Ciena Reports Fiscal Third Quarter 2022 Financial Results
-
Q3 Revenue:
$868.0 million -
Q3 Net Income per Share:
$0.07 GAAP;$0.33 adjusted (non-GAAP) -
Share Repurchases: Repurchased approximately 3.2 million shares of common stock for an aggregate price of
$155.0 million during the quarter.
"Despite continued strong customer demand, our fiscal third quarter financial results were negatively impacted by late delivery and substantially lower-than-committed volume from a small number of suppliers for specific components that are essential for delivering finished goods to our customers," said
For the fiscal third quarter 2022, Ciena reported revenue of
Ciena's GAAP net income for the fiscal third quarter 2022 was
Ciena's adjusted (non-GAAP) net income for the fiscal third quarter 2022 was
Fiscal Third 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 |
|||||||||
|
|
|
Q3 |
|
Q3 |
|
Period Change |
|||||
|
|
|
FY 2022 |
|
FY 2021 |
|
Y-T-Y* |
|||||
|
Revenue |
|
$ |
868.0 |
|
|
$ |
988.1 |
|
|
(12.2 |
)% |
|
Gross margin |
|
|
39.3 |
% |
|
|
48.0 |
% |
|
(8.7 |
)% |
|
Operating expense |
|
$ |
313.7 |
|
|
$ |
326.0 |
|
|
(3.8 |
)% |
|
Operating margin |
|
|
3.1 |
% |
|
|
15.0 |
% |
|
(11.9 |
)% |
|
|
|
Non-GAAP Results |
|||||||||
|
|
|
Q3 |
|
Q3 |
|
Period Change |
|||||
|
|
|
FY 2022 |
|
FY 2021 |
|
Y-T-Y* |
|||||
|
Revenue |
|
$ |
868.0 |
|
|
$ |
988.1 |
|
|
(12.2 |
)% |
|
Adj. gross margin |
|
|
40.0 |
% |
|
|
48.5 |
% |
|
(8.5 |
)% |
|
Adj. operating expense |
|
$ |
273.1 |
|
|
$ |
290.4 |
|
|
(6.0 |
)% |
|
Adj. operating margin |
|
|
8.5 |
% |
|
|
19.1 |
% |
|
(10.6 |
)% |
|
Adj. EBITDA |
|
$ |
96.0 |
|
|
$ |
213.7 |
|
|
(55.1 |
)% |
|
* Denotes % change, or in the case of margin, absolute change |
|||||||||||
|
|
|
Revenue by Segment |
||||||||
|
|
|
Q3 FY 2022 |
|
Q3 FY 2021 |
||||||
|
|
|
Revenue |
|
%** |
|
Revenue |
|
%** |
||
|
Networking Platforms |
|
|
|
|
|
|
|
|
||
|
Converged Packet Optical |
|
$ |
563.9 |
|
65.0 |
|
$ |
712.9 |
|
72.1 |
|
Routing and Switching |
|
|
100.7 |
|
11.6 |
|
|
69.7 |
|
7.1 |
|
Total Networking Platforms |
|
|
664.6 |
|
76.6 |
|
|
782.6 |
|
79.2 |
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
63.5 |
|
7.3 |
|
$ |
56.9 |
|
5.8 |
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
17.3 |
|
2.0 |
|
|
16.6 |
|
1.7 |
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
|
Maintenance Support and Training |
|
|
72.8 |
|
8.4 |
|
|
74.0 |
|
7.5 |
|
Installation and Deployment |
|
|
38.7 |
|
4.4 |
|
|
46.7 |
|
4.7 |
|
Consulting and Network Design |
|
|
11.1 |
|
1.3 |
|
|
11.3 |
|
1.1 |
|
Total |
|
|
122.6 |
|
14.1 |
|
|
132.0 |
|
13.3 |
|
|
|
|
|
|
|
|
|
|
||
|
Total |
|
$ |
868.0 |
|
100.0 |
|
$ |
988.1 |
|
100.0 |
|
** Denotes % of total revenue |
||||||||||
Additional Performance Metrics for Fiscal Third Quarter 2022
|
|
|
Revenue by |
||||||||
|
|
|
Q3 FY 2022 |
|
Q3 FY 2021 |
||||||
|
|
|
Revenue |
|
% ** |
|
Revenue |
|
% ** |
||
|
|
|
$ |
617.4 |
|
71.1 |
|
$ |
692.8 |
|
70.1 |
|
|
|
|
124.2 |
|
14.3 |
|
|
189.2 |
|
19.2 |
|
|
|
|
126.4 |
|
14.6 |
|
|
106.1 |
|
10.7 |
|
Total |
|
$ |
868.0 |
|
100.0 |
|
$ |
988.1 |
|
100.0 |
|
** Denotes % of total revenue |
||||||||||
