Polycom Announces Total Revenues of $379 Million for Second Quarter 2012; Revenues Grew 4 Percent Year-over-Year
UC Group Systems revenues grew 7 percent year-over-year; UC Platform revenues grew 6 percent year-over-year
San Jose, California - Jul 24, 2012 : Polycom, Inc. (Nasdaq: PLCM), the global leader in open standards-based unified communications (UC), today reported financial results for the second quarter ended June 30, 2012. Total combined revenues were $379 million, including revenues from the company’s Enterprise Wireless Solutions (EWS) business of $21 million. Polycom has announced plans to divest the EWS business in order to focus its product and technology portfolio on core unified communications and video collaboration solutions.
Second quarter 2012 consolidated net revenues from continuing operations were $359 million, up 5 percent year-over-year as compared to $341 million for the second quarter of 2011. Non-GAAP net income for the second quarter of 2012 was $39 million, or 22 cents per diluted share, compared to non-GAAP net income of $43 million, or 24 cents per diluted share, for the second quarter of 2011. GAAP net income for the second quarter of 2012 was $7 million, or 4 cents per diluted share, compared to $29 million, or 16 cents per diluted share, for the same period last year. The share and per share data for all periods presented in this release have been adjusted to reflect the two-for-one stock split that was effective July 1, 2011 and the classification of Polycom’s EWS business as discontinued operations.
“Demand for our best in class UC solutions was solid in Q2, which allowed us to exceed both revenue and earnings expectations,” stated Andrew M. Miller, Polycom President and Chief Executive Officer. “In the second half of this year, we will be launching a series of products that we believe will be game-changing and will allow us to expand our addressable market and extend our advantages versus the competition. Most recently, we launched the new Polycom® RealPresence® Resource Manager offering that further differentiates our Polycom® RealPresence® Platform with support for large scale video deployments of up to 10,000 endpoints, including mobile devices, multi-tenancy for service providers to deliver Video-as-a-Service cost-effectively, and a new suite of rich, open APIs that extends the value and ecosystem around our RealPresence Platform.”
“Our overall performance was better than expected, although we are closely monitoring demand in Europe,” continued Eric Brown, Polycom Chief Operating Officer and Chief Financial Officer. “Our primary focus for the balance of the year will be allocating resources to support our key upcoming new product launches.”
When reviewing these results, it is important to note that due to the previously announced divestiture of the EWS business, results attributable to the EWS business are therefore considered discontinued operations for all periods presented. Accordingly, EWS revenue and related expenses are shown, net of taxes, as discontinued operations in the statement of operations and excluded from non-GAAP results. Prior periods have been restated to conform to the current period presentation.
Results for the second quarter ended June 30, 2012, before consideration of EWS as discontinued operations, were as follows:
(millions) Earnings per Diluted Share
Continuing operations $358.5 $0.22
EWS reported as discontinued operations $20.8 $0.02
Total revenues $379.3 $0.24
The reconciliation between GAAP net income and non-GAAP net income is provided in the tables at the end of this release.
On a geographic basis, consolidated net revenues from continuing operations for the second quarter of 2012 were comprised of:
- 50 percent Americas, or $177.7 million, an increase of 3 percent year-over-year;
- 22 percent Europe, Middle East, and Africa (EMEA), or $80.4 million, a decrease of 2 percent year-over-year; and
- 28 percent Asia Pacific, or $100.4 million, an increase of 16 percent year-over-year.
By product line, inclusive of its service component, consolidated net revenues from continuing operations for the second quarter of 2012 were comprised of:
- UC Group Systems of $251.7 million, an increase of 7 percent year-over-year;
- UC Personal Devices of $42.9 million, a decrease of 3 percent year-over-year; and
- UC Platform of $63.9 million, an increase of 6 percent year-over-year.
- In Q2 2012, Polycom generated a total of $41 million in operating cash flow and completed share repurchases of $20 million. Operating cash flow on a trailing 12 month basis was $242 million.
Q2 2012 Business Highlights
- Announced a definitive agreement to divest the EWS business to an affiliate of Sun Capital Partners, Inc. The sale is expected to close within the third quarter of 2012.
- Announced updates to Polycom® RealPresence® Video Content Management solutions that deliver live video streaming and video recordings on-demand through a Web portal to Android and Apple devices.
- Introduced new corporate brand identity to underscore Polycom’s continuing transformation to a software-led company.
- Announced BT Conferencing is using the Polycom® RealPresence® Platform to power its Video-as-a-Service (VaaS) offering for Polycom deployments.
- Entered into a U.S. and Canadian distribution agreement with Avnet Technology Solutions, under which they will resell Polycom® RealPresence® video and voice solutions.
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