Ciena Reports Fiscal Second Quarter 2022 Financial Results

June 2, 2022 at 7:00 AM EDT

HANOVER, Md.--(BUSINESS WIRE)--Jun. 2, 2022-- Ciena® Corporation (NYSE: CIEN), a networking systems, services and software company, today announced unaudited financial results for its fiscal second quarter ended April 30, 2022.

  • Q2 Revenue: $949.2 million
  • Q2 Net Income per Share: $0.25 GAAP; $0.50 adjusted (non-GAAP)
  • Share Repurchases: Repurchased approximately 1.5 million shares of common stock for an aggregate price of $87.0 million, and received 0.9 million shares of common stock pursuant to the final settlement of the Accelerated Share Repurchase program, during the quarter.

“Our strong execution in the fiscal second quarter enabled us to deliver 14% year-over-year revenue growth despite an increasingly challenging supply environment,” said Gary Smith, president and CEO of Ciena. “We also saw continued strength in order flow and backlog growth in the quarter, reflecting the durability of longer-term secular demand drivers. At a time when industry-wide supply chain constraints are resulting in increased uncertainty and a wider range of potential outcomes in the coming quarters, our near-term financial performance is entirely a function of component availability – not the strong underlying demand in our business.”

For the fiscal second quarter 2022, Ciena reported revenue of $949.2 million as compared to $833.9 million for the fiscal second quarter 2021.

Ciena's GAAP net income for the fiscal second quarter 2022 was $38.9 million, or $0.25 per diluted common share, which compares to a GAAP net income of $103.1 million, or $0.66 per diluted common share, for the fiscal second quarter 2021. Ciena's GAAP net income for the fiscal second quarter of 2021 benefited from recording $40.4 million in pre-tax amounts from the Canadian Emergency Wage Subsidy program, which expired in October 2021. See APPENDIX A - Reconciliation of Adjusted (Non- GAAP) Quarterly Measures for more information and a reconciliation of our adjusted (non-GAAP) net income which excludes the effect of these amounts.

Ciena's adjusted (non-GAAP) net income for the fiscal second quarter 2022 was $76.4 million, or $0.50 per diluted common share, which compares to an adjusted (non-GAAP) net income of $97.6 million, or $0.62 per diluted common share, for the fiscal second quarter 2021.

Fiscal Second Quarter 2022 Performance Summary

The tables below (in millions, except percentage data) provide comparisons of certain quarterly results to the prior year. Appendices A and B set forth reconciliations between the GAAP and adjusted (non-GAAP) measures contained in this release.

 

 

GAAP Results

 

 

Q2

 

Q2

 

Period Change

 

 

FY 2022

 

FY 2021

 

Y-T-Y*

Revenue

 

$

949.2

 

 

$

833.9

 

 

13.8

%

Gross margin

 

 

42.3

%

 

 

49.5

%

 

(7.2

)%

Operating expense

 

$

343.4

 

 

$

278.8

 

 

23.2

%

Operating margin

 

 

6.2

%

 

 

16.0

%

 

(9.8

)%

 

 

Non-GAAP Results

 

 

Q2

 

Q2

 

Period Change

 

 

FY 2022

 

FY 2021

 

Y-T-Y*

Revenue

 

$

949.2

 

 

$

833.9

 

 

13.8

%

Adj. gross margin

 

 

43.0

%

 

 

49.2

%

 

(6.2

)%

Adj. operating expense

 

$

301.1

 

 

$

278.7

 

 

8.0

%

Adj. operating margin

 

 

11.3

%

 

 

15.8

%

 

(4.5

)%

Adj. EBITDA

 

$

129.3

 

 

$

156.2

 

 

(17.2

)%

 

* Denotes % change, or in the case of margin, absolute change

 

 

Revenue by Segment

 

 

Q2 FY 2022

 

Q2 FY 2021

 

 

Revenue

 

%**

 

Revenue

 

%**

Networking Platforms

 

 

 

 

 

 

 

 

Converged Packet Optical

 

$

625.3

 

65.8

 

$

573.7

 

