Second Quarter
- Net revenue of $254.5 million,
down $30.0 million or 10.5%
year-over-year
- GAAP operating margin of 8.8%, up 80 bps
year-over-year
- Non-GAAP operating margin of 13.2%, down 300 bps
year-over-year
- GAAP diluted Earnings per share (EPS) of $0.05, up $0.01 or
25.0% year-over-year
- Non-GAAP diluted EPS of $0.11,
down $0.03 or 21.4%
year-over-year
CHANDLER, Ariz., Feb. 1, 2024
/PRNewswire/ -- VIAVI (NASDAQ: VIAV) today reported results
for its second fiscal quarter ended December
30, 2023.
Second quarter of fiscal 2024 net revenue was $254.5 million. GAAP net income was $10.7 million, or $0.05 per share. Non-GAAP net income was
$23.7 million, or $0.11 per share.
First quarter of fiscal 2024 net revenue was $247.9 million. GAAP net income was $9.8 million, or $0.04 per share. Non-GAAP net income was
$19.5 million, or $0.09 per share.
Second quarter of fiscal 2023 net revenue was $284.5 million. GAAP net income was $8.4 million, or $0.04 per share. Non-GAAP net income was
$31.5 million, or $0.14 per share.
"The December quarter came in stronger than expected. Revenue
was slightly above the mid-point of our guidance, helped by
stronger demand for 400G/800G Fiber, Mil/Aero, and SE products. EPS
came in above the high end of our guidance, driven by a richer
margin revenue mix. In the near term, we expect stronger demand in
the above segments to help offset continued weakness in Service
Provider spend" said Oleg Khaykin,
VIAVI's President and Chief Executive Officer.
Financial Overview:
The tables below (in millions, except percentage, and per share
data) provide comparisons of quarterly results to prior periods,
including sequential quarterly and year-over-year changes. A full
reconciliation between the GAAP and non-GAAP measures included in
the tables is contained in this release under the section titled
"Use of Non-GAAP (Adjusted) Financial Measures."
Second Quarter Ended December
30, 2023
|
GAAP Results
|
|
Q2
|
|
Q1
|
|
Q2
|
|
Change
|
|
FY
2024
|
|
FY
2024
|
|
FY
2023
|
|
Q/Q
|
|
Y/Y
|
Net revenue
|
$
254.5
|
|
$
247.9
|
|
$
284.5
|
|
2.7 %
|
|
(10.5) %
|
Gross margin
|
58.2 %
|
|
58.2 %
|
|
58.7 %
|
|
— bps
|
|
(50) bps
|
Operating
margin
|
8.8 %
|
|
6.5 %
|
|
8.0 %
|
|
230 bps
|
|
80 bps
|
Income from
operations
|
22.4
|
|
16.0
|
|
22.9
|
|
40.0 %
|
|
(2.2) %
|
Net income per
share
|
0.05
|
|
0.04
|
|
0.04
|
|
25.0 %
|
|
25.0 %
|
|
Non-GAAP Results
|
|
Q2
|
|
Q1
|
|
Q2
|
|
Change
|
|
FY
2024
|
|
FY
2024
|
|
FY
2023
|
|
Q/Q
|
|
Y/Y
|
Gross margin
|
60.0 %
|
|
60.1 %
|
|
61.1 %
|
|
(10) bps
|
|
(110) bps
|
Operating
margin
|
13.2 %
|
|
12.4 %
|
|
16.2 %
|
|
80 bps
|
|
(300) bps
|
Income from
operations
|
33.7
|
|
30.8
|
|
46.0
|
|
9.4 %
|
|
(26.7) %
|
Earnings per
share
|
0.11
|
|
0.09
|
|
0.14
|
|
22.2 %
|
|
(21.4) %
|
|
Net Revenue by Segment
|
|
Q2
|
|
Q1
|
|
Q2
|
|
Change
|
|
FY
2024
|
|
FY
2024
|
|
FY 2023
(1)
|
|
Q/Q
|
|
Y/Y
|
Network
Enablement
|
$
155.5
|
|
$
150.0
|
|
$
183.3
|
|
3.7 %
|
|
(15.2) %
|
Service
Enablement
|
24.1
|
|
20.4
|
|
23.8
|
|
18.1 %
|
|
1.3 %
|
Optical Security and
Performance Products
|
74.9
|
|
77.5
|
|
77.4
|
|
(3.4) %
|
|
(3.2) %
|
Total
|
$
254.5
|
|
$
247.9
|
|
$
284.5
|
|
2.7 %
|
|
(10.5) %
|
(1) Effective for
the first quarter of fiscal 2024, management of certain products
moved from the SE segment to the NE segment to better align with
operational and go-to-market strategies. As a result, prior period
balances have been recast to reflect the impact to net revenue,
gross profit and gross margin.
