Acacia Communications, Inc. (NASDAQ: ACIA), a leading provider of
high-speed coherent optical interconnect products, today reported
financial results for its third quarter ended September 30,
2020. Acacia Communications will not host a conference call to
discuss its results for the third quarter of 2020 or provide
forward guidance for the fourth quarter ending December 31,
2020, due to the previously announced proposed acquisition of
Acacia Communications by Cisco Systems, Inc.
Results for the Third Quarter of 2020
- Revenue of $158.5 million
- GAAP gross margin of 50.4%; non-GAAP gross margin* of
50.6%
- GAAP income from operations of $24.9 million; non-GAAP income
from operations* of $35.5 million
- GAAP net income of $24.3 million; non-GAAP net income* of $33.9
million
- EBITDA* of $27.8 million; adjusted EBITDA* of $38.3
million
- GAAP diluted EPS of $0.56; non-GAAP diluted EPS* of $0.78
*Non-GAAP gross margin, non-GAAP income from operations,
non-GAAP net income, earnings before interest, taxes, depreciation
and amortization (EBITDA), adjusted EBITDA and non-GAAP diluted
earnings per share (EPS) are non-GAAP financial measures that are
not prepared in accordance with generally accepted accounting
principles (GAAP). Please refer below to Use of Non-GAAP
Financial Information for descriptions of these non-GAAP financial
measures and to the Reconciliation of GAAP Measures to Non-GAAP
Measures, attached as Schedule D, for reconciliations of the most
directly comparable GAAP financial measures to these non-GAAP
financial measures.
Use of Non-GAAP Financial Information
This press release includes non-GAAP financial measures that are
not prepared in accordance with, nor an alternative to, GAAP. In
addition, these non-GAAP financial measures are not based on any
standardized methodology prescribed by GAAP and are not necessarily
comparable to similarly-titled measures presented by other
companies.
Schedule D of this press release provides reconciliations of
Acacia Communications’ most comparable GAAP financial measures to
non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and
development expenses, non-GAAP sales, general and administrative
expenses, non-GAAP operating expenses, non-GAAP income from
operations, non-GAAP net income, non-GAAP effective tax rate,
EBITDA, adjusted EBITDA and non-GAAP diluted EPS.
Acacia Communications believes that providing these non-GAAP
financial measures to investors, in addition to providing the most
directly comparable GAAP measures, provides investors the benefit
of viewing the Company’s performance using the same financial
metrics that its management team uses in making many key decisions
and evaluating how its results of operations may look in the
future. Acacia Communications’ management does not believe that
items not involving cash expenditures, such as non-cash
compensation related to equity awards, are part of its critical
decision making process. Also, Acacia Communications’ management
does not believe that items such as warranty and other charges
arising from a manufacturing process quality issue, certain
litigation related costs and settlement reserves outside the normal
course of the Company’s business, acquisition related costs or
certain adjustments to its valuation allowance against deferred tax
assets are reflective of the Company’s underlying operating
performance. Further, in connection with the seven-year denial of
export privileges imposed on April 15, 2018 by the U.S. Department
of Commerce against ZTE, which was subsequently lifted on July 13,
2018, the Company recorded inventory write-offs. Acacia
Communications’ management does not believe these write-offs, and
any subsequent adjustments as a result of management’s ongoing
evaluation of the ZTE inventory, are reflective of the Company’s
underlying operating performance. Therefore, Acacia
Communications excludes those items, as applicable, from
non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and
development expenses, non-GAAP sales, general and administrative
expenses, non-GAAP operating expenses, non-GAAP income from
operations, non-GAAP net income, non-GAAP effective tax rate,
non-GAAP diluted EPS, EBITDA and adjusted EBITDA.
Acacia Communications’ non-GAAP financial measures reflect
adjustments based on the metrics described below, as well as the
related income tax effects. The income tax effect of these non-GAAP
adjustments is determined by recalculating income tax expense
excluding these adjustments.
Non-GAAP gross profit and non-GAAP gross margin. Acacia
Communications defines non-GAAP gross profit as gross profit
as reported on its consolidated statements of operations, excluding
the impact of stock-based compensation, which is a non-cash charge,
warranty and other charges arising from a manufacturing process
quality issue and ZTE-related inventory write-offs and subsequent
adjustments. Acacia Communications defines non-GAAP gross margin as
the non-GAAP gross profit divided by revenue as reported on its
consolidated statements of operations. Acacia
Communications has presented non-GAAP gross profit and
non-GAAP gross margin because the Company believes that the
exclusion of stock-based compensation, warranty and other charges
arising from a manufacturing process quality issue and ZTE-related
inventory write-offs and subsequent adjustments facilitates
comparisons of its results of operations to other companies in its
industry.
