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Ciena Reports Fiscal Fourth Quarter 2021 and Year-End Financial Results

December 09, 2021

Board Authorizes Share Repurchase up to $1.0 Billion

HANOVER, Md.--(BUSINESS WIRE)-- Ciena® Corporation (NYSE: CIEN), a networking systems, services and software company, today announced unaudited financial results for its fiscal fourth quarter and year ended October 30, 2021.

  • Q4 Revenue: $1.04 billion, increasing 25.7% year over year
  • Q4 Net Income per Share: $0.66 GAAP; $0.85 adjusted (non-GAAP), increasing 41.7% year over year
  • Share Repurchases: Repurchased approximately 0.5 million shares of common stock for an aggregate price of $26.7 million during the fourth quarter

“Our strong financial results exceeded our expectations in the fourth quarter and for the full fiscal year, driven by continued execution of our strategy and our demonstrated ability to manage supply chain challenges,” said Gary Smith, President and CEO, Ciena. “Looking ahead, we intend to continue driving growth in our business by leveraging our market leadership and investing to capitalize on robust demand dynamics. In addition, our strong balance sheet and cash generation expectations allow us to increase return of capital to our shareholders.”

For fiscal fourth quarter 2021, Ciena reported revenue of $1.04 billion, as compared to $828.5 million for fiscal fourth quarter 2020. For fiscal year 2021, Ciena reported revenue of $3.62 billion, as compared to $3.53 billion for fiscal year 2020.

Ciena's GAAP net income for fiscal fourth quarter 2021 was $103.5 million, or $0.66 per diluted common share, which compares to GAAP net income of $65.0 million, or $0.42 per diluted common share, for fiscal fourth quarter 2020. For fiscal year 2021, Ciena's GAAP net income was $500.2 million, or $3.19 per diluted common share, as compared to GAAP net income of $361.3 million, or $2.32 per diluted common share, for fiscal year 2020.

Ciena's adjusted (non-GAAP) net income for fiscal fourth quarter 2021 was $132.7 million, or $0.85 per diluted common share, which compares to adjusted (non-GAAP) net income of $94.5 million, or $0.60 per diluted common share, for fiscal fourth quarter 2020. For fiscal year 2021, Ciena's adjusted (non-GAAP) net income was $456.5 million, or $2.91 per diluted common share, as compared to adjusted (non-GAAP) net income of $460.1 million, or $2.95 per diluted common share, for fiscal year 2020.

Share Repurchase Program

On December 1, 2021, Ciena's Board of Directors authorized the repurchase of up to $1.0 billion of the Company's stock, replacing the previous share repurchase authorization. In connection with this new authorization, the company intends to enter into an accelerated share repurchase (ASR) arrangement under which it will repurchase $250 million of its common stock. The final settlement of the ASR is expected to be completed in the second quarter of fiscal 2022.

Performance Summary for the Fiscal Fourth Quarter and the Year Ended October 30, 2021

The tables below (in millions, except percentage data) provide comparisons of certain quarterly and annual 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 (unaudited)

 

 

Quarter Ended

 

Period

 

Year Ended

 

Period

 

 

October 30,

 

October 31,

 

Change

 

October 30,

 

October 31,

 

Change

 

 

2021

 

2020

 

Y-T-Y*

 

2021

 

2020

 

Y-T-Y*

Revenue

 

$

1,041.5

 

 

$

828.5

 

 

25.7

%

 

$

3,620.7

 

 

$

3,532.2

 

 

2.5

%

Gross margin

 

45.8

%

 

48.8

%

 

(3.0

)%

 

47.6

%

 

46.8

%

 

0.8

%

Operating expense

 

$

339.7

 

 

$

310.9

 

 

9.3

%

 

$

1,226.6

 

 

$

1,165.9

 

 

5.2

%

Operating margin

 

13.2

%

 

11.3

%

 

1.9

%

 

13.7

%

 

13.8

%

 

(0.1

)%

 

 

 

Non-GAAP Results (unaudited)

 

 

Quarter Ended

 

Period

 

Year Ended

 

Period

 

 

October 30,

 

October 31,

 

Change

 

October 30,

 

October 31,

 

Change

 

 

2021

 

2020

 

Y-T-Y*

 

2021

 

2020

 

Y-T-Y*

Revenue

 

$

1,041.5

 

 

$

828.5

 

 

25.7

%

 

$

3,620.7

 