68.8

Routing and Switching

 

 

109.2

 

11.5

 

 

63.6

 

7.6

Total Networking Platforms

 

 

734.5

 

77.3

 

 

637.3

 

76.4

 

 

 

 

 

 

 

 

 

Platform Software and Services

 

 

69.1

 

7.3

 

 

56.7

 

6.8

 

 

 

 

 

 

 

 

 

Blue Planet Automation Software and Services

 

 

16.9

 

1.8

 

 

23.9

 

2.9

 

 

 

 

 

 

 

 

 

Global Services

 

 

 

 

 

 

 

 

Maintenance Support and Training

 

 

74.0

 

7.8

 

 

70.4

 

8.4

Installation and Deployment

 

 

41.4

 

4.4

 

 

38.0

 

4.6

Consulting and Network Design

 

 

13.3

 

1.4

 

 

7.6

 

0.9

Total Global Services

 

 

128.7

 

13.6

 

 

116.0

 

13.9

 

 

 

 

 

 

 

 

 

Total

 

$

949.2

 

100.0

 

$

833.9

 

100.0

 

** Denotes % of total revenue

Additional Performance Metrics for Fiscal Second Quarter 2022

 

 

Revenue by Geographic Region

 

 

Q2 FY 2022

 

Q2 FY 2021

 

 

Revenue

 

% **

 

Revenue

 

% **

Americas

 

$

700.8

 

73.8

 

$

587.5

 

70.4

Europe, Middle East and Africa

 

 

145.1

 

15.3

 

 

155.0

 

18.6

Asia Pacific

 

 

103.3

 

10.9

 

 

91.4

 

11.0

Total

 

$

949.2

 

100.0

 

$

833.9

 

100.0

 

** Denotes % of total revenue

  • One 10%-plus customer represented a total of 11.0% of revenue
  • Cash and investments totaled $1.6 billion
  • Cash flow from operations totaled $105.8 million
  • Average days' sales outstanding (DSOs) were 87
  • Accounts receivable, net balance was $774.9 million
  • Unbilled contract asset, net balance was $144.3 million
  • Inventories totaled $536.9 million, including:
    • Raw materials: $373.5 million
    • Work in process: $12.3 million
    • Finished goods: $157.9 million
    • Deferred cost of sales: $28.9 million
    • Reserve for excess and obsolescence: $(35.7) million
  • Product inventory turns were 3.4
  • Headcount totaled 7,536

Supplemental Materials and Live Web Broadcast of Unaudited Fiscal Second Quarter 2022 Results

Today, Thursday, June 2, 2022, in conjunction with this announcement, Ciena has posted to the Quarterly Results page of the Investor Relations section of its website certain related supporting materials for its unaudited fiscal second quarter 2022 results.

Ciena's management will also host a discussion today with investors and financial analysts that will include the Company's outlook. The live audio web broadcast beginning at 8:30 a.m. Eastern will be accessible via www.ciena.com. An archived replay of the live broadcast will be available shortly following its conclusion on the Investor Relations page of Ciena's website.

Notes to Investors

Forward-Looking Statements. You are encouraged to review the Investors section of our website, where we routinely post press releases, Securities and Exchange Commission ("SEC") filings, recent news, financial results, supplemental financial information, and other announcements. From time to time we exclusively post material information to this website along with other disclosure channels that we use. This press release contains certain forward-looking statements that involve risks and uncertainties. These statements are based on current expectations, forecasts, assumptions and other information available to the Company as of the date hereof. Forward-looking statements include statements regarding Ciena's expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or similar words. Forward-looking statements in this release include: "Our strong execution in the fiscal second quarter enabled us to deliver 14% year-over-year revenue growth despite an increasingly challenging supply environment; "We also saw continued strength in order flow and backlog growth in the quarter, reflecting the durability of longer-term secular demand drivers"; "At a time when industry-wide supply chain constraints are resulting in increased uncertainty and a wider range of potential outcomes in the coming quarters, our near-term financial performance is entirely a function of component availability – not the strong underlying demand in our business."

