Posts Tagged ‘Peter Alexander’

Harmonic Invests in Vislink, Signs £2 Million OEM Order for Pebble Beach Software

Broadcast technology vendor financials, Broadcast Vendor M&A | Posted by Joe Zaller
Sep 08 2014

Playout and compression specialist Harmonic has acquired 3.6% of UK-based Vislink plc, through the purchase of 4 million new ordinary shares valued at £0.50 each.

Vislink says it will use the investment from Harmonic to further strengthen its balance sheet.

In parallel with the investment, Harmonic has also signed £2m OEM contract with Vislink, through which Harmonic sell playout solutions from Pebble Beach Systems to broadcast industry customers. Vislink acquired Pebble Beach in March 2014 for $24.7m.

Under the terms of the OEM deal, Harmonic will place an initial order for software licenses of £2.0m, receivable in 2014, to secure Pebble Beach Systems’ products for onward sale in its integrated package.

Vislink says the deal with Harmonic “should contribute to improved profitability and penetration of Pebble Beach Systems software globally in the second half [of 2014].”

“This agreement is another key strategic partnership for Vislink and reinforces our strategy of moving into software and providing customer centric, solution-led and best-in-class products which enable Vislink to successfully capture new expanded markets,” said Vislink Executive Chairman John Hawkins. “This agreement will also provide significant new channels to market for our software solutions. We are delighted to welcome Harmonic as a partner and shareholder.”

“We are pleased to seal this strategic partnership with Vislink and become aligned with their interests as a shareholder,” said Harmonic SVP Peter Alexander. “We are both innovation leaders in video, and see significant synergy across our customer base and product lines. Together we can grow market share and broaden our addressable markets globally.”

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Related Content:

Press Release: Pebble Beach Systems To Partner With Harmonic Inc

Broadcast Vendor M&A: Vislink Buys Pebble Beach for $24.7 Million

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Harmonic Revenue Dips 2 Percent in Q3 2012

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Oct 24 2012

Harmonic announced that its revenue for the third quarter of 2012 was $136.7m, down 2% versus the same period a year ago, and up 3% versus the previous quarter.

The GAAP net loss for the quarter was $8.2m, or $(0.07) per share, compared with a GAAP net income $3.5m or $0.03 per share last year, and GAAP net income of $17,000, or $0.00 per share last quarter.

Non-GAAP net income for the third quarter was $8.1m or $0.07 per share, versus non-GAAP net income of $12.7m, or $0.11 per share last year, and non-GAAP net income of $7.2m or $0.06 per share last quarter

The results were in-line with the company’s previously issued guidance of revenue in the range of $130m to $140m, and also in-line with the consensus expectations of equity analysts.

On a GAAP basis, gross margins and operating margins for the quarter were 44% and -1%, compared to 46% and 3%, respectively, for the same period of 2011, and 43% and -2% respectively last quarter.

Non-GAAP gross margins and operating margins for the quarter were 48% and 8%, versus 51% and 12%, respectively last year, and 48% and 7%, respectively last quarter.

Company CFO Carolyn Aver attributed the decrease in gross margins to product mix in the quarter, as well as shift of revenue to emerging markets where ASPs are lower.

 

On a product-line basis:

  • Video processing represented 37% of total revenue versus 41% last year, and 45% last quarter

 

  • Production and playout (Omneon) represented 17% of total revenue versus 19% last year and 16% last quarter

 

  • Edge and access revenue represented 29% of total revenue versus 28% last year and 25% last quarter.

 

  • Services represented 17% of total revenue, versus 12% last year and 14% last quarter.  This represents record service revenue for the company.  Aver said that service revenue grew 20% from the second quarter and 35% from last year’s third quarter. “Services in general and professional services specifically have been an area of focus for us. This quarter’s revenue represents the successful completion of several projects. I do expect that service revenue will decrease slightly in Q4,” she said.

 

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On a segment basis,

  • Cable was 50% of revenue, versus 45% last year and 48% last quarter.  The company said that demand from cable operators was particularly strong for its edge & products, and it believes it is gain market share in this area

 

  • Satellite & telco accounted was 20% of revenue versus 25% last year and 21% last quarter

 

  • Broadcast and media was 3o% of revenue, versus 30% last year, and 31% last quarter

 

Although the company did say it had won some multi-screen deals in the quarter, Harmonic CEP Patrick Harshman said that “customers are generally still struggling to find the right business model necessary to justify volume investments in multi-screen and over the top capabilities.”

