☒
|
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
☐
|
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
Delaware
|
77-0201147
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification Number)
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Common stock, $0.001 par value
|
|
HLIT
|
|
NASDAQ Global Select Market
|
Large accelerated filer
|
¨
|
Accelerated Filer
|
ý
|
|
|
|
|
Non-accelerated filer
|
¨
|
Smaller reporting company
|
☐
|
|
|
|
|
|
|
Emerging growth company
|
☐
|
|
|
|
|
|
|
|
|
|
June 26, 2020
|
|
December 31, 2019
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
77,744
|
|
|
$
|
93,058
|
|
Accounts receivable, net
|
74,781
|
|
|
88,500
|
|
||
Inventories, net
|
32,097
|
|
|
29,042
|
|
||
Prepaid expenses and other current assets
|
23,255
|
|
|
40,762
|
|
||
Total current assets
|
207,877
|
|
|
251,362
|
|
||
Property and equipment, net
|
41,341
|
|
|
22,928
|
|
||
Operating lease right-of-use assets
|
25,292
|
|
|
27,491
|
|
||
Goodwill
|
239,816
|
|
|
239,780
|
|
||
Intangibles, net
|
1,993
|
|
|
4,461
|
|
||
Other long-term assets
|
41,202
|
|
|
41,305
|
|
||
Total assets
|
$
|
557,521
|
|
|
$
|
587,327
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Other debts and finance lease obligations, current
|
$
|
6,323
|
|
|
$
|
6,713
|
|
Accounts payable
|
27,235
|
|
|
40,933
|
|
||
Income taxes payable
|
1,017
|
|
|
1,226
|
|
||
Deferred revenue
|
47,605
|
|
|
37,117
|
|
||
Accrued and other current liabilities
|
55,366
|
|
|
62,535
|
|
||
Convertible notes, short-term
|
7,855
|
|
|
43,375
|
|
||
Total current liabilities
|
145,401
|
|
|
191,899
|
|
||
Convertible notes, long-term
|
126,554
|
|
|
88,629
|
|
||
Other debts and finance lease obligations, long-term
|
13,994
|
|
|
10,511
|
|
||
Income taxes payable, long-term
|
182
|
|
|
178
|
|
||
Other non-current liabilities
|
41,108
|
|
|
41,254
|
|
||
Total liabilities
|
327,239
|
|
|
332,471
|
|
||
Commitments and contingencies (Note 17)
|
|
|
|
||||
Convertible notes
|
—
|
|
|
2,410
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.001 par value, 5,000 shares authorized; no shares issued or outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value, 150,000 shares authorized; 96,863 and 91,875 shares issued and outstanding at June 26, 2020 and December 31, 2019, respectively
|
97
|
|
|
92
|
|
||
Additional paid-in capital
|
2,342,856
|
|
|
2,327,359
|
|
||
Accumulated deficit
|
(2,109,295
|
)
|
|
(2,071,940
|
)
|
||
Accumulated other comprehensive loss
|
(3,376
|
)
|
|
(3,065
|
)
|
||
Total stockholders’ equity
|
230,282
|
|
|
252,446
|
|
||
Total liabilities and stockholders’ equity
|
$
|
557,521
|
|
|
$
|
587,327
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26, 2020
|
|
June 28, 2019
|
|
June 26, 2020
|
|
June 28, 2019
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Appliance and integration
|
$
|
42,224
|
|
|
$
|
54,417
|
|
|
$
|
89,976
|
|
|
$
|
106,782
|
|
SaaS and service
|
31,770
|
|
|
30,448
|
|
|
62,435
|
|
|
58,189
|
|
||||
Total net revenue
|
73,994
|
|
|
84,865
|
|
|
152,411
|
|
|
164,971
|
|
||||
Cost of revenue:
|
|
|
|
|
|
|
|
||||||||
Appliance and integration
|
22,784
|
|
|
29,312
|
|
|
49,071
|
|
|
56,366
|
|
||||
SaaS and service
|
13,437
|
|
|
11,625
|
|
|
28,829
|
|
|
22,828
|
|
||||
Total cost of revenue
|
36,221
|
|
|
40,937
|
|
|
77,900
|
|
|
79,194
|
|
||||
Total gross profit
|
37,773
|
|
|
43,928
|
|
|
74,511
|
|
|
85,777
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
19,498
|
|
|
21,313
|
|
|
41,621
|
|
|
42,714
|
|
||||
Selling, general and administrative
|
27,005
|
|
|
29,319
|
|
|
58,223
|
|
|
57,330
|
|
||||
Amortization of intangibles
|
742
|
|
|
784
|
|
|
1,512
|
|
|
1,572
|
|
||||
Restructuring and related charges
|
82
|
|
|
276
|
|
|
758
|
|
|
333
|
|
||||
Total operating expenses
|
47,327
|
|
|
51,692
|
|
|
102,114
|
|
|
101,949
|
|
||||
Loss from operations
|
(9,554
|
)
|
|
(7,764
|
)
|
|
(27,603
|
)
|
|
(16,172
|
)
|
||||
Interest expense, net
|
(3,062
|
)
|
|
(2,956
|
)
|
|
(5,965
|
)
|
|
(5,862
|
)
|
||||
Loss on debt extinguishment
|
(834
|
)
|
|
—
|
|
|
(834
|
)
|
|
—
|
|
||||
Other expense, net
|
(373
|
)
|
|
(428
|
)
|
|
(646
|
)
|
|
(739
|
)
|
||||
Loss before income taxes
|
(13,823
|
)
|
|
(11,148
|
)
|
|
(35,048
|
)
|
|
(22,773
|
)
|
||||
Provision for income taxes
|
1,578
|
|
|
697
|
|
|
2,307
|
|
|
378
|
|
||||
Net loss
|
$
|
(15,401
|
)
|
|
$
|
(11,845
|
)
|
|
$
|
(37,355
|
)
|
|
$
|
(23,151
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
$
|
(0.16
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
(0.26
|
)
|
Shares used in per share calculation:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
96,727
|
|
|
88,931
|
|
|
96,255
|
|
|
88,554
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26, 2020
|
|
June 28, 2019
|
|
June 26, 2020
|
|
June 28, 2019
|
||||||||
Net loss
|
$
|
(15,401
|
)
|
|
$
|
(11,845
|
)
|
|
$
|
(37,355
|
)
|
|
$
|
(23,151
|
)
|
Losses (gains) reclassified into earnings
|
—
|
|
|
(101
|
)
|
|
—
|
|
|
56
|
|
||||
Change in foreign currency translation adjustments
|
2,839
|
|
|
857
|
|
|
(280
|
)
|
|
(443
|
)
|
||||
Other comprehensive income (loss) before tax
|
2,839
|
|
|
756
|
|
|
(280
|
)
|
|
(387
|
)
|
||||
Provision for (benefit from) income taxes
|
(125
|
)
|
|
(55
|
)
|
|
31
|
|
|
51
|
|
||||
Other comprehensive income (loss), net of tax
|
2,964
|
|
|
811
|
|
|
(311
|
)
|
|
(438
|
)
|
||||
Total comprehensive loss
|
$
|
(12,437
|
)
|
|
$
|
(11,034
|
)
|
|
$
|
(37,666
|
)
|
|
$
|
(23,589
|
)
|
|
Three Months Ended June 26, 2020
|
|||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive Loss
|
|
Total
Stockholders’
Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||
Balance at March 27, 2020
|
96,566
|
|
|
$
|
97
|
|
|
$
|
2,336,459
|
|
|
$
|
(2,093,894
|
)
|
|
$
|
(6,340
|
)
|
|
$
|
236,322
