Polycom Inc. Reports Operating Results (10-Q)
Polycom Inc. has a market cap of $2.81 billion; its shares were traded at around $33.35 with a P/E ratio of 44.5 and P/S ratio of 2.9. Polycom Inc. had an annual average earning growth of 5.6% over the past 10 years.PLCM is in the portfolios of John Buckingham of Al Frank Asset Management, Inc., Jeremy Grantham of GMO LLC, Chuck Royce of Royce& Associates, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations: Our Video Communications Solutions, Voice Communications Solutions and Services segments accounted for 54%, 29% and 17%, respectively, of our revenues during the three months ended March 31, 2010, compared with 54%, 27% and 19%, respectively, of our revenues in the three months ended March 31, 2009. See Note 12 of Notes to Condensed Consolidated Financial Statements for further information on our segments, including a summary of our segment revenues, segment contribution margin and segment inventory.
Video Communications Solutions segment revenues include revenues from sales of our video communications and network systems product lines. Revenue from video communications products increased to $118.2 million for the three months ended March 31, 2010 from $101.5 million in the year ago period, a 16% increase. The revenue increase in the three month period was primarily due to an increase in sales volumes of our HDX® product family and new video communications products, such as our Polycom® CX5000 unified conference station, QDX 6000 video conferencing system and VVX 1500 business media phone, partially offset by lower sales volumes of our immersive telepresence products, and decreases in sales volumes of our VSX® product family due to the transition to HD products. While we experienced strong growth in orders of our immersive telepresence products both sequentially and year-over-year in the first quarter of 2010, revenues from our immersive telepresence products in the first quarter of 2010 were down sequentially and year-over-year as revenue recognized in any given period will fluctuate depending on a number of factors, including customer request dates and timing of product acceptance where contractually required. Revenues from our network systems products for the three months ended March 31, 2010 were $30.1 million, up 48% from revenues of $20.3 million in the comparable 2009 period. The revenue increase is primarily due to increases in our video network systems and software revenues, which were driven primarily by the introduction of new products and enhancements to existing products.
Voice Communications Solutions product revenues in the three month period increased by $18.3 million or 30% as compared to the comparable year ago period. This increase is primarily due to increased sales volumes of our voice communications products, including our Voice-over-IP, circuit-switched, wireless and installed voice product lines. Revenues from our Voice Communications Solutions declined year-over-year from the fourth quarter of 2008 through the second quarter of 2009. We believe these declines were primarily a result of the global economic climate and that this business is now improving as the economy improves. In the third quarter of 2009, we experienced sequential growth for the first time since the second quarter of 2008. We have continued to experience sequential growth with increases of 4% and 8% in the fourth quarter of 2009 and first quarter of 2010, respectively.
International revenues, defined as revenues outside of the U.S. and Canada, accounted for 50% and 47% of total revenues for the three month periods ended March 31, 2010 and 2009, respectively. On a regional basis, North America, EMEA, Asia Pacific and Latin America accounted for 50%, 25%, 21% and 4%, respectively, of our total revenues for the three months ended March 31, 2010. North America, EMEA, Asia Pacific and Latin America revenues increased 16%, 17%, 39% and 90%, respectively, over the comparable 2009 period. Revenue increases across these geographic regions were across all three of our segments.
During the three months ended March 31, 2010, one channel partner accounted for 13% of our total net revenues, 13% of our Video Communications Solutions segment revenues and 17% of our Voice Communications Solutions revenue. No one customer accounted for more than 10% of our Services segment revenues during the three months ended March 31, 2010. During the three months ended March 31, 2009, no one customer accounted for more than 10% of our total net revenues or of our Voice Communications Solutions or Services segment revenues. One channel partner accounted for 11% of our Video Communications Solutions segment revenues during the three months ended March 31, 2009. We believe it is unlikely that the loss of any of our channel partners would have a long term material adverse effect on our consolidated net revenues or segment net revenues as we believe end-users would likely purchase our products from a different channel partner. However, a loss of any one of these channel partners could have a material adverse impact during the transition period.
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