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Ciena Reports Fiscal Second Quarter 2021 Financial Results

June 03, 2021

HANOVER, Md.--(BUSINESS WIRE)-- Ciena® Corporation (NYSE: CIEN), a networking systems, services and software company, today announced unaudited financial results for its fiscal second quarter ended May 1, 2021.

  • Q2 Revenue: $833.9 million
  • Q2 Net Income per Share: $0.66 GAAP; $0.62 adjusted (non-GAAP)
  • Share Repurchases: Repurchased approximately 0.5 million shares of common stock for an aggregate price of $26.2 million during the quarter

“We delivered strong fiscal second quarter results as we continued to see encouraging signs in the market environment, including improvements in customer spending,” said Gary Smith, president and CEO of Ciena. “These dynamics, combined with our business and financial performance in the first half of the year, give us strong visibility and confidence in our ability to achieve our financial targets as we move through the year.”

For the fiscal second quarter 2021, Ciena reported revenue of $833.9 million as compared to $894.1 million for the fiscal second quarter 2020.

Ciena's GAAP net income for the fiscal second quarter 2021 was $103.1 million, or $0.66 per diluted common share, which compares to a GAAP net income of $91.7 million, or $0.59 per diluted common share, for the fiscal second quarter 2020. Ciena's GAAP net income for the second quarter of 2021 benefited from recording $40.4 million in pre-tax amounts from the Canadian Emergency Wage Subsidy program. 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 2021 was $97.6 million, or $0.62 per diluted common share, which compares to an adjusted (non-GAAP) net income of $117.4 million, or $0.76 per diluted common share, for the fiscal second quarter 2020.

Fiscal Second Quarter 2021 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

 

 

 

FY 2021

 

FY 2020

 

Y-T-Y*

Revenue

$

833.9

 

 

$

894.1

 

 

(6.7

)%

Gross margin

 

49.5

%

 

 

46.2

%

 

3.3

%

Operating expense

$

278.8

 

 

$

285.8

 

 

(2.5

)%

Operating margin

 

16.0

%

 

 

14.3

%

 

1.7

%

 

 

 

 

 

 

Non-GAAP Results

 

Q2

 

Q2

 

 

 

FY 2021

 

FY 2020

 

Y-T-Y*

Revenue

$

833.9

 

 

$

894.1

 

 

(6.7

)%

Adj. gross margin

 

49.2

%

 

 

46.9

%

 

2.3

%

Adj. operating expense

$

278.7

 

 

$

258.7

 

 

7.7

%

Adj. operating margin

 

15.8

%

 

 

17.9

%

 

(2.1

)%

Adj. EBITDA

$

156.2

 

 

$

183.0

 

 

(14.6

)%

 

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

 

 

Revenue by Segment

 

 

Q2 FY 2021

 

Q2 FY 2020

 

 

Revenue

 

%**

 

Revenue

 

%**

Networking Platforms

 

 

 

 

 

 

 

 

Converged Packet Optical

 

$

573.7

 

 

68.8

 

 

$

654.3

 

 

73.2

 

Routing and Switching (1)

 

63.6

 

 

7.6

 

 

64.2

 

 

7.2

 

Total Networking Platforms

 

637.3

 

 

76.4

 

 

718.5

 

 

80.4

 

 

 

 

 

 

 

 

 

 

Platform Software and Services

 

56.7

 

 

6.8

 

 

45.0

 

 

5.0

 

 

 

 

 

 

 

 

 

 

Blue Planet Automation Software and Services

 

23.9

 

 

2.9

 

 

15.0

 

 

1.7

 

 

 

 

 

 

 

 

 

 

Global Services

 

 

 

 

 

 

 

 

Maintenance Support and Training

 

70.4

 

 

8.4

 

 

71.5

 

 

8.0

 

Installation and Deployment

 

38.0

 

 

4.6

 

 

34.2

 

 

3.8

 

Consulting and Network Design

 

7.6

 

 

0.9

 

 

9.9

 

 

1.1

 

Total Global Services

 

116.0

 

 

13.9

 

 

115.6

 

 

12.9

 

 

 