- Two 10%-plus customers represented a total of 24.1% of revenue
-
Cash and investments totaled
$1.3 billion -
Cash flow used in operations totaled
$205.4 million - Average days' sales outstanding (DSOs) were 100
-
Accounts receivable, net balance was
$802.5 million -
Unbilled contract asset, net balance was
$157.4 million -
Inventories totaled
$826.7 million , including:-
Raw materials:
$621.8 million -
Work in process:
$19.5 million -
Finished goods:
$187.0 million -
Deferred cost of sales:
$33.8 million -
Reserve for excess and obsolescence:
$(35.4) million
-
Raw materials:
- Product inventory turns were 2.1
- Headcount totaled 8,013
Supplemental Materials and Live Web Broadcast of Unaudited Fiscal Third Quarter 2022 Results
Today,
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
Notes to Investors
Forward-Looking Statements. You are encouraged to review the Investors section of our website, where we routinely post press releases,
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
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.
|
|
||||||||||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
|
(in thousands, except per share data) |
||||||||||||||||
|
(unaudited) |
||||||||||||||||
|
|
Quarter Ended |
|
Nine Months Ended |
|||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||||||
|
Revenue: |
|
|
|
|
|
|
|
|||||||||
|
Products |
$ |
684,284 |
|
|
$ |
804,414 |
|
|
$ |
2,109,239 |
|
|
$ |
2,071,677 |
|
|
|
Services |
|
183,697 |
|
|
|
183,727 |
|
|
|
552,412 |
|
|
|
507,521 |
|
|
|
Total revenue |
|
867,981 |
|
|
|
988,141 |
|
|
|
2,661,651 |
|
|
|
2,579,198 |
|
|
|
Cost of goods sold: |
|
|
|
|
|
|
|
|||||||||
|
Products |
|
434,756 |
|
|
|
420,236 |
|
|
|
1,259,378 |
|
|
|
1,074,935 |
|
|
|
Services |
|
92,446 |
|
|
|
93,355 |
|
|
|
275,526 |
|
|
|
259,403 |
|
|
|
Total cost of goods sold |
|
527,202 |
|
|
|
513,591 |
|
|
|
1,534,904 |
|
|
|
1,334,338 |
|
|
|
Gross profit |
|
340,779 |
|
|
|
474,550 |
|
|
|
1,126,747 |
|
|
|
1,244,860 |
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|||||||||
|
Research and development |
|
150,025 |
|
|
|
146,225 |
|
|
|
457,758 |
|
|
|
389,212 |
|
|
|
Selling and marketing |
|
105,880 |
|
|
|
114,924 |
|
|
|
344,700 |
|
|
|
322,589 |
|
|
|
General and administrative |
|
41,121 |
|
|
|
48,863 |
|
|
|
131,191 |
|
|
|
132,491 |
|
|
|
Significant asset impairments and restructuring costs |
|
7,692 |
|
|
|
9,789 |
|
|
|
20,203 |
|
|
|
23,865 |
|
|
|
Amortization of intangible assets |
|
8,919 |
|
|
|
5,967 |
|
|
|
26,757 |
|
|
|
17,896 |
|
|
|
Acquisition and integration costs |
|
35 |
|
|
|
259 |
|
|
|
598 |
|
|
|
860 |
|
|
|
Total operating expenses |
|
313,672 |
|
|
|
326,027 |
|
|
|
981,207 |
|
|
|
886,913 |
|
|
|
Income from operations |
|
27,107 |
|
|
|
148,523 |
|
|
|
145,540 |
|
|
|
357,947 |
|
|
|
Interest and other income (loss), net |
|
366 |
|
|
|
795 |
|
|
|
4,860 |
|
|
|
(1,600 |
) |
|
|
Interest expense |
|
(12,642 |
) |
|
|
(7,776 |
) |
|
|
(33,275 |
) |
|
|
(22,921 |
) |
|
|
Income before income taxes |
|
14,831 |
|
|
|
141,542 |
|
|
|
117,125 |
|
|
|
333,426 |
|
|
|
Provision (benefit) for income taxes |
|
4,319 |
|
|
|
(96,690 |
) |
|
|
21,868 |
|
|
|
(63,271 |
) |
|
|
Net income |