|
- Americas, Asia-Pacific and
EMEA customers represented 40.5%, 31.2% and 28.3%, respectively, of
total net revenue for the quarter ended December 30, 2023.
- As of December 30, 2023, the
Company held $571.8 million in total
cash, short-term investments and short-term restricted cash.
- As of December 30, 2023, the
Company had $96.4 million aggregate
principal amount of 1.00% Senior Convertible Notes, $250 million aggregate principal amount of 1.625%
Senior Convertible Notes and $400
million aggregate principal amount of 3.75% Senior Notes
with a total net carrying value of $729.1
million.
- During the fiscal quarter ended December
30, 2023, the Company generated $20.4
million of cash flows from operations.
Business Outlook for the Third Quarter of Fiscal 2024
For the third quarter of fiscal 2024 ending March 30, 2024, the Company expects net revenue
to be between $245 million to
$253 million and non-GAAP EPS to be
between $0.05 to $0.09.
With respect to our expectations above, the Company has not
reconciled GAAP net income per share to non-GAAP EPS in this
press release because it is unable to provide a meaningful or
accurate estimate of certain reconciling items described in the
"Use of Non-GAAP (Adjusted) Financial Measures" section below and
the information is not available without unreasonable effort as a
result of the inherent difficulty of forecasting the timing and/or
amounts of certain items, including certain charges related to
restructuring, acquisition, integration and related charges. In
addition, the Company believes such reconciliations would imply a
degree of precision that may be confusing or misleading to
investors.
Conference Call
The Company will discuss these results and other related matters
at 1:30 p.m. Pacific Time on
February 1, 2024 in a live webcast,
which will also be archived for replay on the Company's website at
https://investor.viavisolutions.com. The Company will
post supplementary slides outlining the Company's latest financial
results on https://investor.viavisolutions.com under the
"Quarterly Results" section concurrently with this earnings press
release. This press release is being furnished as a Current Report
on Form 8-K with the Securities and Exchange Commission, and
will be available at www.sec.gov.
About VIAVI
VIAVI (NASDAQ: VIAV) is a global provider of network test,
monitoring and assurance solutions for telecommunications, cloud,
enterprises, first responders, military, aerospace and railway.
VIAVI is also a leader in light management technologies for 3D
sensing, anti-counterfeiting, consumer electronics, industrial,
automotive, government and aerospace applications. Learn more about
VIAVI at www.viavisolutions.com. Follow us on VIAVI Perspectives,
LinkedIn and YouTube.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These
statements include any expectation, anticipation or guidance as to
future financial performance, including future revenue, gross
margin, operating expense, operating margin, profitability targets,
cash flow and other financial metrics, as well as the impact and
duration of certain trends and market position and conditions,
including market stabilization and recovery. These forward-looking
statements involve risks and uncertainties that could cause actual
results to differ materially from those projected. In particular,
the Company's ability to predict future financial performance
continues to be difficult due to, among other things:
(a) continuing general limited visibility across many of our
product lines; (b) quarter-over-quarter product mix
fluctuations, which can materially impact profitability measures
due to the broad gross margin ranges across our portfolio;
(c) consolidations in our customer base; (d) unforeseen
changes or deceleration in the demand for current and new products,
technologies, services, delays or unforeseen events in the roll-out
of new industry platforms such as 5G or evolving technology such as
3D sensing and customer purchasing delays due to macroeconomic
conditions, tightening of expenditures or as they assess or
transition to such new technologies and/or architectures, all of
which limit near-term demand visibility, and could negatively
impact potential revenue; (e) continued decline of average selling
prices across our businesses; (f) notable seasonality and a
significant level of in-quarter book-and-ship business;
(g) various product and manufacturing transfers, site
consolidations, product discontinuances and restructuring and
workforce reduction plans, including anticipated cost savings