 

 

 

 

 

 

 

Total

 

$

833.9

 

 

100.0

 

 

$

894.1

 

 

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 Second Quarter 2021

 

 

Revenue by Geographic Region

 

 

Q2 FY 2021

 

Q2 FY 2020

 

 

Revenue

 

% **

 

Revenue

 

% **

Americas

 

$

587.5

 

 

70.4

 

 

$

650.4

 

 

72.7

 

Europe, Middle East and Africa

 

155.0

 

 

18.6

 

 

141.4

 

 

15.8

 

Asia Pacific

 

91.4

 

 

11.0

 

 

102.3

 

 

11.5

 

Total

 

$

833.9

 

 

100.0

 

 

$

894.1

 

 

100.0

 

 

** Denotes % of total revenue

  • One 10%-plus customer represented a total of 15% of revenue
  • Cash and investments totaled $1.4 billion
  • Cash flow from operations totaled $225.0 million
  • Average days' sales outstanding (DSOs) were 86
  • Accounts receivable, net balance was $716.8 million
  • Unbilled contract asset, net balance was $81.4 million
  • Inventories totaled $401.2 million, including:
    • Raw materials: $139.4 million
    • Work in process: $10.8 million
    • Finished goods: $234.2 million
    • Deferred cost of sales: $57.4 million
    • Reserve for excess and obsolescence: $(40.6) million
  • Product inventory turns were 3.4
  • Headcount totaled 7,077

Supplemental Materials and Live Web Broadcast of Unaudited Fiscal Second Quarter 2021 Results

Today, Thursday, June 3, 2021, in conjunction with this announcement, Ciena has posted to the Quarterly Results page of the Investor Relations section of its website an accompanying investor presentation for its unaudited fiscal second quarter 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, 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: “We delivered strong fiscal second quarter results as we continued to see encouraging signs in the market environment, including improvements in customer spending,” and “These dynamics, combined with our business and financial performance in the first half of the year, give us strong visibility and confidence in our ability to achieve our financial targets as we move through the year.”

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 successfully our business and growth strategies; the duration and severity of the COVID-19 pandemic and its impact 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 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; 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; 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 its Annual Report on Form 10-K filed with the SEC on December 18, 2020 and included in its Quarterly Report on Form 10-Q for the second quarter of fiscal 2021 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

 

 

May 1,

 

May 2,

 

May 1,

 

May 2,

 

 

2021

 

2020

 

2021

 

2020

Revenue:

 

 

 

 

 

 

 

 

Products

 

$

670,043

 

 

$

739,892

 

 

$

1,267,263

 

 

$

1,427,107

 

Services

 

163,884

 

 

154,161

 

 

323,794

 

 

299,858

 

Total revenue

 

833,927

 

 

894,053

 

 

1,591,057

 

 

1,726,965

 

Cost of goods sold:

 

 

 

 

 

 

 

 

Products

 

339,601

 

 

405,138

 

 

654,699

 

 

794,151

 

Services

 

81,907

 

 

75,589

 

 

166,048

 

 

148,953

 

Total cost of goods sold

 

421,508

 

 

480,727

 

 

820,747

 

 

943,104

 

Gross profit

 

412,419

 

 

413,326

 

 

770,310

 

 

783,861

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

110,246

 

 

131,530

 

 

242,987

 

 

262,430

 

Selling and marketing

 

110,387

 

 

101,214

 

 

207,665

 

 

208,280

 

General and administrative

 

43,635

 

 

42,030

 

 

83,628

 

 

84,498

 

Amortization of intangible assets

 

6,019

 

 

5,839

 

 

11,929

 

 

11,692

 

Significant asset impairments and restructuring costs

 

8,209

 

 

3,811

 

 

14,076

 

 

8,283

 

Acquisition and integration costs

 

294

 

 

1,414

 

 

601

 

 

3,233

 

Total operating expenses

 

278,790

 

 

285,838

 

 

560,886

 

 

578,416

 

Income from operations

 

133,629

 

 

127,488

 

 

209,424

 

 

205,445

 

Interest and other income (loss), net

 

(1,274

)