$ |
10,512 |
|
|
$ |
238,232 |
|
|
$ |
95,257 |
|
|
$ |
396,697 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Net Income per Common Share |
|
|
|
|
|
|
|
|||||||||
|
Basic net income per common share |
$ |
0.07 |
|
|
$ |
1.53 |
|
|
$ |
0.63 |
|
|
$ |
2.55 |
|
|
|
Diluted net income per potential common share |
$ |
0.07 |
|
|
$ |
1.52 |
|
|
$ |
0.62 |
|
|
$ |
2.53 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Weighted average basic common shares outstanding |
|
149,862 |
|
|
|
155,271 |
|
|
|
152,083 |
|
|
|
155,277 |
|
|
|
Weighted average dilutive potential common shares outstanding 1 |
|
150,463 |
|
|
|
156,744 |
|
|
|
153,209 |
|
|
|
156,742 |
|
|
|
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) 0.6 million and 1.1 million for the third quarter and first nine months of fiscal 2022, respectively; and (ii) 1.5 million shares for each of the third quarter and first nine months of fiscal 2021. |
|
|
||||||||
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
|
(in thousands, except share data) |
||||||||
|
(unaudited) |
||||||||
|
|
|
|
|
|||||
|
ASSETS |
|
|
|
|||||
|
Current assets: |
|
|
|
|||||
|
Cash and cash equivalents |
$ |
859,687 |
|
|
$ |
1,422,546 |
|
|
|
Short-term investments |
|
321,823 |
|
|
|
181,483 |
|
|
|
Accounts receivable, net |
|
802,484 |
|
|
|
884,958 |
|
|
|
Inventories |
|
826,673 |
|
|
|
374,265 |
|
|
|
Prepaid expenses and other |
|
377,709 |
|
|
|
325,654 |
|
|
|
Total current assets |
|
3,188,376 |
|
|
|
3,188,906 |
|
|
|
Long-term investments |
|
77,723 |
|
|
|
70,038 |
|
|
|
Equipment, building, furniture and fixtures, net |
|
281,690 |
|
|
|
284,968 |
|
|
|
Operating lease right-of-use assets |
|
45,452 |
|
|
|
44,285 |
|
|
|
|
|
328,978 |
|
|
|
311,645 |
|
|
|
Other intangible assets, net |
|
76,918 |
|
|
|
65,314 |
|
|
|
Deferred tax asset, net |
|
797,924 |
|
|
|
800,180 |
|
|
|
Other long-term assets |
|
103,721 |
|
|
|
99,891 |
|
|
|
Total assets |
$ |
4,900,782 |
|
|
$ |
4,865,227 |
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|||||
|
Current liabilities: |
|
|
|
|||||
|
Accounts payable |
$ |
439,229 |
|
|
$ |
356,176 |
|
|
|
Accrued liabilities and other short-term obligations |
|
301,589 |
|
|
|
409,285 |
|
|
|
Deferred revenue |
|
147,808 |
|
|
|
118,007 |
|
|
|
Operating lease liabilities |
|
19,786 |
|
|
|
18,632 |
|
|
|
Current portion of long-term debt |
|
6,930 |
|
|
|
6,930 |
|
|
|
Total current liabilities |
|
915,342 |
|
|
|
909,030 |
|
|
|
Long-term deferred revenue |
|
61,845 |
|
|
|
57,457 |
|
|
|
Other long-term obligations |
|
150,767 |
|
|
|
166,803 |
|
|
|
Long-term operating lease liabilities |
|
42,639 |
|
|
|
41,564 |
|
|
|
Long-term debt, net |
|
1,062,453 |
|
|
|
670,355 |
|
|
|
Total liabilities |
$ |
2,233,046 |
|
|
$ |
1,845,209 |
|
|
|
Stockholders’ equity: |
|
|
|
|||||
|
Preferred stock – par value |
|
— |
|
|
|
— |
|
|
|
Common stock – par value |
|
1,483 |
|
|
|
1,549 |
|
|
|
Additional paid-in capital |
|
6,378,007 |
|
|
|
6,803,162 |
|
|
|
Accumulated other comprehensive income (loss) |
|
(21,879 |
) |
|
|
439 |
|
|
|
Accumulated deficit |
|
(3,689,875 |
) |
|
|
(3,785,132 |
) |
|
|
Total stockholders’ equity |
|
2,667,736 |
|
|
