Polycom Q4 2009 Earnings

Consolidated Fourth Quarter Revenues Return to Year-Over-Year Growth at $268 Million; Revenue Growth of 10 Percent Quarter-to-Quarter; Record Quarterly Operating Cash Flow of $68 Million

Polycom, Inc. (Nasdaq: PLCM), the global leader in telepresence, video and voice communications solutions, has reported its earnings for the fourth quarter ended 31 December 2009.

Fourth quarter 2009 consolidated net revenues were $268 million, compared to $263 million for the fourth quarter of 2008. Non-GAAP net income for the fourth quarter of 2009 was $28 million, or 33 cents per diluted share. This compares to Non-GAAP net income of $35 million, or 42 cents per diluted share, for the fourth quarter of 2008. GAAP net income for the fourth quarter of 2009 was $13 million, or 15 cents per diluted share, compared to $26 million, or 30 cents per diluted share, for the same period last year.

For the year ended 31 December 2009, net revenues were $967 million, compared to $1,069 million for the year ended 31 December 2008. Non-GAAP net income for the year ended 31 December 2009 was $102 million, or $1.19 per diluted share, compared to $130 million, or $1.49 per diluted share, for the comparable period of 2008. GAAP net income for the year ended 31 December 2009 was $50 million, or 58 cents per diluted share, compared to GAAP net income of $76 million, or 87 cents per diluted share, for the same period last year.

On a product line basis, consolidated net revenues for the fourth quarter of 2009 were comprised of:
    70 percent video solutions, or $187 million (53 percent video communications, or $143 million, and 17 percent network systems, or $44 million); and
    30 percent voice communications, or $81 million.

On a product line basis, consolidated net revenues for the fourth quarter of 2008 were comprised of:
    67 percent video solutions, or $176 million (54 percent video communications, or $142 million, and 13 percent network systems, or $34 million); and
    33 percent voice communications, or $87 million.

“Polycom’s strategic investment plan announced last quarter has already yielded positive results, evidenced by double-digit sequential revenue growth and record backlog during the fourth quarter,” said Robert Hagerty, Polycom chairman and CEO. “We added go-to-market coverage in key geographies and verticals and deepened our strategic partnerships, all of which helped to accelerate broad-based improvements in our revenue engine and solutions-selling capability. With our thriving go-to-market team and best of breed product portfolio, we are enabling our growing customer base to capture the benefits of Unified Collaboration in meeting rooms, at the desktop, and while mobile.”

“A critical component of our investment plan is building an ecosystem of strategic partners to deliver customers the best and most integrated collaboration solutions. This increased investment in time and resources has resulted in several powerful partnerships, including Avaya, BT, IBM, Juniper and Siemens. In combination with our improved go-to-market capability, our strategic partnerships are enabling Polycom to deliver an open architecture solution that is easy to adopt and use. As the largest pure play Unified Collaboration company with an open platform, we are solidifying our role as the ecosystem’s partner of choice,” Hagerty concluded.

“Strong customer demand, supported by our investment plan, fueled our revenue growth and drove record order backlog and deferred revenues,” said Michael Kourey, Polycom senior vice president, finance and administration, and CFO. “As a result of this operating performance and working capital management, we generated a record positive operating cash flow of $68 million, representing Polycom’s 48th consecutive quarter of positive operating cash flow. We exited the quarter with $467 million in cash and investments and no debt.”