Ciena's actual results, performance or events may differ materially from these forward-looking statements made or implied due to a number of risks and uncertainties relating to Ciena's business, including: the effect of broader economic and market conditions on our customers and their business; our ability to execute our business and growth strategies; the impact of supply chain constraints or disruptions; the duration and severity of the COVID-19 pandemic and the impact of countermeasures taken to mitigate its spread on macroeconomic conditions, economic activity, demand for our technology solutions, short- and long-term changes in customer or end user needs, continuity of supply chain, our business operations, liquidity and financial results;  changes in network spending or network strategy by our customers; seasonality and the timing and size of customer orders, including our ability to recognize revenue relating to such sales; the level of competitive pressure we encounter; the product, customer and geographic mix of sales within the period; changes in foreign currency exchange rates; factors beyond our control such as natural disasters, climate change, acts of war or terrorism, geopolitical events, including but not limited to the ongoing conflict between Ukraine and Russia, and public health emergencies; changes in tax or trade regulations, including the imposition of tariffs, duties or efforts to withdraw from or materially modify international trade agreements; and the other risk factors disclosed in Ciena’s periodic reports filed with the Securities and Exchange Commission (SEC) including Ciena’s Annual Report on Form 10-K filed with the SEC on December 17, 2021 and included in its Quarterly Report on Form 10-Q for the second quarter of fiscal 2022 to be filed with the SEC. Ciena assumes no obligation to update any forward-looking information included in this press release.

Non-GAAP Presentation of Quarterly and Annual Results. This release includes non-GAAP measures of Ciena's gross profit, operating expense, income from operations, earnings before interest, tax, depreciation and amortization (EBITDA), Adjusted EBITDA, and measures of net income and net income per share. In evaluating the operating performance of Ciena's business, management excludes certain charges and credits that are required by GAAP. These items share one or more of the following characteristics: they are unusual and Ciena does not expect them to recur in the ordinary course of its business; they do not involve the expenditure of cash; they are unrelated to the ongoing operation of the business in the ordinary course; or their magnitude and timing is largely outside of Ciena's control. Management believes that the non-GAAP measures below provide management and investors useful information and meaningful insight to the operating performance of the business. The presentation of these non-GAAP financial measures should be considered in addition to Ciena's GAAP results and these measures are not intended to be a substitute for the financial information prepared and presented in accordance with GAAP. Ciena's non-GAAP measures and the related adjustments may differ from non-GAAP measures used by other companies and should only be used to evaluate Ciena's results of operations in conjunction with our corresponding GAAP results. To the extent not previously disclosed in a prior Ciena financial results press release, Appendices A and B to this press release set forth a complete GAAP to non-GAAP reconciliation of the non-GAAP measures contained in this release.

About Ciena. Ciena (NYSE: CIEN) is a networking systems, services and software company. We provide solutions that help our customers create the Adaptive Network™ in response to the constantly changing demands of their users. By delivering best-in-class networking technology through high-touch consultative relationships, we build the world’s most agile networks with automation, openness and scale. For updates on Ciena, follow us on Twitter @Ciena, LinkedIn, the Ciena Insights blog, or visit www.ciena.com.

 

CIENA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

 

 

Quarter Ended

 

Six Months Ended

 

April 30,

 

May 1,

 

April 30,

 

May 1,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenue:

 

 

 

 

 

 

 

Products

$

759,948

 

 

$

670,043

 

 

$

1,424,955

 

 

$

1,267,263

 

Services

 

189,279

 

 

 

163,884

 

 

 

368,715

 

 

 

323,794

 

Total revenue

 

949,227

 

 

 

833,927

 

 

 

1,793,670

 

 

 

1,591,057

 

Cost of goods sold:

 

 

 

 

 

 

 

Products

 

452,057

 

 

 

339,601

 

 

 

824,622

 

 

 

654,699

 

Services

 

95,389

 

 

 

81,907

 

 

 

183,080

 

 

 

166,048

 

Total cost of goods sold

 

547,446

 

 

 

421,508

 

 

 

1,007,702

 

 