|
3,020,018 |
|
|
|
Total liabilities and stockholders’ equity |
$ |
4,900,782 |
|
|
$ |
4,865,227 |
|
|
|
|
||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
|
(in thousands) (unaudited) |
||||||||
|
|
Nine Months Ended |
|||||||
|
|
|
|
|
|||||
|
|
2022 |
|
2021 |
|||||
|
Cash flows provided by (used in) operating activities: |
|
|
|
|||||
|
Net income |
$ |
95,257 |
|
|
$ |
396,697 |
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|||||
|
Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements |
|
68,280 |
|
|
|
71,918 |
|
|
|
Share-based compensation expense |
|
77,827 |
|
|
|
62,970 |
|
|
|
Amortization of intangible assets |
|
36,521 |
|
|
|
27,341 |
|
|
|
Deferred taxes |
|
(19,824 |
) |
|
|
(139,543 |
) |
|
|
Provision for inventory excess and obsolescence |
|
12,038 |
|
|
|
13,460 |
|
|
|
Provision for warranty |
|
12,416 |
|
|
|
12,726 |
|
|
|
Other |
|
(442 |
) |
|
|
6,350 |
|
|
|
Changes in assets and liabilities: |
|
|
|
|||||
|
Accounts receivable |
|
74,478 |
|
|
|
(163,149 |
) |
|
|
Inventories |
|
(464,664 |
) |
|
|
(38,821 |
) |
|
|
Prepaid expenses and other |
|
(39,805 |
) |
|
|
(17,272 |
) |
|
|
Operating lease right-of-use assets |
|
12,504 |
|
|
|
12,340 |
|
|
|
Accounts payable, accruals and other obligations |
|
(37,587 |
) |
|
|
31,388 |
|
|
|
Deferred revenue |
|
34,949 |
|
|
|
24,969 |
|
|
|
Short and long-term operating lease liabilities |
|
(15,197 |
) |
|
|
(14,618 |
) |
|
|
Net cash provided by (used in) operating activities |
|
(153,249 |
) |
|
|
286,756 |
|
|
|
Cash flows used in investing activities: |
|
|
|
|||||
|
Payments for equipment, furniture, fixtures and intellectual property |
|
(66,908 |
) |
|
|
(67,290 |
) |
|
|
Purchase of available-for-sale securities |
|
(614,333 |
) |
|
|
(132,895 |
) |
|
|
Proceeds from maturities of available-for-sale securities |
|
460,000 |
|
|
|
122,063 |
|
|
|
Settlement of foreign currency forward contracts, net |
|
4,450 |
|
|
|
7,326 |
|
|
|
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 |
|
(286,834 |
) |
|
|
(66,118 |
) |
|
|
Cash flows used in financing activities: |
|
|
|
|||||
|
Proceeds from issuance of senior notes |
|
400,000 |
|
|
|
— |
|
|
|
Payment of long term debt |
|
(3,465 |
) |
|
|
(5,197 |
) |
|
|
Payment of debt issuance costs |
|
(5,159 |
) |
|
|
— |
|
|
|
Payment of finance lease obligations |
|
(2,555 |
) |
|
|
(2,243 |
) |
|
|
Shares repurchased for tax withholdings on vesting of stock unit awards |
|
(41,280 |
) |
|
|
(36,484 |
) |
|
|
Repurchases of common stock - repurchase program |
|
(487,792 |
) |
|
|
(64,555 |
) |
|
|
Proceeds from issuance of common stock |
|
30,224 |
|
|
|
28,289 |
|
|
|
Net cash used in financing activities |
|
(110,027 |
) |
|
|
(80,190 |
) |
|
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
(12,780 |
) |
|
|
1,344 |
|
|
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
(562,890 |
) |
|
|
141,792 |
|
|
|
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 |
$ |
859,714 |
|
|
$ |
1,230,500 |
|
|
|
Supplemental disclosure of cash flow information |
|
|
|
|||||
|
Cash paid during the period for interest |
$ |
24,823 |
|
|
$ |
22,392 |
|
|
|
Cash paid during the period for income taxes, net |