Non-GAAP research and development expenses. Acacia
Communications defines non-GAAP research and development
expenses as research and development expenses as reported on the
Company’s consolidated statements of operations, excluding the
impact of stock-based compensation. Acacia Communications has
presented non-GAAP research and development expenses because the
Company believes that the exclusion of stock-based compensation
facilitates comparisons of its results of operations to other
companies in its industry.
Non-GAAP sales, general and administrative expenses. Acacia
Communications defines non-GAAP sales, general and
administrative expenses as sales, general and administrative
expenses as reported on the Company’s consolidated statements of
operations, excluding the impact of stock-based compensation,
certain litigation related costs and settlement reserves and
acquisition related costs. Acacia Communications has presented
non-GAAP sales, general and administrative expenses because the
Company believes that the exclusion of stock-based compensation,
certain litigation related costs and settlement reserves and
acquisition related costs facilitates comparisons of its results of
operations to other companies in its industry.
Non-GAAP operating expenses. Acacia Communications defines
non-GAAP operating expenses as operating expenses as reported on
the Company’s consolidated statements of operations, excluding the
impact of stock-based compensation, certain litigation related
costs and settlement reserves and acquisition related costs. Acacia
Communications has presented non-GAAP operating expenses
because the Company believes that the exclusion of stock-based
compensation, certain litigation related costs and settlement
reserves and acquisition related costs facilitates comparisons of
its results of operations to other companies in its industry.
Non-GAAP income from operations. Acacia
Communications defines non-GAAP income from operations as
income from operations as reported on the Company’s consolidated
statements of operations, excluding the impact of stock-based
compensation, warranty and other charges arising from a
manufacturing process quality issue, ZTE-related inventory
write-offs and subsequent adjustments, certain litigation related
costs and settlement reserves and acquisition related costs. Acacia
Communications has presented non-GAAP income from operations
because the Company believes that the exclusion of stock-based
compensation, warranty and other charges arising from a
manufacturing process quality issue, ZTE-related inventory
write-offs and subsequent adjustments, certain litigation related
costs and settlement reserves and acquisition related costs
facilitates comparisons of its results of operations to other
companies in its industry.
Non-GAAP net income, non-GAAP effective tax rate and non-GAAP
diluted EPS. Acacia Communications defines non-GAAP net income
as net income as reported on the Company’s consolidated statements
of operations, excluding the impact of stock-based compensation
which is a non-cash charge, as well as warranty and other charges
arising from a manufacturing process quality issue, ZTE-related
inventory write-offs and subsequent adjustments, certain litigation
related costs and settlement reserves, acquisition related costs,
the tax effects of those excluded items and certain valuation
allowance adjustments against deferred tax assets.
Acacia Communications defines non-GAAP effective tax rate as the
non-GAAP provision for income taxes divided by non-GAAP income
before provision for income taxes. Non-GAAP provision for income
taxes is defined as the income tax provision (benefit) as reported
on the Company’s consolidated statements of operations, as adjusted
for the tax effects of excluding stock-based compensation expense,
warranty and other charges arising from a manufacturing process
quality issue, ZTE-related inventory write-offs and subsequent
adjustments, certain litigation related costs and settlement
reserves, acquisition related costs, as well as the impact of
certain valuation allowance adjustments against deferred tax
assets. Non-GAAP income before provision for income taxes is
defined as GAAP income before income tax provision (benefit) as
reported on the Company’s consolidated statements of operations,
excluding stock-based compensation expense, warranty and other
charges arising from a manufacturing process quality issue,
ZTE-related inventory write-offs and subsequent adjustments,
certain litigation related costs and settlement reserves and
acquisition related costs.
In order to calculate non-GAAP diluted EPS, Acacia
Communications uses a non-GAAP weighted-average share count
which includes the impact of dilutive stock-based awards for
periods in which there was a GAAP net loss resulting in GAAP
diluted net loss per share, but a non-GAAP net income.
Acacia Communications has presented non-GAAP net income,
non-GAAP effective tax rate and non-GAAP diluted EPS because the
Company believes that the exclusion of the items discussed above
facilitates comparisons of its results of operations to other
companies in its industry and more accurately reflects the
underlying performance of our continuing business operations.