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,401
|
)
|
|
—
|
|
|
(15,401
|
)
|
|||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,964
|
|
|
2,964
|
|
|||||
Issuance of common stock under option, stock award and purchase plans
|
297
|
|
|
—
|
|
|
(220
|
)
|
|
—
|
|
|
—
|
|
|
(220
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
3,495
|
|
|
—
|
|
|
—
|
|
|
3,495
|
|
|||||
Conversion feature of 4.375% Convertible Senior Notes due 2022
|
—
|
|
|
—
|
|
|
8,254
|
|
|
—
|
|
|
—
|
|
|
8,254
|
|
|||||
Portion of conversion feature of 4.00% Convertible Senior Notes due 2020 exchanged
|
—
|
|
|
—
|
|
|
(6,909
|
)
|
|
—
|
|
|
—
|
|
|
(6,909
|
)
|
|||||
Reclassification from mezzanine equity to equity for 4.00% Convertible Senior Notes due in 2020
|
—
|
|
|
—
|
|
|
1,777
|
|
|
—
|
|
|
—
|
|
|
1,777
|
|
|||||
Balance at June 26, 2020
|
96,863
|
|
|
$
|
97
|
|
|
$
|
2,342,856
|
|
|
$
|
(2,109,295
|
)
|
|
$
|
(3,376
|
)
|
|
$
|
230,282
|
|
|
Three Months Ended June 28, 2019
|
|||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive Loss
|
|
Total
Stockholders’
Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||
Balance at March 29, 2019
|
88,784
|
|
|
$
|
89
|
|
|
$
|
2,300,259
|
|
|
$
|
(2,077,322
|
)
|
|
$
|
(2,465
|
)
|
|
$
|
220,561
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,845
|
)
|
|
—
|
|
|
(11,845
|
)
|
|||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
811
|
|
|
811
|
|
|||||
Issuance of common stock under option, stock award and purchase plans
|
290
|
|
|
—
|
|
|
(36
|
)
|
|
—
|
|
|
—
|
|
|
(36
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
2,575
|
|
|
—
|
|
|
—
|
|
|
2,575
|
|
|||||
Balance at June 28, 2019
|
89,074
|
|
|
$
|
89
|
|
|
$
|
2,302,798
|
|
|
$
|
(2,089,167
|
)
|
|
$
|
(1,654
|
)
|
|
$
|
212,066
|
|
|
Six Months Ended June 26, 2020
|
|||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive Loss
|
|
Total
Stockholders’
Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||
Balance at December 31, 2019
|
91,875
|
|
|
$
|
92
|
|
|
$
|
2,327,359
|
|
|
$
|
(2,071,940
|
)
|
|
$
|
(3,065
|
)
|
|
$
|
252,446
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(37,355
|
)
|
|
—
|
|
|
(37,355
|
)
|
|||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(311
|
)
|
|
(311
|
)
|
|||||
Issuance of common stock under option, stock award and purchase plans
|
2,575
|
|
|
3
|
|
|
1,948
|
|
|
—
|
|
|
—
|
|
|
1,951
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
9,796
|
|
|
—
|
|
|
—
|
|
|
9,796
|
|
|||||
Conversion feature of 4.375% Convertible Senior Notes due 2022
|
—
|
|
|
—
|
|
|
8,254
|
|
|
—
|
|
|
—
|
|
|
8,254
|
|
|||||
Portion of conversion feature of 4.00% Convertible Senior Notes due 2020 exchanged
|
—
|
|
|
—
|
|
|
(6,909
|
)
|
|
—
|
|
|
—
|
|
|
(6,909
|
)
|
|||||
Exercise of warrant
|
2,413
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Reclassification from mezzanine equity to equity for 4.00% Convertible Senior Notes due in 2020
|
—
|
|
|
—
|
|
|
2,410
|
|
|
—
|
|
|
—
|
|
|
2,410
|
|
|||||
Balance at June 26, 2020
|
96,863
|
|
|
$
|
97
|
|
|
$
|
2,342,856
|
|
|
$
|
(2,109,295
|
)
|
|
$
|
(3,376
|
)
|
|
$
|
230,282
|
|
|
Six Months Ended June 28, 2019
|
|||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive Loss
|
|
Total
Stockholders’
Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||
Balance at December 31, 2018
|
87,057
|
|
|
$
|
87
|
|
|
$
|
2,296,795
|
|
|
$
|
(2,067,416
|
)
|
|
$
|
(1,216
|
)
|
|
$
|
228,250
|
|
Cumulative effect to retained earnings related to adoption of Topic 718 (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,400
|
|
|
—
|
|
|
1,400
|
|
|||||
Balance at January 1, 2019
|
87,057
|
|
|
87
|
|
|
2,296,795
|
|
|
(2,066,016
|
)
|
|
(1,216
|
)
|
|
229,650
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,151
|
)
|
|
—
|
|
|
(23,151
|
)
|
|||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(438
|
)
|
|
(438
|
)
|
|||||
Issuance of common stock under option, stock award and purchase plans
|
2,017
|
|
|
2
|
|
|
1,317
|
|
|
—
|
|
|
—
|
|
|
1,319
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
4,686
|
|
|
—
|
|
|
—
|
|
|
4,686
|
|
|||||
Balance at June 28, 2019
|
89,074
|
|
|
$
|
89
|
|
|
$
|
2,302,798
|
|
|
$
|
(2,089,167
|
)
|
|
$
|
(1,654
|
)
|
|
$
|
212,066
|
|
|
Six months ended
|
||||||
|
June 26, 2020
|
|
June 28, 2019
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(37,355
|
)
|
|
$
|
(23,151
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
||||
Amortization of intangibles
|
2,462
|
|
|
4,162
|
|
||
Depreciation
|
5,535
|
|
|
5,716
|
|
||
Stock-based compensation
|
9,807
|
|
|
4,623
|
|
||
Amortization of discount on convertible and other debt
|
3,785
|
|
|
3,262
|
|
||
Amortization of non-cash warrant
|
868
|
|
|
48
|
|
||
Loss on debt extinguishment
|
834
|
|
|
—
|
|
||
Deferred income taxes, net
|
1,116
|
|
|
(145
|
)
|
||
Provision for excess and obsolete inventories
|
723
|
|
|
384
|
|
||
Provision for doubtful accounts, returns and discounts
|
662
|
|
|
500
|
|
||
Other non-cash adjustments, net
|
118
|
|
|
79
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
13,024
|
|
|
10,699
|
|
||
Inventories
|
(4,032
|
)
|
|
(2,440
|
)
|
||
Prepaid expenses and other assets
|
19,182
|
|
|
(1,526
|
)
|
||
Accounts payable
|
(14,963
|
)
|
|
(1,752
|
)
|
||
Deferred revenue
|
11,241
|
|
|
4,989
|
|
||
Income taxes payable
|
(181
|
)
|
|
(292
|
)
|
||
Accrued and other liabilities
|
(11,936
|
)
|
|
(9,802
|
)
|
||
Net cash provided by (used in) operating activities
|
890
|
|
|
(4,646
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property and equipment
|
(20,753
|
)
|
|
(2,939
|
)
|
||
Net cash used in investing activities
|
(20,753
|
)
|
|
(2,939
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Payments of convertible debt
|
(25
|
)
|
|
—
|
|
||
Payment of convertible debt issuance costs
|