 

820,747

 

Gross profit

 

401,781

 

 

 

412,419

 

 

 

785,968

 

 

 

770,310

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

159,324

 

 

 

110,246

 

 

 

307,733

 

 

 

242,987

 

Selling and marketing

 

119,939

 

 

 

110,387

 

 

 

238,820

 

 

 

207,665

 

General and administrative

 

45,572

 

 

 

43,635

 

 

 

90,070

 

 

 

83,628

 

Significant asset impairments and restructuring costs

 

9,102

 

 

 

8,209

 

 

 

12,511

 

 

 

14,076

 

Amortization of intangible assets

 

8,920

 

 

 

6,019

 

 

 

17,838

 

 

 

11,929

 

Acquisition and integration costs

 

495

 

 

 

294

 

 

 

563

 

 

 

601

 

Total operating expenses

 

343,352

 

 

 

278,790

 

 

 

667,535

 

 

 

560,886

 

Income from operations

 

58,429

 

 

 

133,629

 

 

 

118,433

 

 

 

209,424

 

Interest and other income (loss), net

 

808

 

 

 

(1,274

)

 

 

4,494

 

 

 

(2,395

)

Interest expense

 

(11,985

)

 

 

(7,785

)

 

 

(20,633

)

 

 

(15,145

)

Income before income taxes

 

47,252

 

 

 

124,570

 

 

 

102,294

 

 

 

191,884

 

Provision for income taxes

 

8,330

 

 

 

21,453

 

 

 

17,549

 

 

 

33,419

 

Net income

$

38,922

 

 

$

103,117

 

 

$

84,745

 

 

$

158,465

 

 

 

 

 

 

 

 

 

Net Income per Common Share

 

 

 

 

 

 

 

Basic net income per common share

$

0.26

 

 

$

0.66

 

 

$

0.55

 

 

$

1.02

 

Diluted net income per potential common share

$

0.25

 

 

$

0.66

 

 

$

0.55

 

 

$

1.01

 

 

 

 

 

 

 

 

 

Weighted average basic common shares outstanding

 

152,197

 

 

 

155,331

 

 

 

153,179

 

 

 

155,257

 

Weighted average dilutive potential common shares outstanding 1

 

153,344

 

 

 

156,876

 

 

 

154,580

 

 

 

156,734

 

1 Weighted average dilutive potential common shares outstanding used in calculating GAAP diluted net income per potential common share includes the following number of shares underlying certain stock option and stock unit awards: (i) 1.1 million and 1.4 million for the second quarter and first six months of fiscal 2022, respectively; and (ii) 1.5 million shares for each of the second quarter and first six months of fiscal 2021.

 

CIENA CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

 

 

April 30,
2022

 

October 30,
2021

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$ 1,019,863

 

$ 1,422,546

Short-term investments

529,552

 

181,483

Accounts receivable, net

774,896

 

884,958

Inventories

536,878

 

374,265

Prepaid expenses and other

367,344

 

325,654

Total current assets

3,228,533

 

3,188,906

Long-term investments

87,142

 

70,038

Equipment, building, furniture and fixtures, net

278,494

 

284,968

Operating lease right-of-use assets

45,721

 

44,285

Goodwill

328,924

 

311,645

Other intangible assets, net

88,956

 

65,314

Deferred tax asset, net

798,238

 

800,180

Other long-term assets

108,121

 

99,891

Total assets

$ 4,964,129

 

$ 4,865,227

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$ 352,999

 

$ 356,176

Accrued liabilities and other short-term obligations

333,150

 

409,285

Deferred revenue

156,400

 

118,007

Operating lease liabilities

19,279

 

18,632

Current portion of long-term debt

6,930

 

6,930

Total current liabilities

868,758

 

909,030

Long-term deferred revenue

62,369

 

57,457

Other long-term obligations

148,043

 

166,803

Long-term operating lease liabilities

40,355

 

41,564

Long-term debt, net

1,062,182

 

670,355

Total liabilities

$ 2,181,707

 

$ 1,845,209

Stockholders’ equity:

 