EBITDA and Adjusted EBITDA. Acacia Communications defines
EBITDA as net income as reported on the Company’s consolidated
statements of operations before depreciation, interest income, net,
and its income tax provision (benefit). Acacia Communications
defines adjusted EBITDA as EBITDA excluding the impact of
stock-based compensation, warranty and other charges arising from a
manufacturing process quality issue, ZTE-related inventory
write-offs and subsequent adjustments, certain litigation related
costs and settlement reserves and acquisition related costs. Acacia
Communications has presented adjusted EBITDA because it is a
key measure used by its management and board of directors to
understand and evaluate the Company’s operating performance, to
establish budgets and to develop operational goals for managing its
business. In particular, Acacia Communications believes that
the exclusion of the amounts eliminated in calculating adjusted
EBITDA can provide a useful measure for period-to-period
comparisons of its core operating performance.
Acacia Communications uses these non-GAAP financial
measures to evaluate its operating performance and trends, and make
planning decisions. Acacia Communications believes that each
of these non-GAAP financial measures helps identify underlying
trends in its business that could otherwise be masked by the effect
of the items that the Company excludes. Accordingly, Acacia
Communications believes that these financial measures provide
useful information to investors and others in understanding and
evaluating its operating results, enhancing the overall
understanding of the Company’s past performance and future
prospects, and allowing for greater transparency with respect to
key financial metrics used by its management in its financial and
operational decision-making.
Acacia Communications’ non-GAAP financial measures are not
prepared in accordance with GAAP, and should not be considered in
isolation of, or as an alternative to, measures prepared in
accordance with GAAP. There are a number of limitations related to
the use of these non-GAAP financial measures rather than gross
profit, gross margin, research and development expenses, sales,
general and administrative expenses, operating expenses, income
from operations, net income, effective tax rate or diluted EPS,
which are the most directly comparable GAAP measures. Some of these
limitations are:
- Acacia Communications excludes stock-based compensation expense
from each of its non-GAAP financial measures, although it has
recently been, and will continue to be for the foreseeable future,
a significant recurring expense for its business and an important
part of the Company’s compensation strategy;
- Acacia Communications excludes the tax benefits generated from
the exercise of non-qualified stock options, the disqualifying
disposition of incentive stock options and ESPP shares, and the
vesting of restricted stock units, including any excess tax
benefits and shortfalls recognized by the Company in the year of
the taxable transaction, in calculating its non-GAAP net income,
non-GAAP effective tax rate and non-GAAP diluted EPS. The Company
believes that excluding these tax benefits enables investors to see
the full effect that excluding stock-based compensation expense had
on the operating results. These benefits are tied to the exercise
or vesting of underlying employee equity awards and the price of
our common stock at the time of exercise or vesting, which factors
may vary from period to period independent of the operating
performance of the Company’s business. Similar to stock-based
compensation expense, the Company believes that excluding these tax
benefits provides investors and management with greater visibility
to the underlying performance of its business operations and
facilitates comparison with other periods as well as the results of
other companies in its industry;
- Acacia Communications excludes warranty and other charges
arising from a manufacturing process quality issue from its
non-GAAP gross profit, non-GAAP gross margin, non-GAAP income from
operations, non-GAAP net income, non-GAAP effective tax rate,
non-GAAP diluted EPS and adjusted EBITDA measures, as management
does not believe the charges are reflective of the Company’s
underlying operating performance;
- Acacia Communications excludes certain adjustments to its
valuation allowance against deferred tax assets from its non-GAAP
net income, non-GAAP effective tax rate and non-GAAP diluted EPS
measures, as management does not believe the charges are reflective
of the Company’s underlying operating performance;
- Acacia Communications excludes ZTE-related inventory write-offs
and subsequent adjustments from its non-GAAP gross profit, non-GAAP
gross margin, non-GAAP income from operations, non-GAAP net income,
non-GAAP effective tax rate, non-GAAP diluted EPS and adjusted
EBITDA measures, as management believes the activity is not related
to the Company’s normal course of business and is not reflective of
the Company’s underlying operating performance;
- Acacia Communications excludes certain litigation related costs
and settlement reserves from its non-GAAP sales, general and
administrative expenses, non-GAAP operating expenses, non-GAAP
income from operations, non-GAAP net income, non-GAAP effective tax
rate, non-GAAP diluted EPS and adjusted EBITDA measures, if
management believes the activity is not related to the Company’s
normal course of business and is not reflective of the Company’s
underlying operating performance. These expenses may continue in
the future;
- Acacia Communications excludes acquisition related costs from
its non-GAAP sales, general and administrative expenses, non-GAAP
operating expenses, non-GAAP income from operations, non-GAAP net
income, non-GAAP effective tax rate, non-GAAP diluted EPS and
adjusted EBITDA measures, as management believes the activity is
not related to the Company’s normal course of business and is not
reflective of the Company’s underlying operating performance;
- EBITDA and adjusted EBITDA exclude depreciation expense and,
although this is a non-cash expense, the assets being depreciated
may have to be replaced in the future;
- EBITDA and adjusted EBITDA do not reflect interest income,
which increases cash available to the Company, as this income is
not generated by the Company’s core operations;
- EBITDA and adjusted EBITDA do not reflect the income tax
provision (benefit) which may impact cash available to the Company;
and
- the expenses and other items that the Company excludes in its
calculation of adjusted EBITDA may differ from the expenses and
other items, if any, that other companies may exclude from adjusted
EBITDA when they report their operating results.