 

$

3,532.2

 

 

2.5

%

Adj. gross margin

 

46.3

%

 

49.5

%

 

(3.2

)%

 

47.9

%

 

47.4

%

 

0.5

%

Adj. operating expense

 

$

307.1

 

 

$

278.9

 

 

10.1

%

 

$

1,129.3

 

 

$

1,055.3

 

 

7.0

%

Adj. operating margin

 

16.8

%

 

15.8

%

 

1.0

%

 

16.8

%

 

17.6

%

 

(0.8

)%

Adj. EBITDA

 

$

199.2

 

 

$

154.5

 

 

28.9

%

 

$

702.8

 

 

$

713.9

 

 

(1.6

)%

 

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

 

 

Revenue by Segment (unaudited)

 

 

Quarter Ended

 

 

October 30, 2021

 

October 31, 2020

 

 

Revenue

 

%**

 

Revenue

 

% **

Networking Platforms

 

 

 

 

 

 

 

 

Converged Packet Optical

 

$

754.6

 

 

72.5

 

 

$

579.3

 

 

69.9

 

Routing and Switching (1)

 

74.2

 

 

7.1

 

 

56.0

 

 

6.8

 

Total Networking Platforms

 

828.8

 

 

79.6

 

 

635.3

 

 

76.7

 

 

 

 

 

 

 

 

 

 

Platform Software and Services

 

66.1

 

 

6.3

 

 

54.5

 

 

6.6

 

 

 

 

 

 

 

 

 

 

Blue Planet Automation Software and Services

 

19.8

 

 

1.9

 

 

20.9

 

 

2.5

 

 

 

 

 

 

 

 

 

 

Global Services

 

 

 

 

 

 

 

 

Maintenance Support and Training

 

71.3

 

 

6.9

 

 

67.0

 

 

8.1

 

Installation and Deployment

 

47.2

 

 

4.5

 

 

43.0

 

 

5.2

 

Consulting and Network Design

 

8.3

 

 

0.8

 

 

7.8

 

 

0.9

 

Total Global Services

 

126.8

 

 

12.2

 

 

117.8

 

 

14.2

 

 

 

 

 

 

 

 

 

 

Total

 

$

1,041.5

 

 

100.0

 

 

$

828.5

 

 

100.0

 

 

 

Revenue by Segment (unaudited)

 

 

Year Ended

 

 

October 30, 2021

 

October 31, 2020

 

 

Revenue

 

%**

 

Revenue

 

% **

Networking Platforms

 

 

 

 

 

 

 

 

Converged Packet Optical

 

$

2,553.5

 

 

70.5

 

 

$

2,547.6

 

 

72.1

 

Routing and Switching (1)

 

271.8

 

 

7.5

 

 

267.5

 

 

7.6

 

Total Networking Platforms

 

2,825.3

 

 

78.0

 

 

2,815.1

 

 

79.7

 

 

 

 

 

 

 

 

 

 

Platform Software and Services

 

229.6

 

 

6.4

 

 

197.8

 

 

5.6

 

 

 

 

 

 

 

 

 

 

Blue Planet Automation Software and Services

 

77.2

 

 

2.1

 

 

62.6

 

 

1.8

 

 

 

 

 

 

 

 

 

 

Global Services

 

 

 

 

 

 

 

 

Maintenance Support and Training

 

283.4

 

 

7.8

 

 

269.4

 

 

7.6

 

Installation and Deployment

 

171.5

 

 

4.7

 

 

152.0

 

 

4.3

 

Consulting and Network Design

 

33.7

 

 

1.0

 

 

35.3

 

 

1.0

 

Total Global Services

 

488.6

 

 

13.5

 

 

456.7

 

 

12.9

 

 

 

 

 

 

 

 

 

 

Total

 

$

3,620.7

 

 

100.0

 

 

$

3,532.2

 

 

100.0

 

** Denotes % of total revenue

(1)

Ciena renamed its former “Packet Networking” product line “Routing and Switching” effective as of the beginning of fiscal 2021. This change, affecting only the presentation of such information, was made on a prospective basis and does not impact comparability of previous financial results or the composition of this product category.

