Ciena® Corporation (NYSE: CIEN), a networking systems, services
and software company, today announced unaudited financial results
for its fiscal fourth quarter and year ended October 31, 2020.
- Q4 Revenue: $828.5 million
- Q4 Net Income per Share: $0.42 GAAP; $0.60 adjusted
(non-GAAP), increasing 3.4% year over year
- Share Repurchases: Reinstituting share repurchase
program with the intent to resume purchases in the first quarter of
2021
"Our fiscal fourth quarter and full-year 2020 performance
reported today demonstrates that we have the innovation,
diversification and global scale to perform well in a challenging
environment," said Gary Smith, President and CEO, Ciena. "While we
expect current market conditions to persist in the near-term, we
are confident in strong secular demand dynamics and our ability to
continue to outperform the market."
For the fiscal fourth quarter 2020, Ciena reported revenue of
$828.5 million as compared to $968.0 million for the fiscal fourth
quarter 2019. For fiscal year 2020, Ciena reported revenue of $3.53
billion, as compared to $3.57 billion for fiscal year 2019.
Ciena's GAAP net income for the fiscal fourth quarter 2020 was
$65.0 million or $0.42 per diluted common share, which compares to
a GAAP net income of $80.3 million, or $0.51 per diluted common
share, for the fiscal fourth quarter 2019. For fiscal year 2020,
Ciena's GAAP net income was $361.3 million, or $2.32 per diluted
common share, as compared to a GAAP net income of $253.4 million,
or $1.61 per diluted common share for fiscal year 2019.
Ciena's adjusted (non-GAAP) net income for the fiscal fourth
quarter 2020 was $94.5 million, or $0.60 per diluted common share,
which compares to an adjusted (non-GAAP) net income of $90.4
million, or $0.58 per diluted common share, for the fiscal fourth
quarter 2019. For fiscal year 2020, Ciena's adjusted (non-GAAP) net
income was $460.1 million, or $2.95 per diluted common share, as
compared to an adjusted (non-GAAP) net income of $331.8 million, or
$2.11 per diluted common share for fiscal year 2019.
Performance Summary for the Fiscal Fourth Quarter and the
Year Ended October 31, 2020
The tables below (in millions, except percentage data) provide
comparisons of certain quarterly and annual results to the prior
year. Appendices A and B set forth reconciliations between the GAAP
and adjusted (non-GAAP) measures contained in this release.
GAAP Results
(unaudited)
Quarter Ended
Period Change
Year Ended
Period Change
October 31, 2020
November 2, 2019
Y-T-Y*
October 31, 2020
November 2, 2019
Y-T-Y*
Revenue
$
828.5
$
968.0
(14.4
)%
$
3,532.2
$
3,572.1
(1.1
)%
Gross margin
48.8
%
43.4
%
5.4
%
46.8
%
43.2
%
3.6
%
Operating expense
$
310.9
$
326.5
(4.8
)%
$
1,165.9
$
1,195.3
(2.5
)%
Operating margin
11.3
%
9.6
%
1.7
%
13.8
%
9.7
%
4.1
%
Non-GAAP Results
(unaudited)
Quarter Ended
Period Change
Year Ended
Period Change
October 31, 2020
November 2, 2019
Y-T-Y*
October 31, 2020
November 2, 2019
Y-T-Y*
Revenue
$
828.5
$
968.0
(14.4
)%
$
3,532.2
$
3,572.1
(1.1
)%
Adj. gross margin
49.5
%
43.8
%
5.7
%
47.4
%
43.7
%
3.7
%
Adj. operating expense
$
278.9
$
295.3
(5.6
)%
$
1,055.3
$
1,091.8
(3.3
)%
Adj. operating margin
15.8
%
13.3
%
2.5
%
17.6
%
13.1
%
4.5
%
Adj. EBITDA
$
154.5
$
151.6
1.9
%
$
713.9
$
557.3
28.1
%
* Denotes % change, or in the case of
margin, absolute change
Revenue by Segment
(unaudited)
Quarter Ended
October 31, 2020
November 2, 2019
Revenue
%**
Revenue
% **
Networking Platforms
Converged Packet Optical
$
579.3
69.9
$
665.8
68.8
Packet Networking
$
56.0
6.8
131.9
13.6
Total Networking Platforms