Because of these limitations, non-GAAP financial measures should
be considered along with other operating and financial performance
measures presented in accordance with GAAP.
Acacia Communications’ use of non-GAAP financial measures, and
the underlying methodology when excluding certain items, is not
necessarily an indication of the results of operations that may be
expected in the future, or that Acacia Communications will not, in
fact, record such items in future periods.
Investors should consider Acacia Communications’ non-GAAP
financial measures in conjunction with the corresponding GAAP
financial measures.
About Acacia Communications
Acacia Communications develops, manufactures and sells
high-speed coherent optical interconnect products that are designed
to transform communications networks through improvements in
performance, capacity and cost. By implementing optical
interconnect technology in a silicon-based platform, a process
Acacia Communications refers to as the “siliconization of optical
interconnect,” Acacia Communications is able to offer products at
higher speeds and density with lower power consumption, that meet
the needs of cloud and service providers and can be easily
integrated in a cost-effective manner with existing network
equipment. www.acacia-inc.com.
Forward Looking Statements
This press release includes statements concerning Acacia
Communications and its future expectations, plans and
prospects that constitute “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995.
For this purpose, any statements contained herein that are not
statements of historical fact may be deemed to be forward-looking
statements. Without limiting the foregoing, the words “may,”
“should,” “expects,” “plans,” “anticipates,” “could,” “intends,”
“target,” “projects,” “contemplates,” “believes,” “estimates,”
“predicts,” “potential,” “will” or “continue” or the negative of
these terms or other similar expressions are intended to help you
identify forward-looking statements. The forward-looking statements
in this press release are only predictions. The events and
circumstances reflected in the forward-looking statements may not
be achieved or occur and actual results could differ materially
from those projected in the forward looking statements. Acacia
Communications has based these forward-looking statements largely
on its current expectations and projections about future events and
financial trends that the Company believes may affect its business,
financial condition and results of operations. These
forward-looking statements speak only as of the date of this press
release and are subject to a number of risks, uncertainties and
assumptions including, without limitation, the occurrence of any
event, change or other circumstances that could give rise to the
termination of the Agreement and Plan of Merger the Company has
entered into with Cisco Systems, Inc. and Amarone Acquisition Corp.
and any inability to complete the proposed merger due to the
failure to satisfy conditions to completion of the proposed merger,
including that a governmental entity may prohibit, delay or refuse
to grant approval for the consummation of the proposed merger,
uncertainty regarding the extent to which the coronavirus disease,
COVID-19, pandemic and related response measures will adversely
affect the Company’s business, results of operations and financial
condition, or the business and financial condition of our customers
and suppliers, the Company’s ability to sustain or increase revenue
from its larger customers, generate revenues from new customers, or
offset the discontinuation of concentrated purchases by its larger
customers with purchases by new or existing customers, the
Company’s ability to anticipate the timing and scale of demand for
its products, including from its largest customers, the adverse
impact of negative economic conditions created or exacerbated by
the ongoing COVID-19 pandemic, the Company’s expectations regarding
expenses and revenue, its ability to maintain and expand gross
profit, the sufficiency of the Company’s cash resources and needs
for additional financing, the Company’s ability to produce products
free of problems, defects, errors and vulnerabilities, the
Company’s anticipated growth strategies, its expectations regarding
competition, the anticipated trends and challenges in the Company’s
business and the markets in which it operates, the Company’s
expectations regarding, and the capacity and stability of, its
supply chain and manufacturing, the size and growth of the
potential markets for the Company’s products and the ability to
serve those markets, the scope, progress, expansion and costs of
developing and commercializing its products, the timing, rate and
degree of introducing any of its products into the market and the
market acceptance of any of its products, the Company’s ability to
establish and maintain development partnerships, its ability to
attract or retain key personnel, the Company’s expectations
regarding federal, state and foreign regulatory requirements,
including export controls, tax law changes and interpretations,
economic sanctions and anti-corruption regulations, regulatory or
legislative developments in the United States and foreign
countries, including trade policy and tariffs and export control
laws or regulations that could impede its ability to sell its
products to its customer ZTE Kangxun Telecom Co. Ltd. or any of its
affiliates or that could impede its ability to sell its products to
other customers in certain foreign jurisdictions, particularly in
China, or that could impede sales by such customers in the United
States, the Company’s ability to obtain and maintain intellectual
property protection for its products, and other risks set forth
under the caption “Risk Factors” in the Company’s public reports
filed with the SEC, including the Company’s Quarterly Report on
Form 10-Q for the fiscal quarter ended September 30, 2020 to
be filed with the SEC and in other filings that the Company may
make with the SEC in the future. Because forward-looking
statements are inherently subject to risks and uncertainties, some
of which cannot be predicted or quantified, you should not rely on
these forward-looking statements as indicative of future events.
