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Polycom Reports Fourth Quarter and Fiscal Year 2011 Earnings
January 24, 2012 | Hogan Keyser
PLEASANTON, CA -- Polycom, Inc., the global leader in standards-based unified communications (UC), today reported its earnings for the fourth quarter and fiscal year ended December 31, 2011.
Fourth quarter 2011 consolidated net revenues were a record $407 million, compared to $340 million for the fourth quarter of 2010. GAAP net income for the fourth quarter of 2011 was $50 million, or 28 cents per diluted share, compared to $33 million, or 19 cents per diluted share, for the same period last year. Non-GAAP net income for the fourth quarter of 2011 was $74 million, or 41 cents per diluted share, compared to non-GAAP net income of $43 million, or 24 cents per diluted share, for the fourth quarter of 2010. Note that 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.
For the year ended December 31, 2011, net revenues were $1.5 billion, compared to $1.2 billion for the year ended December 31, 2010. GAAP net income for the year ended December 31, 2011 was $136 million, or 75 cents per diluted share, compared to GAAP net income of $68 million, or 39 cents per diluted share, for the same period last year. Non-GAAP net income for the year ended December 31, 2011 was $213 million, or $1.18 per diluted share, compared to $133 million, or $0.75 per diluted share, for the same period last year.
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 for the fourth quarter of 2011 were comprised of:
- 48 percent Americas, or $193.8 million, an increase of 7 percent year-over-year;
- 27 percent Europe, Middle East, and Africa, or $109.7 million, an increase of 28 percent year-over-year; and
- 25 percent Asia Pacific, or $103.5 million, an increase of 42 percent year-over-year.
"2011 closed strong with full-year revenues of $1.5 billion, driven by particular strength in sales of the Polycom(R) RealPresence(TM) Platform and broad geographic growth," said Andrew Miller, Polycom president and CEO. "Enabled by Polycom's innovations, we experienced unprecedented demand for our secure, interoperable, unified collaboration solutions by both enterprise and service provider customers. Leveraging our industry-leading technology and powerful network of strategic partners, Polycom's cloud, mobility, and software-driven infrastructure strategy is beginning to yield and we look forward to another year of solid growth in 2012."
"Polycom generated 20 percent year-over-year revenue growth in Q4, which drove revenues, operating profits, and operating cash flow to record levels," said Michael Kourey, Polycom's executive vice president, finance and administration, and CFO. "We are pleased to have achieved significant operating margin expansion and unprecedented operating cash flow of $122 million in the fourth quarter. Net of the strategic acquisitions and stock repurchases in the period, Polycom exited 2011 with $592 million in cash and investments and no debt."
Q4 2011 Business Highlights
- Strong revenue growth in both Europe and Asia Pacific with emerging geographies up over 40 percent year-over-year
- North American sales management structure with key leadership hires in place
- Polycom RealPresence Platform generated revenue growth of 45 percent year-over-year
- Acquired ViVu, Inc., a video collaboration software company, reinforcing Polycom's cloud and software strategy
- Launched Polycom(R) RealPresence(TM) Mobile software for Apple(R) iPad(R) 2 and the leading Android devices
- Expanded Microsoft(R) Lync(TM) integration with new Polycom(R) CX7000 unified group video collaboration system
Earnings Call Details
Polycom will hold a conference call today, Jan. 23, 2012, at 5 p.m. EST/2 p.m. PST to discuss its fourth quarter earnings. You may participate by viewing the webcast at www.polycom.com/investors or, for callers in the US and Canada, by calling 888.227.5826; and for callers outside of the US and Canada, by calling 303.223.2680. 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 US and Canada, at 800.633.8284; and for callers outside of the US and Canada, at 402.977.9140. The access number for the replay is 21572693. A replay of the call will be available on www.polycom.com for approximately 12 months.
Forward Looking Statements
This release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 regarding future events, future demand for our products, and the future performance of the Company, including statements regarding the expected growth for Polycom in 2012. 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 general 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; increasing costs and differing uses of capital; changes in key personnel that may cause disruption to the business; any disruptive impact to us that may result from new executive hires; 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 September 30, 2011, 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.
Polycom is the global leader in standards-based unified communications (UC) solutions for telepresence, video, and voice, powered by the Polycom RealPresence platform. The RealPresence platform interoperates with the broadest range of business, mobile and social applications and devices. More than 400,000 organizations trust Polycom solutions to collaborate and meet face to face from any location for more productive and effective engagement with colleagues, partners, customers and prospects. Polycom, together with its broad partner ecosystem, provides customers with the best TCO, scalability, and security -- on-premises, hosted or cloud delivered. Visit www.polycom.com or connect with Polycom on Twitter, Facebook, and LinkedIn.
(C) 2012 Polycom, Inc. All rights reserved. POLYCOM(R), the Polycom "Triangles" 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.
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