Additional Performance Metrics for Fiscal Fourth Quarter and Year Ended October 30, 2021

 

 

Revenue by Geographic Region (unaudited)

 

 

Quarter Ended

 

 

October 30, 2021

 

October 31, 2020

 

 

Revenue

 

% **

 

Revenue

 

% **

Americas

 

$

748.7

 

 

71.9

 

 

$

531.6

 

 

64.2

 

Europe, Middle East and Africa

 

170.8

 

 

16.4

 

 

157.6

 

 

19.0

 

Asia Pacific

 

122.0

 

 

11.7

 

 

139.3

 

 

16.8

 

Total

 

$

1,041.5

 

 

100.0

 

 

$

828.5

 

 

100.0

 

 

 

Revenue by Geographic Region (unaudited)

 

 

Year Ended

 

 

October 30, 2021

 

October 31, 2020

 

 

Revenue

 

% **

 

Revenue

 

% **

Americas

 

$

2,525.6

 

 

69.8

 

 

$

2,469.3

 

 

69.9

 

Europe, Middle East and Africa

 

670.5

 

 

18.5

 

 

591.5

 

 

16.8

 

Asia Pacific

 

424.6

 

 

11.7

 

 

471.4

 

 

13.3

 

Total

 

$

3,620.7

 

 

100.0

 

 

$

3,532.2

 

 

100.0

 

 

** Denotes % of total revenue

  • One 10%-plus customer represented a total of 12.9% and 12.4% of revenue for the fiscal fourth quarter and fiscal year 2021, respectively
  • Cash and investments totaled $1.7 billion
  • Cash flow from operations totaled $254.9 million and $541.6 million for the fiscal fourth quarter and fiscal year 2021, respectively
  • Average days' sales outstanding (DSOs) were 85 and 98 for the fiscal fourth quarter and fiscal year 2021, respectively
  • Accounts receivable, net balance was $885.0 million
  • Unbilled contract asset balance, net was $101.4 million
  • Inventories totaled $374.3 million, including:
    • Raw materials: $175.4 million
    • Work in process: $10.3 million
    • Finished goods: $180.8 million
    • Deferred cost of sales: $44.7 million
    • Reserve for excess and obsolescence: $(36.9) million
  • Product inventory turns were 5.0 and 4.1 for the fiscal fourth quarter and fiscal year 2021, respectively
  • Headcount totaled 7,241

Supplemental Materials and Live Web Broadcast of Unaudited Fiscal Fourth Quarter and Year-End 2021 Results

Today, Thursday, December 9, 2021, in conjunction with this announcement, Ciena posted to the Quarterly Results page of the Investor Relations section of its website certain related supporting materials for its unaudited fiscal fourth quarter and fiscal year 2021 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, 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 financial results exceeded our expectations in the fourth quarter and for the full fiscal year, driven by continued execution of our strategy and our demonstrated ability to manage supply chain challenges"; "Looking ahead, we intend to continue driving growth in our business by leveraging our market leadership and investing to capitalize on robust demand dynamics"; In addition, our strong balance sheet and cash generation expectations allow us to increase return of capital to our shareholders."

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 duration and severity of the COVID-19 pandemic and the impact of countermeasures taken to mitigate its spread; the impact of COVID-19 on macroeconomic conditions, the level of economic activity, demand for our technology solutions, short- and long-term customer or end user needs and changes thereto, continuity of supply chain, logistics and business operations, liquidity and financial results; changes in network spending or network strategy by 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; supply chain disruptions and the level of success relating to efforts to optimize Ciena's operations; changes in foreign currency exchange rates affecting revenue and operating expense; factors beyond our control such as natural disasters, acts of war or terrorism, and public health emergencies, including the COVID-19 pandemic; the impact of the Tax Cuts and Jobs Act; changes in tax or trade regulations, including the imposition of tariffs, duties or efforts to withdraw from or materially modify international trade agreements; changes in estimates of prospective income tax rates and any adjustments to Ciena's provisional estimates whether related to further guidance, analysis or otherwise, and the other risk factors disclosed in Ciena's periodic reports filed with the Securities and Exchange Commission, including its Quarterly Report on Form 10-Q filed with the SEC on September 8, 2021 and its Annual Report on Form 10-K 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 for the relevant period, Appendix 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 clients 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 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 

 

 

Quarter Ended

 

Year Ended

 

 

October 30,

 

October 31,

 

October 30,

 

October 31,

 

 

2021

 

2020

 

2021

 

2020

Revenue:

 

 

 

 

 

 

 

 

Products

 

$

860,925

 

 

$

668,661

 

 

$

2,932,602

 