associated with such plans; (h) challenges integrating the
businesses the Company has acquired and realizing all of the
expected benefits and savings; (i) supply chain and materials
constraints and the ability of our suppliers and contract
manufacturers to meet production and delivery requirements to our
forecasted demand; (j) potential disruptions or delays to our
manufacturing and operations due to climate conditions and natural
disasters in the regions where we operate, such as wildfires,
drought conditions and related water shortages in Arizona, as well
as wildfires in Northern California and related blackouts and power
outages in that region; (k) the uncertain and ongoing impact to our
supply chain of military conflicts, such as the ongoing conflict
between Russia and Ukraine and the escalating armed conflict
between Israel and Hamas, tariffs, sanctions and other trade
measures imposed by domestic and foreign governments, adverse
actions and escalating tensions with foreign governments, including
China, and the possibility of escalation of "trade wars,"
cyber-attacks, and retaliatory measures; (l) the impact of
infectious disease outbreaks, epidemics, and pandemics including
the ongoing effects of COVID-19 on our financial results, revenues,
customer demand, business operations and manufacturing and on the
business operations of our customers, contract manufacturers and
suppliers; and (m) inherent uncertainty related to global
markets, including inflationary pressures, recessions, tightening
monetary policy and liquidity, and the effect of such markets on
demand for our products. These forward-looking statements involve
risks and uncertainties that could cause actual results to differ
materially from those projected. For more information on the risks
and uncertainties associated with the Company's business, please
refer to the "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Risk Factors" sections of
the Company's filings with the Securities and Exchange Commission,
including, but not limited to, its annual report on Form 10-K and
quarterly reports on Form 10-Q. The forward-looking statements
contained in this press release are made as of the date thereof and
the Company assumes no obligation to update such statements. We
have not filed our Form 10-Q for the quarter ended December 30,
2023. As a result, all financial results described in this earnings
release should be considered preliminary, and are subject to change
to reflect any necessary adjustments or changes in accounting
estimates, that are identified prior to the time we file the Form
10-Q.
Contact Information
Investors:
Chetan
Doshi - Head of Corporate FP&A
408-404-6305
chetan.doshi@viavisolutions.com
Press:
Amit Malhotra
202-341-8624
amit.malhotra@viavisolutions.com
The following financial tables are presented in accordance with
GAAP, unless otherwise specified.
-SELECTED PRELIMINARY FINANCIAL DATA -
VIAVI SOLUTIONS
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except
per share data)
(unaudited)
PRELIMINARY
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
December 30,
2023
|
|
December 31,
2022
|
|
December 30,
2023
|
|
December 31,
2022
|
Net revenue
|
$
254.5
|
|
$
284.5
|
|
$
502.4
|
|
$
594.7
|
Cost of
revenues
|
103.1
|
|
111.8
|
|
203.1
|
|
230.1
|
Amortization of
acquired technologies
|
3.4
|
|
5.7
|
|
6.9
|
|
12.8
|
Gross
profit
|
148.0
|
|
167.0
|
|
292.4
|
|
351.8
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
49.5
|
|
51.9
|
|
99.4
|
|
104.5
|
Selling, general and
administrative
|
74.8
|
|
90.0
|
|
152.0
|
|
170.2
|
Amortization of other
intangibles
|
1.4
|
|
2.2
|
|
3.5
|
|
4.4
|
Restructuring and
related benefits
|
(0.1)
|
|
—
|
|
(0.9)
|
|
—
|
Total
operating expenses
|
125.6
|
|
144.1
|
|
254.0
|
|
279.1
|
Income from
operations
|
22.4
|
|
22.9
|
|
38.4
|
|
72.7
|
Interest and other
income, net
|
3.8
|
|
2.2
|
|
14.0
|
|
3.3
|
Interest
expense
|
(7.9)
|
|
(6.2)
|
|
(15.7)
|
|
(12.3)
|
Income
before income taxes
|
18.3
|
|
18.9
|
|
36.7
|
|
63.7
|
Provision for income
taxes
|
7.6
|
|
10.5
|
|
16.2
|
|
22.7
|
Net income
|
$
10.7
|
|
$
8.4
|
|
$
20.5
|
|
$
41.0
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
Basic
|
$
0.05
|
|
$
0.04
|
|
$
0.09
|
|
$
0.18
|
Diluted
|
$
0.05
|
|
$
0.04
|
|
$
0.09
|
|
$
0.18
|
|
|
|
|
|
|
|
|
Shares used in per
share calculations:
|
|
|
|
|
|
|
|
Basic
|
222.5
|
|
225.9
|
|
222.2
|
|
226.1
|
Diluted
|
223.5
|
|
227.1
|
|
223.9
|
|
228.8
|
|
The preliminary
financial statements are estimated based on our current
information.
