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8-K - 8-K - POLYCOM INCd664777d8k.htm

Exhibit 99.1

 

LOGO

 

Investor Contact:    Laura Graves
   Polycom, Inc.
  

1.408.586.4271

laura.graves@polycom.com

Press Contact:    Ryan Batty
   Polycom, Inc.
  

1.408.586.4467

ryan.batty@polycom.com

Polycom Announces Revenues of $348 Million for Fourth Quarter 2013

UC Personal Devices revenues grow 33 percent year-over-year

SAN JOSE, Calif. – January 22, 2014 – Polycom, Inc. (Nasdaq: PLCM), the global leader in open, standards-based unified communication and collaboration (UC&C), today reported financial results for the fourth quarter ended December 31, 2013. Polycom reported fourth quarter 2013 net revenues of $348 million, non-GAAP net income of $25 million and non-GAAP earnings per diluted share of 16 cents. GAAP net loss for the fourth quarter was $2 million, or 1 cent per share. A reconciliation of GAAP to non-GAAP results is provided in the tables at the end of this press release.

“Polycom posted stronger sequential performance in Q4 2013, driven by on-going strength in UC Personal Devices and improvements in EMEA and Asia Pacific,” said Peter Leav, Polycom President and Chief Executive Officer. “In 2014, our goal is to prioritize growth areas within the business and deliver an improved cost structure that will result in better overall profitability for Polycom.”

“Polycom generated $168 million in operating cash flow in 2013,” said Eric Brown, Polycom Chief Operating Officer and Chief Financial Officer. “We continue to emphasize capital return for shareholders, including our recently executed $400 million share repurchase program. Polycom repurchased a total of 45 million shares in 2013.”

On a comparative basis, consolidated financial results were:

 

($ in millions, except per share data)    Q4 2013     Q3 2013     Q4 2012  

Revenues

   $ 347.9      $ 336.5      $ 353.0   

Non-GAAP Net Income

   $ 25.4      $ 19.3      $ 30.7   

Non-GAAP EPS

   $ 0.16      $ 0.11      $ 0.17   

GAAP Net Income (Loss)

   $ (2.0   $ (24.0   $ 1.9   

GAAP EPS

   $ (0.01   $ (0.14   $ 0.01   


On a geographic basis, consolidated net revenues were comprised of:

 

($ in millions)    Q4 2013     Q3 2013     Q4 2012     Sequential
Change
    Year-Over-
Year
Change
 

Americas

   $ 170.6      $ 177.3      $ 175.2        -4     -3

% of revenues

     49     53     50    

Europe, Middle East & Africa (EMEA)

     89.2        80.0        93.4        11     -5

% of revenues

     26     24     26    

Asia Pacific

     88.1        79.2        84.4        11     4

% of revenues

     25     23     24    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Totals *

   $ 347.9      $ 336.5      $ 353.0        3     -1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

* may not foot due to rounding

By product line, inclusive of its service component, consolidated net revenues were comprised of:

 

($ in millions)    Q4 2013     Q3 2013     Q4 2012     Sequential
Change
    Year-Over-
Year
Change
 

UC Group Systems

   $ 218.1      $ 221.4      $ 238.2        -1     -8

% of revenues

     63     66     67    

UC Personal Devices

     62.1        56.9        46.8        9     33

% of revenues

     18     17     13    

UC Platform

     67.7        58.2        68.0        16     0

% of revenues

     19     17     19    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Totals *

   $ 347.9      $ 336.5      $ 353.0        3     -1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

* may not foot due to rounding

In Q4 2013, Polycom generated a total of $50 million in operating cash flow. Operating cash flow on a trailing 12 month basis was $168 million. Cash and investments at the end of Q4 2013 totaled $584 million.

Earnings Call Details

Polycom will hold a conference call today, January 22, 2014, at 5:00 p.m. EST/2:00 p.m. PST to discuss its fourth quarter 2013 financial results. Peter Leav, President and CEO, and Eric Brown, Chief Operating Officer and Chief Financial Officer, will host the call. 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 1.888.223.4990 and for callers outside of the U.S. and Canada, by calling 1.303.223.2680. 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 21703637. 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 future growth, cost reductions, profitability and capital return for shareholders. 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 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 Quarterly Report on Form 10-Q for the quarter ended September 30, 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 is the global leader in open, standards-based unified communications and collaboration (UC&C) solutions for voice and video collaboration, trusted by more than 415,000 customers around the world. Polycom solutions are powered by the Polycom® RealPresence® Platform, comprehensive software infrastructure and rich APIs that interoperate with the broadest set of communication, business, mobile and cloud applications and devices to deliver secure face-to-face video collaboration in any environment. Polycom and its ecosystem of over 7,000 partners provide truly unified communications solutions that deliver the best user experience, highest multi-vendor interoperability, and lowest TCO. Visit www.polycom.com or connect with us on Twitter, Facebook, and LinkedIn to learn how we’re pushing the greatness of human collaboration forward.

