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Ciena Reports Fiscal Third Quarter 2021 Financial Results

September 02, 2021

HANOVER, Md.--(BUSINESS WIRE)-- Ciena® Corporation (NYSE: CIEN), a networking systems, services and software company, today announced unaudited financial results for its fiscal third quarter ended July 31, 2021.

  • Q3 Revenue: $988.1 million
  • Q3 Net Income per Share: $1.52 GAAP; $0.92 adjusted (non-GAAP)
  • Share Repurchases: Repurchased approximately 0.5 million shares of common stock for an aggregate price of $26.0 million during the quarter

“We delivered outstanding fiscal third quarter results that reflect continued momentum in our business as well as our differentiated position in the market,” said Gary Smith, president and CEO of Ciena. “These results combined with a robust demand environment give us confidence that we will deliver our expected strong second half performance.”

For the fiscal third quarter 2021, Ciena reported revenue of $988.1 million as compared to $976.7 million for the fiscal third quarter 2020.

Ciena's GAAP net income for the fiscal third quarter 2021 was $238.2 million, or $1.52 per diluted common share, which compares to a GAAP net income of $142.3 million, or $0.91 per diluted common share, for the fiscal third quarter 2020. Ciena's GAAP net income for the third quarter of 2021 benefited from the recording of a $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 2021 was $144.9 million, or $0.92 per diluted common share, which compares to an adjusted (non-GAAP) net income of $166.4 million, or $1.06 per diluted common share, for the fiscal third quarter 2020.

Fiscal Third 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

 

 

Q3

 

Q3

 

 

 

 

FY 2021

 

FY 2020

 

Y-T-Y*

Revenue

 

$

988.1

 

 

$

976.7

 

 

1.2

%

Gross margin

 

48.0

%

 

47.6

%

 

0.4

%

Operating expense

 

$

326.0

 

 

$

276.6

 

 

17.9

%

Operating margin

 

15.0

%

 

19.3

%

 

(4.3)

%

 

 

Non-GAAP Results

 

 

Q3

 

Q3

 

 

 

 

FY 2021

 

FY 2020

 

Y-T-Y*

Revenue

 

$

988.1

 

 

$

976.7

 

 

1.2

%

Adj. gross margin

 

48.5

%

 

48.2

%

 

0.3

%

Adj. operating expense

 

$

290.4

 

 

$

251.2

 

 

15.6

%

Adj. operating margin

 

19.1

%

 

22.4

%

 

(3.3)

%

Adj. EBITDA

 

$

213.7

 

 

$

241.1

 

 

(11.4)

%

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

 

 

Revenue by Segment

 

 

Q3 FY 2021

 

Q3 FY 2020

 

 

Revenue

 

%**

 

Revenue

 

%**

Networking Platforms

 

 

 

 

 

 

 

 

Converged Packet Optical

 

$

712.9

 

 

72.1

 

 

$

722.5

 

 

74.0

 

Routing and Switching (1)

 

69.7

 

 

7.1

 

 

79.8

 

 

8.1

 

Total Networking Platforms

 

782.6

 

 

79.2

 

 

802.3

 

 

82.1

 

 

 

 

 

 

 

 

 

 

Platform Software and Services

 

56.9

 

 

5.8

 

 

46.4

 

 

4.8

 

 

 

 

 

 

 

 

 

 

Blue Planet Automation Software and Services

 

16.6

 

 

1.7

 

 

11.3

 

 

1.1

 

 

 

 

 

 

 

 

 

 

Global Services

 

 

 

 

 

 

 

 

Maintenance Support and Training

 

74.0

 

 

7.5

 

 

69.1

 

 

7.1

 

Installation and Deployment

 

46.7

 

 

4.7

 

 

39.8

 

 

4.1

 

Consulting and Network Design

 

11.3

 

 

1.1

 

 

7.8

 

 

0.8

 

Total Global Services

 

132.0

 

 

13.3

 

 

116.7

 

 

12.0

 

 

 

 

 

 

 

 

 

 

Total

 

$

988.1

 

 

100.0

 

 

$

976.7

 

 

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 Third Quarter 2021

 

 

Revenue by Geographic Region

 

 

Q3 FY 2021

 

Q3 FY 2020

 

 

Revenue

 

% **

 

Revenue

 

% **

Americas

 

$

692.8

 

 

70.1

 

 

$

713.3

 

 

73.0

 

Europe, Middle East and Africa

 

189.2

 

 

19.2

 

 

162.5

 

 

16.6

 

Asia Pacific

 

106.1

 

 

10.7

 

 

100.9

 

 

10.4

 

Total

 

$

988.1

 

 

100.0

 

 

$

976.7

 

 

100.0

 