$
635.3
76.7
797.7
82.4
Platform Software and Services
$
54.5
6.6
41.2
4.3
Blue Planet Automation Software and
Services
$
20.9
2.5
16.6
1.7
Global Services
Maintenance Support and Training
$
67.0
8.1
65.3
6.7
Installation and Deployment
$
43.0
5.2
36.5
3.8
Consulting and Network Design
$
7.8
0.9
10.7
1.1
Total Global Services
$
117.8
14.2
112.5
11.6
Total
$
828.5
100.0
$
968.0
100.0
Revenue by Segment
(unaudited)
Year Ended
October 31, 2020
November 2, 2019
Revenue
%**
Revenue
% **
Networking Platforms
Converged Packet Optical
$
2,547.6
72.1
$
2,562.8
71.8
Packet Networking
267.5
7.6
348.5
9.8
Total Networking Platforms
2,815.1
79.7
2,911.3
81.6
Platform Software and Services
197.8
5.6
155.3
4.3
Blue Planet Automation Software and
Services
62.6
1.8
54.6
1.5
Global Services
Maintenance Support and Training
269.4
7.6
261.3
7.3
Installation and Deployment
152.0
4.3
148.2
4.1
Consulting and Network Design
35.3
1.0
41.4
1.2
Total Global Services
456.7
12.9
450.9
12.6
Total
$
3,532.2
100.0
$
3,572.1
100.0
Additional Performance Metrics for Fiscal Fourth Quarter and
Year Ended October 31, 2020
Revenue by Geographic Region
(unaudited)
Quarter Ended
October 31, 2020
November 2, 2019
Revenue
% **
Revenue
% **
Americas
$
531.6
64.2
$
715.7
73.9
Europe, Middle East and Africa
157.6
19.0
153.0
15.8
Asia Pacific
139.3
16.8
99.3
10.3
Total
$
828.5
100.0
$
968.0
100.0
Revenue by Geographic Region
(unaudited)
Year Ended
October 31, 2020
November 2, 2019
Revenue
% **
Revenue
% **
Americas
$
2,469.3
69.9
$
2,503.9
70.1
Europe, Middle East and Africa
591.5
16.8
566.7
15.9
Asia Pacific
471.4
13.3
501.5
14.0
Total
$
3,532.2
100.0
$
3,572.1
100.0
** Denotes % of total revenue
- No customer represented more than 10% of revenue for the fiscal
quarter
- One 10%-plus customer represented a total of 10.6% of revenue
for the fiscal year
- Cash and investments totaled $1.3 billion
- Cash flow from operations totaled $187.3 million and $493.7
million for the fiscal quarter and year, respectively
- Average days' sales outstanding (DSOs) were 88 and 82 for the
fiscal quarter and year, respectively
- Accounts receivable, net balance was $719.4 million
- Unbilled contract asset balance was $85.8 million
- Inventories totaled $344.4 million, including:
- Raw materials: $119.5 million
- Work in process: $13.7 million
- Finished goods: $210.1 million
- Deferred cost of sales: $40.7 million
- Reserve for excess and obsolescence: $(39.6) million
- Product inventory turns were 4.0 and 4.6 for the fiscal quarter
and year, respectively
- Headcount totaled 7,032
Share Repurchase Program
After temporarily suspending repurchases of our common stock
during fiscal 2020, we will be reinstituting this program in first
quarter of 2021 and are currently targeting repurchases in the
range of $150 million during fiscal 2021. Ciena may purchase shares
at management's discretion in the open market, in privately
negotiated transactions, in transactions structured through
investment banking institutions, or a combination of the foregoing.
Ciena may also, from time to time, enter into Rule 10b5-1 plans to
facilitate repurchases of its shares under this authorization. The
amount and timing of repurchases are subject to a variety of
factors including liquidity, cash flow, stock price, and general
business and market conditions. The program may be modified,
suspended or discontinued at any time. During fiscal year 2020,
Ciena repurchased approximately 1.9 million shares of its common
stock at an average price of $39.81 per share for an aggregate
purchase price of $74.5 million.