 

$

2,914,790

 

Services

 

180,561

 

 

159,819

 

 

688,082

 

 

617,367

 

Total revenue

 

1,041,486

 

 

828,480

 

 

3,620,684

 

 

3,532,157

 

Cost of goods sold:

 

 

 

 

 

 

 

 

Products

 

470,334

 

 

343,413

 

 

1,545,269

 

 

1,573,791

 

Services

 

94,033

 

 

80,718

 

 

353,436

 

 

305,475

 

Total cost of goods sold

 

564,367

 

 

424,131

 

 

1,898,705

 

 

1,879,266

 

Gross profit

 

477,119

 

 

404,349

 

 

1,721,979

 

 

1,652,891

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

147,454

 

 

137,237

 

 

536,666

 

 

529,888

 

Selling and marketing

 

129,625

 

 

113,382

 

 

452,214

 

 

416,425

 

General and administrative

 

49,383

 

 

43,415

 

 

181,874

 

 

169,548

 

Significant asset impairments and restructuring costs

 

5,700

 

 

7,854

 

 

29,565

 

 

22,652

 

Amortization of intangible assets

 

5,836

 

 

5,851

 

 

23,732

 

 

23,383

 

Acquisition and integration costs

 

1,712

 

 

3,127

 

 

2,572

 

 

4,031

 

Total operating expenses

 

339,710

 

 

310,866

 

 

1,226,623

 

 

1,165,927

 

Income from operations

 

137,409

 

 

93,483

 

 

495,356

 

 

486,964

 

Interest and other income (loss), net

 

(168)

 

 

(249)

 

 

(1,768)

 

 

964

 

Interest expense

 

(7,916)

 

 

(7,395)

 

 

(30,837)

 

 

(31,321)

 

Loss on extinguishment and modification of debt

 

 

 

 

 

 

 

(646)

 

Income before income taxes

 

129,325

 

 

85,839

 

 

462,751

 

 

455,961

 

Provision (benefit) for income taxes

 

25,826

 

 

20,798

 

 

(37,445)

 

 

94,670

 

Net income

 

$

103,499

 

 

$

65,041

 

 

$

500,196

 

 

$

361,291

 

 

 

 

 

 

 

 

 

 

Net Income per Common Share

 

 

 

 

 

 

 

 

Basic net income per common share

 

$

0.67

 

 

$

0.42

 

 

$

3.22

 

 

$

2.34

 

Diluted net income per potential common share

 

$

0.66

 

 

$

0.42

 

 

$

3.19

 

 

$

2.32

 

 

 

 

 

 

 

 

 

 

Weighted average basic common shares outstanding

 

155,232

 

 

154,706

 

 

155,279

 

 

154,287

 

Weighted average diluted potential common shares outstanding(1)

 

156,689

 

 

156,563

 

 

156,743

 

 

155,955

 

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

Weighted average diluted potential common shares outstanding used in calculating GAAP diluted net income per potential common share for fiscal 2021 includes 1.5 million shares underlying certain stock option and stock unit awards.

Weighted average diluted potential common shares outstanding used in calculating GAAP diluted net income per potential common share for the fourth quarter of fiscal 2020 includes 1.9 million shares underlying certain stock option and stock unit awards.

Weighted average diluted potential common shares outstanding used in calculating GAAP diluted net income per potential common share for fiscal 2020 includes 1.7 million shares underlying certain stock option and stock unit awards.

 

CIENA CORPORATION

CONDENSED UNAUDITED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

 

 

October 30,

 

October 31,

 

2021

 

2020

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

1,422,546

 

 

$

1,088,624

 

Short-term investments

181,483

 

 

150,667

 

Accounts receivable, net

884,958

 

 

719,405

 

Inventories

374,265

 

 

344,379

 

Prepaid expenses and other

325,654

 

 

308,084

 

Total current assets

3,188,906

 

 

2,611,159

 

Long-term investments

70,038

 

 

82,226

 

Equipment, building, furniture and fixtures, net

284,968

 

 

272,377

 

Operating lease right-of-use assets

44,285

 

 

57,026

 

Goodwill

311,645

 

 

310,847

 

Other intangible assets, net

65,314

 

 

96,647

 

Deferred tax asset, net

800,180

 

 

647,805

 

Other long-term assets

99,891

 

 

102,830

 

Total assets

$

4,865,227

 

 