|
VIAVI SOLUTIONS
INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(in millions,
unaudited)
PRELIMINARY
|
|
|
December 30,
2023
|
|
July 1,
2023
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
543.7
|
|
$
506.5
|
Short-term
investments
|
25.0
|
|
14.6
|
Restricted
cash
|
3.1
|
|
4.5
|
Accounts receivable,
net
|
208.9
|
|
231.2
|
Inventories,
net
|
115.1
|
|
116.1
|
Prepayments and other
current assets
|
69.5
|
|
72.1
|
Total current
assets
|
965.3
|
|
945.0
|
Property, plant and
equipment, net
|
236.5
|
|
243.0
|
Goodwill,
net
|
455.2
|
|
455.2
|
Intangibles,
net
|
48.2
|
|
58.6
|
Deferred income
taxes
|
90.4
|
|
87.0
|
Other non-current
assets
|
60.6
|
|
61.7
|
Total
assets
|
$
1,856.2
|
|
$
1,850.5
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
43.8
|
|
$
47.2
|
Accrued payroll and
related expenses
|
46.6
|
|
50.5
|
Deferred
revenue
|
60.8
|
|
78.6
|
Accrued
expenses
|
21.9
|
|
21.2
|
Short-term
debt
|
96.3
|
|
96.2
|
Other current
liabilities
|
42.7
|
|
49.8
|
Total current
liabilities
|
312.1
|
|
343.5
|
Long-term
debt
|
632.8
|
|
629.5
|
Other non-current
liabilities
|
183.3
|
|
186.7
|
Total stockholders'
equity
|
728.0
|
|
690.8
|
Total liabilities and
stockholders' equity
|
$
1,856.2
|
|
$
1,850.5
|
|
The preliminary
financial statements are estimated based on our current
information.
|
VIAVI SOLUTIONS
INC.
REPORTABLE SEGMENT
INFORMATION
(in millions,
unaudited)
PRELIMINARY
|
|
Three Months Ended
December 30, 2023
|
|
Network and Service
Enablement
|
|
|
|
|
|
|
|
|
|
Network
Enablement
|
|
Service
Enablement
|
|
Network and
Service
Enablement
|
|
Optical Security
and Performance
Products
|
|
Other Items
(1)
|
|
Consolidated
GAAP Measures
|
Net revenue
|
$
155.5
|
|
$
24.1
|
|
$
179.6
|
|
$
74.9
|
|
$
—
|
|
$
254.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
$
97.2
|
|
$
16.6
|
|
$
113.8
|
|
$
39.0
|
|
$
(4.8)
|
|
$
148.0
|
Gross margin
|
62.5 %
|
|
68.9 %
|
|
63.4 %
|
|
52.1 %
|
|
|
|
58.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
|
|
$
6.4
|
|
$
27.3
|
|
$
(11.3)
|
|
$
22.4
|
Operating
margin
|
|
|
|
|
3.6 %
|
|
36.4 %
|
|
|
|
8.8 %
|
|
Three Months Ended
December 31, 2022
|
|
Network and Service
Enablement
|
|
|
|
|
|
|
|
|
|
Network
Enablement (2)
|
|
Service
Enablement (2)
|
|
Network and
Service
Enablement
|
|
Optical Security
and Performance
Products
|
|
Other Items
(1)
|
|
Consolidated
GAAP Measures
|
Net revenue
|
$
183.3
|
|
$
23.8
|
|
$
207.1
|
|
$
77.4
|
|
$
—
|
|
$
284.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
$
118.1
|
|
$
15.3
|
|
$
133.4
|
|
$
40.5
|
|
$
(6.9)
|
|
$
167.0
|
Gross margin
|
64.4 %
|
|
64.3 %
|
|
64.4 %
|
|
52.3 %
|
|
|
|
58.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
|
|
$
18.5
|
|
$
27.5
|
|
$
(23.1)
|
|
$
22.9
|
Operating
margin
|
|
|
|
|
8.9 %
|
|
35.5 %
|
|
|
|
8.0 %
|
|
Six Months Ended
December 30, 2023
|
|
Network and Service
Enablement
|
|
|
|
|
|
|
|
|
|
Network
Enablement
|
|
Service
Enablement
|
|
Network and
Service
Enablement
|
|
Optical Security
and Performance
Products
|
|
Other Items
(1)
|
|
Consolidated
GAAP Measures
|
Net revenue
|
$
305.5
|
|
$
44.5
|
|
$
350.0
|