International sales accounted for 58% of revenue in the quarter versus 51% during the same period a year ago, and 54% last quarter. This company said the increase is primarily a result of strong growth in Asia-Pacific and some emerging market growth, offset in part by year-over-year declines in Europe.

Harshman said that Harmonic continues to see strong growth in US from cable and telco customers, but that demand from US satellite and media companies was down year-over-year.

Bookings in the quarter were approximately $128.7m, down 9% versus last year, and down 8% versus last quarter.  The company said that new orders from Europe were down over 15% year-over-year, but that it gained market share in Europe, in cable, edge & access, and in multi-screen. Order growth in Asia and other emerging markets was “solid.”

Total backlog and deferred revenue was $137.7m at the end of the quarter, up 10% versus last year, and down 6% versus the previous quarter when it was an all-time high for the company.

  

Guidance:

Harmonic anticipates net revenue in the range of $132 million to $142 million for the fourth quarter of 2012. GAAP gross margins and operating expenses for the fourth quarter of 2012 are expected to be in the range of 44% to 46% and $60 million to $61.5 million, respectively. Non-GAAP gross margins and operating expenses for the fourth quarter of 2012, which will exclude stock-based compensation and the amortization of intangibles, are anticipated to be in the range of 48% to 50% and $55 million to $56.5 million, respectively.

 

“Harmonic delivered sequential revenue and earnings growth, and more than $20 million of cash from operations, in what continues to be a challenging economic environment,” said Harshman. “Our competitive position remains strong, and we believe we gained market share in both domestic and international markets. We also made significant progress on new product developments that position Harmonic to capitalize on the next wave of investment by our customers, including cable access (CCAP), high efficiency video coding (HEVC) for next-generation Internet-delivered and Ultra HD video, and a further strengthened solution portfolio enabling multiscreen video services.”

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Related Content:

Press release: Harmonic Announces Third Quarter 2012 Results

Harmonic Q3 2012 Earnings Call Presentation

Harmonic Q3 2012 Conference Call Transcript

Previous Quarter: Euro Weakness Offsets Strength in US for Harmonic in Q2 2012

Previous Year: Harmonic Reports Strong Q3 2011 Results, Driven by Strong Performance in Americas

 

© Devoncroft Partners.  All Rights Reserved

 

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Impressions of IBC 2012: M&A, Cloud, Multi-Platform, 4K, Efficient Operations, CiaB, and the “Return of Grass Valley”

broadcast industry technology trends, broadcast industry trends, broadcast technology market research, content delivery, market research, technology trends | Posted by Joe Zaller
Sep 20 2012

A previous version of this article appeared in the “Tech Thursday” Spotlight Section of TVNewsCheck

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Against the backdrop of the ongoing European debt crisis and the afterglow of the 2012 Olympics, nearly 51,000 visitors made their way to Amsterdam for the annual IBC trade show. Major themes of the five-day broadcast technology jamboree included vendor consolidation, buzz about new technologies for multi-screen content delivery and social TV, futuristic technology demonstrations, and several important new product introductions.

The broadcast vendor community got a little less fragmented on the first morning of IBC, with a merger announcement by two Norway-based video transport technology providers — Nevion and T-VIPS

Although no additional deals were unveiled at the show, vendor consolidation was one of the most discussed themes at IBC, and according to statements made by some of the leading vendors, there is potentially a lot more consolidation on the way.   

Newly acquired Miranda technologies made its debut as a “Belden brand” at IBC, and Belden EVP Denis Suggs was on hand at the show to meet customers and explain his company’s vision for the broadcast industry, and why they decided to buy Miranda in one of the largest broadcast technology M&A deals in recent years. 

In a nutshell, Belden saw the opportunity to acquire a cash-generating company with a top-class management team that’s growing faster than the overall market and jumped at it. Including Miranda, Belden now generates approximately $450 million a year in broadcast-related revenue, making it one of the industry’s largest players, and it appears they are not done doing deals in this space. 

Suggs said Belden views Miranda as a platform from which is can further expand its broadcast industry operations, and that it intends to support Miranda’s existing plan for further acquisitions.

