Jump to content

Polycom Reports Fourth Quarter and Fiscal Year 2008 Earnings

2008 Full-Year Revenue Growth of 15 Percent to a Record $1.1 Billion; 2008 Operating Cash Flow of $166.6 Million; Fourth Quarter Revenues of $263.0 Million with Operating Cash Flow of $50.5 Million

PLEASANTON, Calif. - Jan 21, 2009 : Polycom, Inc. (NASDAQ: PLCM), the global leader in telepresence, video and voice communications solutions, today reported its earnings for the fourth quarter ended Dec. 31, 2008.

Fourth quarter 2008 consolidated net revenues were $263.0 million, compared to $263.3 million for the fourth quarter of 2007. Non-GAAP net income for the fourth quarter of 2008 was $35.2 million, or 42 cents per diluted share. This compares to Non-GAAP net income of $38.5 million, or 42 cents per diluted share, for the fourth quarter of 2007. GAAP net income for the fourth quarter of 2008 was $25.7 million, or 30 cents per diluted share, compared to $22.8 million, or 25 cents per diluted share, for the same period last year.

For the year ended Dec. 31, 2008, net revenues were $1.1 billion, compared to $929.9 million for the year ended Dec. 31, 2007. Non-GAAP net income for the year ended Dec. 31, 2008 was $130.4 million, or $1.49 per diluted share, compared to $128.9 million, or $1.37 per diluted share, for the comparable period of 2007. GAAP net income for the year ended Dec. 31, 2008 was $75.7 million, or 87 cents per diluted share, compared to GAAP net income of $62.9 million, or 67 cents 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 product line basis, consolidated net revenues for the fourth quarter of 2008 were comprised of:

  • 67 percent video solutions, or $175.9 million (54 percent video communications, or $141.7 million, and 13 percent network systems, or $34.2 million); and
  • 33 percent voice communications, or $87.1 million.

This compares to the fourth quarter of 2007, in which consolidated net revenues were comprised of:

  • 63 percent video solutions, or $164.9 million (49 percent video communications, or $129.2 million, and 14 percent network systems, or $35.7 million); and
  • 37 percent voice communications, or $98.4 million.

"We are pleased to have surpassed the $1 billion revenue mark in 2008," said Robert Hagerty, Polycom’s chairman and CEO. "As the largest company in the Unified Collaboration industry, Polycom generated year-over-year growth in our Video Solutions business, illustrating the resilience of our fast-ROI video offering. With our Voice business showing more sensitivity to the economic environment, Polycom proactively took action in Q4 to reduce our operating cost structure and, as we announced earlier this month, we have implemented a restructuring plan designed to optimize our cost structure as we move into 2009."

"With our rapid pace of innovation and the full breadth of our offering, we believe Polycom is the best positioned in the industry to deliver the cost-savings benefits of video adoption to our customers. Our strategic partnerships with Avaya, Cisco, IBM, Microsoft, and others enable us to provide integrated solutions that capture the full benefits of Unified Collaboration. These partnerships differentiate Polycom as the solutions provider of choice for companies who describe our collaboration solution as a strategic technology investment. In spite of the challenging economy, through our leading solutions and go-to-market strategy and, of course, our improved cost structure, we expect to continue to gain strength competitively in 2009 and to deliver solid operating results," Hagerty concluded.

"Driven by $263.0 million in revenues and strong operating margins, Polycom generated $50.5 million in positive operating cash flow during the fourth quarter," said Michael Kourey, Polycom's senior vice president, finance and administration, and CFO. "Contributing to Polycom's 44th consecutive quarter of positive operating cash flow was the four day year-over-year improvement in DSO to 44 days and a 3 percent sequential reduction in inventories. Polycom exits 2008 with a strong balance sheet, including $324.5 million in cash and investments and no debt."

About Polycom
Polycom, Inc. (Nasdaq: PLCM) is the global leader in telepresence, video, and voice solutions and a visionary in communications that empower people to connect and collaborate everywhere. Please visit www.polycom.com for more information.

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 resilience of Polycom's video solutions business in the current global economic environment, the optimization of our cost structure in 2009, Polycom as best-positioned in the industry to deliver the cost-savings benefits of video adoption to our customers, and our expectation to continue to gain competitive strength and deliver solid operating results in 2009. 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, potential fluctuations in results and future growth rates, risks associated with general economic conditions, including the impact of the crisis in the worldwide financial markets, the current recession in the United States and negative macroeconomic indicators and recessionary factors globally, the market acceptance of Polycom's products and changing market demands, including demands for differing technologies or product and services offerings, possible delays in the development, availability and shipment of new products, increasing costs and differing uses of capital, changes in key personnel and the impact of recent restructuring actions, and the impact of global conflicts such as those in the Middle East 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 Sept. 30, 2008, and in other reports filed by Polycom with the SEC. Polycom disclaims any intent or obligations to update these forward-looking statements.

As has been noted on the Company's web site since Jan. 14, 2009, Polycom will hold a conference call today, Jan. 21, 2009, at 5:00 p.m. EDT/2:00 p.m. PT to discuss its fourth quarter earnings. Robert Hagerty, chairman, president and CEO, and Michael Kourey, chief financial officer, will host the conference call. You may participate by viewing the webcast at www.polycom.com or, for callers in the US and Canada, by calling 800.954.0648; and for callers outside of the US and Canada, by calling 212.231.2900, with the passcode being 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 21411274. A replay of the call will also be maintained on our website for twelve months at www.polycom.com under Investor Relations – Earnings Calls-Archives.

© 2009 Polycom, Inc. All rights reserved. POLYCOM®, 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.


Contacts