© 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     Twelve Months Ended  
     December 31,     December 31,     December 31,     December 31,  
     2013     2012     2013     2012  

Revenues:

        

Product revenues

   $ 251,044      $ 261,874      $ 991,110      $ 1,042,484   

Service revenues

     96,898        91,152        377,279        350,144   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     347,942        353,026        1,368,389        1,392,628   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenues:

        

Cost of product revenues

     112,435        109,506        422,429        426,369   

Cost of service revenues

     38,475        36,704        153,189        142,827   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenues

     150,910        146,210        575,618        569,196   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     197,032        206,816        792,771        823,432   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

        

Sales and marketing

     109,384        116,312        435,047        464,353   

Research and development

     51,250        55,085        216,032        208,510   

General and administrative

     20,141        25,910        96,602        98,285   

Amortization of purchased intangibles

     2,854        2,512        10,389        9,830   

Restructuring costs

     13,831        195        48,470        22,024   

Acquisition-related expenses

     13        2,271        3,424        14,064   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     197,473        202,285        809,964        817,066   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     (441     4,531        (17,193     6,366   

Interest expense

     (1,481     (281     (3,217     (751

Interest income and other income /(expense)

     (753     (577     (1,794     (3,117
  

 

 

   

 

 

   

 

 

   

 

 

 

Other expense, net

     (2,234     (858     (5,011     (3,868

Loss from continuing operations before provision for income taxes

     (2,675     3,673        (22,204     2,498   

Provision for (benefit from) income taxes

     (706     39,362        (3,669     39,467   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from continuing operations

     (1,969     (35,689     (18,535     (36,969

Income from operations of discontinued operations, net of taxes

     —          2,178        —          9,888   

Gain from sale of discontinued operations, net of taxes

     —          35,425        459        35,425   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income / (loss)

   $ (1,969   $ 1,914      $ (18,076   $ 8,344   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic and diluted net income per share:

        

Income per share from continuing operations

   $ (0.01   $ (0.20   $ (0.11   $ (0.21

Income per share from discontinued operations, net of taxes

   $ —        $ 0.01      $ —        $ 0.06   

Gain per share from sale of discontinued operations, net of taxes

   $ —        $ 0.20      $ —        $ 0.20   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic and diluted net income per share

   $ (0.01   $ 0.01      $ (0.11   $ 0.05   
  

 

 

   

 

 

   

 

 

   

 

 

 

Number of shares used in computation of net income per share:

        

Basic

     151,158        175,519        167,272        176,878   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     151,158        175,519        167,272        176,878   
  

 

 

   

 

 

   

 

 

   

 

 

 

Note:

Earnings per share amounts for continuing operations, discontinued operations and net income, as presented above, are calculated individually and may not sum due to rounding differences. *

The tax provision and net income for the three and twelve months ended December 31, 2012 has been revised from previously issued financial statements to correct an error. These adjustments were not considered material to previously issued financial statements. However, because of the significance of these adjustments to the current period, the Company has revised the prior periods contained herein. The adjustments had no impact on income before provision for income taxes or net cash flows.

 

* 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 earnings per share as their effect is anti-dilutive


POLYCOM, INC.

Reconciliation of GAAP to Non-GAAP Net Income

(In thousands, except per share amounts)

(Unaudited)

 

     Three Months Ended     Twelve Months Ended  
     December 31,     December 31,     December 31,     December 31,  
     2013     2012     2013     2012  

GAAP net income (loss)