Grass Valley CEO Alain Andreoli echoed a similar sentiment at his company’s press conference. He said that Francisco Partners, the private equity firm that owns Grass Valley, has a $3 billion fund behind it and will support Grass Valley’s efforts to become an industry consolidators.

When the dust settles, he said, Grass Valley may not be the largest player, but it will certainly be in the top three. Last year, Grass Valley bought PubliTronic, a provider of channel-in-a-box (CiaB) technology, to gain a larger foothold in the playout market. Expect to see Grass Valley and other players making additional strategic moves that help them enter attractive new market spaces.

But most IBC M&A talk centered on Harris Broadcast, which is currently being divested by its parent company. Although rumors were flying at the show about who might buy the division, its executives were tight-lipped. Harris Broadcast President Harris Morris would only say that the deal is progressing according to plan, and is on track to be completed as soon as the end of 2012.

New products and services based on cloud technology, multi-platform content delivery and social TV services dominated many demonstration and hallway conversations at IBC, particularly in the “Connected World” pavilion, where dozens of new and established firms displayed a host of products aimed at securing a place in this emerging ecosystem.

Despite the enthusiasm of vendors, many buyers publicly and privately expressed caution about the technology.

Critics of cloud technology cited immature technology, bandwidth limitations, security, and an unproven business case as barriers to its adoption. Likewise, broadcasters and content owners expressed concern over the “disconnect” between the desire of end-users to receive and consume video content on an ever-increasing number personal devices, and the ability of broadcasters to create sustainable and profitable multi-platform business models.

Cloud-based discussions at IBC ranged from real-world case studies of how EVS helped broadcasters set up private clouds to facilitate remote production of the Euro 2012 soccer championships and London Olympics, to practical solutions from Signiant and Aspera for managing the delivery of file-based content over IP-enabled and cloud-based infrastructure, to new solutions for cloud-based video production.

Cloud-based production is an emerging trend, but initiatives such as the ‘Adobe Anywhere’ initiative will prove to be a catalyst in this area. Taking cloud-based production to the “next level” are new firms like VC-backed start-up A-Frame, which is building from the ground-up a complete cloud-based video production environment that marries the experience of broadcast and post-production experts with forward-thinking IT-based software experts. 

On the multi-screen front, Ericsson introduced its first encoder based on HEVC/H.265 compression technology. The company says that its HEVC implementation offers the potential for users to reduce bandwidth by up to 50%, thereby enabling more efficient delivery of content over multiple platforms, including mobile networks.

Harmonic unveiled a new version of its ProMedia transcoder, aimed at enabling its customers to deliver an integrated multi-screen experience to their subscribers. Harmonic also introduced new members of its senior management team: CMO Peter Alexander, and CTO Krish Padmanabhan, who recently joined the company from Cisco and NetApp, respectively.

Noticeable by their absence on the Harmonic booth at IBC were the familiar Omneon and Rhozet brand names, which have now been absorbed into Harmonic. “Harmonic is a branded house, not a house of brands, and our singular focus is delivering excellent video quality to consumers everywhere,” said Alexander.

The Sony/SES Astra demonstration of live delivery of 4K images over satellite drew a lot of attention.

For many years, 4K images have been trade show “eye candy” for visitors, but at IBC 2012 Sony and SES showed that technology exists today to transmit high quality 4K images over satellite at a manageable 50mbit/s using h.264 compression technology.  The stunning live video images were delivered via an SES satellite to an 84-inch Sony Bravia 4K display.

The demo prompted speculation that 4K will be the “next HD” in terms of consumer adoption and broadcast infrastructure upgrades. Other observers took a more practical approach, saying that the industry might see 4K being used as a high-end production format in near to mid term, but that it will be a long time before broadcasters who have already spent millions on the transition to HDTV decide to upgrade again to 4K.

Indeed, when it comes to broadcast infrastructure upgrades it is operational efficiency, not higher resolution, which appears to be the primary demand of broadcasters. Thus, many vendors at IBC were promoting solutions designed to help broadcasters transition their operations to file-based and IT-oriented workflows. 

One of the ongoing initiatives in this area has been the development by a large number of vendors of integrated IT-based playout technologies, more commonly known as channel-in-a-box (CiaB).  These systems offer the promise of increased operational efficiency and significant cost savings through the integration of previously disparate playout and master control functionality into a single IT-based platform. Over the past several years, major vendors including Grass Valley, Miranda, Snell, Harmonic, and Evertz have offered products.