 

 

Preferred stock – par value $0.01; 20,000,000 shares authorized; zero shares issued and outstanding

 

Common stock – par value $0.01; 290,000,000 shares authorized; 150,865,553

and 154,858,981 shares issued and outstanding

1,509

 

1,549

Additional paid-in capital

6,497,359

 

6,803,162

Accumulated other comprehensive income (loss)

(16,059)

 

439

Accumulated deficit

(3,700,387)

 

(3,785,132)

Total stockholders’ equity

2,782,422

 

3,020,018

Total liabilities and stockholders’ equity

$ 4,964,129

 

$ 4,865,227

 

CIENA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands) (unaudited)

 

 

Six Months Ended

 

April 30,

 

May 1,

 

 

2022

 

 

 

2021

 

Cash flows provided by operating activities:

 

 

 

Net income

$

84,745

 

 

$

158,465

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements

 

46,030

 

 

 

47,295

 

Share-based compensation expense

 

50,970

 

 

 

40,499

 

Amortization of intangible assets

 

24,463

 

 

 

18,517

 

Deferred taxes

 

(13,474

)

 

 

(9,606

)

Provision for inventory excess and obsolescence

 

8,487

 

 

 

10,402

 

Provision for warranty

 

7,228

 

 

 

7,937

 

Other

 

(5,833

)

 

 

5,928

 

Changes in assets and liabilities:

 

 

 

Accounts receivable

 

104,455

 

 

 

(180

)

Inventories

 

(171,056

)

 

 

(66,934

)

Prepaid expenses and other

 

(36,673

)

 

 

(8,565

)

Operating lease right-of-use assets

 

8,222

 

 

 

8,253

 

Accounts payable, accruals and other obligations

 

(88,960

)

 

 

(30,108

)

Deferred revenue

 

43,753

 

 

 

45,482

 

Short and long-term operating lease liabilities

 

(10,216

)

 

 

(9,726

)

Net cash provided by operating activities

 

52,141

 

 

 

217,659

 

Cash flows used in investing activities:

 

 

 

Payments for equipment, furniture, fixtures and intellectual property

 

(45,249

)

 

 

(51,651

)

Purchase of available for sale securities

 

(461,548

)

 

 

(102,429

)

Proceeds from maturities of available for sale securities

 

90,000

 

 

 

91,810

 

Settlement of foreign currency forward contracts, net

 

3,708

 

 

 

9,414

 

Acquisition of business, net of cash acquired

 

(62,043

)

 

 

 

Purchase of cost method equity investments

 

(8,000

)

 

 

 

Proceeds from sale of cost method equity investments

 

 

 

 

4,678

 

Net cash used in investing activities

 

(483,132

)

 

 

(48,178

)

Cash flows provided by (used in) financing activities:

 

 

 

Proceeds from issuance of senior notes

 

400,000

 

 

 

 

Payment of long term debt

 

(3,465

)

 

 

(3,465

)

Payment of debt issuance costs

 

(5,145

)

 

 

 

Payment of finance lease obligations

 

(1,635

)

 

 

(1,463

)

Shares repurchased for tax withholdings on vesting of restricted stock units

 

(35,004

)

 

 

(27,893

)

Repurchases of common stock - repurchase program

 

(332,794

)

 

 

(38,498

)

Proceeds from issuance of common stock

 

15,185

 

 

 

13,480

 

Net cash provided by (used in) financing activities

 

37,142

 

 

 

(57,839

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

(8,807

)

 

 

2,696

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

(402,656

)

 

 

114,338

 

Cash, cash equivalents and restricted cash at beginning of period

 

1,422,604

 

 

 

1,088,708

 

Cash, cash equivalents and restricted cash at end of period

$

1,019,948

 

 

$

1,203,046

 

Supplemental disclosure of cash flow information

 

 

 

Cash paid during the period for interest

$

16,809

 

 

$

14,949

 

Cash paid during the period for income taxes, net

$

17,905

 

 

$

27,666

 

Operating lease payments

$

10,917

 

 

$

10,785

 

