553
|
|
|
12,419
|
Deferred taxes
|
|
|
150
|
|
|
149
|
Long-term debt
|
|
|
240,625
|
|
|
242,188
|
Other non-current liabilities
|
|
|
50,204
|
|
|
43,849
|
Total liabilities
|
|
|
773,868
|
|
|
772,665
|
|
|
|
|
|
Stockholders' equity
|
|
|
980,216
|
|
|
976,365
|
Total liabilities and stockholders' equity
|
|
$
|
1,754,084
|
|
$
|
1,749,030
|
|
|
|
|
|
|
|
POLYCOM, INC.
|
Condensed Consolidated Statements of Cash Flows
|
(In thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
March 31,
|
|
|
2014
|
|
2013
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
Net income (loss)
|
|
$
|
(3,991
|
)
|
|
$
|
2,576
|
|
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
|
14,533
|
|
|
|
16,430
|
|
Amortization of purchased intangibles
|
|
|
3,352
|
|
|
|
3,768
|
|
Amortization of software development costs
|
|
|
288
|
|
|
|
-
|
|
Amortization of debt issuance costs
|
|
|
134
|
|
|
|
-
|
|
Amortization of discounts and premiums on investments, net
|
|
|
442
|
|
|
|
386
|
|
Write-down of excess and obsolete inventories
|
|
|
1,781
|
|
|
|
2,934
|
|
Stock-based compensation expense
|
|
|
5,647
|
|
|
|
17,771
|
|
Excess tax benefits from stock-based compensation expense
|
|
|
(1,695
|
)
|
|
|
(155
|
)
|
Loss on disposal of property and equipment
|
|
|
3,685
|
|
|
|
1,206
|
|
Gain from sale of discontinued operations, net of tax
|
|
|
-
|
|
|
|
(459
|
)
|
|
|
|
|
|
|
|
|
|
|
Changes in assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
Trade receivables
|
|
|
(870
|
)
|
|
|
17,179
|
|
Inventories
|
|
|
(1,752
|
)
|
|
|
(525
|
)
|
Deferred taxes
|
|
|
(1,762
|
)
|
|
|
1,994
|
|
Prepaid expenses and other assets
|
|
|
(8,623
|
)
|
|
|
(4,530
|
)
|
Accounts payable
|
|
|
6,750
|
|
|
|
7,857
|
|
Taxes payable
|
|
|
4,936
|
|
|
|
(1,681
|
)
|
Other accrued liabilities and deferred revenue
|
|
|
(3,761
|
)
|
|
|
(15,351
|
)
|
Net cash provided by operating activities
|
|
|
19,094
|
|
|
|
49,400
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
Purchases of property and equipment
|
|
|
(10,929
|
)
|
|
|
(12,757
|
)
|
Capitalized software development costs for products to be sold
|
|
|
(1,073
|
)
|
|
|
-
|
|
Purchases of investments
|
|
|
(90,663
|
)
|
|
|
(55,754
|
)
|
Proceeds from sale of investments
|
|
|
30,114
|
|
|
|
9,227
|
|
Proceeds from maturity of investments
|
|
|
35,430
|
|
|
|
68,136
|
|
Net cash received from sale of discontinued operations
|
|
|
-
|
|
|
|
556
|
|
Net cash paid in purchase acquisitions
|
|
|
-
|
|
|
|
(8,350
|
)
|
Net cash provided by (used in) investing activities
|
|
|
(37,121
|
)
|
|
|
1,058
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
Proceeds from issuance of common stock under employee option and
stock purchase plans
|
|
|
13,295
|
|
|
|
13,206
|
|
Payments on debt
|
|
|
(1,562
|
)
|
|
|
-
|
|
Purchase and retirement of common stock
|
|
|
(7,816
|
)
|
|
|
(38,041
|
)
|
Excess tax benefits from stock-based compensation expense
|
|
|
1,695
|
|
|
|
155
|
|
Net cash provided by (used in) financing activities
|
|
|
5,612
|
|
|
|
(24,680
|
)
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(12,415
|
)
|
|
|
25,778
|
|
Cash and cash equivalents, beginning of period
|
|
|
392,629
|
|
|
|
477,073
|
|
Cash and cash equivalents, end of period
|
|
$
|
380,214
|
|
|
$
|
502,851
|
|
|
|
|
|
|
Certain prior period amounts have also been reclassified to
conform to the current period presentation.
|
|
POLYCOM, INC.