   $ (1,969   $ 1,914      $ (18,076   $ 8,344   

Income from discontinued operations, net of taxes

     —          (2,178     —          (9,888

Gain from sale of discontinued operations, net of taxes

     —          (35,425     (459     (35,425

Amortization of purchased intangibles

     8,471        4,421        19,750        17,465   

Restructuring costs

     13,831        195        48,470        22,024   

Acquisition-related expenses

     13        2,271        3,424        14,064   

Stock-based compensation expense

     11,165        23,690        64,465        88,761   

Effect of stock-based compensation on warranty rates

     126        128        547        669   

Severance costs associated with CFO retirement

     —          —          —          929   

Legal costs associated with the indemnification of a former officer

     —          —          —          236   

Costs associated with CEO separation and related SEC investigation

     802        —          2,909        —     

Tax expense on company reorganization

     —          38,835        —          38,835   

Income tax effect of non-GAAP exclusions

     (7,053     (3,162     (27,141     (24,200
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income

   $ 25,386      $ 30,689      $ 93,889      $ 121,814   
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP earnings per share

        

Basic and diluted

   $ (0.01   $ 0.01      $ (0.11   $ 0.05   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP earnings per share

        

Basic

   $ 0.17      $ 0.17      $ 0.56      $ 0.69   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.16      $ 0.17      $ 0.55      $ 0.68   
  

 

 

   

 

 

   

 

 

   

 

 

 

Number of shares used in computation of GAAP earnings per share:

        

Basic and diluted

     151,158        175,519        167,272        176,878   

Number of shares used in computation of non-GAAP earnings per share:

        

Basic

     151,158        175,519        167,272        176,878   

Diluted

     155,310        177,953        171,008        178,945   

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 GAAP earnings per share as their effect is anti-dilutive


POLYCOM, INC.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

     December 31,
2013
     December 31,
2012
 

ASSETS

     

Current assets

     

Cash and cash equivalents

   $ 392,629       $ 477,073   

Short-term investments

     134,684         197,196   

Trade receivables, net

     183,369         194,654   

Inventories

     103,309         99,960   

Deferred taxes

     37,085         48,916   

Prepaid expenses and other current assets

     50,352         52,539   
  

 

 

    

 

 

 

Total current assets

     901,428         1,070,338   

Property and equipment, net

     115,157         133,319   

Long-term investments

     56,372         50,333   

Goodwill and purchased intangibles

     596,918         608,802   

Deferred taxes

     51,398         28,406   

Other assets

     27,757         21,238   
  

 

 

    

 

 

 

Total assets

   $ 1,749,030       $ 1,912,436   
  

 

 

    

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

     

Current liabilities

     

Accounts payable

   $ 84,640       $ 89,983   

Accrued payroll and related liabilities

     40,162         39,469   

Taxes payable

     5,389         4,736   

Deferred revenue

     172,408         158,482   

Term loan-current

     6,250         —     

Other accrued liabilities

     77,744         63,018   
  

 

 

    

 

 

 

Total current liabilities

     386,593         355,688   

Non-current liabilities

     

Deferred revenue

     87,467         91,061   

Term loan-non current

     242,188         —     

Taxes payable

     12,419         15,598   

Deferred taxes

     149         236   

Other non-current liabilities

     43,849         22,079   
  

 

 

    

 

 

 

Total liabilities

     772,665         484,662   

Stockholders’ equity

     976,365         1,427,774   
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 1,749,030       $ 1,912,436   
  

 

 

    

 

 

 

The tax provision and net income for the year ended December 31, 2012 have been revised from previously issued financial statements to correct an error. These adjustments were not considered material to previously issued financial statements. However, because of the significance of these adjustments to the current period, the Company has revised the prior periods contained herein. The adjustments had no impact on income before provision for income taxes or net cash flows.


POLYCOM, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

     Twelve Months Ended  
     December 31,
2013
    December 31,
2012
 

Cash flows from operating activities:

    

Net income (loss)

   $ (18,076   $ 8,344   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Gain from sale of discontinued operations, net of tax

     (459     (35,425

Tax expense on company reorganization

     —          38,836   

Depreciation and amortization

     64,975        61,586   

Amortization of purchased intangibles

     19,825        20,318   

Amortization of debt issue costs

     178        —     

Amortization of discounts and premiums on investments, net

     1,816        2,381   

Provision for excess and obsolete inventories

     7,390        6,420   

Provision for doubtful accounts

     —          1,100   

Stock-based compensation expense

     64,465        89,245   

Excess tax benefits from stock-based compensation

     (920     (9,297

Loss on disposals of property and equipment

     5,859        4,080   

Changes in assets and liabilities, net of the effect of acquisitions:

    

