SAN JOSE, Calif. - Jul 23, 2013: Polycom, Inc. (Nasdaq: PLCM), the global leader in open, standards-based unified communication and collaboration (UC&C), today reported financial results for the second quarter ended June 30, 2013. Polycom reported second quarter 2013 net revenues of $345 million, non-GAAP net income of $26 million and non-GAAP earnings per diluted share of 15 cents. GAAP net income for the second quarter was $5 million, or 3 cents per diluted share. A reconciliation of GAAP to non-GAAP results is provided in the tables at the end of this press release.
Polycom also announced the appointment of Kevin Parker as Interim Chief Executive Officer. Mr. Parker has served on the Polycom board since 2005, and is currently a Managing Principal at Bridge Growth Partners, LLC. Mr. Parker’s complete bio can be found at http://www.polycom.com/company/about-us/leadership.html. Mr. Parker replaces Andrew Miller who resigned as Chief Executive Officer, President and a member of the Board of Directors on July 19, 2013, after the Audit Committee of the Board of Directors found certain irregularities in Mr. Miller’s expense submissions, for which Mr. Miller accepted responsibility. The amounts involved did not have a material impact on the Company's current or previously reported financial statements for any period, nor did they involve any other employees.
“Polycom delivered a solid financial performance in Q2, driven by our U.S. Enterprise and voice related businesses,” stated Kevin Parker, Polycom’s interim President and Chief Executive Officer. “Andy Miller’s resignation under these circumstances is disappointing and should not be viewed as a reflection of the financial integrity of the company, the strength of our team or our plans for the future. I look forward to working with the Polycom team, partners and customers to drive our strategy forward, and we thank Andy for his four years of service.”
“Our second quarter sales results demonstrate continued progress with our new products, as we expand our addressable market and grow our services businesses,” continued Eric Brown, Polycom Chief Operating Officer and Chief Financial Officer. “We accelerated our share repurchase program and closed the quarter with total cash and investments of $4 per share and trailing 12 month operating cash flow of $195 million.”
In Q2 2013, Polycom generated a total of $32 million in operating cash flow. Operating cash flow on a trailing 12 month basis was $195 million. Cash and investments at the end of Q2 2013 totaled $694 million or approximately $4 per share. Deferred revenue was $259 million. Polycom repurchased $50 million of common stock in Q2 2013, and $84 million year-to-date, leaving $89 million in remaining repurchase authorization as of June 30, 2013.
Earnings Call Details
Polycom will hold a conference call today, July 23, 2013, at 5:00 p.m. EST/2:00 p.m. PST to discuss its second quarter 2013 financial results. Kevin Parker, interim President and CEO, and Eric Brown, Chief Operating Officer and Chief Financial Officer, will host the call. You may participate by viewing the webcast at www.polycom.com/investors or, for callers in the U.S. and Canada, you may participate by calling 1.800.735.5968 and for callers outside of the U.S. and Canada, by calling 184.108.40.20618. 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 21662401. 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 the future plans of the Company. 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; 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, including those changes announced today; 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 March 31, 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.