Acacia Communications assumes no obligation to update any
forward-looking statements contained in this press release as a
result of new information, future events or otherwise.
SCHEDULE AACACIA
COMMUNICATIONS, INC. CONDENSED CONSOLIDATED
BALANCE SHEETS(in thousands)(unaudited)
|
September 30, 2020 |
|
December 31, 2019 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
211,224 |
|
|
$ |
36,617 |
|
Marketable securities - short-term |
244,458 |
|
|
300,129 |
|
Accounts receivable |
137,246 |
|
|
97,948 |
|
Inventory |
35,195 |
|
|
40,820 |
|
Prepaid expenses and other current assets |
8,641 |
|
|
6,518 |
|
Total current assets |
636,764 |
|
|
482,032 |
|
Marketable securities - long-term |
83,477 |
|
|
134,632 |
|
Property and equipment, net |
28,187 |
|
|
26,801 |
|
Operating lease right-of-use assets |
29,470 |
|
|
25,046 |
|
Deferred tax asset |
51,976 |
|
|
51,798 |
|
Other assets |
1,132 |
|
|
1,106 |
|
Total assets |
$ |
831,006 |
|
|
$ |
721,415 |
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
65,355 |
|
|
$ |
46,957 |
|
Accrued liabilities |
67,331 |
|
|
61,680 |
|
Deferred revenue |
6,973 |
|
|
4,483 |
|
Total current liabilities |
139,659 |
|
|
113,120 |
|
Income taxes payable |
6,280 |
|
|
7,117 |
|
Non-current operating lease liabilities |
18,972 |
|
|
15,726 |
|
Other long-term liabilities |
4,992 |
|
|
7,029 |
|
Total liabilities |
169,903 |
|
|
142,992 |
|
|
|
|
|
Stockholders’ equity: |
|
|
|
Common stock |
4 |
|
|
4 |
|
Treasury stock |
(39,712 |
) |
|
(39,712 |
) |
Additional paid-in capital |
428,532 |
|
|
402,032 |
|
Accumulated other comprehensive income |
886 |
|
|
720 |
|
Retained earnings |
271,393 |
|
|
215,379 |
|
Total stockholders’ equity |
661,103 |
|
|
578,423 |
|
Total liabilities and
stockholders’ equity |
$ |
831,006 |
|
|
$ |
721,415 |
|
SCHEDULE BACACIA
COMMUNICATIONS, INC. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS(in thousands, except per share
data)(unaudited)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Revenue |
$ |
158,456 |
|
|
$ |
119,591 |
|
|
$ |
419,297 |
|
|
$ |
335,990 |
|
Cost of revenue |
78,541 |
|
|
60,512 |
|
|
214,892 |
|
|
175,982 |
|
Gross profit |
79,915 |
|
|
59,079 |
|
|
204,405 |
|
|
160,008 |
|
Operating expenses: |
|
|
|
|
|
|
|
Research and development |
39,884 |
|
|
28,649 |
|
|
104,554 |
|
|
88,578 |
|
Sales, general and administrative |
15,082 |
|
|
20,457 |
|
|
47,729 |
|
|
66,143 |
|
Total operating expenses |
54,966 |
|
|
49,106 |
|
|
152,283 |
|
|
154,721 |
|
Income from operations |
24,949 |
|
|
9,973 |
|
|
52,122 |
|
|
5,287 |
|
Other income, net: |
|
|
|
|
|
|
|
Interest income, net |
951 |
|
|
2,592 |
|
|
4,869 |
|
|
7,940 |
|
Other income (expense), net |
44 |
|
|
(102 |
) |
|
(33 |
) |
|
(209 |
) |
Total other income, net |
995 |
|
|
2,490 |
|
|
4,836 |
|
|
7,731 |
|
Income before income tax expense
(benefit) |
25,944 |
|
|
12,463 |
|
|
56,958 |
|
|
13,018 |
|
Income tax expense (benefit) |
1,655 |
|
|
(2,642 |
) |
|
944 |
|
|
(7,039 |
) |
Net income |
$ |
24,289 |
|
|
$ |
