Polycom, Inc. (NASDAQ:PLCM) Q4 2014 Earnings Conference Call - Final Transcript

Jan 22, 2015 • 05:00 pm ET


Polycom, Inc. (NASDAQ:PLCM) Q4 2014 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by. Welcome to Polycom's Fourth Quarter 2014 Financial Results Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded Thursday, January 22, 2015.

I would now like to turn the call over to Laura Graves. Please go ahead.

Laura Graves

Good afternoon. And welcome to the conference call for Polycom's fourth quarter and calendar year end 2014 financial results. This is Laura Graves and here with me today are Peter Leav, our President and Chief Executive Officer; and Laura Durr, our Chief Financial Officer.

Today's press release and the accompanying slide presentation can be found in the Investor Relations portion of our Web site. Investors and other interested parties should refer to these materials for additional supplemental information. These materials and a replay of this conference call will be maintained on our Web site for up to 12 months.

(Forward-Looking Cautionary Statement)

Now, to begin commentary on our Q4 and calendar 2014 financial results, here is Polycom's President and CEO, Peter Leav. Peter?

Peter Leav

Thank you, Laura.Polycom reported overall revenue of $349 million in the fourth quarter of 2014 up 4% sequentially and approximately flat on a year-over-year basis. We have spoken about a single OEM contract that was included in the 2013 results, but did not repeat in 2014. The value of that contract was approximately $8 million in

Unidentified Speaker

Q4 2013. When you exclude that amount from prior year results Polycom's Q4 2014 top line revenue grew approximately 2% on a year-over-year basis.

For the full year, Polycom reported overall revenue of $1.35 billion up 1.3% on a year-over-year basis after adjusting for the OEM contract, which had a value of approximately $43 million in 2013 and approximately $3 million in calendar year 2014. Improving operating performance has been our focus and the number one financial priority for Polycom throughout 2014.

Non-GAAP operating margins for the fourth quarter were 12.3% growing more than 25% versus the same period a year ago. As you will recall, Polycom had not achieved double-digit non-GAAP operating margins in any quarter in 2013. In 2014, we achieved double-digit non-GAAP operating margins each quarter and drove year-over-year improvement -- non-GAAP operating margins also grew 25% on a full year basis.

Non-GAAP earnings per share were $0.24 in the fourth quarter up 50% year-over-year primarily due to enhanced operating performance. On a full year basis, non-GAAP earnings per share were $0.85 up 55% over calendar year 2013. Our improved performance in 2014 is in line with our renewed focus on strategic planning and consistent execution. The dedication and commitment of our global team is recognized and very much appreciated.

Polycom is a compelling global brand and extensive partner in customer ecosystem and a robust product portfolio. We have over 900 patents issued and pending that allow Polycom to set the standard for both audio and video excellence. And we are committed to open