$ |
28,593 |
|
|
$ |
46,165 |
|
|
|
Operating lease payments |
$ |
16,342 |
|
|
$ |
16,162 |
|
|
|
Non-cash investing and financing activities |
|
|
|
|||||
|
Purchase of equipment in accounts payable |
$ |
9,320 |
|
|
$ |
5,517 |
|
|
|
Repurchase of common stock in accrued liabilities from repurchase program |
$ |
5,000 |
|
|
$ |
800 |
|
|
|
Operating right-of-use assets subject to lease liability |
$ |
8,226 |
|
|
$ |
4,182 |
|
|
|
APPENDIX A - Reconciliation of Adjusted (Non- GAAP) Quarterly Measures |
||||||||
|
(in thousands, except per share data) (unaudited) |
||||||||
|
|
|
|
|
|
||||
|
|
|
Quarter Ended |
||||||
|
|
|
|
|
|
||||
|
|
|
2022 |
|
2021 |
||||
|
Gross Profit Reconciliation (GAAP/non-GAAP) |
|
|
|
|
||||
|
GAAP gross profit |
|
$ |
340,779 |
|
|
$ |
474,550 |
|
|
Share-based compensation-products |
|
|
1,002 |
|
|
|
1,037 |
|
|
Share-based compensation-services |
|
|
1,940 |
|
|
|
1,315 |
|
|
Canadian Emergency Wage Subsidy-products |
|
|
— |
|
|
|
(94 |
) |
|
Canadian Emergency Wage Subsidy-services |
|
|
— |
|
|
|
(47 |
) |
|
Amortization of intangible assets |
|
|
3,140 |
|
|
|
2,857 |
|
|
Total adjustments related to gross profit |
|
|
6,082 |
|
|
|
5,068 |
|
|
Adjusted (non-GAAP) gross profit |
|
$ |
346,861 |
|
|
$ |
479,618 |
|
|
Adjusted (non-GAAP) gross profit percentage |
|
|
40.0 |
% |
|
|
48.5 |
% |
|
|
|
|
|
|
||||
|
Operating Expense Reconciliation (GAAP/non-GAAP) |
|
|
|
|
||||
|
GAAP operating expense |
|
$ |
313,672 |
|
|
$ |
326,027 |
|
|
Share-based compensation-research and development |
|
|
8,233 |
|
|
|
5,541 |
|
|
Share-based compensation-sales and marketing |
|
|
8,075 |
|
|
|
6,534 |
|
|
Share-based compensation-general and administrative |
|
|
7,579 |
|
|
|
8,237 |
|
|
Canadian Emergency Wage Subsidy-research and development |
|
|
— |
|
|
|
(596 |
) |
|
Canadian Emergency Wage Subsidy-sales and marketing |
|
|
— |
|
|
|
(53 |
) |
|
Canadian Emergency Wage Subsidy-general and administrative |
|
|
— |
|
|
|
(46 |
) |
|
Significant asset impairments and restructuring costs |
|
|
7,692 |
|
|
|
9,789 |
|
|
Amortization of intangible assets |
|
|
8,919 |
|
|
|
5,967 |
|
|
Acquisition and integration costs |
|
|
35 |
|
|
|
259 |
|
|
Total adjustments related to operating expense |
|
|
40,533 |
|
|
|
35,632 |
|
|
Adjusted (non-GAAP) operating expense |
|
$ |
273,139 |
|
|
$ |
290,395 |
|
|
|
|
|
|
|
||||
|
Income from Operations Reconciliation (GAAP/non-GAAP) |
|
|
|
|
||||
|
GAAP income from operations |
|
$ |
27,107 |
|
|
$ |
148,523 |
|
|
Total adjustments related to gross profit |
|
|
6,082 |
|
|
|
5,068 |
|
|
Total adjustments related to operating expense |
|
|
40,533 |
|
|
|
35,632 |
|
|
Total adjustments related to income from operations |
|
|
46,615 |
|
|
|
40,700 |
|
|
Adjusted (non-GAAP) income from operations |
|
$ |
73,722 |
|
|
$ |
189,223 |
|
|
Adjusted (non-GAAP) operating margin percentage |
|
|
8.5 |
% |
|
|
19.1 |
% |
|
|
|
|
|
|
||||
|
Net Income Reconciliation (GAAP/non-GAAP) |
|
|
|
|
||||
|
GAAP net income |
|
$ |
10,512 |
|
|
$ |
238,232 |
|
|
Exclude GAAP provision (benefit) for income taxes |
|
|
4,319 |
|
|
|
(96,690 |
) |
|
Income before income taxes |
|
|
14,831 |
|
|
