SUNNYVALE, Calif.--(BUSINESS WIRE)--April 24, 2003--Harmonic Inc. (Nasdaq:HLIT) today announced its results for the quarter ended March 28, 2003. For the first quarter of 2003, Harmonic reported net sales of $37.0 million, compared to $39.3 million in the previous quarter and $54.0 million in the first quarter of 2002. Domestic sales represented approximately 73% of total sales for the first quarter of 2003. The CS division, which designs, manufactures and markets digital headend systems for a number of markets, had divisional net sales of $24.0 million, up from $21.0 million in the previous quarter. During the first quarter, the Company saw increased shipments to its satellite customers, including sales to major domestic operators as well as a number of international customers. The BAN division, which designs, manufactures and markets fiber optic products for broadband cable networks, had divisional net sales of approximately $13.0 million, compared to $18.3 million in the previous quarter. The decrease in BAN sales was primarily due to unexpected delays in orders from certain customers and general capital spending concerns in light of current conditions in the financial markets. Despite challenging business conditions, Harmonic believes that it has continued to maintain its competitive position in the worldwide cable market. "Capital spending remained slow worldwide and some of our major domestic cable customers moved even more cautiously than expected in the first quarter," said Anthony J. Ley, Chairman, President and Chief Executive Officer. "Despite the current market uncertainty, we believe cable operators will need to continue their network upgrade programs in order to keep pace with subscriber growth and the demand for more digital video, high-speed data, video-on-demand and HDTV. We are also seeing satellite operators renew their expansion into new markets and extend their local channel and HDTV services. Harmonic remains well-positioned to capitalize on the long-term opportunities across a wide range of broadband markets." The GAAP net loss for the first quarter of 2003 was $11.7 million or $0.19 per share, compared to $14.0 million or $0.24 per share for the same period of 2002. The GAAP net loss for the first quarter of 2003 includes a non-cash charge for the amortization of intangibles of $3.5 million and a credit relating to the sale of previously reserved inventory of $1.1 million. Excluding the above charge and credit, the non-GAAP loss for the quarter was $9.3 million, or $0.15 per share, compared to a non-GAAP loss of $8.2 million, or $0.14 per share for the first quarter of 2002. A reconciliation between GAAP and non-GAAP net loss is provided in the accompanying tables. At March 28, 2003, the Company had cash, cash equivalents and short-term investments of $43.5 million, compared to $49.2 million at the end of the previous quarter. Harmonic Inc.