|
$
152.4
|
|
$
—
|
|
$
502.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
$
191.8
|
|
$
30.3
|
|
$
222.1
|
|
$
79.7
|
|
$
(9.4)
|
|
$
292.4
|
Gross margin
|
62.8 %
|
|
68.1 %
|
|
63.5 %
|
|
52.3 %
|
|
|
|
58.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
|
|
$
7.9
|
|
$
56.6
|
|
$
(26.1)
|
|
$
38.4
|
Operating
margin
|
|
|
|
|
2.3 %
|
|
37.1 %
|
|
|
|
7.6 %
|
|
Six Months Ended
December 31, 2022
|
|
Network and Service
Enablement
|
|
|
|
|
|
|
|
|
|
Network
Enablement (2)
|
|
Service
Enablement (2)
|
|
Network and
Service
Enablement
|
|
Optical Security
and Performance
Products
|
|
Other Items
(1)
|
|
Consolidated
GAAP Measures
|
Net revenue
|
$
379.8
|
|
$
46.2
|
|
$
426.0
|
|
$
168.7
|
|
$
—
|
|
$
594.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
$
244.9
|
|
$
30.1
|
|
$
275.0
|
|
$
92.3
|
|
$
(15.5)
|
|
$
351.8
|
Gross margin
|
64.5 %
|
|
65.2 %
|
|
64.6 %
|
|
54.7 %
|
|
|
|
59.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
|
|
$
47.3
|
|
$
66.1
|
|
$
(40.7)
|
|
$
72.7
|
Operating
margin
|
|
|
|
|
11.1 %
|
|
39.2 %
|
|
|
|
12.2 %
|
(1) Other items include
charges (benefits) unrelated to core operating performance
primarily consisting of stock-based compensation, amortization of
acquisition-related intangibles, restructuring, changes in fair
value of contingent consideration liabilities and other charges
unrelated to core operating performance.
|
(2) Effective for
the first quarter of fiscal 2024, management of certain products
moved from the SE segment to the NE segment to better align with
operational and go-to-market strategies. As a result, prior period
balances have been recast to reflect the impact to net revenue,
gross profit and gross margin.
|
|
|
The preliminary
financial schedules are estimated based on our current
information.
|
Use of Non-GAAP (Adjusted) Financial Measures
The Company provides non-GAAP gross margin, non-GAAP operating
margin, non-GAAP net income, non-GAAP earnings per share, EBITDA
and adjusted EBITDA financial measures as supplemental information
regarding the Company's operational performance. The Company uses
the measures disclosed in this release to evaluate the Company's
historical and prospective financial performance, as well as its
performance relative to its competitors. Specifically, management
uses these items to further its own understanding of the Company's
core operating performance, which the Company believes represent
its performance in the ordinary, ongoing and customary course of
its operations. Accordingly, management excludes from core
operating performance items such as those relating to certain
purchase price accounting adjustments, amortization of
acquisition-related intangibles, stock-based compensation, legal
settlements, restructuring, changes in fair value of contingent
consideration liabilities and certain investing expenses and other
activities that management believes are not reflective of such
ordinary, ongoing and core operating activities. The Company
believes excluding these items enables investors to evaluate
more clearly and consistently the Company's core operational
performance.
