Harmonic Inc. ( HLIT) Q4 2011 Earnings Conference Call January 31, 2011 17:00 ET Executives Carolyn Aver – Chief Financial Officer Patrick Harshman – Chief Executive Officer Analysts Mark Sue – RBC Capital Markets Mark Mckechnie – ThinkEquity Blair King – Avondale Partners Larry Harris – CL King & Associates Simon Leopold – Morgan Keegan William Stein – Credit Suisse James Kissner – Jefferies & Company Presentation Operator
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Please note that unless otherwise indicated, the financial metrics we provide you on this call are determined on a non-GAAP and pro forma basis. Revenues described as pro forma include Omneon as if they had been part of our results for the period stated. These items, together with corresponding GAAP numbers and a reconciliation to GAAP are contained in today’s earnings press release, which we have posted on our website and filed with the SEC on Form 8-K.We will also discuss historical, financial, and other statistical information regarding our business and operations. Some of this information is included in the press release, and the remainder of the information will be available in a recorded version of this call on our website. With that, let me turn the call over to Patrick. Patrick Harshman – Chief Executive Officer Thank you, Carolyn, and thank you everyone for joining us today. Turning now to our slide three, today, we reported record fourth quarter revenue of approximately $144 million, up 4% from the same period last year and up 3% sequentially from the prior quarter. In the fourth quarter, we saw continued strong international growth and continued broadening of our customer base. Our international revenue represented 57% of our total sales. Notably, no single customer was 10% of our total sales and our top 10 customers represented only 34% of total revenue. Fourth quarter bookings were approximately $142 million as we continue to see strong competitive momentum across the growing base of global customers, media applications, and markets. At the same time, the lack of budget flush we saw in the final period of the year seems to indicate some continued customer caution with respect to the global economic environment. Our operating performance has continued to improve. We’ve realized gross margins of 51% and delivered an operating margin of 13% and our non-GAAP earnings were $0.12 per share and we generated approximately $20 million of cash during the period.
So, let’s now turn to slide four to take a look at our full year results. We had record revenue of approximately $549 million, up 8% from 2010 on a pro forma basis. Our international revenue represented 55% of our total sales and our top 10 customers represented only 35% of total revenue. We’ve realized annual gross margins of 51% and delivered an annual operating margin of 12%.Our non-GAAP earnings were $0.41 per share and we generated approximately $41 million of cash during the year. It’s important to consider these results in the context of the year when growth in the U.S. market and cable market in particular was challenging industry wide. In this environment, we attributed our ability to grow to our strategic focus on leveraging our video strengths across an increasingly broad base of global customers. More specifically and turning now to slide five, throughout the year we’ve highlighted three areas of strategic focus, instrumental to our evolution to new kind of video company. First, we have anticipated an expanding international market opportunity. And consequently, we have been very focused on strengthening our sales and marketing position overseas. Second, in the internet era, we see broadcast and media companies as well positioned for significant growth. And we have been working hard to strengthen our customer relationships and product offerings for this market. And third, particularly in developed markets, we see a new wave of video applications and services for both traditional video networks and over-the-top delivery creating tremendous opportunities for innovative new products and solutions. Read the rest of this transcript for free on seekingalpha.com