(35
|
)
|
|
—
|
|
||
Proceeds from other debts and finance leases
|
9,398
|
|
|
4,503
|
|
||
Repayment of other debts and finance leases
|
(6,342
|
)
|
|
(6,162
|
)
|
||
Proceeds from common stock issued to employees
|
3,000
|
|
|
2,147
|
|
||
Payment of tax withholding obligations related to net share settlements of restricted stock units
|
(1,049
|
)
|
|
(828
|
)
|
||
Net cash provided by (used in) financing activities
|
4,947
|
|
|
(340
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(398
|
)
|
|
—
|
|
||
Net decrease in cash and cash equivalents
|
(15,314
|
)
|
|
(7,925
|
)
|
||
Cash and cash equivalents at beginning of period
|
93,058
|
|
|
65,989
|
|
||
Cash and cash equivalents at end of period
|
$
|
77,744
|
|
|
$
|
58,064
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Income tax payments, net
|
809
|
|
|
860
|
|
||
Interest payments, net
|
2,037
|
|
|
2,495
|
|
||
Supplemental schedule of non-cash investing and financing activities:
|
|
|
|
||||
Capital expenditures incurred but not yet paid
|
5,000
|
|
|
78
|
|
||
Fair value of Convertible Senior Notes due 2022 used to settle Convertible Senior Notes due 2020
|
44,357
|
|
|
—
|
|
|
As of
|
||||||
|
June 26,
2020 |
|
December 31,
2019 |
||||
Contract assets
|
$
|
4,289
|
|
|
$
|
13,969
|
|
Deferred revenue
|
54,694
|
|
|
43,450
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26, 2020
|
|
June 28, 2019
|
|
June 26, 2020
|
|
June 28, 2019
|
||||||||
Operating lease cost
|
$
|
2,015
|
|
|
$
|
2,231
|
|
|
$
|
4,683
|
|
|
$
|
4,227
|
|
Variable lease cost
|
710
|
|
|
744
|
|
|
1,502
|
|
|
1,523
|
|
||||
Total lease cost
|
$
|
2,725
|
|
|
$
|
2,975
|
|
|
$
|
6,185
|
|
|
$
|
5,750
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26, 2020
|
|
June 28, 2019
|
|
June 26, 2020
|
|
June 28, 2019
|
||||||||
Cash paid for amounts included in the measurement of operating lease liabilities
|
$
|
2,217
|
|
|
$
|
2,494
|
|
|
$
|
4,638
|
|
|
$
|
4,624
|
|
Right-of-use assets obtained in exchange for operating lease obligations
|
$
|
—
|
|
|
$
|
10,305
|
|
|
$
|
1,671
|
|
|
$
|
10,305
|
|
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
Financial Statement Location
|
|
June 26, 2020
|
|
June 28, 2019
|
|
June 26, 2020
|
|
June 28, 2019
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
||||||||
Gains (losses) recognized in operations
|
Other expense, net
|
|
$
|
579
|
|
|
$
|
(44
|
)
|
|
$
|
(333
|
)
|
|
$
|
(609
|
)
|
|
|
June 26, 2020
|
|
December 31, 2019
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||
Purchase
|
|
$
|
24,415
|
|
|
$
|
14,806
|
|
Sell
|
|
$
|
1,451
|
|
|
$
|
2,629
|
|
|
|
|
|
Asset Derivatives
|
|
|
|
Derivative Liabilities
|
||||||||||||
|
|
Balance Sheet Location
|
|
June 26, 2020
|
|
December 31, 2019
|
|
Balance Sheet Location
|
|
June 26, 2020
|
|
December 31, 2019
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
|
Prepaid expenses and other current assets
|
|
$
|
48
|
|
|
$
|
43
|
|
|
Accrued and other current liabilities
|
|
$
|
153
|
|
|
$
|
112
|
|
Total derivatives
|
|
|
|
$
|
48
|
|
|
$
|
43
|
|
|
|
|
$
|
153
|
|
|
$
|
112
|
|
|
|
Gross Amounts of Derivatives
|
|
Gross Amounts of Derivatives Offset in the Condensed Consolidated Balance Sheets
|
|
Net Amounts of Derivatives Presented in the Condensed Consolidated Balance Sheets
|
|||||
Derivative assets
|
|
$
|
48
|
|
|
—
|
|
|
$
|
48
|
|
Derivative liabilities
|
|
$
|
153
|
|
|
—
|
|
|
$
|
153
|
|
•
|
Level 1 — Observable inputs that reflect quoted prices for identical assets or liabilities in active markets.
|
•
|
Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. The forward exchange contracts are classified as Level 2 because they are valued using quoted market prices and other observable data for similar instruments in an active market.
|
•
|
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
As of June 26, 2020
|
|
|
|
|
|
|
|
||||||||
Prepaid and other current assets
|
|
|
|
|
|
|
|
||||||||
Derivative assets
|
$
|
—
|
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
48
|
|
Total assets measured and recorded at fair value
|
$
|
—
|
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
48
|
|
Accrued and other current liabilities
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
153
|
|
|
$
|
—
|
|
|
$
|
153
|
|
Total liabilities measured and recorded at fair value
|
$
|
—
|
|
|
$
|
153
|
|
|
$
|
—
|
|
|
$
|
153
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
As of December 31, 2019
|
|
|
|
|
|
|
|
||||||||
Prepaid and other current assets
|
|
|
|
|
|
|
|
||||||||
Derivative assets
|
$
|
—
|
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
43
|
|
Total assets measured and recorded at fair value
|
$
|
—
|
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
43
|
|
Accrued and other current liabilities
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
112
|
|
|
$
|
—
|
|
|
$
|
112
|
|
Total liabilities measured and recorded at fair value
|
$
|
—
|
|
|
$
|
112
|
|
|
$
|
—
|
|
|
$
|
112
|
|
|
June 26, 2020
|
|
December 31, 2019
|
||||
Accounts receivable, net:
|
|
|
|
||||
Accounts receivable
|
$
|
77,163
|
|
|
$
|
91,513
|
|
Less: allowances for doubtful accounts and sales returns
|
(2,382
|
)
|
|
(3,013
|
)
|
||
Total
|
$
|
74,781
|
|
|
$
|
88,500
|
|
|
June 26, 2020
|
|
December 31, 2019
|
||||
Inventories, net:
|
|
|
|
||||
Raw materials
|
$
|
3,776
|
|
|
$
|
4,179
|
|
Work-in-process
|
1,458
|
|
|
1,633
|
|
||
Finished goods
|
18,546
|
|
|
14,080
|
|
||
Service-related spares
|
8,317
|
|
|
9,150
|
|
||
Total
|
$
|
32,097
|
|
|
$
|
29,042
|
|
|
June 26, 2020
|
|
December 31, 2019
|
||||
Prepaid expenses and other current assets:
|
|
|
|
||||
French R&D tax credits receivable(1)
|
$
|
—
|
|
|
$
|
7,343
|
|
Contract assets(2)
|
4,289
|
|
|
13,969
|
|
||
Deferred cost of revenue
|
5,072
|
|
|
2,631
|
|
||