The Company believes providing this additional information
allows investors to see Company results through the eyes of
management. The Company further believes that providing this
information allows investors to better understand the Company's
financial performance and, importantly, to evaluate the efficacy of
the methodology and information used by management to evaluate and
measure such performance.
The non-GAAP adjustments described in this release are excluded
by the Company from its GAAP financial measures because the Company
believes excluding these items enables investors to evaluate more
clearly and consistently the Company's core operational
performance. The non-GAAP adjustments are outlined below.
Cost of revenues, costs of research and development and costs of
selling, general and administrative: The Company's GAAP
presentation of gross margin and operating expenses may include
(i) additional depreciation and amortization from changes in
estimated useful life and the write-down of certain property,
equipment and intangibles that have been identified for disposal
but remained in use until the date of disposal, (ii) charges
such as severance, benefits and outplacement costs related to
restructuring plans, (iii) costs for facilities not required
for ongoing operations, and costs related to the relocation of
certain equipment from these facilities and/or contract
manufacturer facilities, (iv) stock-based compensation, (v)
amortization expense related to acquired intangibles, (vi) changes
in fair value of contingent consideration liabilities and
(vii) other charges unrelated to our core operating
performance comprised mainly of acquisition related transaction
costs, integration costs related to acquired entities, litigation
and legal settlements and other costs and contingencies unrelated
to current and future operations, including transformational
initiatives such as the implementation of simplified
automated processes, site consolidations, and reorganizations.
The Company excludes these items in calculating non-GAAP gross
margin, non-GAAP operating margin, non-GAAP net income, non-GAAP
earnings per share, EBITDA and adjusted EBITDA.
Non-cash interest expense and other expense: The Company
excludes certain investing expenses, including accretion of debt
discount, and other non-cash activities that management believes
are not reflective of such ordinary, ongoing and core operating
activities, in calculating non-GAAP net income and non-GAAP
EPS.
Income tax expense or benefit: The Company excludes certain
non-cash tax expense or benefit items, such as the utilization of
net operating losses where valuation allowances were released,
intra-period tax allocation benefit and the tax effect for
amortization of non-tax deductible intangible assets, in
calculating non-GAAP net income and non-GAAP earnings per
share.
Interest, taxes, depreciation, amortization and other
adjustments: The Company's EBITDA calculation primarily excludes
interest income and other income (expense), interest expense,
taxes, depreciation and amortization, and other items that are not
part of its core operating performance described above. The
Company's adjusted EBITDA excludes items in addition to the items
excluded from the EBITDA calculation, such as stock-based
compensation, restructuring and related charges (benefits), gain or
loss on sale of available for-sale investments, changes in fair
value of contingent consideration liabilities arising from prior
acquisitions and other charges related to activities that are not
part of its core operating performance described above. Management
believes adjusted EBITDA is a helpful indicator of the Company's
core operational cash flow.
Non-GAAP financial measures are not in accordance with,
preferable to, or an alternative for, generally accepted accounting
principles in the United States.
The GAAP measure most directly comparable to non-GAAP net income is
net income. The GAAP measure most directly comparable to non-GAAP
earnings per share is net income per share. The Company believes
these GAAP measures alone are not fully indicative of its core
operating expenses and performance and that providing non-GAAP
financial measures in conjunction with GAAP measures provides
valuable supplemental information regarding the Company's overall
performance.
VIAVI SOLUTIONS
INC.