$

4,180,917

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

356,176

 

 

$

291,904

 

Accrued liabilities and other short-term obligations

409,285

 

 

334,132

 

Deferred revenue

118,007

 

 

108,700

 

Operating lease liabilities

18,632

 

 

19,035

 

Current portion of long-term debt

6,930

 

 

6,930

 

Total current liabilities

909,030

 

 

760,701

 

Long-term deferred revenue

57,457

 

 

49,663

 

Other long-term obligations

166,803

 

 

123,185

 

Long-term operating lease liabilities

41,564

 

 

61,415

 

Long-term debt, net

670,355

 

 

676,356

 

Total liabilities

$

1,845,209

 

 

$

1,671,320

 

 

 

 

 

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; 154,858,981 and 154,563,005 shares issued and outstanding

1,549

 

 

1,546

 

Additional paid-in capital

6,803,162

 

 

6,826,531

 

Accumulated other comprehensive income (loss)

439

 

 

(35,358

)

Accumulated deficit

(3,785,132

)

 

(4,283,122

)

Total stockholders’ equity

3,020,018

 

 

2,509,597

 

Total liabilities and stockholders’ equity

$

4,865,227

 

 

$

4,180,917

 

 

CIENA CORPORATION

CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

Year Ended

 

October 30, 2021

 

October 31, 2020

Cash flows provided by operating activities:

 

 

 

Net income

$

500,196

 

 

$

361,291

 

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

 

 

 

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

96,233

 

 

93,908

 

Share-based compensation costs

84,336

 

 

67,758

 

Amortization of intangible assets

36,033

 

 

38,619

 

Deferred taxes

(156,469

)

 

64,339

 

Provision for inventory excess and obsolescence

17,850

 

 

24,701

 

Provision for warranty

17,093

 

 

22,417

 

Other

14,525

 

 

20,483

 

Changes in assets and liabilities:

 

 

 

Accounts receivable

(174,377

)

 

(17,299

)

Inventories

(47,567

)

 

(25,044

)

Prepaid expenses and other

(19,691

)

 

(38,998

)

Operating lease right-of-use assets

16,632

 

 

16,787

 

Accounts payable, accruals and other obligations

162,134

 

 

(117,931

)

Deferred revenue

16,822

 

 

2,519

 

Short and long-term operating lease liabilities

(22,104

)

 

(19,896

)

Net cash provided by operating activities

541,646

 

 

493,654

 

Cash flows used in investing activities:

 

 

 

Payments for equipment, furniture, fixtures and intellectual property

(79,550

)

 

(82,667

)

Purchase of available for sale securities

(172,778

)

 

(223,196

)

Proceeds from maturities of available for sale securities

152,253

 

 

110,390

 

Settlement of foreign currency forward contracts, net

4,680

 

 

3,531

 

Proceeds from sale of equity investment

4,678

 

 

 

Acquisition of businesses, net of cash acquired

 

 

(28,300

)

Net cash used in investing activities

(90,717

)

 

(220,242

)

Cash flows used in financing activities:

 

 

 

Payment of long-term debt

(6,929

)

 

(5,198

)

Payment of debt issuance costs

 

 

(382

)

Payment of finance lease obligations

(3,004

)

 

(2,703

)

Shares repurchased for tax withholdings on vesting of stock unit awards

(44,071

)

 

(32,472

)

Repurchases of common stock - repurchase program

(91,288

)

 

(74,535

)

Proceeds from issuance of common stock

28,457

 

 

28,068

 

Net cash used in financing activities

(116,835

)

 

(87,222

)

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

(198

)

 

(1,643

)

Net increase in cash, cash equivalents and restricted cash

333,896

 

 

184,547

 

Cash, cash equivalents and restricted cash at beginning of fiscal year

1,088,708

 

 

904,161

 

Cash, cash equivalents and restricted cash at end of fiscal year

$

1,422,604

 

 

$

1,088,708

 

Supplemental disclosure of cash flow information

 

 

 

Cash paid during the fiscal year for interest

$

29,864

 

 

$

32,837

 

Cash paid during the fiscal year for income taxes, net

$

73,127

 

 

$

53,076

 

Operating lease payments

$

24,058

 

 

$

22,089

 

Non-cash investing and financing activities

 

 

 

Purchase of equipment in accounts payable

$

10,138

 

 

$

7,854

 

Repurchase of common stock in accrued liabilities from repurchase program

$

800

 