|
141,542 |
|
|
Total adjustments related to income from operations |
|
|
46,615 |
|
|
|
40,700 |
|
|
Adjusted income before income taxes |
|
|
61,446 |
|
|
|
182,242 |
|
|
Non-GAAP tax provision on adjusted income before income taxes |
|
|
12,412 |
|
|
|
37,360 |
|
|
Adjusted (non-GAAP) net income |
|
$ |
49,034 |
|
|
$ |
144,882 |
|
|
|
|
|
|
|
||||
|
Weighted average basic common shares outstanding |
|
|
149,862 |
|
|
|
155,271 |
|
|
Weighted average dilutive potential common shares outstanding 1 |
|
|
150,463 |
|
|
|
156,744 |
|
|
Net Income per Common Share |
|
|
|
|
||||
|
GAAP diluted net income per potential common share |
|
$ |
0.07 |
|
|
$ |
1.52 |
|
|
Adjusted (non-GAAP) diluted net income per potential common share |
|
$ |
0.33 |
|
|
$ |
0.92 |
|
1 Weighted average dilutive potential common shares outstanding used in calculating Adjusted (non-GAAP) diluted net income per potential common share includes the following number of shares underlying certain stock option and stock unit awards: (i) 0.6 million for the third quarter of fiscal 2022, and (ii) 1.5 million for the third quarter of fiscal 2021
|
APPENDIX B - Calculation of EBITDA and Adjusted EBITDA (unaudited) |
|||||||
|
(in thousands) (unaudited) |
|||||||
|
|
|
|
|
|
|||
|
|
|
Quarter Ended |
|||||
|
|
|
|
|
|
|||
|
|
|
2022 |
|
2021 |
|||
|
Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) |
|
|
|
|
|||
|
Net income (GAAP) |
|
$ |
10,512 |
|
$ |
238,232 |
|
|
Add: Interest expense |
|
|
12,642 |
|
|
7,776 |
|
|
Less: Interest and other income, net |
|
|
366 |
|
|
795 |
|
|
Add: Provision (benefit) for income taxes |
|
|
4,319 |
|
|
(96,690 |
) |
|
Add: Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements |
|
|
22,250 |
|
|
24,623 |
|
|
Add: Amortization of intangible assets |
|
|
12,059 |
|
|
8,824 |
|
|
EBITDA |
|
$ |
61,416 |
|
$ |
181,970 |
|
|
Less: Canadian Emergency Wage Subsidy |
|
|
— |
|
|
836 |
|
|
Add: Share-based compensation cost |
|
|
26,857 |
|
|
22,471 |
|
|
Add: Significant asset impairments and restructuring costs |
|
|
7,692 |
|
|
9,789 |
|
|
Add: Acquisition and integration costs |
|
|
35 |
|
|
259 |
|
|
Adjusted EBITDA |
|
$ |
96,000 |
|
$ |
213,653 |
|
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 and the redesign of business processes.
- 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
Xelic during the second quarter of fiscal 2022. Acquisition and integration costs for the third 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. -
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 third fiscal quarter of 2022 and 20.5% for the third 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. Ciena's GAAP tax provision for the third quarter of 2021 benefited from recording a$124.2 million tax benefit related to an internal transfer of non-U.S. intangible assets that was recognized as a result of the step-up in basis of such rights for tax purposes. The Non-GAAP tax provision for the periods presented do not include this tax benefit or the corresponding deferred tax asset.
View source version on businesswire.com: https://www.businesswire.com/news/home/20220831005832/en/
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