15,105 |
|
|
$ |
56,014 |
|
|
$ |
20,057 |
|
Earnings per share: |
|
|
|
|
|
|
|
Basic |
$ |
0.58 |
|
|
$ |
0.37 |
|
|
$ |
1.34 |
|
|
$ |
0.49 |
|
Diluted |
$ |
0.56 |
|
|
$ |
0.35 |
|
|
$ |
1.30 |
|
|
$ |
0.47 |
|
Weighted-average shares used to
compute earnings per share: |
|
|
|
|
|
|
|
Basic |
42,061 |
|
|
41,119 |
|
|
41,841 |
|
|
40,730 |
|
Diluted |
43,229 |
|
|
42,667 |
|
|
43,195 |
|
|
42,404 |
|
SCHEDULE CACACIA
COMMUNICATIONS, INC. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (in
thousands)(unaudited)
|
Nine Months Ended September 30, |
|
2020 |
|
2019 |
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
Net income |
$ |
56,014 |
|
|
$ |
20,057 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Depreciation |
8,109 |
|
|
9,274 |
|
Stock-based compensation |
26,216 |
|
|
25,717 |
|
Deferred income taxes |
(178 |
) |
|
(8,294 |
) |
Non-cash lease expense |
3,261 |
|
|
3,667 |
|
Other non-cash benefits |
(253 |
) |
|
(1,970 |
) |
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
(39,298 |
) |
|
(8,913 |
) |
Inventory |
5,625 |
|
|
(11,796 |
) |
Prepaid expenses and other current assets |
(2,123 |
) |
|
4,321 |
|
Other assets |
(17 |
) |
|
(112 |
) |
Accounts payable |
19,493 |
|
|
(1,227 |
) |
Accrued liabilities |
5,267 |
|
|
27,814 |
|
Deferred revenue |
(231 |
) |
|
6,703 |
|
Income taxes payable |
(837 |
) |
|
(1,674 |
) |
Lease liabilities |
(4,212 |
) |
|
(3,741 |
) |
Other long-term liabilities |
299 |
|
|
458 |
|
Net cash provided by operating activities |
77,135 |
|
|
60,284 |
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
Purchases of property and equipment |
(10,466 |
) |
|
(9,111 |
) |
Purchases of marketable securities |
(217,802 |
) |
|
(359,578 |
) |
Sales and maturities of marketable securities |
325,047 |
|
|
307,927 |
|
Deposits |
(9 |
) |
|
(2 |
) |
Net cash provided by (used in) investing activities |
96,770 |
|
|
(60,764 |
) |
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
Proceeds from the issuance of common stock under stock-based
compensation plans |
702 |
|
|
4,504 |
|
Net cash provided by financing activities |
702 |
|
|
4,504 |
|
|
|
|
|
Net increase in cash and cash
equivalents |
174,607 |
|
|
4,024 |
|
Cash and cash
equivalents—Beginning of period |
36,617 |
|
|
60,444 |
|
Cash and cash equivalents—End
of period |
$ |
211,224 |
|
|
$ |
64,468 |
|
|
|
|
|
Supplemental cash flow
disclosures: |
|
|
|
Cash paid (refunds received) for income taxes, net |
$ |
1,390 |
|
|
$ |
(972 |
) |
Non-cash
transactions: |
|
|
|
Right of use assets acquired under operating leases |
$ |
4,913 |
|
|
$ |
7,084 |
|
SCHEDULE DACACIA
COMMUNICATIONS, INC. RECONCILIATION OF GAAP
MEASURES TO NON-GAAP MEASURES (in thousands, except
for per share data)(unaudited)
|
|
Three Months Ended |
|
|
Q3 2020 |
|
Q2 2020 |
|
Q3 2019 |
Non-GAAP Gross Profit
and Non-GAAP Gross Margin |
|
|
|
|
|
|
GAAP gross profit |
|
$ |
79,915 |
|
|
$ |
65,208 |
|
|
$ |
59,079 |
|
Stock-based compensation - cost of revenue |
|
491 |
|
|
548 |
|
|
481 |
|