 

$

 

Operating lease right-of-use assets subject to lease liability

$

4,356

 

 

$

24,160

 

Unrealized gain on equity investment

$

 

 

$

2,681

 

 

APPENDIX A - Reconciliation of Adjusted (Non-GAAP) Measurements (unaudited)

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Year Ended

 

 

October 30, 2021

 

October 31, 2020

 

October 30, 2021

 

October 31, 2020

Gross Profit Reconciliation (GAAP/non-GAAP)

 

 

 

 

 

 

 

 

GAAP gross profit

 

$

477,119

 

 

$

404,349

 

 

$

1,721,979

 

 

$

1,652,891

 

Share-based compensation-products

 

920

 

 

724

 

 

3,408

 

 

3,182

 

Share-based compensation-services

 

1,240

 

 

968

 

 

5,181

 

 

3,853

 

Canadian Emergency Wage Subsidy-products

 

 

 

 

 

(4,283

)

 

 

Canadian Emergency Wage Subsidy-services

 

 

 

 

 

(2,667

)

 

 

Amortization of intangible assets

 

2,856

 

 

3,732

 

 

12,301

 

 

15,235

 

Total adjustments related to gross profit

 

5,016

 

 

5,424

 

 

13,940

 

 

22,270

 

Adjusted (non-GAAP) gross profit

 

$

482,135

 

 

$

409,773

 

 

$

1,735,919

 

 

$

1,675,161

 

Adjusted (non-GAAP) gross profit percentage

 

46.3

%

 

49.5

%

 

47.9

%

 

47.4

%

 

 

 

 

 

 

 

 

 

Operating Expense Reconciliation (GAAP/non-GAAP)

 

 

 

 

 

 

 

 

GAAP operating expense

 

$

339,710

 

 

$

310,866

 

 

$

1,226,623

 

 

$

1,165,927

 

Share-based compensation-research and development

 

5,684

 

 

4,030

 

 

21,863

 

 

16,987

 

Share-based compensation-sales and marketing

 

6,192

 

 

5,137

 

 

25,152

 

 

20,194

 

Share-based compensation-general and administrative

 

7,466

 

 

5,982

 

 

28,804

 

 

23,424

 

Canadian Emergency Wage Subsidy-research and development

 

 

 

 

 

(29,519

)

 

 

Canadian Emergency Wage Subsidy-sales and marketing

 

 

 

 

 

(2,604

)

 

 

Canadian Emergency Wage Subsidy-general and administrative

 

 

 

 

 

(2,207

)

 

 

Significant asset impairments and restructuring costs

 

5,700

 

 

7,854

 

 

29,565

 

 

22,652

 

Amortization of intangible assets

 

5,836

 

 

5,851

 

 

23,732

 

 

23,383

 

Acquisition and integration costs

 

1,712

 

 

3,127

 

 

2,572

 

 

4,031

 

Total adjustments related to operating expense

 

$

32,590

 

 

$

31,981

 

 

$

97,358

 

 

$

110,671

 

Adjusted (non-GAAP) operating expense

 

$

307,120

 

 

$

278,885

 

 

$

1,129,265

 

 

$

1,055,256

 

 

 

 

 

 

 

 

 

 

Income from Operations Reconciliation (GAAP/non-GAAP)

 

 

 

 

 

 

 

 

GAAP income from operations

 

$

137,409

 

 

$

93,483

 

 

$

495,356

 

 

$

486,964

 

Total adjustments related to gross profit

 

5,016

 

 

5,424

 

 

13,940

 

 

22,270

 

Total adjustments related to operating expense

 

32,590

 

 

31,981

 

 

97,358

 

 

110,671

 

Total adjustments related to income from operations

 

37,606

 

 

37,405

 

 

111,298

 

 

132,941

 

Adjusted (non-GAAP) income from operations

 

$

175,015

 

 

$

130,888

 

 

$

606,654

 

 

$

619,905

 

Adjusted (non-GAAP) operating margin percentage

 

16.8

%

 

15.8

%

 

16.8

%

 

17.6

%

Net Income Reconciliation (GAAP/non-GAAP)

 

 

 

 

 

 

 

 

GAAP net income

 

$

103,499

 

 

$

65,041

 

 

$

500,196

 

 

$

361,291

 

Exclude GAAP provision (benefit) for income taxes

 

25,826

 

 

20,798

 

 