|
Selected Summary Data
|
(In millions except per share amounts and headcount)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
|
|
2014
|
|
2013
|
|
2013
|
|
Balance Sheet Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and investments
|
|
$
|
596
|
|
|
$
|
584
|
|
|
$
|
728
|
|
|
Number of shares outstanding
|
|
|
138
|
|
|
|
135
|
|
|
|
175
|
|
|
Cash and investments per share
|
|
$
|
4.31
|
|
|
$
|
4.32
|
|
|
$
|
4.17
|
|
|
Debt
|
|
$
|
247
|
|
|
$
|
248
|
|
|
$
|
-
|
|
|
Operating cash flow - quarterly
|
|
$
|
19
|
|
|
$
|
50
|
|
|
$
|
49
|
|
|
Operating cash flow - trailing 12 months
|
|
$
|
138
|
|
|
$
|
168
|
|
|
$
|
204
|
|
|
DSO (Days Sales Outstanding)
|
|
|
51
|
|
|
|
48
|
|
|
|
48
|
|
|
Inventory turns - GAAP
|
|
|
5.3
|
|
|
|
5.8
|
|
|
|
5.7
|
|
|
Inventory turns - non-GAAP
|
|
|
5.2
|
|
|
|
5.5
|
|
|
|
5.6
|
|
|
Deferred revenue
|
|
$
|
259
|
|
|
$
|
260
|
|
|
$
|
253
|
|
|
Share repurchases:
|
|
|
|
|
|
|
|
Quarter-to-date share purchases - shares
|
|
|
-
|
|
|
|
35.4
|
|
|
|
3.4
|
|
|
Quarter-to-date share repurchases - dollars
|
|
$
|
-
|
|
|
$
|
400
|
|
|
$
|
34
|
|
|
Year-to-date share purchases - shares
|
|
|
-
|
|
|
|
45
|
|
|
|
3.4
|
|
|
Year-to-date share repurchases - dollars
|
|
$
|
-
|
|
|
$
|
502
|
|
|
$
|
34
|
|
|
Remaining authorization for share repurchases (1)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
39
|
|
|
|
|
|
|
|
|
|
|
Ending headcount
|
|
|
3,578
|
|
|
|
3,774
|
|
|
|
3,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended
|
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
|
|
2014
|
|
2013
|
|
2013
|
|
Income Statement Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP:
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
329
|
|
|
$
|
348
|
|
|
$
|
339
|
|
|
Gross margin
|
|
|
58.4
|
%
|
|
|
56.6
|
%
|
|
|
58.8
|
%
|
|
Operating expenses
|
|
$
|
199
|
|
|
$
|
197
|
|
|
$
|
200
|
|
|
Operating margin
|
|
|
(2.1
|
%)
|
|
|
(0.1
|
%)
|
|
|
(0.1
|
%)
|
|
Diluted EPS
|
|
$
|
(0.03
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP:
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
329
|
|
|
$
|
348
|
|
|
$
|
339
|
|
|
Gross margin
|
|
|
59.2
|
%
|
|
|
58.8
|
%
|
|
|
59.9
|
%
|
|
Operating expenses
|
|
$
|
161
|
|
|
$
|
171
|
|
|
$
|
173
|
|
|
Operating margin
|
|
|
10.1
|
%
|
|
|
9.8
|
%
|
|
|
8.8
|
%
|
|
Diluted EPS
|
|
$
|
0.18
|
|
|
$
|
0.16
|
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1)
|
Polycom is not obligated to purchase any specific number of
shares under its Share Repurchase Program and the program may be
modified, suspended or discontinued at any time.
|
|
|
|
|
|
|
|
|
POLYCOM, INC.