Prepaid maintenance, royalty, rent, and property taxes
|
3,153
|
|
|
1,594
|
|
||
Capitalized sales commissions
|
1,529
|
|
|
1,309
|
|
||
Other
|
9,212
|
|
|
13,916
|
|
||
Total
|
$
|
23,255
|
|
|
$
|
40,762
|
|
|
June 26, 2020
|
|
December 31, 2019
|
||||
Property and equipment, net:
|
|
|
|
||||
Machinery and equipment
|
$
|
73,508
|
|
|
$
|
75,229
|
|
Capitalized software
|
35,027
|
|
|
34,190
|
|
||
Construction in progress*
|
25,549
|
|
|
5,506
|
|
||
Leasehold improvements
|
15,674
|
|
|
15,170
|
|
||
Furniture and fixtures
|
8,939
|
|
|
6,036
|
|
||
Property and equipment, gross
|
158,697
|
|
|
136,131
|
|
||
Less: accumulated depreciation and amortization
|
(117,356
|
)
|
|
(113,203
|
)
|
||
Total
|
$
|
41,341
|
|
|
$
|
22,928
|
|
|
June 26, 2020
|
|
December 31, 2019
|
||||
Other long-term assets:
|
|
|
|
||||
French R&D tax credits receivable
|
$
|
17,843
|
|
|
$
|
15,899
|
|
Deferred tax assets
|
9,958
|
|
|
10,575
|
|
||
Equity investment
|
3,593
|
|
|
3,593
|
|
||
Other
|
9,808
|
|
|
11,238
|
|
||
Total
|
$
|
41,202
|
|
|
$
|
41,305
|
|
|
June 26, 2020
|
|
December 31, 2019
|
||||
Accrued and other current liabilities:
|
|
|
|
||||
Accrued employee compensation and related expenses
|
$
|
16,163
|
|
|
$
|
19,454
|
|
Operating lease liability (short-term)
|
7,995
|
|
|
8,881
|
|
||
Customer deposits
|
4,767
|
|
|
3,557
|
|
||
Accrued warranty
|
3,818
|
|
|
4,308
|
|
||
Accrued royalty payments
|
2,657
|
|
|
2,642
|
|
||
Accrued Avid litigation settlement, current
|
2,000
|
|
|
2,000
|
|
||
Contingent inventory reserves
|
1,453
|
|
|
2,208
|
|
||
Others
|
16,513
|
|
|
19,485
|
|
||
Total
|
$
|
55,366
|
|
|
$
|
62,535
|
|
|
June 26, 2020
|
|
December 31, 2019
|
||||
Other non-current liabilities:
|
|
|
|
||||
Operating lease liability (long-term)
|
$
|
24,604
|
|
|
$
|
25,766
|
|
Deferred revenue (long-term)
|
7,089
|
|
|
6,333
|
|
||
Others
|
9,415
|
|
|
9,155
|
|
||
Total
|
$
|
41,108
|
|
|
$
|
41,254
|
|
|
Video
|
|
Cable Access
|
|
Total
|
||||||
Balance as of December 31, 2019
|
$
|
178,982
|
|
|
$
|
60,798
|
|
|
$
|
239,780
|
|
Foreign currency translation adjustment, net
|
67
|
|
|
(31
|
)
|
|
36
|
|
|||
Balance as of June 26, 2020
|
$
|
179,049
|
|
|
$
|
60,767
|
|
|
$
|
239,816
|
|
|
|
|
June 26, 2020
|
|
December 31, 2019
|
||||||||||||||||||||
|
Weighted Average Remaining Life (Years)
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
||||||||||||
Developed core technology
|
n/a
|
|
$
|
31,707
|
|
|
$
|
(31,707
|
)
|
|
$
|
—
|
|
|
$
|
31,707
|
|
|
$
|
(30,757
|
)
|
|
$
|
950
|
|
Customer relationships/contracts
|
0.7
|
|
44,588
|
|
|
(42,595
|
)
|
|
1,993
|
|
|
44,577
|
|
|
(41,092
|
)
|
|
3,485
|
|
||||||
Trademarks and trade names
|
n/a
|
|
611
|
|
|
(611
|
)
|
|
—
|
|
|
609
|
|
|
(583
|
)
|
|
26
|
|
||||||
Maintenance agreements and related relationships
|
n/a
|
|
5,500
|
|
|
(5,500
|
)
|
|
—
|
|
|
5,500
|
|
|
(5,500
|
)
|
|
—
|
|
||||||
Order backlog
|
n/a
|
|
3,089
|
|
|
(3,089
|
)
|
|
—
|
|
|
3,085
|
|
|
(3,085
|
)
|
|
—
|
|
||||||
Total identifiable intangibles, net
|
|
|
$
|
85,495
|
|
|
$
|
(83,502
|
)
|
|
$
|
1,993
|
|
|
$
|
85,478
|
|
|
$
|
(81,017
|
)
|
|
$
|
4,461
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26,
2020 |
|
June 28,
2019 |
|
June 26,
2020 |
|
June 28,
2019 |
||||||||
Included in cost of revenue
|
$
|
65
|
|
|
$
|
1,295
|
|
|
$
|
950
|
|
|
$
|
2,590
|
|
Included in operating expenses
|
742
|
|
|
784
|
|
|
1,512
|
|
|
1,572
|
|
||||
Total amortization expense
|
$
|
807
|
|
|
$
|
2,079
|
|
|
$
|
2,462
|
|
|
$
|
4,162
|
|
|
Cost of Revenue
|
|
Operating
Expenses
|
|
Total
|
||||||
Year ended December 31,
|
|
|
|
|
|
||||||
2020 (remaining six months)
|
$
|
—
|
|
|
$
|
1,495
|
|
|
$
|
1,495
|
|
2021
|
—
|
|
|
498
|
|
|
498
|
|
|||
Total future amortization expense
|
$
|
—
|
|
|
$
|
1,993
|
|
|
$
|
1,993
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26,
2020 |
|
June 28,
2019 |
|
June 26,
2020 |
|
June 28,
2019 |
||||||||
Restructuring and related charges in:
|
|
|
|
|
|
|
|
||||||||
Cost of revenue
|
$
|
2
|
|
|
$
|
91
|
|
|
$
|
(71
|
)
|
|
$
|
392
|
|
Operating expenses - Restructuring and related charges
|
82
|
|
|
276
|
|
|
758
|
|
|
333
|
|
||||
Total restructuring and related charges
|
$
|
84
|
|
|
$
|
367
|
|
|
$
|
687
|
|
|
$
|
725
|
|
|
|
Excess facilities
|
|
Severance and benefits
|
|
French VDP
|
|
Others
|
|
Total
|
||||||||||
Balance at December 31, 2019
|
|
$
|
720
|
|
|
$
|
3,294
|
|
|
$
|
806
|
|
|
$
|
30
|
|
|
$
|
4,850
|
|
Charges for current period
|
|
—
|
|
|
591
|
|
|
49
|
|
|
47
|
|
|
687
|
|
|||||
Cash payments
|
|
(642
|
)
|
|
(1,653
|
)
|
|
(650
|
)
|
|
(30
|
)
|
|
(2,975
|
)
|
|||||
Others
|
|
—
|
|
|
(164
|
)
|
|
(41
|
)
|
|
—
|
|
|
(205
|
)
|
|||||
Balance at June 26, 2020
|
|
$
|
78
|
|
|
$
|
2,068
|
|
|
$
|
164
|
|
|
$
|
47
|
|
|
$
|
2,357
|
|
|
June 26, 2020
|
||
Liability:
|
|
||
Principal amount
|
$
|
37,707
|
|
Less: Debt discount, net of amortization
|
(1,681
|
)
|
|
Less: Debt issuance costs, net of amortization
|
(527
|
)
|
|
Carrying amount
|
$
|
35,499
|
|
Remaining amortization period (years)
|
2.4
|
|
|
Effective interest rate on liability component
|
6.95
|
%
|
|
June 26, 2020
|
|
December 31, 2019
|
||||
Liability:
|
|
|
|
||||
Principal amount
|
$
|
115,500
|
|
|
$
|
115,500
|
|
Less: Debt discount, net of amortization
|
(21,517
|
)
|
|
(23,652
|
)
|
||
Less: Debt issuance costs, net of amortization
|
(2,928
|
)
|
|
(3,219
|
)
|
||
Carrying amount
|
$
|
91,055
|
|
|
$
|
88,629
|
|
Remaining amortization period (years)
|
4.2
|
|
|
4.7
|
|
||
Effective interest rate on liability component
|
7.95
|
%
|
|
7.95
|
%
|
|
June 26, 2020
|
|
December 31, 2019
|
||||
Liability:
|
|
|
|
||||
Principal amount
|
$
|
8,053
|
|
|
$
|
45,785
|
|
Less: Debt discount, net of amortization
|
(177
|
)
|
|
(2,151
|
)
|
||
Less: Debt issuance costs, net of amortization