Non-cash investing and financing activities

 

 

 

Purchase of equipment in accounts payable

$

8,093

 

 

$

4,966

 

Repurchase of common stock in accrued liabilities from repurchase program

$

5,000

 

 

$

900

 

Operating right-of-use assets subject to lease liability

$

3,589

 

 

$

1,770

 

 

APPENDIX A - Reconciliation of Adjusted (Non- GAAP) Quarterly Measures

(in thousands, except per share data) (unaudited)

 

 

 

 

 

 

 

Quarter Ended

 

 

April 30,

 

May 1,

 

 

 

2022

 

 

 

2021

 

Gross Profit Reconciliation (GAAP/non-GAAP)

 

 

 

 

GAAP gross profit

 

$

401,781

 

 

$

412,419

 

Share-based compensation-products

 

 

1,058

 

 

 

498

 

Share-based compensation-services

 

 

1,943

 

 

 

1,421

 

Canadian Emergency Wage Subsidy-products

 

 

 

 

 

(4,189

)

Canadian Emergency Wage Subsidy-services

 

 

 

 

 

(2,620

)

Amortization of intangible assets

 

 

3,313

 

 

 

2,856

 

Total adjustments related to gross profit

 

 

6,314

 

 

 

(2,034

)

Adjusted (non-GAAP) gross profit

 

$

408,095

 

 

$

410,385

 

Adjusted (non-GAAP) gross profit percentage

 

 

43.0

%

 

 

49.2

%

 

 

 

 

 

Operating Expense Reconciliation (GAAP/non-GAAP)

 

 

 

 

GAAP operating expense

 

$

343,352

 

 

$

278,790

 

Share-based compensation-research and development

 

 

8,309

 

 

 

5,844

 

Share-based compensation-sales and marketing

 

 

8,061

 

 

 

6,610

 

Share-based compensation-general and administrative

 

 

7,334

 

 

 

6,743

 

Canadian Emergency Wage Subsidy-research and development

 

 

 

 

 

(28,923

)

Canadian Emergency Wage Subsidy-sales and marketing

 

 

 

 

 

(2,551

)

Canadian Emergency Wage Subsidy-general and administrative

 

 

 

 

 

(2,161

)

Significant asset impairments and restructuring costs

 

 

9,102

 

 

 

8,209

 

Amortization of intangible assets

 

 

8,920

 

 

 

6,019

 

Acquisition and integration costs

 

 

495

 

 

 

294

 

Total adjustments related to operating expense

 

 

42,221

 

 

 

84

 

Adjusted (non-GAAP) operating expense

 

$

301,131

 

 

$

278,706

 

 

 

 

 

 

Income from Operations Reconciliation (GAAP/non-GAAP)

 

 

 

 

GAAP income from operations

 

$

58,429

 

 

$

133,629

 

Total adjustments related to gross profit

 

 

6,314

 

 

 

(2,034

)

Total adjustments related to operating expense

 

 

42,221

 

 

 

84

 

Total adjustments related to income from operations

 

 

48,535

 

 

 

(1,950

)

Adjusted (non-GAAP) income from operations

 

$

106,964

 

 

$

131,679

 

Adjusted (non-GAAP) operating margin percentage

 

 

11.3

%

 

 

15.8

%

 

 

 

 

 

Net Income Reconciliation (GAAP/non-GAAP)

 

 

 

 

GAAP net income

 

$

38,922

 

 

$

103,117

 

Exclude GAAP provision for income taxes

 

 

8,330

 

 

 

21,453

 

Income before income taxes

 

 

47,252

 

 

 

124,570

 

Total adjustments related to income from operations

 

 

48,535

 

 

 

(1,950

)

Unrealized loss on cost method equity investment

 

 

 

 

 

165

 

Adjusted income before income taxes

 

 

95,787

 

 

 

122,785

 

Non-GAAP tax provision on adjusted income before income taxes

 

 

19,349

 

 

 

25,171

 

Adjusted (non-GAAP) net income

 

$

76,438

 

 

$

97,614

 

 

 

 

 

 