At IBC 2012, Harris became the latest entrant into the market with the launch of Versio, a CiaB system based on several of the company’s existing technology platforms including the Nexio server family, ADC automation, and Inscriber graphics. 

When describing the new Versio product at the company IBC press conference, Harris Morris said the No. 1 requirement for automated IT-based playout systems is reliability, and that this is an area where Harris Broadcast excels. Morris also emphasized that CiaB platforms rely heavily on automation technology, where Harris Broadcast is an established leader, making the company a natural choice for broadcasters considering integrated IT-based playout.

Although Harris Broadcast touted the fact that their Versio platform is based on the company’s existing technology platforms, it stopped well short of saying that the new system is a direct replacement for its current products, particularly its popular Nexio server family.

Instead the company described Versio as a robust cost-effective way for broadcasters to quickly add new services and digital subchannels channels, and to provide backup in emergencies.

“Channel-in-a-box should be about opening up new possibilities rather than limiting how a broadcaster can operate across multiple on-air scenarios,” said Andrew Warman, senior product manager at Harris Broadcast. “It’s limiting to look at channel-in-a-box as a system replacement for servers, automation, and other play-to-air systems. Broadcasters need freedom to build appropriate workflows for their operations, including external components.”

However, other vendors clearly see the CiaB market differently, and have taken a very different approach than Harris Broadcast, especially those firms that do not have an existing playout server business to protect. 

Snell Chief Architect Neil Maycock said that his company’s ICE platform is not only “ready for prime-time,” it is on the air today delivering high value content for major broadcasters.  Maycock also said that ICE has a unique architecture that enables it to scale from a single channel implementation, through a multi-location centralcasting model, to a large multi-channel playout environment.

PlayBox CEO Vassil Lefterov said he has built his entire business on disrupting the traditional server-based playout market. “We believe our singular focus on this application is a key advantage,” he said.  “Playbox has thousands of live channels on the air today and is working to re-define playout operations for many of our customers.”

Grass Valley, which like Harris has a significant video server business, took a more pragmatic approach.  SVP and CMO Graham Sharp said that “it’s likely CiaB and other IT-based playout systems may ultimately impact everyone’s server business, so we’ve taken the decision to cannibalize our own products where necessary by embracing IT technology, because if we don’t do it to ourselves someone else will.” 

Grass Valley was among the vendors with significant new products. Introductions included a new LDX camera platform that scales from a basic model to a high-end super-slow motion system; a new video server family, and brand new electronics for the Kayenne and Karrera production switchers.  Grass Valley said all its new products feature native 1080p processing, and provide straightforward upgrades via software.

Grass Valley also made bold claims about its future product plans, stating that by 2014 it will have replaced its entire portfolio with all new 1080p, IT-focused products. 

GV’s Sharp also hinted at a major NAB 2013 announcement from Grass Valley: “Next year we will introduce a completely new integrated IP-based platform that is totally format agnostic.” he said.  “We believe this new platform will enable a new way of working that we call non-linear production….”

All Grass Valley products, including those launched at IBC 2012, will be compatible with the new architecture, he said.

Sharp concluded GV press conference by saying: “If there is one take-away from this presentation about Grass Valley, it’s this: We’re back.”

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© Devoncroft Partners. All Rights Reserved.

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Euro Weakness Offsets Strength in US for Harmonic in Q2 2012

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Jul 25 2012

Harmonic announced that its revenue for the second quarter of 2012 was $132.6m, down 1% versus the same period a year ago, and up 4% versus the previous quarter

GAAP net income for the quarter was $17,000, or $0.00 per share, versus GAAP net income of $400,000 or $0.00 per share during the same period a year ago.   Non-GAAP net income for the quarter was $7.2m or $0.06 per share, versus non-GAAP net income of $10.5 million, or $0.09 per share last year

The results were in-line with the company’s previously issued guidance of revenue $130m to $140m, but below the consensus expectations of equity analysts who were looking for revenue of $135m and non-GAAP net income of $0.07 per share.

On a GAAP basis, gross margins and operating margins for the quarter were 43% and -2%, versus 46% and 1%, respectively, last year; and 42% and -7% last quarter.  Non-GAAP gross margins and operating margins for the quarter were 48% and 7%, versus 51% and 11%, respectively last year.