|
(21
|
)
|
|
(259
|
)
|
||
Carrying amount
|
$
|
7,855
|
|
|
$
|
43,375
|
|
Remaining amortization period (years)
|
0.4
|
|
|
0.9
|
|
||
Effective interest rate on liability component
|
9.94
|
%
|
|
9.94
|
%
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26, 2020
|
|
June 28, 2019
|
|
June 26, 2020
|
|
June 28, 2019
|
||||||||
Contractual interest expense
|
$
|
1,036
|
|
|
$
|
1,282
|
|
|
$
|
2,071
|
|
|
$
|
2,565
|
|
Amortization of debt discount
|
1,560
|
|
|
1,479
|
|
|
3,183
|
|
|
2,912
|
|
||||
Amortization of debt issuance costs
|
214
|
|
|
178
|
|
|
426
|
|
|
350
|
|
||||
Total interest expense recognized
|
$
|
2,810
|
|
|
$
|
2,939
|
|
|
$
|
5,680
|
|
|
$
|
5,827
|
|
|
June 26, 2020
|
|
December 31, 2019
|
||||
Financing from French government agencies related to various government incentive programs (1)
|
$
|
13,991
|
|
|
$
|
16,566
|
|
Relief loans (2)
|
6,131
|
|
|
—
|
|
||
Term loans
|
173
|
|
|
587
|
|
||
Obligations under finance leases
|
22
|
|
|
71
|
|
||
Total debt obligations
|
20,317
|
|
|
17,224
|
|
||
Less: current portion
|
(6,323
|
)
|
|
(6,713
|
)
|
||
Long-term portion
|
$
|
13,994
|
|
|
$
|
10,511
|
|
Years ending December 31,
|
Finance lease obligations
|
|
Other Debt obligations
|
||||
2020 (remaining six months)
|
$
|
—
|
|
|
$
|
488
|
|
2021
|
22
|
|
|
10,768
|
|
||
2022
|
—
|
|
|
4,885
|
|
||
2023
|
—
|
|
|
3,416
|
|
||
2024
|
—
|
|
|
112
|
|
||
Thereafter
|
—
|
|
|
626
|
|
||
Total
|
$
|
22
|
|
|
$
|
20,295
|
|
|
|
Stock Options Outstanding
|
|||||||||||
|
|
Number
of
Shares
|
|
Weighted
Average
Exercise Price
Per Share
|
|
Weighted
Average
Remaining
Contractual
Term (Years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Balance at December 31, 2019
|
|
1,888
|
|
|
$
|
5.83
|
|
|
|
|
|
||
Exercised
|
|
(127
|
)
|
|
5.78
|
|
|
|
|
|
|||
Canceled or expired
|
|
(203
|
)
|
|
5.78
|
|
|
|
|
|
|||
Balance at June 26, 2020
|
|
1,558
|
|
|
5.84
|
|
|
1.68
|
|
$
|
655.80
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Vested and exercisable
|
|
1,558
|
|
|
5.84
|
|
|
1.68
|
|
$
|
655.80
|
|
|
|
Restricted Stock Units Outstanding
|
|||||
|
|
Number
of Shares |
|
Weighted
Average Grant Date Fair Value Per Share |
|||
Balance at December 31, 2019
|
|
3,601
|
|
|
$
|
5.18
|
|
Granted
|
|
2,797
|
|
|
5.85
|
|
|
Vested
|
|
(2,128
|
)
|
|
5.42
|
|
|
Forfeited
|
|
(257
|
)
|
|
3.89
|
|
|
Balance at June 26, 2020
|
|
4,013
|
|
|
5.60
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26, 2020
|
|
June 28, 2019
|
|
June 26, 2020
|
|
June 28, 2019
|
||||||||
Service cost
|
$
|
61
|
|
|
$
|
57
|
|
|
$
|
122
|
|
|
$
|
114
|
|
Interest cost
|
9
|
|
|
19
|
|
|
18
|
|
|
39
|
|
||||
Net periodic benefit cost
|
$
|
70
|
|
|
$
|
76
|
|
|
$
|
140
|
|
|
$
|
153
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26,
2020 |
|
June 28,
2019 |
|
June 26,
2020 |
|
June 28,
2019 |
||||||||
Stock-based compensation in:
|
|
|
|
|
|
|
|
||||||||
Cost of revenue
|
$
|
312
|
|
|
$
|
195
|
|
|
$
|
1,082
|
|
|
$
|
420
|
|
Research and development expense
|
872
|
|
|
582
|
|
|
2,610
|
|
|
1,198
|
|
||||
Selling, general and administrative expense
|
2,364
|
|
|
1,733
|
|
|
6,115
|
|
|
3,005
|
|
||||
Total stock-based compensation in operating expense
|
3,236
|
|
|
2,315
|
|
|
8,725
|
|
|
4,203
|
|
||||
Total stock-based compensation
|
$
|
3,548
|
|
|
$
|
2,510
|
|
|
$
|
9,807
|
|
|
$
|
4,623
|
|
|
ESPP Purchase Period Ending
|
||||
|
July 1,
2020 |
|
July 1,
2019 |
||
Expected term (years)
|
0.5
|
|
|
0.5
|
|
Volatility
|
50
|
%
|
|
43
|
%
|
Risk-free interest rate
|
1.6
|
%
|
|
2.5
|
%
|
Expected dividends
|
0.0
|
%
|
|
0.0
|
%
|
Estimated weighted average fair value per share at purchase date
|
$2.26
|
|
$1.31
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26,
2020 |
|
June 28,
2019 |
|
June 26,
2020 |
|
June 28,
2019 |
||||||||
Loss before income taxes
|
$
|
(13,823
|
)
|
|
$
|
(11,148
|
)
|
|
$
|
(35,048
|
)
|
|
$
|
(22,773
|
)
|
Provision for income taxes
|
1,578
|
|
|
697
|
|
|
2,307
|
|
|
378
|
|
||||
Effective income tax rate
|
(11.4
|
)%
|
|
(6.3
|
)%
|
|
(6.6
|
)%
|
|
(1.7
|
)%
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26,
2020 |
|
June 28,
2019 |
|
June 26,
2020 |
|
June 28,
2019 |
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(15,401
|
)
|
|
$
|
(11,845
|
)
|
|
$
|
(37,355
|
)
|
|
$
|
(23,151
|
)
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
96,727
|
|
|
88,931
|
|
|
96,255
|
|
|
88,554
|
|
||||
Net loss per share:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
$
|
(0.16
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
(0.26
|
)
|
|
Three months ended
|
|
Six months ended
|
||||||||
|
June 26,
2020 |
|
June 28,
2019 |
|
June 26,
2020 |
|
June 28,
2019 |
||||
Stock options
|
1,558
|
|
|
2,664
|
|
|
1,677
|
|
|
2,803
|
|
RSUs
|
2,963
|
|
|
2,668
|
|
|
2,931
|
|
|
2,534
|
|
Stock purchase rights under the ESPP
|
581
|
|
|
509
|
|
|
512
|
|
|
499
|
|
Convertible Debt
|
—
|
|
|
—
|
|
|
584
|
|
|
—
|
|
Warrants (1)
|
—
|
|
|
1,954
|
|
|
—
|
|
|
1,954
|
|
Total
|
5,102
|
|
|
7,795
|
|
|
5,704
|
|
|
7,790
|
|
•
|
The conversion spread of 1,400,522 shares will have a dilutive impact on diluted net income per share when the Company’s average market price of its common stock for a given period exceeds the conversion price of $5.75 per share for the 2020 Notes.
|
•
|
The conversion spread of 6,557,739 shares will have a dilutive impact on diluted net income per share when the Company’s average market price of its common stock for a given period exceeds the conversion price of $5.75 per share for the 2022 Notes.
|
•
|
The conversion spread of 13,337,182 shares will have a dilutive impact on diluted net income per share when the Company’s average market price of its common stock for a given period exceeds the conversion price of $8.66 per share for the 2024 Notes.