Weighted average basic common shares outstanding

 

 

152,197

 

 

 

155,331

 

Weighted average dilutive potential common shares outstanding 1

 

 

153,344

 

 

 

156,876

 

Net Income per Common Share

 

 

 

 

GAAP diluted net income per potential common share

 

$

0.25

 

 

$

0.66

 

Adjusted (non-GAAP) diluted net income per potential common share

 

$

0.50

 

 

$

0.62

 

1 Weighted average dilutive potential common shares outstanding used in calculating Adjusted (non-GAAP) diluted net income per potential common share for the second quarter of fiscal 2022 includes 1.1 million shares underlying certain stock option and stock unit awards.

Weighted average dilutive potential common shares outstanding used in calculating Adjusted (non-GAAP) diluted net income per potential common share for the second quarter of fiscal 2021 includes 1.5 million shares underlying certain stock option and stock unit awards.

 

APPENDIX B - Calculation of EBITDA and Adjusted EBITDA (unaudited)

(in thousands) (unaudited)

 

 

 

 

 

 

 

Quarter Ended

 

 

April 30,

 

May 1,

 

 

2022

 

 

2021

 

Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)

 

 

 

 

Net income (GAAP)

 

$

38,922

 

$

103,117

 

Add: Interest expense

 

 

11,985

 

 

7,785

 

Less: Interest and other income (loss), net

 

 

808

 

 

(1,274

)

Add: Provision for income taxes

 

 

8,330

 

 

21,453

 

Add: Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements

 

 

22,377

 

 

24,107

 

Add: Amortization of intangible assets

 

 

12,233

 

 

8,875

 

EBITDA

 

$

93,039

 

$

166,611

 

Less: Canadian Emergency Wage Subsidy

 

 

 

 

40,444

 

Add: Share-based compensation cost

 

 

26,673

 

 

21,535

 

Add: Significant asset impairments and restructuring costs

 

 

9,102

 

 

8,209

 

Add: Acquisition and integration costs

 

 

495

 

 

294

 

Adjusted EBITDA

 

$

129,309

 

$

156,205

 

The adjusted (non-GAAP) measures above and their reconciliation to Ciena's GAAP results for the periods presented reflect adjustments relating to the following items:

  • Share-based compensation - a non-cash expense incurred in accordance with share-based compensation accounting guidance.
  • Canadian Emergency Wage Subsidy - a program introduced by the Government of Canada to offset a portion of employee wages for a limited period in response to COVID-19 outbreak.
  • Significant asset impairments and restructuring costs - costs incurred as a result of restructuring activities taken to align resources with perceived market opportunities, the redesign of business processes and a $4.1 million impairment charge due to Ciena's decision to suspend its business operations in Russia in response to the conflict in Ukraine.
  • Amortization of intangible assets - a non-cash expense arising from the acquisition of intangible assets, principally developed technologies and customer-related intangibles, that Ciena is required to amortize over its expected useful life.
  • Acquisition and integration costs - includes financial, legal and accounting advisor expenses related to our acquisition of Vyatta during the first quarter of fiscal 2022 and Xelic during the second quarter of fiscal 2022. Acquisition and integration costs for the second quarter of fiscal 2021 include costs of acquisition compensation associated with a three-year earn-out arrangement related to the DonRiver acquisition in fiscal 2018.
  • Unrealized loss on cost method equity investment - reflects a change in the carrying value of a certain cost method equity investment.
  • Non-GAAP tax provision - consists of current and deferred income tax expense commensurate with the level of adjusted income before income taxes and utilizes a current, blended U.S. and foreign statutory annual tax rate of 20.2% for the second fiscal quarter of 2022 and 20.5% for the second fiscal quarter of 2021. This rate may be subject to change in the future, including as a result of changes in tax policy or tax strategy.

 

Press Contact:
Jamie Moody
Ciena Corporation
+1 (410) 694-5761
pr@ciena.com

Investor Contact:
Gregg Lampf
Ciena Corporation
+1 (410) 694-5700
ir@ciena.com

Source: Ciena Corporation