Warranty and other charges due to manufacturing process quality
issue |
|
(252 |
) |
|
(254 |
) |
|
(255 |
) |
Inventory write-offs |
|
(12 |
) |
|
(101 |
) |
|
(65 |
) |
Non-GAAP gross profit |
|
$ |
80,142 |
|
|
$ |
65,401 |
|
|
$ |
59,240 |
|
GAAP gross margin |
|
50.4 |
% |
|
48.2 |
% |
|
49.4 |
% |
Non-GAAP gross margin |
|
50.6 |
% |
|
48.4 |
% |
|
49.5 |
% |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Q3 2020 |
|
Q2 2020 |
|
Q3 2019 |
Non-GAAP R&D
Expenses |
|
|
|
|
|
|
GAAP research and development
expenses |
|
$ |
39,884 |
|
|
$ |
32,575 |
|
|
$ |
28,649 |
|
Stock-based compensation |
|
5,161 |
|
|
5,646 |
|
|
5,330 |
|
Non-GAAP research and
development expenses |
|
$ |
34,723 |
|
|
$ |
26,929 |
|
|
$ |
23,319 |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Q3 2020 |
|
Q2 2020 |
|
Q3 2019 |
Non-GAAP SG&A
Expenses |
|
|
|
|
|
|
GAAP sales, general and
administrative expenses |
|
$ |
15,082 |
|
|
$ |
18,276 |
|
|
$ |
20,457 |
|
Stock-based compensation |
|
2,396 |
|
|
2,590 |
|
|
2,899 |
|
Litigation related costs and settlement reserves |
|
3,000 |
|
|
5,000 |
|
|
— |
|
Acquisition related costs |
|
(232 |
) |
|
997 |
|
|
6,400 |
|
Non-GAAP sales, general and
administrative expenses |
|
$ |
9,918 |
|
|
$ |
9,689 |
|
|
$ |
11,158 |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Q3 2020 |
|
Q2 2020 |
|
Q3 2019 |
Non-GAAP Operating
Expenses |
|
|
|
|
|
|
GAAP operating expenses |
|
$ |
54,966 |
|
|
$ |
50,851 |
|
|
$ |
49,106 |
|
Stock-based compensation |
|
7,557 |
|
|
8,236 |
|
|
8,229 |
|
Litigation related costs and settlement reserves |
|
3,000 |
|
|
5,000 |
|
|
— |
|
Acquisition related costs |
|
(232 |
) |
|
997 |
|
|
6,400 |
|
Non-GAAP operating
expenses |
|
$ |
44,641 |
|
|
$ |
36,618 |
|
|
$ |
34,477 |
|
|
|
|
|
|
|
|
SCHEDULE D (Cont.)ACACIA
COMMUNICATIONS, INC. RECONCILIATION OF GAAP
MEASURES TO NON-GAAP MEASURES (in thousands, except
for per share data)(unaudited)
|
|
Three Months Ended |
|
|
Q3 2020 |
|
Q2 2020 |
|
Q3 2019 |
Non-GAAP Income from
Operations |
|
|
|
|
|
|
GAAP income from operations |
|
$ |
24,949 |
|
|
$ |
14,357 |
|
|
$ |
9,973 |
|
Stock-based compensation |
|
8,048 |
|
|
8,784 |
|
|
8,710 |
|
Warranty and other charges due to manufacturing process quality
issue |
|
(252 |
) |
|
(254 |
) |
|
(255 |
) |
Litigation related costs and settlement reserves |
|
3,000 |
|
|
5,000 |
|
|
— |
|
Inventory write-offs |
|
(12 |
) |
|
(101 |
) |
|
(65 |
) |
Acquisition related costs |
|
(232 |
) |
|
997 |
|
|
6,400 |
|
Non-GAAP income from
operations |
|
$ |
35,501 |
|
|
$ |
28,783 |
|
|
$ |
24,763 |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Q3 2020 |
|
Q2 2020 |
|
Q3 2019 |
Non-GAAP Net
Income |
|
|
|
|
|
|
GAAP net income |
|
$ |
24,289 |
|
|
$ |
16,081 |
|
|
$ |
15,105 |
|
Stock-based compensation |
|
8,048 |
|
|
8,784 |
|
|
8,710 |
|
Warranty and other charges due to manufacturing process quality
issue |
|
(252 |
) |
|
(254 |
) |
|
(255 |
) |
Litigation related costs and settlement reserves |
|
3,000 |
|
|
5,000 |
|
|
— |
|