|
|
|||||||||||||||
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26, 2020
|
|
June 28, 2019
|
|
June 26, 2020
|
|
June 28, 2019
|
||||||||
Video
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
47,453
|
|
|
$
|
71,625
|
|
|
$
|
101,825
|
|
|
$
|
138,801
|
|
Gross profit
|
26,024
|
|
|
41,444
|
|
|
53,931
|
|
|
80,046
|
|
||||
Operating income (loss)
|
(4,237
|
)
|
|
4,459
|
|
|
(10,504
|
)
|
|
6,427
|
|
||||
Cable Access
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
26,541
|
|
|
$
|
13,240
|
|
|
$
|
50,586
|
|
|
$
|
26,170
|
|
Gross profit
|
12,128
|
|
|
4,063
|
|
|
22,542
|
|
|
9,131
|
|
||||
Operating loss
|
(878
|
)
|
|
(7,266
|
)
|
|
(4,143
|
)
|
|
(13,088
|
)
|
||||
Total
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
73,994
|
|
|
$
|
84,865
|
|
|
$
|
152,411
|
|
|
$
|
164,971
|
|
Gross profit
|
38,152
|
|
|
45,507
|
|
|
76,473
|
|
|
89,177
|
|
||||
Operating loss
|
$
|
(5,115
|
)
|
|
$
|
(2,807
|
)
|
|
$
|
(14,647
|
)
|
|
$
|
(6,661
|
)
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26, 2020
|
|
June 28, 2019
|
|
June 26, 2020
|
|
June 28, 2019
|
||||||||
Total segment operating loss
|
$
|
(5,115
|
)
|
|
$
|
(2,807
|
)
|
|
$
|
(14,647
|
)
|
|
$
|
(6,661
|
)
|
Unallocated corporate expenses
|
(84
|
)
|
|
(368
|
)
|
|
(687
|
)
|
|
(726
|
)
|
||||
Stock-based compensation
|
(3,548
|
)
|
|
(2,510
|
)
|
|
(9,807
|
)
|
|
(4,623
|
)
|
||||
Amortization of intangibles
|
(807
|
)
|
|
(2,079
|
)
|
|
(2,462
|
)
|
|
(4,162
|
)
|
||||
Loss from operations
|
(9,554
|
)
|
|
(7,764
|
)
|
|
(27,603
|
)
|
|
(16,172
|
)
|
||||
Non-operating expense, net
|
(4,269
|
)
|
|
(3,384
|
)
|
|
(7,445
|
)
|
|
(6,601
|
)
|
||||
Loss before income taxes
|
$
|
(13,823
|
)
|
|
$
|
(11,148
|
)
|
|
$
|
(35,048
|
)
|
|
$
|
(22,773
|
)
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26, 2020
|
|
June 28, 2019
|
|
June 26, 2020
|
|
June 28, 2019
|
||||||||
Net Revenue (in thousands) (1)
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
35,223
|
|
|
$
|
35,710
|
|
|
$
|
69,626
|
|
|
$
|
65,825
|
|
Other Countries
|
38,771
|
|
|
49,155
|
|
|
82,785
|
|
|
99,146
|
|
||||
Total
|
$
|
73,994
|
|
|
$
|
84,865
|
|
|
$
|
152,411
|
|
|
$
|
164,971
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26, 2020
|
|
June 28, 2019
|
|
June 26, 2020
|
|
June 28, 2019
|
||||||||
Market (in thousands)
|
|
|
|
|
|
|
|
||||||||
Service Provider
|
$
|
42,169
|
|
|
$
|
43,438
|
|
|
$
|
85,928
|
|
|
$
|
87,650
|
|
Broadcast and Media
|
31,825
|
|
|
41,427
|
|
|
66,483
|
|
|
77,321
|
|
||||
Total
|
$
|
73,994
|
|
|
$
|
84,865
|
|
|
$
|
152,411
|
|
|
$
|
164,971
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26,
2020 |
|
June 28,
2019 |
|
June 26,
2020 |
|
June 28,
2019 |
||||||||
Balance at beginning of period
|
$
|
3,744
|
|
|
$
|
4,587
|
|
|
$
|
4,314
|
|
|
$
|
4,869
|
|
Accrual for current period warranties
|
1,013
|
|
|
1,570
|
|
|
1,669
|
|
|
2,973
|
|
||||
Warranty costs incurred
|
(939
|
)
|
|
(1,355
|
)
|
|
(2,165
|
)
|
|
(3,040
|
)
|
||||
Balance at end of period
|
$
|
3,818
|
|
|
$
|
4,802
|
|
|
$
|
3,818
|
|
|
$
|
4,802
|
|
•
|
the impact of the COVID-19 pandemic, and related responses of businesses and governments to the pandemic, on our operations and personnel, on commercial activity in the markets in which we operate and worldwide and regional economies, and on our results of operations;
|
•
|
developing trends and demands in the markets we address, particularly emerging markets;
|
•
|
economic conditions, particularly in certain geographies, and in financial markets;
|
•
|
new and future products and services;
|
•
|
spending of our customers;
|
•
|
our strategic direction, future business plans and growth strategy;
|
•
|
industry and customer consolidation;
|
•
|
expected demand for and benefits of our products and services;
|
•
|
concentration of revenue sources;
|
•
|
expectations regarding our CableOS solutions;
|
•
|
expectations regarding the impact of the software license agreement with Comcast on our business;
|
•
|
potential future acquisitions and dispositions;
|
•
|
anticipated results of potential or actual litigation;
|
•
|
our competitive environment;
|
•
|
the impact of our restructuring plans;
|
•
|
the impact of governmental regulations, including with respect to tariffs and economic sanctions;
|
•
|
anticipated revenue and expenses, including the sources of such revenue and expenses;
|
•
|
expected impacts of changes in accounting rules;
|
•
|
expectations regarding the usability of our inventory and the risk that inventory will exceed forecasted demand;
|
•
|
expectations and estimates related to goodwill and intangible assets and their associated carrying value; and
|
•
|
use of cash, cash needs and ability to raise capital, including repaying our convertible notes.
