Harmonic Inc. (HLIT) Q2 2012 Earnings Call July 24, 2012 5:00 pm ET Executives Carolyn V. Aver – Chief Financial Officer Patrick Harshman – President and Chief Executive Officer Analysts James Kissner – Jefferies & Co Richard Ingrassia – Roth Capital Partners Blair King – Avondale Partners LLC Greg Mesniaeff – Maxim Group Victor Chiu – Raymond James Presentation Operator
Previous Statements by HLIT
» Harmonic's CEO Discusses Q1 2012 Results - Earnings Call Transcript
» Harmonic's CEO Discusses Q4 2011 Results - Earnings Call Transcript
» Harmonic's CEO Presents at UBS Global Technology and Services Conference - Conference Call Transcript
» Harmonic's CEO Discusses Q3 2011 Results - Earnings Call Transcript
Please note that unless otherwise indicated, the financial metrics we provide you on this call are determined on a non-GAAP basis. These items together with corresponding GAAP numbers and a reconciliation to GAAP are contained in today’s earnings press release which we’ve 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 operation. 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 Thank you Carolyn, and thank you everyone for joining us. Turning now to our slide three, today we reported our results for the second quarter of 2012, which were broadly in line with our guidance issued a quarter ago. Reflecting healthy U.S. demand and our overall strong competitive position, our bookings were $139.5 million dollars up 6% from the second quarter of last year and in line with our expectations. To the first half of the year, bookings outside Europe had grown 11%, although orders from Europe were down 5% year-over-year. A key driver of our strong order book across most geographies has been an increasing number of IP video project win, underscoring healthy IP video demand trends success of newest video delivery products and momentum leveraging our system expertise, top of high-value professional services as part of these project wins. Revenue was $132.6 million, driven by 10% year-over-year growth of our business in the U.S., which slowed by 9% year-over-year decline in our international business, with Europe being our principal challenge. As with new bookings, year-over-year revenue performance was strongest for video processing product line in our services business. One of the consequences of strong resistance and project based order book is a move to more multi-period revenue recognition. Consequently, our book-to-bill ratio was again greater than one, and we have a record backlog of $146 million.
Turning to operating performance, our gross margins were 48%, but the first quarter was slightly lower than forecast due to both product mix and continuing competitive pricing environment market.Operating expenses were approximately $54 million in the quarter. And non-GAAP earnings were $0.06 per share from last quarters $0.03. We also have robust cash performance, generating approximately $20 million cash from operations during the quarter, resulting in to cash balance increase of approximately $9 million after using $7 million for a share repurchase program. Carolyn will provide additional details and is operating results and our repurchase activity in just a few months. Turning now to slide 4, to provide context to these results and our opportunities going forward. I'd like to review three important topics, our strategic priorities in focus, our key new product initiatives, and important changes and additions we recently made to our corporate leadership team. Let's turn to slide 5, to begin with an update on our strategic priorities. At the beginning of the year I laid out three areas of strategic focus for 2012, continuing to broaden our global customer base, extending our product leadership position, and driving continuous improvements of our operational execution. We've remained very focused on these initiatives and despite marketplace challenges, mainly in Europe, making meaningful progress in each of these areas. Broadening our global customer base has been a key strategic priority to which we remain committed, despite current European headwinds. If we don't control macroeconomic conditions and our revenues are lower than we're aiming for. We do control a competitive positioning. Our strong bookings growth outside of Europe, demonstrates our solid competitive momentum worldwide. Specifically, during the quarter we gained market share by expanding our footprint and a number of existing accounts. By adding new customers across geographies, including here in the U.S., in Latin America and other emerging economy markets and even within Europe. Read the rest of this transcript for free on seekingalpha.com