Company CFO Carolyn Aver attributed the decrease in gross margins to product mix in the quarter, as well as the competitive environment, particularly in emerging markets.   

When asked on the company’s conference call with equity analysts about competitive pricing leading to lower gross margins, Harmonic CEO Patrick Harshman said emerging markets were particularly competitive.  However Harshman then went on to describe these markets as “beachfront property” where there is intense competition on the part of vendors to “get in on the foundation as new operators launch services and begin to expand.” Harshman went on to say that these market are strategically important and offer long-term growth potential. “We believe that being present as we are and as increasingly in places like Southeast Asia, in Brazil, in India, we think it’s very strategically significant. So, well, we’re not pleased with the gross margin, we believe the strategic value of the footprint that we’re establishing in these markets is quite valuable and important.”

On a product-line basis, video processing represented 45% of total revenue, production and playout (Omneon) represented 16% of total revenue, and edge and access revenue represented 25% of total revenue. Services represented 14% of total revenue and grew in absolute dollars.

On a segment basis, cable accounted for 48% of revenue, satellite & telco accounted for 21% of revenue, and broadcast and media accounted for 31% of revenue

International sales accounted for 54% of revenue in the quarter versus 59% during the same period a year ago, due primarily by weakness in Europe versus relative strength in the US.  More specifically, the company said that its revenue in the US grew by 10% in the quarter, but was offset by a 9% decline in Europe.  Service revenue in the quarter grew 13% versus last year, and the company said that it won more than 25 new projects for OTT video deployments, many at existing customers. 

Bookings in the quarter were approximately $139.5m, up 6% versus last year.  Harmonic said its total backlog of orders and deferred revenue now stands at $146m, an all-time record for the company. 

 

Omneon Performance

When asked by an analyst about the performance of Omneon, Harshman said the integration is “still a work in process,” and that Harmonic has been successful getting the Omneon sales force to take the historic Harmonic product line, including video processing and multi-screen products into the media and broadcast accounts, but he acknowledged that Harmonic  is doing somewhat less of a good job kind of cross selling the Omneon products the other way.

However Harshman went on to hint at some exciting prospects for the Omneon business, saying  “One of the kind of the apples in our eyes in terms putting Harmonic and Omneon together was to really to develop a whole next generation of – a new class of products that actually married or integrated historically disparate technologies. And well we are not prepared here to announce to anything yet. We are working in earnest on new products that really break down some barriers and we will really deliver I think exceptional, operational as well as capital saving to our customers that unify and integrate historically Harmonic and Omneon technologies. I think this is going to be really unique and powerful for us as well as our customers and well, we’re pretty excited about that.”

 

Senior Management & Board Changes:

Separately, the company announced several changes to its senior management team and board of directors. Longtime Harmonic executive Nimrod Ben-Natan was named SVP and GM of the company’s new Edge and Access business unit.  Cisco Systems alum Peter Alexander was named Harmonic’s new SVP and CMO, replacing Geoff Stedman who left the company in April 2012.   Joining from NetApp is Krishnan Padmanabhan who was named SVP of video products. In addition to these executive appointments, Mitzi Reaugh, senior vice president, strategy and business development at Miramax, has joined harmonic’s board of directors.

 

Guidance:

Harmonic said it anticipates net revenue in a range of $130m to $140m for the third quarter of 2012. GAAP gross margins and operating expenses for the third quarter of 2012 are expected to be in the range of 43% to 45% and $61 million to $62 million, respectively. Non-GAAP gross margins and operating expenses for the third quarter of 2012, which will exclude stock-based compensation and the amortization of intangibles, are anticipated to be in the range of 47.5% to 49.5% and $55 million to $56 million, respectively.

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Related Content:

 Press release: Harmonic Announces Second Quarter 2012 Results

 Harmonic Q2 2012 Conference Call Transcript

 Harmonic Announces $25 Million Stock Buyback Program

 Press release: Harmonic Adds Executive and Board Leadership

 Previous Quarter: Harmonic Q1 2012: Weakness in Europe Results in 4% Revenue Decline

 Previous Year: Harmonic Q2 2011 Revenues Falls Short of Estimates

 

© Devoncroft Partners.  All Rights Reserved

 

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