Ciena Reports Fiscal Third Quarter 2022 Financial Results

September 1, 2022 at 7:00 AM EDT

HANOVER, Md.--(BUSINESS WIRE)--Sep. 1, 2022-- Ciena® Corporation (NYSE: CIEN), a networking systems, services and software company, today announced unaudited financial results for its fiscal third quarter ended July 30, 2022.

  • 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 Gary Smith, president and CEO of Ciena. "While these dynamics will continue in our fiscal fourth quarter, we expect improvement as we move into fiscal 2023, providing us increased ability to service this unprecedented demand and continue to gain market share.”

For the fiscal third quarter 2022, Ciena reported revenue of $868.0 million as compared to $988.1 million for the fiscal third quarter 2021.

Ciena's GAAP net income for the fiscal third quarter 2022 was $10.5 million, or $0.07 per diluted common share, which compares to a GAAP net income of $238.2 million, or $1.52 per diluted common share, for the fiscal third quarter 2021. Ciena's GAAP net income for the fiscal third quarter of 2021 benefited from the recording $124.2 million tax benefit related to an internal transfer of non-U.S. intangible assets. 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 third quarter 2022 was $49.0 million, or $0.33 per diluted common share, which compares to an adjusted (non-GAAP) net income of $144.9 million, or $0.92 per diluted common share, for the fiscal third quarter 2021.

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

 

 

 

 

 

 

 

 

 

Platform Software and Services

 

 

63.5

 

7.3

 

$

56.9

 

5.8

 

 

 

 

 

 

 

 

 

Blue Planet Automation Software and Services

 

 

17.3

 

2.0

 

 

16.6

 

1.7

 

 

 

 

 

 

 

 

 

Global Services

 

 

 

 

 

 

 

 

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 Global Services

 

 

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 Geographic Region

 

 

Q3 FY 2022

 

Q3 FY 2021

 

 

Revenue

 

% **

 

Revenue

 

% **

Americas

 

$

617.4

 

71.1

 

$

692.8

 

70.1

Europe, Middle East and Africa

 

 

124.2

 

14.3

 

 

189.2

 

19.2

Asia Pacific

 

 

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
  • Product inventory turns were 2.1
  • Headcount totaled 8,013

Supplemental Materials and Live Web Broadcast of Unaudited Fiscal Third Quarter 2022 Results
Today, Thursday, September 1, 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 third 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: "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. While these dynamics will continue in our fiscal fourth quarter, we expect improvement as we move into fiscal 2023, providing us increased ability to service this unprecedented demand and continue to gain market share.”

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 third 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

 

Nine Months Ended

 

July 30

 

July 31

 

July 30

 

July 31

 

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.

CIENA CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

 

 

July 30,
2022

 

October 30,
2021

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

 

Goodwill

 

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 $0.01; 20,000,000 shares authorized; zero shares issued and outstanding

 

 

 

 

 

Common stock – par value $0.01; 290,000,000 shares authorized; 148,293,357 and 154,858,981 shares issued and outstanding

 

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

 

CIENA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands) (unaudited)

 

 

Nine Months Ended

 

July 30

 

July 31

 

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

 

 

July 30

 

July 31

 

 

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

 

 

July 30

 

July 31

 

 

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.

Jamie Moody
Ciena Corporation
+1 (214) 995-8035
pr@ciena.com

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

Source: Ciena Corporation