 

(2,665

)

 

(2,395

)

 

981

 

Interest expense

 

(7,785

)

 

(7,860

)

 

(15,145

)

 

(16,675

)

Loss on extinguishment and modification of debt

 

 

 

 

 

 

 

(646

)

Income before income taxes

 

124,570

 

 

116,963

 

 

191,884

 

 

189,105

 

Provision for income taxes

 

21,453

 

 

25,308

 

 

33,419

 

 

35,122

 

Net income

 

$

103,117

 

 

$

91,655

 

 

$

158,465

 

 

$

153,983

 

 

 

 

 

 

 

 

 

 

Net Income per Common Share

 

 

 

 

 

 

 

 

Basic net income per common share

 

$

0.66

 

 

$

0.60

 

 

$

1.02

 

 

$

1.00

 

Diluted net income per potential common share

 

$

0.66

 

 

$

0.59

 

 

$

1.01

 

 

$

0.99

 

 

 

 

 

 

 

 

 

 

Weighted average basic common shares outstanding

 

155,331

 

 

153,858

 

 

155,257

 

 

154,099

 

Weighted average dilutive potential common shares outstanding 1

 

156,876

 

 

155,141

 

 

156,734

 

 

155,443

 

1 Weighted average dilutive potential common shares outstanding used in calculating 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.

 

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

 

Weighted average dilutive potential common shares outstanding used in calculating GAAP diluted net income per potential common share for the second quarter of fiscal 2020 includes 1.3 million shares underlying certain stock option and stock unit awards.

 

Weighted average dilutive potential common shares outstanding used in calculating GAAP diluted net income per potential common share for the first six months of fiscal 2020 includes 1.3 million shares underlying certain stock option and stock unit awards.

CIENA CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

 

 

 

May 1,
2021

 

October 31,
2020

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

1,202,974

 

 

$

1,088,624

 

Short-term investments

 

151,816

 

 

150,667

 

Accounts receivable, net

 

716,779

 

 

719,405

 

Inventories

 

401,233

 

 

344,379

 

Prepaid expenses and other

 

321,651

 

 

308,084

 

Total current assets

 

2,794,453

 

 

2,611,159

 

Long-term investments

 

91,715

 

 

82,226

 

Equipment, building, furniture and fixtures, net

 

298,329

 

 

272,377

 

Operating lease right-of-use assets

 

50,997

 

 

57,026

 

Goodwill

 

311,734

 

 

310,847

 

Other intangible assets, net

 

82,879

 

 

96,647

 

Deferred tax asset, net

 

653,922

 

 

647,805

 

Other long-term assets

 

103,984

 

 

102,830

 

Total assets

 

$

4,388,013

 

 

$

4,180,917

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

279,247

 

 

$

291,904

 

Accrued liabilities and other short-term obligations

 

330,060

 

 

334,132

 

Deferred revenue

 

147,075

 

 

108,700

 

Operating lease liabilities

 

19,364

 

 

19,035

 

Current portion of long-term debt

 

6,930

 

 

6,930

 

Total current liabilities

 

782,676

 

 

760,701

 

Long-term deferred revenue

 

57,224

 

 

49,663

 

Other long-term obligations

 

127,700

 

 

123,185

 

Long-term operating lease liabilities

 

53,795

 

 

61,415

 

Long-term debt, net

 

673,355

 

 

676,356

 

Total liabilities

 

$

1,694,750

 

 

$

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; 154,962,122 and 154,563,005 shares issued and outstanding

 

1,550

 

 

1,546

 

Additional paid-in capital

 

6,813,215

 

 

6,826,531

 

Accumulated other comprehensive gain (loss)

 

5,361

 

 

(35,358

)

Accumulated deficit

 

(4,126,863

)

 

(4,283,122

)

Total stockholders’ equity

 

2,693,263

 

 

2,509,597

 

Total liabilities and stockholders’ equity

 

$

4,388,013

 

 

$

4,180,917

 

CIENA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands) (unaudited)

 

 

 

Six Months Ended

 

 

May 1,

 

May 2,

 

 

2021

 

2020

Cash flows provided by operating activities:

 

 

 

 

Net income

 

$

158,465

 

 

$

153,983

 

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

 

 

 

 

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

 

47,295

 

 

48,381

 

Share-based compensation costs

 

40,499

 

 

33,579

 

Amortization of intangible assets

 

18,517

 

 

19,361

 

Deferred taxes

 

(9,606

)

 

25,420

 

Provision for inventory excess and obsolescence

 

10,402

 

 

12,640

 

Provision for warranty

 

7,937

 

 

13,793

 

Other

 

5,928

 

 

16,190

 

Changes in assets and liabilities:

 

 

 

 

Accounts receivable

 

(180

)

 

15,865

 

Inventories

 

(66,934

)

 

5,618

 

Prepaid expenses and other

 

(8,565

)

 

(54,839

)

Operating lease right-of-use assets

 

8,253

 

 

8,642

 

Accounts payable, accruals and other obligations

 

(30,108

)

 

(151,713

)

Deferred revenue

 

45,482

 

 

(5,679

)

Short and long-term operating lease liabilities

 

(9,726

)

 

(10,311

)

Net cash provided by operating activities

 

217,659

 

 

130,930

 

Cash flows used in investing activities:

 

 

 

 

Payments for equipment, furniture, fixtures and intellectual property

 

(51,651

)

 

(45,458

)

Purchase of available for sale securities

 

(102,429

)

 

(40,894

)

Proceeds from maturities of available for sale securities

 

91,810

 

 

60,000

 

Settlement of foreign currency forward contracts, net

 

9,414

 

 

(3,836

)

Acquisition of business, net of cash acquired

 

 

 

(28,300

)

Proceeds from sale of equity investment

 

4,678

 

 

 

Net cash used in investing activities

 

(48,178

)

 

(58,488

)

Cash flows used in financing activities:

 

 

 

 

Payment of long term debt

 

(3,465

)

 

(1,733

)

Payment of debt issuance costs

 

 

 

(382

)

Payment of finance lease obligations

 

(1,463

)

 

(1,381

)

Shares repurchased for tax withholdings on vesting of restricted stock units

 

(27,893

)

 

(18,200

)

Repurchases of common stock - repurchase program

 

(38,498

)

 

(74,535

)

Proceeds from issuance of common stock

 

13,480

 

 

12,290

 

Net cash used in financing activities

 

(57,839

)

 

(83,941

)

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

 

2,696

 

 

(4,876

)

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

 

114,338

 

 

(16,375

)

Cash, cash equivalents and restricted cash at beginning of period

 

1,088,708

 

 

904,161

 

Cash, cash equivalents and restricted cash at end of period

 

$

1,203,046

 

 

$

887,786

 

Supplemental disclosure of cash flow information

 

 

 

 

Cash paid during the period for interest

 

$

14,949

 

 

$

17,590

 

Cash paid during the period for income taxes, net

 

$

27,666

 

 

$

22,011

 

Operating lease payments

 

$

10,785

 

 

$

11,409

 

Non-cash investing and financing activities

 

 

 

 

Purchase of equipment in accounts payable

 

$

4,966

 

 

$

4,480

 

Repurchase of common stock in accrued liabilities from repurchase program

 

$

900

 

 

$

 

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

 

$

1,770

 

 

$

4,887

 

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

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

 

 

 

 

 

 

 

Quarter Ended

 

 

May 1,

 

May 2,

 

 

2021

 

2020

Gross Profit Reconciliation (GAAP/non-GAAP)

 

 

 

 

GAAP gross profit

 

$

412,419

 

 

$

413,326

 

Share-based compensation-products

 

498

 

 

827

 

Share-based compensation-services

 

1,421

 

 

1,036

 

Canadian Emergency Wage Subsidy-products

 

(4,189

)

 

 

Canadian Emergency Wage Subsidy-services

 

(2,620

)

 

 

Amortization of intangible assets

 

2,856

 

 

3,835

 

Total adjustments related to gross profit

 

(2,034

)

 

5,698

 

Adjusted (non-GAAP) gross profit

 

$

410,385

 

 

$

419,024

 