Inventory write-offs |
|
(12 |
) |
|
(101 |
) |
|
(65 |
) |
Acquisition related costs |
|
(232 |
) |
|
997 |
|
|
6,400 |
|
Tax effect of excluded items |
|
(625 |
) |
|
(2,352 |
) |
|
(4,364 |
) |
Valuation allowance adjustments |
|
(308 |
) |
|
(182 |
) |
|
— |
|
Non-GAAP net income |
|
$ |
33,908 |
|
|
$ |
27,973 |
|
|
$ |
25,531 |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Q3 2020 |
|
Q2 2020 |
|
Q3 2019 |
Non-GAAP Effective Tax
Rate |
|
|
|
|
|
|
GAAP effective tax rate |
|
6.4 |
% |
|
(0.8 |
)% |
|
(21.2 |
)% |
Tax effect of excluded items |
|
0.5 |
% |
|
8.1 |
% |
|
27.5 |
% |
Valuation allowance adjustments |
|
0.2 |
% |
|
0.6 |
% |
|
— |
% |
Non-GAAP effective tax
rate |
|
7.1 |
% |
|
7.9 |
% |
|
6.3 |
% |
SCHEDULE D (Cont.)ACACIA
COMMUNICATIONS, INC. RECONCILIATION OF GAAP
MEASURES TO NON-GAAP MEASURES (in thousands, except
for per share data)(unaudited)
|
|
Three Months Ended |
|
|
Q3 2020 |
|
Q2 2020 |
|
Q3 2019 |
Earnings Before
Interest, Taxes, Depreciation and Amortization (EBITDA) and
Adjusted EBITDA |
|
|
|
|
|
|
GAAP net income |
|
$ |
24,289 |
|
|
$ |
16,081 |
|
|
$ |
15,105 |
|
Depreciation |
|
2,794 |
|
|
2,645 |
|
|
2,944 |
|
Interest income, net |
|
(951 |
) |
|
(1,625 |
) |
|
(2,592 |
) |
Income tax expense (benefit) |
|
1,655 |
|
|
(133 |
) |
|
(2,642 |
) |
EBITDA |
|
27,787 |
|
|
16,968 |
|
|
12,815 |
|
Stock-based compensation |
|
8,048 |
|
|
8,784 |
|
|
8,710 |
|
Warranty and other charges due to manufacturing process quality
issue |
|
(252 |
) |
|
(254 |
) |
|
(255 |
) |
Litigation related costs and settlement reserves |
|
3,000 |
|
|
5,000 |
|
|
— |
|
Inventory write-offs |
|
(12 |
) |
|
(101 |
) |
|
(65 |
) |
Acquisition related costs |
|
(232 |
) |
|
997 |
|
|
6,400 |
|
Adjusted EBITDA |
|
$ |
38,339 |
|
|
$ |
31,394 |
|
|
$ |
27,605 |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Q3 2020 |
|
Q2 2020 |
|
Q3 2019 |
Non-GAAP Diluted
EPS |
|
|
|
|
|
|
GAAP diluted EPS |
|
$ |
0.56 |
|
|
$ |
0.37 |
|
|
$ |
0.35 |
|
Stock-based compensation |
|
0.19 |
|
|
0.20 |
|
|
0.21 |
|
Warranty and other charges due to manufacturing process quality
issue |
|
(0.01 |
) |
|
(0.01 |
) |
|
(0.01 |
) |
Litigation related costs and settlement reserves |
|
0.07 |
|
|
0.12 |
|
|
— |
|
Inventory write-offs |
|
— |
|
|
— |
|
|
— |
|
Acquisition related costs |
|
(0.01 |
) |
|
0.02 |
|
|
0.15 |
|
Tax effect of excluded items |
|
(0.01 |
) |
|
(0.05 |
) |
|
(0.10 |
) |
Valuation allowance adjustments |
|
(0.01 |
) |
|
— |
|
|
— |
|
Non-GAAP diluted EPS |
|
$ |
0.78 |
|
|
$ |
0.65 |
|
|
$ |
0.60 |
|
|
|
|
|
|
|
|
Weighted-average shares used
to compute GAAP and non-GAAP diluted EPS |
|
43,229 |
|
|
43,139 |
|
|
42,667 |
|
SOURCE Acacia Communications, Inc.
For further information:
Investor Relations Contact: Monica GouldOffice: (212)
871-3927Email: IR@acacia-inc.com
Lindsay SavareseOffice: (212) 331-8417Email:
IR@acacia-inc.com
Public Relations Contact: Kelly KarrOffice: (408) 718-9350Email:
PR@acacia-inc.com
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