|
|
Three months ended
|
|
|
|
|
Six months ended
|
|
|
|
||||||||||||||||||
|
June 26, 2020
|
|
June 28, 2019
|
|
Q2 FY20 vs Q2 FY19
|
|
June 26, 2020
|
|
June 28, 2019
|
|
Q2 FY20 YTD vs Q2 FY19 YTD
|
||||||||||||||||
Segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Video
|
$
|
47,453
|
|
|
$
|
71,625
|
|
|
$
|
(24,172
|
)
|
(34
|
)%
|
|
$
|
101,825
|
|
|
$
|
138,801
|
|
|
$
|
(36,976
|
)
|
(27
|
)%
|
Cable Access
|
26,541
|
|
|
13,263
|
|
|
13,278
|
|
100
|
%
|
|
50,586
|
|
|
26,218
|
|
|
24,368
|
|
93
|
%
|
||||||
Total segment revenue
|
73,994
|
|
|
84,888
|
|
|
(10,894
|
)
|
(13
|
)%
|
|
152,411
|
|
|
165,019
|
|
|
(12,608
|
)
|
(8
|
)%
|
||||||
Amortization of warrants
|
—
|
|
|
(23
|
)
|
|
23
|
|
(100
|
)%
|
|
—
|
|
|
(48
|
)
|
|
48
|
|
(100
|
)%
|
||||||
Total net revenue
|
$
|
73,994
|
|
|
$
|
84,865
|
|
|
$
|
(10,871
|
)
|
(13
|
)%
|
|
$
|
152,411
|
|
|
$
|
164,971
|
|
|
$
|
(12,560
|
)
|
(8
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Segment revenue as a % of total segment revenue:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Video
|
64
|
%
|
|
84
|
%
|
|
|
|
|
67
|
%
|
|
84
|
%
|
|
|
|
||||||||||
Cable Access
|
36
|
%
|
|
16
|
%
|
|
|
|
|
33
|
%
|
|
16
|
%
|
|
|
|
|
Three months ended
|
|
|
|
|
Six months ended
|
|
|
|
||||||||||||||||||
|
June 26, 2020
|
|
June 28, 2019
|
|
Q2 FY20 vs Q2 FY19
|
|
June 26, 2020
|
|
June 28, 2019
|
|
Q2 FY20 YTD vs Q2 FY19 YTD
|
||||||||||||||||
Geography:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Americas
|
$
|
42,307
|
|
|
$
|
42,437
|
|
|
$
|
(130
|
)
|
—
|
%
|
|
$
|
79,957
|
|
|
$
|
76,625
|
|
|
$
|
3,332
|
|
4
|
%
|
EMEA
|
24,714
|
|
|
25,203
|
|
|
(489
|
)
|
(2
|
)%
|
|
52,530
|
|
|
53,281
|
|
|
(751
|
)
|
(1
|
)%
|
||||||
APAC
|
6,973
|
|
|
17,225
|
|
|
(10,252
|
)
|
(60
|
)%
|
|
19,924
|
|
|
35,065
|
|
|
(15,141
|
)
|
(43
|
)%
|
||||||
Total net revenue
|
$
|
73,994
|
|
|
$
|
84,865
|
|
|
$
|
(10,871
|
)
|
(13
|
)%
|
|
$
|
152,411
|
|
|
$
|
164,971
|
|
|
$
|
(12,560
|
)
|
(8
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Regional revenue as a % of total net revenue:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Americas
|
58
|
%
|
|
50
|
%
|
|
|
|
|
53
|
%
|
|
47
|
%
|
|
|
|
||||||||||
EMEA
|
33
|
%
|
|
30
|
%
|
|
|
|
|
34
|
%
|
|
32
|
%
|
|
|
|
||||||||||
APAC
|
9
|
%
|
|
20
|
%
|
|
|
|
|
13
|
%
|
|
21
|
%
|
|
|
|
|
Three months ended
|
|
|
|
|
Six months ended
|
|
|
|
||||||||||||||||||
|
June 26, 2020
|
|
June 28, 2019
|
|
Q2 FY20 vs Q2 FY19
|
|
June 26, 2020
|
|
June 28, 2019
|
|
Q2 FY20 YTD vs Q2 FY19 YTD
|
||||||||||||||||
Gross profit
|
$
|
37,773
|
|
|
$
|
43,928
|
|
|
$
|
(6,155
|
)
|
(14
|
)%
|
|
$
|
74,511
|
|
|
$
|
85,777
|
|
|
$
|
(11,266
|
)
|
(13
|
)%
|
As a percentage of net revenue (“gross margin”)
|
51.0
|
%
|
|
51.8
|
%
|
|
(0.8
|
)%
|
|
|
48.9
|
%
|
|
52.0
|
%
|
|
(3.1
|
)%
|
|
|
Three months ended
|
|
|
|
|
Six months ended
|
|
|
|
||||||||||||||||||
|
June 26, 2020
|
|
June 28, 2019
|
|
Q2 FY20 vs Q2 FY19
|
|
June 26, 2020
|
|
June 28, 2019
|
|
Q2 FY20 YTD vs Q2 FY19 YTD
|
||||||||||||||||
Research and development
|
$
|
19,498
|
|
|
$
|
21,313
|
|
|
$
|
(1,815
|
)
|
(9
|
)%
|
|
$
|
41,621
|
|
|
$
|
42,714
|
|
|
$
|
(1,093
|
)
|
(3
|
)%
|
As a percentage of net revenue
|
26.4
|
%
|
|
25.1
|
%
|
|
|
|
|
27.3
|
%
|
|
25.9
|
%
|
|
|
|
|
Three months ended
|
|
|
|
|
Six months ended
|
|
|
|
||||||||||||||||||
|
June 26, 2020
|
|
June 28, 2019
|
|
Q2 FY20 vs Q2 FY19
|
|
June 26, 2020
|
|
June 28, 2019
|
|
Q2 FY20 YTD vs Q2 FY19 YTD
|
||||||||||||||||
Selling, general and administrative
|
$
|
27,005
|
|
|
$
|
29,319
|
|
|
$
|
(2,314
|
)
|
(8
|
)%
|
|
$
|
58,223
|
|
|
$
|
57,330
|
|
|
$
|
893
|
|
2
|
%
|
As a percentage of net revenue
|
36.5
|
%
|
|
34.5
|
%
|
|
|
|
|
38.2
|
%
|
|
34.8
|
%
|
|
|
|
|
Three months ended
|
|
|
|
|
Six months ended
|
|
|
|
||||||||||||||||||
|
June 26, 2020
|
|
June 28, 2019
|
|
Q2 FY20 vs Q2 FY19
|
|
June 26, 2020
|
|
June 28, 2019
|
|
Q2 FY20 YTD vs Q2 FY19 YTD
|
||||||||||||||||
Video
|
$
|
(4,237
|
)
|
|
$
|
4,459
|
|
|
$
|
(8,696
|
)
|
(195
|
)%
|
|
$
|
(10,504
|
)
|
|
$
|
6,427
|
|
|
$
|
(16,931
|
)
|
(263
|
)%
|
Cable Access
|
(878
|
)
|
|
(7,243
|
)
|
|
6,365
|
|
(88
|
)%
|
|
(4,143
|
)
|
|
(13,040
|
)
|
|
8,897
|
|
(68
|
)%
|
||||||
Total segment operating loss
|
$
|
(5,115
|
)
|
|
$
|
(2,784
|
)
|
|
$
|
(2,331
|
)
|
84
|
%
|
|
$
|
(14,647
|
)
|
|
$
|
(6,613
|
)
|
|
$
|
(8,034
|
)
|
121
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Segment operating income (loss) as a % of segment revenue (“operating margin”):
|
|||||||||||||||||||||||||||
Video
|
(8.9
|
)%
|
|
6.2
|
%
|
|
(15.1
|
)%
|
|
|
(10.3
|
)%
|
|
4.6
|
%
|
|
(14.9
|
)%
|
|
||||||||
Cable Access
|
(3.3
|
)%
|
|
(54.6
|
)%
|
|
51.3
|
%
|
|
|
(8.2
|
)%
|
|
(49.7
|
)%
|
|
41.5
|
%
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 26, 2020
|
|
June 28, 2019
|
|
June 26, 2020
|
|
June 28, 2019
|
||||||||
Total segment operating loss
|
$
|
(5,115
|
)
|
|
$
|
(2,784
|
)
|
|
$
|
(14,647
|
)
|
|
$
|
(6,613
|
)
|
Amortization of warrants
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
(48
|
)
|
||||
Unallocated corporate expenses
|
(84
|
)
|
|
(368
|
)
|
|
(687
|
)
|
|
(726
|
)
|
||||
Stock-based compensation
|
(3,548
|
)
|
|
(2,510
|
)
|
|
(9,807
|
)
|
|
(4,623
|
)
|
||||
Amortization of intangibles
|
(807
|
)
|
|
(2,079
|
)
|
|
(2,462
|
)
|
|
(4,162
|
)
|
||||
Loss from operations
|
(9,554
|
)
|
|
(7,764
|
)
|
|
(27,603
|
)
|
|
(16,172
|
)
|
||||
Non-operating expense, net
|
(4,269
|
)
|
|
(3,384
|
)
|
|
(7,445
|
)
|
|
(6,601
|
)
|
||||
Loss before income taxes
|
$
|
(13,823
|
)
|
|
$
|
(11,148
|
)
|
|
$
|
(35,048
|
)
|
|
$
|
(22,773
|
)
|
|
Three months ended
|
|
|
|
|
Six months ended
|
|
|
|
||||||||||||||||||
|
June 26, 2020
|
|
June 28, 2019
|
|
Q2 FY20 vs Q2 FY19
|
|
June 26, 2020
|
|
June 28, 2019
|
|
Q2 FY20 YTD vs Q2 FY19 YTD
|
||||||||||||||||
Amortization of intangibles
|
$
|
742
|
|
|
$
|
784
|
|
|
$
|
(42
|
)
|
(5
|
)%
|
|
$
|
1,512
|
|
|
$
|
1,572
|
|
|
$
|
(60
|
)
|
(4
|
)%
|
As a percentage of net revenue
|
1.0
|
%
|
|
0.9
|
%
|
|
|
|
|
1.0
|
%
|
|
1.0
|
%
|
|
|
|
|
|
|
Three months ended
|
|
|
|
|
Six months ended
|
|
|
|
|||||||||||||||||
|
June 26, 2020
|
|
June 28, 2019
|
|
Q2 FY20 vs Q2 FY19
|
|
June 26, 2020
|
|
June 28, 2019
|
|
Q2 FY20 YTD vs Q2 FY19 YTD
|
|||||||||||||||