** Denotes % of total revenue

  • Three 10%-plus customers represented a total of 37.5% of revenue
  • Cash and investments totaled $1.5 billion
  • Cash flow from operations totaled $69.1 million
  • Average days' sales outstanding (DSOs) were 89
  • Accounts receivable, net balance was $878.2 million
  • Unbilled contract asset, net balance was $98.8 million
  • Inventories totaled $370.2 million, including:
    • Raw materials: $139.3 million
    • Work in process: $10.6 million
    • Finished goods: $204.6 million
    • Deferred cost of sales: $53.8 million
    • Reserve for excess and obsolescence: $(38.1) million
  • Product inventory turns were 4.5
  • Headcount totaled 7,251

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

Today, Thursday, September 2, 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 third 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 outstanding fiscal third quarter results that reflect continued momentum in our business as well as our differentiated position in the market” and "These results combined with a robust demand environment give us confidence that we will deliver our expected strong second half performance.”

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 third 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

 

Nine Months Ended

 

July 31,

 

August 1,

 

July 31,

 

August 1,

 

2021

 

2020

 

2021

 

2020

Revenue:

 

 

 

 

 

 

 

Products

$

804,414

 

 

$

819,022

 

 

$

2,071,677

 

 

$

2,246,129

 

Services

183,727

 

 

157,690

 

 

507,521

 

 

457,548

 

Total revenue

988,141

 

 

976,712

 

 

2,579,198

 

 

2,703,677

 

Cost of goods sold:

 

 

 

 

 

 

 

Products

420,236

 

 

436,227

 

 

1,074,935

 

 

1,230,378

 

Services

93,355

 

 

75,804

 

 

259,403

 

 

224,757

 

Total cost of goods sold

513,591

 

 

512,031

 

 

1,334,338

 

 

1,455,135

 

Gross profit

474,550

 

 

464,681

 

 

1,244,860

 

 

1,248,542

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

146,225

 

 

130,221

 

 

389,212

 

 

392,651

 

Selling and marketing

114,924

 

 

94,763

 

 

322,589

 

 

303,043

 

General and administrative

48,863

 

 

41,635

 

 

132,491

 

 

126,133

 

Significant asset impairments and restructuring costs

9,789

 

 

6,515

 

 

23,865

 

 

14,798

 

Amortization of intangible assets

5,967

 

 

5,840

 

 

17,896

 

 

17,532

 

Acquisition and integration costs (recoveries)

259

 

 

(2,329)

 

 

860

 

 

904

 

Total operating expenses

326,027

 

 

276,645

 

 

886,913

 

 

855,061

 

Income from operations

148,523

 

 

188,036

 

 

357,947

 

 

393,481

 

Interest and other income (loss), net

795

 

 

232

 

 

(1,600)

 

 

1,213

 

Interest expense

(7,776)

 

 

(7,251)

 

 

(22,921)

 

 

(23,926)

 

Loss on extinguishment and modification of debt

 

 

 

 

 

 

(646)

 

Income before income taxes

141,542

 

 

181,017

 

 

333,426

 

 

370,122

 

Provision (benefit) for income taxes

(96,690)

 

 

38,750

 

 

(63,271)

 

 

73,872

 

Net income

$

238,232

 

 

$

142,267

 

 

$

396,697

 

 

$

296,250

 

 

 

 

 

 

 

 

 

Net Income per Common Share

 

 

 

 

 

 

 

Basic net income per common share

$

1.53

 

 

$

0.92

 

 

$

2.55

 

 

$

1.92

 

Diluted net income per potential common share

$

1.52

 

 

$

0.91

 

 

$

2.53

 

 

$

1.90

 

 

 

 

 

 

 

 

 

Weighted average basic common shares outstanding

155,271

 

 

154,184

 

 

155,277

 

 

154,136

 

Weighted average dilutive potential common shares outstanding 1

156,744

 

 

156,318

 

 

156,742

 

 

155,741

 

1 Weighted average dilutive potential common shares outstanding used in calculating GAAP diluted net income per potential common share for the third 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 nine 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 third quarter of fiscal 2020 includes 2.1 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 nine months of fiscal 2020 includes 1.6 million shares underlying certain stock option and stock unit awards.