|
Reconciliations of GAAP Measures to Non-GAAP Measures
|
(In thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
March 31,
|
|
|
2014
|
|
2013
|
|
|
|
|
|
GAAP cost of revenues used in inventory turns
|
|
$
|
136,539
|
|
|
$
|
139,655
|
|
Stock-based compensation expense
|
|
|
(1,601
|
)
|
|
|
(2,337
|
)
|
Effect of stock-based compensation expense on warranty rates
|
|
|
(129
|
)
|
|
|
(157
|
)
|
Amortization of purchased intangibles
|
|
|
(841
|
)
|
|
|
(1,248
|
)
|
Non-GAAP cost of revenues used in inventory turns
|
|
$
|
133,968
|
|
|
$
|
135,913
|
|
|
|
|
|
|
GAAP gross profit
|
|
$
|
191,985
|
|
|
$
|
199,097
|
|
Stock-based compensation expense
|
|
|
1,601
|
|
|
|
2,337
|
|
Effect of stock-based compensation expense on warranty rates
|
|
|
129
|
|
|
|
157
|
|
Amortization of purchased intangibles
|
|
|
841
|
|
|
|
1,248
|
|
Non-GAAP gross profit
|
|
$
|
194,556
|
|
|
$
|
202,839
|
|
Non-GAAP gross margin
|
|
|
59.2
|
%
|
|
|
59.9
|
%
|
|
|
|
|
|
GAAP sales and marketing expense
|
|
$
|
93,968
|
|
|
$
|
108,715
|
|
Stock-based compensation expense
|
|
|
(391
|
)
|
|
|
(6,636
|
)
|
Non-GAAP sales and marketing expense
|
|
$
|
93,577
|
|
|
$
|
102,079
|
|
Non-GAAP sales and marketing expense as percent of revenues
|
|
|
28.5
|
%
|
|
|
30.1
|
%
|
|
|
|
|
|
GAAP research and development expense
|
|
$
|
48,147
|
|
|
$
|
55,935
|
|
Stock-based compensation expense
|
|
|
(1,042
|
)
|
|
|
(4,721
|
)
|
Non-GAAP research and development expense
|
|
$
|
47,105
|
|
|
$
|
51,214
|
|
Non-GAAP research and development expense as percent of revenues
|
|
|
14.3
|
%
|
|
|
15.1
|
%
|
|
|
|
|
|
GAAP general and administrative expense
|
|
$
|
23,793
|
|
|
$
|
23,694
|
|
Stock-based compensation expense
|
|
|
(2,613
|
)
|
|
|
(4,077
|
)
|
Costs associated with CEO separation and related SEC investigation
|
|
|
(610
|
)
|
|
|
-
|
|
Non-GAAP general and administrative expense
|
|
$
|
20,570
|
|
|
$
|
19,617
|
|
Non-GAAP general and administrative expense as percent of revenues
|
|
|
6.3
|
%
|
|
|
5.8
|
%
|
|
|
|
|
|
GAAP total operating expenses
|
|
$
|
198,899
|
|
|
$
|
199,592
|
|
Stock-based compensation expense
|
|
|
(4,046
|
)
|
|
|
(15,434
|
)
|
Amortization of purchased intangibles
|
|
|
(2,492
|
)
|
|
|
(2,502
|
)
|
Restructuring costs
|
|
|
(30,343
|
)
|
|
|
(5,423
|
)
|
Transaction-related expenses
|
|
|
(156
|
)
|
|
|
(3,323
|
)
|
Costs associated with CEO separation and related SEC investigation
|
|
|
(610
|
)
|
|
|
-
|
|
Non-GAAP total operating expenses
|
|
$
|
161,252
|
|
|
$
|
172,910
|
|
Non-GAAP total operating expenses as percent of revenues
|
|
|
49.1
|
%
|
|
|
51.0
|
%
|
|
|
|
|
|
GAAP operating loss
|
|
$
|
(6,914
|
)
|
|
$
|
(495
|
)
|
Stock-based compensation expense
|
|
|
5,647
|
|
|
|
17,771
|
|
Effect of stock-based compensation expense on warranty rates
|
|
|
129
|
|
|
|
157
|
|
Amortization of purchased intangibles
|
|
|
3,333
|
|
|
|
3,750
|
|
Restructuring costs
|
|
|
30,343
|
|
|
|
5,423
|
|
Transaction-related expenses
|
|
|
156
|
|
|
|
3,323
|
|
Costs associated with CEO separation and related SEC investigation
|
|
|
610
|
|
|
|
-
|
|
Non-GAAP operating income
|
|
$
|
33,304
|
|
|
$
|
29,929
|
|
Non-GAAP operating margin
|
|
|
10.1
|
%
|
|
|
8.8
|
%
|
|
|
|
|
|
POLYCOM, INC.
|
Summary of Stock-Based Compensation Expense
|
(In thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
March 31,
|
|
|
2014
|
|
2013
|
|
|
|
|
|
Cost of product revenues
|
|
$
|
640
|
|
$
|
861
|
Cost of service revenues
|
|
|
961
|
|
$
|
1,476
|
Stock-based compensation expense in total cost of revenues
|
|
|
1,601
|
|
|
2,337
|
|
|
|
|
|
Sales and marketing
|
|
|
391
|
|
|
6,636
|
Research and development
|
|
|
1,042
|
|
|
4,721
|
General and administrative
|
|
|
2,613
|
|
|
4,077
|
Stock-based compensation expense in operating expenses
|
|
|
4,046
|
|
|
15,434
|
|
|
|
|
|
Total stock-based compensation expense
|
|
$
|
5,647
|
|
$
|
17,771
|
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|