Restructuring and related charges in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cost of revenue
|
$
|
2
|
|
|
$
|
91
|
|
|
$
|
(89
|
)
|
(98
|
)%
|
|
$
|
(71
|
)
|
|
$
|
392
|
|
|
(463
|
)
|
(118
|
)%
|
Operating expenses-Restructuring and related charges
|
82
|
|
|
276
|
|
|
(194
|
)
|
(70
|
)%
|
|
758
|
|
|
333
|
|
|
425
|
|
128
|
%
|
|||||
Total restructuring and related charges
|
$
|
84
|
|
|
$
|
367
|
|
|
$
|
(283
|
)
|
(77
|
)%
|
|
$
|
687
|
|
|
$
|
725
|
|
|
(38
|
)
|
(5
|
)%
|
|
Three months ended
|
|
|
|
|
Six months ended
|
|
|
|
||||||||||||||||||
|
June 26, 2020
|
|
June 28, 2019
|
|
Q2 FY20 vs Q2 FY19
|
|
June 26, 2020
|
|
June 28, 2019
|
|
Q2 FY20 YTD vs Q2 FY19 YTD
|
||||||||||||||||
Provision for income taxes
|
$
|
1,578
|
|
|
$
|
697
|
|
|
$
|
881
|
|
126
|
%
|
|
$
|
2,307
|
|
|
$
|
378
|
|
|
$
|
1,929
|
|
510
|
%
|
Effective income tax rate
|
(11.4
|
)%
|
|
(6.3
|
)%
|
|
|
|
|
(6.6
|
)%
|
|
(1.7
|
)%
|
|
|
|
|
Six months ended
|
||||||
|
June 26, 2020
|
|
June 28, 2019
|
||||
Net cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
890
|
|
|
$
|
(4,646
|
)
|
Investing activities
|
(20,753
|
)
|
|
(2,939
|
)
|
||
Financing activities
|
4,947
|
|
|
(340
|
)
|
||
Effect of foreign exchange rate changes on cash and cash equivalents
|
(398
|
)
|
|
—
|
|
||
Net decrease in cash and cash equivalents
|
$
|
(15,314
|
)
|
|
$
|
(7,925
|
)
|
|
Payments due in each fiscal year
|
||||||||||||||||||
|
Total
Amounts
Committed
|
|
2020 (Remaining six months)
|
|
2021 and 2022
|
|
2023 and 2024
|
|
Thereafter
|
||||||||||
Convertible debt
|
$
|
161,260
|
|
|
$
|
8,053
|
|
|
$
|
37,707
|
|
|
$
|
115,500
|
|
|
$
|
—
|
|
Operating leases
|
43,839
|
|
|
4,866
|
|
|
12,061
|
|
|
9,205
|
|
|
17,707
|
|
|||||
Purchase commitments
|
52,503
|
|
|
34,335
|
|
|
17,944
|
|
|
224
|
|
|
—
|
|
|||||
French debt and other debt
|
20,295
|
|
|
488
|
|
|
15,653
|
|
|
3,528
|
|
|
626
|
|
|||||
Interest on convertible debt
|
14,671
|
|
|
2,132
|
|
|
7,919
|
|
|
4,620
|
|
|
—
|
|
|||||
Other commitments (1)
|
1,954
|
|
|
713
|
|
|
1,190
|
|
|
51
|
|
|
—
|
|
|||||
Avid litigation settlement fees
|
2,000
|
|
|
2,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
French VDP Obligations
|
164
|
|
|
164
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Finance lease
|
22
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
296,708
|
|
|
$
|
52,751
|
|
|
$
|
92,496
|
|
|
$
|
133,128
|
|
|
$
|
18,333
|
|
Other commercial commitments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Standby letters of credit
|
$
|
2,563
|
|
|
$
|
2,068
|
|
|
$
|
495
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total commercial commitments
|
$
|
2,563
|
|
|
$
|
2,068
|
|
|
$
|
495
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
June 26, 2020
|
|
December 31, 2019
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
||||
Purchase
|
$
|
24,415
|
|
|
$
|
14,806
|
|
Sell
|
$
|
1,451
|
|
|
$
|
2,629
|
|
•
|
Declines in demand for our offerings or delays in purchasing decisions as a result of COVID-19, including as a result of social distancing requirements and shelter-in-place orders limiting our ability to deploy our products, and general economic uncertainty causing a number of businesses to delay or reduce costs.
|
•
|
Delays in payments or defaults by our customers or if customers terminate their relationships with us or do not renew their agreements on economic or other terms that are favorable to us.
|
•
|
The responsive measures to the COVID-19 pandemic have caused us to modify our business practices by having employees work remotely, canceling all non-essential employee travel, and cancelling, postponing or holding virtually events and meetings. We may in the future be required to, or choose voluntarily to, take additional actions for the health and safety of our workforce, whether in response to government orders or based on our own determinations of what is in the best interests of our employees. To the extent our current or future measures result in decreased productivity, harm our company culture or otherwise negatively affect our business, our financial condition and operating results could be adversely affected.
|
Exhibit
Number
|
Exhibit Index
|
|
|
4.1#
|
Indenture, dated June 2, 2020, between Harmonic Inc. and U.S. Bank National Association.
|
|
|
4.2#
|
Form of 4.375% Convertible Senior Note due 2022 (included in Exhibit 4.1).
|
|
|
10.1#
|
First Amendment to Credit Agreement, dated as of May 28, 2020, by and between Harmonic Inc. and JPMorgan Chase Bank, N.A.
|
|
|
10.2
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1*
|
|
|
|
32.2*
|
|
|
|
101
|
The following materials from Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 26, 2020, formatted in Inline Extensible Business Reporting Language (iXBRL) include:
|
|
|
|
(i) Condensed Consolidated Balance Sheets at June 26, 2020 and December 31, 2019, (ii) Condensed Consolidated Statements of Operations for the three and six months ended June 26, 2020 and June 28, 2019, (iii) Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 26, 2020 and June 28, 2019, (iv) Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 26, 2020 and June 28, 2019, (v) Condensed Consolidated Statements of Cash Flows for the six months ended June 26, 2020 and March June 28, 2019, and (vi) Notes to Condensed Consolidated Financial Statements.
|
|
|
104
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
|
HARMONIC INC.
|
|
|
|
By:
|
/s/ Sanjay Kalra
|
|
Sanjay Kalra
|
|
Chief Financial Officer
|
|
Date: August 4, 2020
|
(b)
|
he/she has been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of his/her own choice or has elected not to retain legal counsel;
|
(c)
|
he/she understands the terms and consequences of this Agreement and of the releases it contains; and
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Harmonic Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant, and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
By:
|
/s/ Patrick J. Harshman
|
|
Patrick J. Harshman
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Harmonic Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant, and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
By:
|
/s/ Sanjay Kalra
|
|
Sanjay Kalra
|
|
Chief Financial Officer
|
/s/ Patrick J. Harshman
|
Patrick J. Harshman
|
President and Chief Executive Officer
|
/s/ Sanjay Kalra
|
Sanjay Kalra
|
Chief Financial Officer
|