RECONCILIATION OF
GAAP MEASURES FROM CONTINUING OPERATIONS
TO NON-GAAP
MEASURES
(in millions, except
per share data)
(unaudited)
PRELIMINARY
|
The following tables
reconcile GAAP measures to non-GAAP measures:
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
December 30,
2023
|
|
December 31,
2022
|
|
December 30,
2023
|
|
December 31,
2022
|
|
Gross
Profit
|
|
Gross
Margin
|
|
Gross
Profit
|
|
Gross
Margin
|
|
Gross
Profit
|
|
Gross
Margin
|
|
Gross
Profit
|
|
Gross
Margin
|
GAAP
measures
|
$
148.0
|
|
58.2 %
|
|
$
167.0
|
|
58.7 %
|
|
$
292.4
|
|
58.2 %
|
|
$
351.8
|
|
59.2 %
|
Stock-based
compensation
|
1.2
|
|
0.4 %
|
|
1.2
|
|
0.4 %
|
|
2.4
|
|
0.5 %
|
|
2.4
|
|
0.4 %
|
Other charges
unrelated to core operating
performance (1)
|
0.2
|
|
0.1 %
|
|
—
|
|
— %
|
|
0.1
|
|
— %
|
|
0.3
|
|
0.1 %
|
Amortization of
intangibles
|
3.4
|
|
1.3 %
|
|
5.7
|
|
2.0 %
|
|
6.9
|
|
1.4 %
|
|
12.8
|
|
2.1 %
|
Total related to Cost
of Revenue
|
4.8
|
|
1.8 %
|
|
6.9
|
|
2.4 %
|
|
9.4
|
|
1.9 %
|
|
15.5
|
|
2.6 %
|
Non-GAAP
measures
|
$
152.8
|
|
60.0 %
|
|
$
173.9
|
|
61.1 %
|
|
$
301.8
|
|
60.1 %
|
|
$
367.3
|
|
61.8 %
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
December 30,
2023
|
|
December 31,
2022
|
|
December 30,
2023
|
|
December 31,
2022
|
|
Operating
Income
|
|
Operating
Margin
|
|
Operating
Income
|
|
Operating
Margin
|
|
Operating
Income
|
|
Operating
Margin
|
|
Operating
Income
|
|
Operating
Margin
|
GAAP
measures
|
$ 22.4
|
|
8.8 %
|
|
$ 22.9
|
|
8.0 %
|
|
$ 38.4
|
|
7.6 %
|
|
$ 72.7
|
|
12.2 %
|
Stock-based
compensation
|
12.5
|
|
4.9 %
|
|
13.0
|
|
4.6 %
|
|
23.7
|
|
4.7 %
|
|
26.0
|
|
4.4 %
|
Change in fair
value of contingent liability
|
(7.0)
|
|
(2.8) %
|
|
1.3
|
|
0.5 %
|
|
(8.4)
|
|
(1.7) %
|
|
1.8
|
|
0.3 %
|
Other charges
(benefits) unrelated to core
operating performance (1)
|
1.1
|
|
0.4 %
|
|
0.9
|
|
0.3 %
|
|
1.3
|
|
0.3 %
|
|
(4.3)
|
|
(0.7) %
|
Amortization of
intangibles
|
4.8
|
|
1.9 %
|
|
7.9
|
|
2.8 %
|
|
10.4
|
|
2.1 %
|
|
17.2
|
|
2.9 %
|
Restructuring
and related benefits
|
(0.1)
|
|
— %
|
|
—
|
|
— %
|
|
(0.9)
|
|
(0.2) %
|
|
—
|
|
— %
|
Total related to Cost
of Revenue and Operating
Expenses
|
11.3
|
|
4.4 %
|
|
23.1
|
|
8.2 %
|
|
26.1
|
|
5.2 %
|
|
40.7
|
|
6.9 %
|
Non-GAAP
measures
|
$ 33.7
|
|
13.2 %
|
|
$ 46.0
|
|
16.2 %
|
|
$ 64.5
|
|
12.8 %
|
|
$
113.4
|
|
19.1 %
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
December 30,
2023
|
|
December 31,
2022
|
|
December 30,
2023
|
|
December 31,
2022
|
|
Net Income
|
|
Diluted
EPS
|
|
Net Income
|
|
Diluted
EPS
|
|
Net Income
|
|
Diluted
EPS
|
|
Net Income
|
|
Diluted
EPS
|
GAAP
measures
|
$ 10.7
|
|
$ 0.05
|
|
$
8.4
|
|
$ 0.04
|
|
$ 20.5
|
|
$ 0.09
|
|
$ 41.0
|
|
$ 0.18
|
Items reconciling GAAP
Net income and EPS to
Non-GAAP Net income and EPS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
12.5
|
|
0.06
|
|
13.0
|
|
0.06
|
|
23.7
|
|
0.10
|
|
26.0
|
|
0.11
|
Change in fair value
of contingent liability
|
(7.0)
|
|
(0.03)
|
|
1.3
|
|