 

CIENA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)

 

 

July 31,
2021

 

October 31,
2020

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

1,230,441

 

 

$

1,088,624

 

Short-term investments

182,010

 

 

150,667

 

Accounts receivable, net

878,229

 

 

719,405

 

Inventories

370,170

 

 

344,379

 

Prepaid expenses and other

323,283

 

 

308,084

 

Total current assets

2,984,133

 

 

2,611,159

 

Long-term investments

60,888

 

 

82,226

 

Equipment, building, furniture and fixtures, net

288,937

 

 

272,377

 

Operating lease right-of-use assets

48,937

 

 

57,026

 

Goodwill

311,569

 

 

310,847

 

Other intangible assets, net

73,974

 

 

96,647

 

Deferred tax asset, net

784,702

 

 

647,805

 

Other long-term assets

102,728

 

 

102,830

 

Total assets

$

4,655,868

 

 

$

4,180,917

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

301,606

 

 

$

291,904

 

Accrued liabilities and other short-term obligations

373,291

 

 

334,132

 

Deferred revenue

126,179

 

 

108,700

 

Operating lease liabilities

19,085

 

 

19,035

 

Current portion of long-term debt

6,930

 

 

6,930

 

Total current liabilities

827,091

 

 

760,701

 

Long-term deferred revenue

57,720

 

 

49,663

 

Other long-term obligations

123,731

 

 

123,185

 

Long-term operating lease liabilities

51,235

 

 

61,415

 

Long-term debt, net

671,855

 

 

676,356

 

Total liabilities

$

1,731,632

 

 

$

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; 155,103,315

and 154,563,005 shares issued and outstanding

1,551

 

 

1,546

 

Additional paid-in capital

6,815,946

 

 

6,826,531

 

Accumulated other comprehensive loss

(4,630)

 

 

(35,358)

 

Accumulated deficit

(3,888,631)

 

 

(4,283,122)

 

Total stockholders’ equity

2,924,236

 

 

2,509,597

 

Total liabilities and stockholders’ equity

$

4,655,868

 

 

$

4,180,917

 

 

CIENA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)

 

 

Nine Months Ended

 

July 31,

 

August 1,

 

2021

 

2020

Cash flows provided by operating activities:

 

 

 

Net income

$

396,697

 

 

$

296,250

 

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

 

 

 

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

71,918

 

 

70,370

 

Share-based compensation costs

62,970

 

 

50,838

 

Amortization of intangible assets

27,341

 

 

29,035

 

Deferred taxes

(139,543)

 

 

57,636

 

Provision for inventory excess and obsolescence

13,460

 

 

20,176

 

Provision for warranty

12,726

 

 

19,172

 

Other

6,350

 

 

15,085

 

Changes in assets and liabilities:

 

 

 

Accounts receivable

(163,149)

 

 

(6,688)

 

Inventories

(38,821)

 

 

(39,568)

 

Prepaid expenses and other

(17,272)

 

 

(52,945)

 

Operating lease right-of-use assets

12,340

 

 

12,816

 

Accounts payable, accruals and other obligations

31,388

 

 

(131,647)

 

Deferred revenue

24,969

 

 

(19,039)

 

Short and long-term operating lease liabilities

(14,618)

 

 

(15,132)

 

Net cash provided by operating activities

286,756

 

 

306,359

 

Cash flows used in investing activities:

 

 

 

Payments for equipment, furniture, fixtures and intellectual property

(67,290)

 

 

(61,333)

 

Purchase of available for sale securities

(132,895)

 

 

(39,859)

 

Proceeds from maturities of available for sale securities

122,063

 

 

90,000

 

Settlement of foreign currency forward contracts, net

7,326

 

 

3,067

 

Acquisition of business, net of cash acquired

 

 

(28,300)

 

Proceeds from sale of equity investment

4,678

 

 

 

Net cash used in investing activities

(66,118)

 

 

(36,425)

 

Cash flows used in financing activities:

 

 

 

Payment of long term debt

(5,197)

 

 

(3,465)

 

Payment of debt issuance costs

 

 

(382)

 

Payment of finance lease obligations

(2,243)

 

 

(2,030)

 

Shares repurchased for tax withholdings on vesting of restricted stock units

(36,484)

 

 

(26,328)

 

Repurchases of common stock - repurchase program

(64,555)

 

 

(74,535)

 

Proceeds from issuance of common stock

28,289

 

 

27,986

 

Net cash used in financing activities

(80,190)

 

 

(78,754)

 

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

1,344

 

 

(1,526)

 

Net increase in cash, cash equivalents and restricted cash

141,792

 

 

189,654

 

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

$

1,230,500

 

 

$

1,093,815

 

Supplemental disclosure of cash flow information

 

 

 

Cash paid during the period for interest

$

22,392

 

 

$

25,278

 

Cash paid during the period for income taxes, net

$

46,165

 

 

$

41,316

 

Operating lease payments

$

16,162

 

 

$

16,762

 

Non-cash investing and financing activities

 

 

 

Purchase of equipment in accounts payable

$

5,517

 

 

$

4,200

 

Repurchase of common stock in accrued liabilities from repurchase program

$

800

 

 

$

 

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

$

4,182

 

 

$

11,404

 

 

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

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

 

 

 

 

 

 