(37,445

)

 

94,670

 

Income before income taxes

 

129,325

 

 

85,839

 

 

462,751

 

 

455,961

 

Total adjustments related to income from operations

 

37,606

 

 

37,405

 

 

111,298

 

 

132,941

 

Loss on extinguishment and modification of debt

 

 

 

 

 

 

 

646

 

Unrealized (gain) loss on equity investment

 

 

 

(2,681

)

 

165

 

 

(2,681

)

Adjusted income before income taxes

 

166,931

 

 

120,563

 

 

574,214

 

 

586,867

 

Non-GAAP tax provision on adjusted income before income taxes

 

34,221

 

 

26,042

 

 

117,714

 

 

126,763

 

Adjusted (non-GAAP) net income

 

$

132,710

 

 

$

94,521

 

 

$

456,500

 

 

$

460,104

 

 

 

 

 

 

 

 

 

 

Weighted average basic common shares outstanding

 

155,232

 

 

154,706

 

 

155,279

 

 

154,287

 

Weighted average diluted potential common shares outstanding(1)

 

156,689

 

 

156,563

 

 

156,743

 

 

155,955

 

 

 

 

 

 

 

 

 

 

Net Income per Common Share

 

 

 

 

 

 

 

 

GAAP diluted net income per potential common share

 

$

0.66

 

 

$

0.42

 

 

$

3.19

 

 

$

2.32

 

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

 

$

0.85

 

 

$

0.60

 

 

$

2.91

 

 

$

2.95

 

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

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

Weighted average diluted potential common shares outstanding used in calculating Adjusted (non-GAAP) diluted net income per potential common share for the fourth quarter of fiscal 2020 includes 1.9 million shares underlying certain stock option and stock unit awards.

Weighted average diluted potential common shares outstanding used in calculating Adjusted (non-GAAP) diluted net income per potential common share for fiscal 2020 includes 1.7 million shares underlying certain stock option and stock unit awards.

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

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Year Ended

 

 

October 30, 2021

 

October 31, 2020

 

October 30, 2021

 

October 31, 2020

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

 

 

 

 

 

 

 

 

Net income (GAAP)

 

$

103,499

 

 

$

65,041

 

 

$

500,196

 

 

$

361,291

 

Add: Interest expense

 

7,916

 

 

7,395

 

 

30,837

 

 

31,321

 

Less: Interest and other income (loss), net

 

(168

)

 

(249

)

 

(1,768

)

 

964

 

Add: Loss on extinguishment and modification of debt

 

 

 

 

 

 

 

(646

)

Add: Provision (benefit) for income taxes

 

25,826

 

 

20,798

 

 

(37,445

)

 

94,670

 

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

 

24,315

 

 

23,538

 

 

96,233

 

 

93,908

 

Add: Amortization of intangible assets

 

8,692

 

 

9,584

 

 

36,033

 

 

38,619

 

EBITDA

 

$

170,416

 

 

$

126,605

 

 

$

627,622

 

 

$

619,491

 

Less: Canadian Emergency Wage Subsidy

 

 

 

 

 

41,280

 

 

 

Add: Share-based compensation cost

 

21,366

 

 

16,920

 

 

84,336

 

 

67,758

 

Add: Significant asset impairments and restructuring costs

 

5,700

 

 

7,854

 

 

29,565

 

 

22,652

 

Add: Acquisition and integration costs

 

1,712

 

 

3,127

 

 

2,572

 

 

4,031

 

Adjusted EBITDA

 

$

199,194

 

 

$

154,506

 

 

$

702,815

 

 

$

713,932

 

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 expenses for financial, legal and accounting advisors, severance and other employee-related costs associated with our acquisition of Centina in fiscal 2020, and costs and recoveries of acquisition consideration and compensation associated with a three-year earn-out arrangement related to the DonRiver acquisition in fiscal 2018. Ciena does not believe that these costs are reflective of its ongoing operating expense following its completion of these integration activities.
  • Loss on extinguishment and modification of debt - reflects extinguishment and modification of debt expenses related to refinancing of our Term Loan due September 28, 2025.
  • Unrealized (gain)loss on equity investment - reflects a change in the carrying value of certain cost method equity investments.
  • 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 20.5% for fiscal 2021 and 21.6% for fiscal 2020. 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 fiscal 2021 benefited from recording a $119.3 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.

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

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

Source: Ciena Corporation

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