Trade receivables

     13,809        16,582   

Inventories

     (10,739     (11,428

Deferred taxes

     (14,332     (15,933

Prepaid expenses and other assets

     (637     (7,424

Accounts payable

     (5,184     (22,901

Taxes payable

     (5,848     5,123   

Other accrued liabilities

     46,320        37,754   
  

 

 

   

 

 

 

Net cash provided by operating activities

     168,442        189,361   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Purchases of property and equipment

     (55,207     (67,270

Purchases of investments

     (228,238     (315,012

Proceeds from sale of investments

     45,467        52,286   

Proceeds from maturities of investments

     237,499        229,211   

Net cash received from sale of discontinued operations

     556        50,411   

Net cash paid in purchase acquisitions

     (7,974     (4,583
  

 

 

   

 

 

 

Net cash used in investing activities

     (7,897     (54,957
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Proceeds from issuance of common stock under employee option and stock purchase plans

     23,326        25,832   

Proceeds from term loan, net

     247,349        —     

Payment on debt

     (1,562     —     

Repurchase of common stock

     (515,022     (67,901

Excess tax benefits from stock-based compensation

     920        9,297   
  

 

 

   

 

 

 

Net cash used in financing activities

     (244,989     (32,772
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     (84,444     101,632   

Cash and cash equivalents, beginning of period

     477,073        375,441   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 392,629      $ 477,073   
  

 

 

   

 

 

 

The tax provision and net income for the three and twelve months ended December 31, 2012 has been revised from previously issued financial statements to correct an error. These adjustments were not considered material to previously issued financial statements. However, because of the significance of these adjustments to the current period, the Company has revised the prior periods contained herein. The adjustments had no impact on income before provision for income taxes or net cash flows. Certain other 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)

 

     December 31,
2013
    September 30,
2013
    December 31,
2012
 

Balance Sheet Highlights

      

Cash and investments

   $ 584      $ 954      $ 725   

Number of shares outstanding

     135        170        175   

Cash and investments per share

   $ 4.32      $ 5.60      $ 4.13   

Debt

   $ 248      $ 250      $ 0   

Operating cash flow - quarterly

   $ 50      $ 37      $ 66   

Operating cash flow - trailing 12 months

   $ 168      $ 185      $ 189   

DSO (Days Sales Outstanding)

     48        47        50   

Inventory turns - GAAP

     5.8        5.3        5.7   

Inventory turns - non-GAAP

     5.5        5.1        5.7   

Deferred revenues

   $ 260      $ 260      $ 250   

Share repurchases:

      

Quarter-to-date share purchases - shares

     35.4        1.7        0.5   

Quarter-to-date share repurchases - dollars

   $ 400      $ 18      $ 5   

Year-to-date share purchases - shares

     45        10        5   

Year-to-date share repurchases - dollars

   $ 502      $ 102      $ 55   

Remaining authorization for share repurchases (1)

   $ —        $ 400      $ 73   

Ending headcount

     3,774        3,789        3,747   
     For the three months ended  
     December 31,
2013
    September 30,
2013
    December 31,
2012
 

Income Statement Highlights

      

GAAP:

      

Revenues

   $ 348      $ 336      $ 353   

Gross margin

     56.6     58.0     58.6

Operating expenses

   $ 197      $ 217      $ 202   

Operating margin

     -0.1     -6.6     1.3

Diluted EPS

   $ (0.01   $ (0.14   $ 0.01   

Non-GAAP:

      

Revenues

   $ 348      $ 336      $ 353   

Gross margin

     58.8     59.0     59.9

Operating expenses

   $ 171      $ 173      $ 176   

Operating margin

     9.8     7.7     10.0

Diluted EPS

   $ 0.16      $ 0.11      $ 0.17   

 

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     Twelve Months Ended  
     December 31,     December 31,     December 31,     December 31,  
     2013     2012     2013     2012  

GAAP cost of revenues used in inventory turns

   $ 150,910      $ 146,210      $ 575,618      $ 569,196   

Stock-based compensation expense

     (1,892     (2,532     (8,744     (10,204

Effect of stock-based compensation on warranty rates

     (126     (128     (547     (669

Amortization of purchased intangibles

     (5,617     (1,909     (9,361     (7,635
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP cost of revenues used in inventory turns

   $ 143,275      $ 141,641      $ 556,966      $ 550,688   
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP gross profit