 

Quarter Ended

 

 

July 31,

 

August 1,

 

 

 2021

 

2020 

Gross Profit Reconciliation (GAAP/non-GAAP)

 

 

 

 

GAAP gross profit

 

$

474,550

 

 

$

464,681

 

Share-based compensation-products

 

1,037

 

 

960

 

Share-based compensation-services

 

1,315

 

 

1,007

 

Canadian Emergency Wage Subsidy-products

 

(94)

 

 

 

Canadian Emergency Wage Subsidy-services

 

(47)

 

 

 

Amortization of intangible assets

 

2,857

 

 

3,834

 

Total adjustments related to gross profit

 

5,068

 

 

5,801

 

Adjusted (non-GAAP) gross profit

 

$

479,618

 

 

$

470,482

 

Adjusted (non-GAAP) gross profit percentage

 

48.5

%

 

48.2

%

 

 

 

 

 

Operating Expense Reconciliation (GAAP/non-GAAP)

 

 

 

 

GAAP operating expense

 

$

326,027

 

 

$

276,645

 

Share-based compensation-research and development

 

5,541

 

 

4,286

 

Share-based compensation-sales and marketing

 

6,534

 

 

5,180

 

Share-based compensation-general and administrative

 

8,237

 

 

5,940

 

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

 

9,789

 

 

6,515

 

Amortization of intangible assets

 

5,967

 

 

5,840

 

Acquisition and integration costs (recoveries)

 

259

 

 

(2,329)

 

Total adjustments related to operating expense

 

35,632

 

 

25,432

 

Adjusted (non-GAAP) operating expense

 

$

290,395

 

 

$

251,213

 

 

 

 

 

 

Income from Operations Reconciliation (GAAP/non-GAAP)

 

 

 

 

GAAP income from operations

 

$

148,523

 

 

$

188,036

 

Total adjustments related to gross profit

 

5,068

 

 

5,801

 

Total adjustments related to operating expense

 

35,632

 

 

25,432

 

Total adjustments related to income from operations

 

40,700

 

 

31,233

 

Adjusted (non-GAAP) income from operations

 

$

189,223

 

 

$

219,269

 

Adjusted (non-GAAP) operating margin percentage

 

19.1

%

 

22.4

%

 

 

 

 

 

Net Income Reconciliation (GAAP/non-GAAP)

 

 

 

 

GAAP net income

 

$

238,232

 

 

$

142,267

 

Exclude GAAP provision (benefit) for income taxes

 

(96,690)

 

 

38,750

 

Income before income taxes

 

141,542

 

 

181,017

 

Total adjustments related to income from operations

 

40,700

 

 

31,233

 

Adjusted income before income taxes

 

182,242

 

 

212,250

 

Non-GAAP tax provision on adjusted income before income taxes

 

37,360

 

 

45,846

 

Adjusted (non-GAAP) net income

 

$

144,882

 

 

$

166,404

 

 

 

 

 

 

Weighted average basic common shares outstanding

 

155,271

 

154,184

Weighted average dilutive potential common shares outstanding 1

 

156,744

 

156,318

 

 

 

 

 

Net Income per Common Share

 

 

 

 

GAAP diluted net income per common share

 

$

1.52

 

 

$

0.91

 

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

 

$

0.92

 

 

$

1.06

 

1 Weighted average dilutive potential common shares outstanding used in calculating Adjusted (non-GAAP) diluted net income per potential common share for the third 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 third quarter of fiscal 2020 includes 2.1 million shares underlying certain stock option and stock unit awards.

 

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

(in thousands) (unaudited)

 

 

 

 

 

 

 

Quarter Ended

 

 

July 31,

 

August 1,

 

 

2021

 

2020

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

 

 

 

 

Net income (GAAP)

 

$

238,232

 

 

$

142,267

 

Add: Interest expense

 

7,776

 

 

7,251

 

Less: Interest and other income, net

 

795

 

 

232

 

Add: Provision (benefit) for income taxes

 

(96,690)

 

 

38,750

 

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

 

24,623

 

 

21,989

 

Add: Amortization of intangible assets

 

8,824

 

 

9,674

 

EBITDA

 

$

181,970

 

 

$

219,699

 

Less: Canadian Emergency Wage Subsidy

 

836

 

 

 

Add: Share-based compensation cost

 

22,471

 

 

17,259

 

Add: Significant asset impairments and restructuring costs

 

9,789

 

 

6,515

 

Add: Acquisition and integration costs (recoveries)

 

259

 

 

(2,329)

 

Adjusted EBITDA

 

$

213,653

 

 

$

241,144

 

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 (recoveries) -includes 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.

  • 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 third fiscal quarter of 2021 and 21.6% for the third 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. 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.

 

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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