0.01
|
|
(8.4)
|
|
(0.04)
|
|
1.8
|
|
0.01
|
Other charges
(benefits) unrelated to core
operating performance (1)
|
1.1
|
|
—
|
|
0.9
|
|
—
|
|
1.3
|
|
0.01
|
|
(4.3)
|
|
(0.02)
|
Amortization of
intangibles
|
4.8
|
|
0.02
|
|
7.9
|
|
0.03
|
|
10.4
|
|
0.05
|
|
17.2
|
|
0.08
|
Restructuring and
related benefits
|
(0.1)
|
|
—
|
|
—
|
|
—
|
|
(0.9)
|
|
(0.01)
|
|
—
|
|
—
|
Litigation settlement
(2)
|
0.3
|
|
—
|
|
—
|
|
—
|
|
(7.0)
|
|
(0.03)
|
|
—
|
|
—
|
Non-cash interest
expense and other expense
|
1.2
|
|
0.01
|
|
—
|
|
—
|
|
2.4
|
|
0.01
|
|
—
|
|
—
|
Provision for income
taxes
|
0.2
|
|
—
|
|
—
|
|
—
|
|
1.2
|
|
0.01
|
|
2.3
|
|
0.01
|
Total related
to Net income and EPS
|
13.0
|
|
0.06
|
|
23.1
|
|
0.10
|
|
22.7
|
|
0.10
|
|
43.0
|
|
0.19
|
Non-GAAP
measures
|
$ 23.7
|
|
$ 0.11
|
|
$ 31.5
|
|
$ 0.14
|
|
$ 43.2
|
|
$ 0.19
|
|
$ 84.0
|
|
$ 0.37
|
Shares used in per
share calculation for Non-
GAAP EPS
|
|
|
223.5
|
|
|
|
227.1
|
|
|
|
223.9
|
|
|
|
228.8
|
Note: Certain totals
may not add due to rounding.
|
(1) Other items include
charges (benefits) unrelated to core operating performance
primarily consisting of certain acquisition and integration related
charges, legal settlement, accretion of debt discount and losses on
disposal of long-lived assets.
|
(2) Unfavorable
(favorable) litigation settlement recorded to Interest and other
income, net in the Consolidated Statements of Operations for the
three and six months ended December 30, 2023.
|
|
The preliminary
financial schedules are estimated based on our current
information.
|
VIAVI SOLUTIONS
INC.
RECONCILIATION OF
GAAP MEASURES FROM CONTINUING OPERATIONS
TO ADJUSTED
EBITDA
(in millions,
unaudited)
PRELIMINARY
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
December 30,
2023
|
|
December 31,
2022
|
|
December 30,
2023
|
|
December 31,
2022
|
GAAP Net
Income
|
$
10.7
|
|
$
8.4
|
|
$
20.5
|
|
$
41.0
|
Interest and other
income, net (1)
|
(3.8)
|
|
(2.2)
|
|
(14.0)
|
|
(3.3)
|
Interest
expense
|
7.9
|
|
6.2
|
|
15.7
|
|
12.3
|
Provision for income
taxes
|
7.6
|
|
10.5
|
|
16.2
|
|
22.7
|
Depreciation
|
9.7
|
|
8.6
|
|
19.5
|
|
17.1
|
Amortization
|
4.8
|
|
7.9
|
|
10.4
|
|
17.2
|
EBITDA
|
36.9
|
|
39.4
|
|
68.3
|
|
107.0
|
Restructuring and
related benefits
|
(0.1)
|
|
—
|
|
(0.9)
|
|
—
|
Stock-based
compensation
|
12.5
|
|
13.0
|
|
23.7
|
|
26.0
|
Change in fair value
of contingent liability
|
(7.0)
|
|
1.3
|
|
(8.4)
|
|
1.8
|
Other charges
(benefits) unrelated to core operating performance
|
0.7
|
|
0.6
|
|
0.8
|
|
(4.8)
|
Adjusted
EBITDA
|
$
43.0
|
|
$
54.3
|
|
$
83.5
|
|
$
130.0
|
Note: Certain totals
may not add due to rounding.
|
(1) Includes litigation
settlements recorded to Interest and other income, net in the
Consolidated Statements of Operations for the three and six months
ended December 30, 2023.
|
|
The preliminary
financial schedules are estimated based on our current
information.
|
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SOURCE VIAVI Financials