Polycom Reports Significantly Improved Operating Performance On
Revenue of $331 Million in First Quarter 2015
SAN JOSE, Calif.--(BUSINESS WIRE)--Polycom, Inc. (Nasdaq: PLCM) today reported first quarter 2015 revenues of $331 million, non-GAAP net income of $32 million and non-GAAP earnings per diluted share of 23 cents. GAAP net income for the first quarter was $21 million, or 15 cents per diluted share. A reconciliation of GAAP to non-GAAP results is provided in the tables at the end of this press release. “For the first quarter of 2015, we continued to drive improvements in operating income and earnings per share while also achieving revenue growth year-over-year,” stated Peter Leav, President and Chief Executive Officer. “Polycom remains focused on bringing our vision of Unleashing the Power of Human Collaboration to life as we help our customers defy distance and build the workplace of the future.” “Operating margins grew significantly on both an absolute dollar and percentage basis versus the year ago period,” said Laura Durr, Chief Financial Officer and Executive Vice President. “Polycom also generated $30 million in operating cash flow and repurchased $40 million in common stock during the first quarter of 2015.” On a comparative basis, consolidated financial results were: Year-Over-YearChange On a geographic basis, consolidated revenues were comprised of: Year-Over-YearChange (4) % * may not foot due to rounding By product category, inclusive of its service component, consolidated revenues were comprised of: Year-Over-YearChange (4) % * may not foot due to rounding In Q1 2015, Polycom generated a total of $30 million in operating cash flow. Operating cash flow on a trailing 12 month basis was $217 million. Cash and investments at the end of Q1 2015 totaled $669 million, of which approximately $223 million is located in the United States. Net of existing debt, cash and investments at the end of Q1 2015 totaled $428 million. Earnings Call Details Polycom will hold a conference call today, April 22, 2015, at 5:00 p.m. ET/2:00 p.m. PT to discuss these first quarter 2015 financial results and guidance for the second quarter 2015. You may participate by listening to the webcast at www.polycom.com/investors or, for callers in the United States and Canada, you may participate by calling +1.800.771.6692 and for callers outside of the United States and Canada, by calling +1.212.231.2911. The pass code for the call is “Polycom.” A replay of the call will also be available at www.polycom.com/investors or, for callers in the U.S. and Canada, at +1.800.633.8284 and, for callers outside of the United States and Canada, at +1.402.977.9140. The access number for the replay is 21766308. 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 our future financial and operating performance, including future improvement in operating income and earnings per share and future 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 the availability 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, 2014, 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 (loss) or diluted net income (loss) 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 415,000 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. © 2015 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) 2015 2014 As a result of the GAAP net loss in the three months ended March 31, 2014, all potentially issuable common shares for that period have been excluded from the diluted shares used in the computation of GAAP earnings per share as their effect is anti-dilutive. POLYCOM, INC. Reconciliation of GAAP to Non-GAAP Net Income (Loss) (In thousands, except per share amounts) (Unaudited) 2015 2014 Costs associated with CEO separation and related SEC investigation Number of shares used in computation of net income (loss) per share: As a result of the GAAP net loss in the three months ended March 31, 2014, all potentially issuable common shares for that period 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) 2015 2014 POLYCOM, INC. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) 2015 2014 POLYCOM, INC. Selected Summary Data (In millions except per share amounts and headcount) (Unaudited) March 31,2015 December 31,2014 March 31,2014 $ 669 $ 688 $ 596 $ 4.95 $ 5.09 $ 4.31 $ 241 $ 242 $ 247 $ 30 $ 91 $ 19 $ 217 $ 205 $ 138 $ 265 $ 263 $ 259 $ 40 $ 25 $ — $ — $ 40 $ 50 $ — $ 110 $ 150 $ — March 31,2015 December 31,2014 March 31,2014 $ 331 $ 349 $ 329 58.3 % 57.6 % 58.4 % $ 164 $ 179 $ 199 8.8 % 6.4 % (2.1 )% $ 0.15 $ 0.15 $ (0.03 ) $ 331 $ 349 $ 329 59.2 % 58.4 % 59.2 % $ 154 $ 161 $ 161 12.6 % 12.3 % 10.1 % $ 0.23 $ 0.24 $ 0.18 POLYCOM, INC. Reconciliations of GAAP Measures to Non-GAAP Measures (In thousands) (Unaudited) 2015 2014 2014 Effect of stock-based compensation expense on warranty rates Non-GAAP research and development expense as percent of revenues Costs associated with CEO separation and related SEC investigation revenues Costs associated with CEO separation and related SEC investigation Costs associated with CEO separation and related SEC investigation POLYCOM, INC. Summary of Stock-Based Compensation Expense (In thousands) (Unaudited) 2015 2014
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