Polycom Inc. (PLCM, Financial) filed Quarterly Report for the period ended 2009-03-31.
Polycom Inc. develops manufactures and markets a full range ofhigh-quality media-rich communication tools and network solutions. The company's broadband communication solutions enable business users to immediately realize the benefits of video voice and data over rapidly growing converged networks. The company is the leading videoconferencing and voice conferencing product provider and have recently entered the DSL access market particularly in the area of integrated voice appliances and broadband access devices. Polycom Inc. has a market cap of $1.56 billion; its shares were traded at around $18.64 with a P/E ratio of 19 and P/S ratio of 1.5. Polycom Inc. had an annual average earning growth of 19.1% over the past 5 years.
Video Solutions segment revenues include revenues from sales of our video communications and infrastructure product lines. Revenue from video communications products decreased to $101.5 million for the three months ended March 31, 2009 from $113.8 million in the year ago period, an 11% decrease, primarily due to a decrease in sales volumes of our group video products, which consisted primarily of our HDX and VSX® product families. Revenues from our infrastructure products for the three months ended March 31, 2009 were $20.3 million, up 16% from revenues of $17.5 million in the comparable 2008 period, due to increases in our voice infrastructure and software revenues, partially offset by a decrease in video infrastructure revenues.
International sales, or revenues outside of the U.S. and Canada, accounted for 47% of total revenues for each of the three month periods ended March 31, 2009 and 2008, respectively. On a regional basis, North America, Europe, Asia Pacific and Latin America accounted for 53%, 25%, 19% and 3%, respectively, of our total revenues for the three months ended March 31, 2009. North America, Europe, Asia Pacific and Latin America revenues decreased 13%, 17%, 6% and 20%, respectively, in the three months ended March 31, 2009 over the comparable 2008 period. Revenues in North America, Europe, Asia Pacific and Latin America decreased in the three months ended March 31, 2009 over the comparable 2008 period and sequentially from the fourth quarter of 2008 primarily as a result of the global economic climate. During the three months ended March 31, 2009, our European revenues included a $6.1 million benefit related to our hedging activities compared to a $0.4 million decrement to revenue during the three months ended March 31, 2008. In both the first quarter of 2009 and 2008, revenues from sales denominated in Euros and British Pounds comprised less than 20% of our total worldwide revenues. The impact in any given quarter of our hedging programs is dependent upon a number of factors, including the actual level of foreign currency denominated revenues, the percentage of actual revenues covered by our hedge contracts, the exchange rate in our underlying hedge contracts and the actual exchange rate during the quarter. Based upon our outstanding hedge contracts, we anticipate that the hedging benefit to our revenues will likely decrease throughout the remainder of 2009, depending on the future exchange rates of the U.S. dollar versus the Euro and the British Pound, which would also have a negative impact on our gross margins. See Note 9 of Notes to Condensed Consolidated Financial Statements for further information on our hedging activities.
During the three months ended March 31, 2009 and 2008, 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 Solutions segment revenues during the three months ended March 31, 2009 and 2008. 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. We also sell our voice infrastructure products directly to end-users and the revenues in the Video Solutions segment from end-users are subject to more variability than our revenues from our reseller customers.
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Polycom Inc. develops manufactures and markets a full range ofhigh-quality media-rich communication tools and network solutions. The company's broadband communication solutions enable business users to immediately realize the benefits of video voice and data over rapidly growing converged networks. The company is the leading videoconferencing and voice conferencing product provider and have recently entered the DSL access market particularly in the area of integrated voice appliances and broadband access devices. Polycom Inc. has a market cap of $1.56 billion; its shares were traded at around $18.64 with a P/E ratio of 19 and P/S ratio of 1.5. Polycom Inc. had an annual average earning growth of 19.1% over the past 5 years.
Highlight of Business Operations:
Our Video Solutions, Voice Communications Solutions and Services segments accounted for 54%, 27% and 19%, respectively, of our revenues during the three months ended March 31, 2009, compared with 51%, 35% and 14%, respectively, of our revenues in the three months ended March 31, 2008. 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 Solutions segment revenues include revenues from sales of our video communications and infrastructure product lines. Revenue from video communications products decreased to $101.5 million for the three months ended March 31, 2009 from $113.8 million in the year ago period, an 11% decrease, primarily due to a decrease in sales volumes of our group video products, which consisted primarily of our HDX and VSX® product families. Revenues from our infrastructure products for the three months ended March 31, 2009 were $20.3 million, up 16% from revenues of $17.5 million in the comparable 2008 period, due to increases in our voice infrastructure and software revenues, partially offset by a decrease in video infrastructure revenues.
International sales, or revenues outside of the U.S. and Canada, accounted for 47% of total revenues for each of the three month periods ended March 31, 2009 and 2008, respectively. On a regional basis, North America, Europe, Asia Pacific and Latin America accounted for 53%, 25%, 19% and 3%, respectively, of our total revenues for the three months ended March 31, 2009. North America, Europe, Asia Pacific and Latin America revenues decreased 13%, 17%, 6% and 20%, respectively, in the three months ended March 31, 2009 over the comparable 2008 period. Revenues in North America, Europe, Asia Pacific and Latin America decreased in the three months ended March 31, 2009 over the comparable 2008 period and sequentially from the fourth quarter of 2008 primarily as a result of the global economic climate. During the three months ended March 31, 2009, our European revenues included a $6.1 million benefit related to our hedging activities compared to a $0.4 million decrement to revenue during the three months ended March 31, 2008. In both the first quarter of 2009 and 2008, revenues from sales denominated in Euros and British Pounds comprised less than 20% of our total worldwide revenues. The impact in any given quarter of our hedging programs is dependent upon a number of factors, including the actual level of foreign currency denominated revenues, the percentage of actual revenues covered by our hedge contracts, the exchange rate in our underlying hedge contracts and the actual exchange rate during the quarter. Based upon our outstanding hedge contracts, we anticipate that the hedging benefit to our revenues will likely decrease throughout the remainder of 2009, depending on the future exchange rates of the U.S. dollar versus the Euro and the British Pound, which would also have a negative impact on our gross margins. See Note 9 of Notes to Condensed Consolidated Financial Statements for further information on our hedging activities.
During the three months ended March 31, 2009 and 2008, 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 Solutions segment revenues during the three months ended March 31, 2009 and 2008. 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. We also sell our voice infrastructure products directly to end-users and the revenues in the Video Solutions segment from end-users are subject to more variability than our revenues from our reseller customers.
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