   $ 197,032      $ 206,816      $ 792,771      $ 823,432   

Stock-based compensation expense

     1,892        2,532        8,744        10,204   

Effect of stock-based compensation on warranty rates

     126        128        547        669   

Amortization of purchased intangibles

     5,617        1,909        9,361        7,635   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP gross profit

   $ 204,667      $ 211,385      $ 811,423      $ 841,940   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP gross margin

     58.8     59.9     59.3     60.5

GAAP sales and marketing expense

   $ 109,384      $ 116,312      $ 435,047      $ 464,353   

Stock-based compensation expense

     (6,828     (9,722     (26,570     (36,791
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP sales and marketing expense

   $ 102,556      $ 106,590      $ 408,477      $ 427,562   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP sales and marketing expense as percent of revenues

     29.5     30.2     29.9     30.7

GAAP research and development expense

   $ 51,250      $ 55,085      $ 216,032      $ 208,510   

Stock-based compensation expense

     (3,056     (5,387     (15,634     (20,195
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP research and development expense

   $ 48,194      $ 49,698      $ 200,398      $ 188,315   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP research and development expense as percent of revenues

     13.9     14.1     14.6     13.5

GAAP general and administrative expense

   $ 20,141      $ 25,910      $ 96,602      $ 98,285   

Stock-based compensation expense

     611        (6,049     (13,517     (21,571

Severance costs associated with CFO retirement

     —          —          —          (929

Legal costs associated with the indemnification of a former officer

     —          —          —          (236

Costs associated with CEO separation and related SEC investigation

     (802     —          (2,909     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP general and administrative expense

   $ 19,950      $ 19,861      $ 80,176      $ 75,549   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP general and administrative expense as percent of revenues

     5.7     5.6     5.9     5.4

GAAP total operating expenses

   $ 197,473      $ 202,285      $ 809,964      $ 817,066   

Stock-based compensation expense

     (9,273     (21,158     (55,721     (78,557

Amortization of purchased intangibles

     (2,854     (2,512     (10,389     (9,830

Restructuring costs

     (13,831     (195     (48,470     (22,024

Acquisition-related expenses

     (13     (2,271     (3,424     (14,064

Severance costs associated with CFO retirement

     —          —          —          (929

Legal costs associated with the indemnification of a former officer

     —          —          —          (236

Costs associated with CEO separation and related SEC investigation

     (802     —          (2,909     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP total operating expenses

   $ 170,700      $ 176,149      $ 689,051      $ 691,426   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP total operating expenses as percent of revenues

     49.1     49.9     50.4     49.6

GAAP operating income (loss)

   $ (441   $ 4,531      $ (17,193   $ 6,366   

Stock-based compensation expense

     11,165        23,690        64,465        88,761   

Effect of stock-based compensation on warranty rates

     126        128        547        669   

Amortization of purchased intangibles

     8,471        4,421        19,750        17,465   

Restructuring costs

     13,831        195        48,470        22,024   

Acquisition-related expenses

     13        2,271        3,424        14,064   

Severance costs associated with CFO retirement

     —          —          —          929   

Legal costs associated with the indemnification of a former officer

     —          —          —          236   

Costs associated with CEO separation and related SEC investigation

     802        —          2,909        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating income

   $ 33,967      $ 35,236      $ 122,372      $ 150,514   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating margin

     9.8     10.0     8.9     10.8


POLYCOM, INC.

Summary of Stock-Based Compensation Expense

(In thousands)

(Unaudited)

 

     Three Months Ended      Twelve Months Ended  
     December 31,     December 31,      December 31,      December 31,  
     2013     2012      2013      2012  

Cost of sales - product

   $ 640      $ 873       $ 2,892       $ 3,593   

Cost of sales - service

     1,252        1,659         5,852         6,611   
  

 

 

   

 

 

    

 

 

    

 

 

 

Stock-based compensation expense in cost of sales

     1,892        2,532         8,744         10,204   
  

 

 

   

 

 

    

 

 

    

 

 

 

Sales and marketing

     6,828        9,722         26,570         36,791   

Research and development

     3,056        5,387         15,634         20,195   

General and administrative

     (611     6,049         13,517         21,571   
  

 

 

   

 

 

    

 

 

    

 

 

 

Stock-based compensation expense in operating expenses

     9,273        21,158         55,721         78,557   
  

 

 

   

 

 

    

 

 

    

 

 

 

Total stock-based compensation expense

   $ 11,165      $ 23,690       $ 64,465       $ 88,761