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Harmonic Hints at Acquisition Strategy

Jeff Baumgartner
1/29/2008

Harmonic Inc. (Nasdaq: HLIT) said fourth-quarter sales jumped on across-the-board revenue growth from its cable, telco, and satellite video customers, adding that it plans to pursue "selective acquisitions" after a successful stock offer during the period.

Harmonic, citing preliminary and unaudited results, said net sales in the quarter rose 17 percent, to $88.4 million, while full-year net sales reached $312.2 million, up 26 percent from the previous year. (See Harmonic Posts Q4.)

The company, which specializes in cable edge QAMs and digital video gear and software, also posted quarterly GAAP net income of $13.3 million (15 cents per diluted share), more than doubling net income of $5 million (7 cents per diluted share) in the year-ago period. For the full year, GAAP net income ballooned to $30.1 million (36 cents per diluted share), versus $1 million (1 cent per diluted share). International sales for the fiscal year rose 1 point to 44 percent.

Harmonic ended the quarter flush with $269.3 million in cash, cash equivalents, and short-term investments, compared to just $99.0 million at the end of the third quarter. Much of that increase was driven by Harmonic's public offering of 12.5 million shares in the fourth quarter, which brought in about $142 million.

That successful offering "provides us with a strong financial foundation to further grow the business, as well as to continue to pursue selective acquisitions to enhance our technology and market reach," company president and CEO Patrick Harshman said, in a statement.

Last summer, Harmonic put up $15.5 million to buy transcoding specialist Rhozet Corp., which just scored an Internet video deal with Lifetime Networks. (See Harmonic Seals Rhozet Deal, Harmonic's Mobile Video Marriage, and Lifetime Picks Harmonic.)

Looking ahead, Harmonic expects to record net sales in the range of $165 million to $175 million for the first half of 2008.

Harmonic shares were up 63 cents (6.58 percent), to $10.20 each, in early after-hours trading Tuesday.

— Jeff Baumgartner, Site Editor, Cable Digital News

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