Adjusted (non-GAAP) gross profit percentage

 

49.2

%

 

46.9

%

 

 

 

 

 

Operating Expense Reconciliation (GAAP/non-GAAP)

 

 

 

 

GAAP operating expense

 

$

278,790

 

 

$

285,838

 

Share-based compensation-research and development

 

5,844

 

 

4,822

 

Share-based compensation-sales and marketing

 

6,610

 

 

5,264

 

Share-based compensation-general and administrative

 

6,743

 

 

5,975

 

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

)

 

 

Amortization of intangible assets

 

6,019

 

 

5,839

 

Significant asset impairments and restructuring costs

 

8,209

 

 

3,811

 

Acquisition and integration costs

 

294

 

 

1,414

 

Total adjustments related to operating expense

 

84

 

 

27,125

 

Adjusted (non-GAAP) operating expense

 

$

278,706

 

 

$

258,713

 

 

 

 

 

 

Income from Operations Reconciliation (GAAP/non-GAAP)

 

 

 

 

GAAP income from operations

 

$

133,629

 

 

$

127,488

 

Total adjustments related to gross profit

 

(2,034

)

 

5,698

 

Total adjustments related to operating expense

 

84

 

 

27,125

 

Total adjustments related to income from operations

 

(1,950

)

 

32,823

 

Adjusted (non-GAAP) income from operations

 

$

131,679

 

 

$

160,311

 

Adjusted (non-GAAP) operating margin percentage

 

15.8

%

 

17.9

%

 

 

 

 

 

Net Income Reconciliation (GAAP/non-GAAP)

 

 

 

 

GAAP net income

 

$

103,117

 

 

$

91,655

 

Exclude GAAP provision for income taxes

 

21,453

 

 

25,308

 

Income before income taxes

 

124,570

 

 

116,963

 

Total adjustments related to income from operations

 

(1,950

)

 

32,823

 

Unrealized loss on equity investment

 

165

 

 

 

Adjusted income before income taxes

 

122,785

 

 

149,786

 

Non-GAAP tax provision on adjusted income before income taxes

 

25,171

 

 

32,354

 

Adjusted (non-GAAP) net income

 

$

97,614

 

 

$

117,432

 

 

 

 

 

 

Weighted average basic common shares outstanding

 

155,331

 

 

153,858

 

Weighted average dilutive potential common shares outstanding 1

 

156,876

 

 

155,141

 

 

 

 

 

 

Net Income per Common Share

 

 

 

 

GAAP diluted net income per common share

 

$

0.66

 

 

$

0.59

 

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

 

$

0.62

 

 

$

0.76

 

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 2021 includes 1.5 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 2020 includes 1.3 million shares underlying certain stock option and stock unit awards.

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

(in thousands) (unaudited)

 

 

 

 

 

 

 

Quarter Ended

 

 

May 1,

 

May 2,

 

 

2021

 

2020

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

 

 

 

 

Net income (GAAP)

 

$

103,117

 

 

$

91,655

 

Add: Interest expense

 

7,785

 

 

7,860

 

Add: Interest and other loss, net

 

1,274

 

 

2,665

 

Add: Provision for income taxes

 

21,453

 

 

25,308

 

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

 

24,107

 

 

22,599

 

Add: Amortization of intangible assets

 

8,875

 

 

9,674

 

EBITDA

 

$

166,611

 

 

$

159,761

 

Less: Canadian Emergency Wage Subsidy

 

40,444

 

 

 

Add: Share-based compensation cost

 

21,535

 

 

17,977

 

Add: Significant asset impairments and restructuring costs

 

8,209

 

 

3,811

 

Add: Acquisition and integration costs

 

294

 

 

1,414

 

Adjusted EBITDA

 

$

156,205

 

 

$

182,963

 

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.
  • 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.
  • 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.
  • Acquisition and integration costs -includes costs of acquisition 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.
  • Unrealized loss on 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 20.5% for the second fiscal quarter of 2021 and 21.6% for the second fiscal quarter of 2020. 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 (214) 995-8035
pr@ciena.com

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

Source: Ciena Corporation

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