Supplemental Materials and Live Web Broadcast of Unaudited
Fiscal Fourth Quarter 2020 Results
Today, Thursday, December 10, 2020, in conjunction with this
announcement, Ciena has posted to the Quarterly Results page of the
Investor Relations section of its website certain related
supporting materials for its unaudited fiscal fourth quarter and
fiscal 2020 results.
Ciena's management will also host a discussion today with
investors and financial analysts that will include the Company's
outlook. The live audio web broadcast beginning at 8:30 a.m.
Eastern will be accessible via www.ciena.com. An archived replay of
the live broadcast will be available shortly following its
conclusion on the Investor Relations page of Ciena's website.
Notes to Investors
Forward-Looking Statements. You are encouraged to review
the Investors section of our website, where we routinely post press
releases, SEC filings, recent news, financial results, supplemental
financial information, and other announcements. From time to time
we exclusively post material information to this website along with
other disclosure channels that we use. This press release contains
certain forward-looking statements that involve risks and
uncertainties. These statements are based on current expectations,
forecasts, assumptions and other information available to the
Company as of the date hereof. Forward-looking statements include
statements regarding Ciena's expectations, beliefs, intentions or
strategies regarding the future and can be identified by
forward-looking words such as "anticipate," "believe," "could,"
"estimate," "expect," "intend," "may," "should," "will," and
"would" or similar words. Forward-looking statements in this
release include: "Our fiscal fourth quarter and full-year year 2020
performance reported today demonstrates that we have the
innovation, diversification and global scale to perform well in a
challenging environment." "While we expect current market
conditions to persist in the near-term, we are confident in strong
secular demand dynamics and our ability to continue to outperform
the market."
Ciena's actual results, performance or events may differ
materially from these forward-looking statements made or implied
due to a number of risks and uncertainties relating to Ciena's
business, including: the effect of broader economic and market
conditions on our customers and their business; our ability to
execute our business and growth strategies; the duration and
severity of the COVID-19 pandemic and the impact of countermeasures
taken to mitigate its spread; the impact of COVID-19 on
macroeconomic conditions, the level of economic activity, demand
for our technology solutions, short- and long-term customer or end
user needs and changes thereto, continuity of supply chain,
logistics and business operations, liquidity and financial results;
changes in network spending or network strategy by customers;
seasonality and the timing and size of customer orders, including
our ability to recognize revenue relating to such sales; the level
of competitive pressure we encounter; the product, customer and
geographic mix of sales within the period; supply chain disruptions
and the level of success relating to efforts to optimize Ciena's
operations; changes in foreign currency exchange rates affecting
revenue and operating expense; the impact of the Tax Cuts and Jobs
Act, changes in estimates of prospective income tax rates and any
adjustments to Ciena's provisional estimates whether related to
further guidance, analysis or otherwise, and the other risk factors
disclosed in Ciena's periodic reports filed with the Securities and
Exchange Commission, including its Quarterly Report on Form 10-Q
filed with the SEC on September 9, 2020 and its Annual Report on
Form 10-K to be filed with the SEC. Ciena assumes no obligation to
update any forward-looking information included in this press
release.
Non-GAAP Presentation of Quarterly and Annual Results.
This release includes non-GAAP measures of Ciena's gross profit,
operating expense, income from operations, earnings before
interest, tax, depreciation and amortization (EBITDA), Adjusted
EBITDA, and measures of net income and net income per share. In
evaluating the operating performance of Ciena's business,
management excludes certain charges and credits that are required
by GAAP. These items share one or more of the following
characteristics: they are unusual and Ciena does not expect them to
recur in the ordinary course of its business; they do not involve
the expenditure of cash; they are unrelated to the ongoing
operation of the business in the ordinary course; or their
magnitude and timing is largely outside of Ciena's control.
Management believes that the non-GAAP measures below provide
management and investors useful information and meaningful insight
to the operating performance of the business. The presentation of
these non-GAAP financial measures should be considered in addition
to Ciena's GAAP results and these measures are not intended to be a
substitute for the financial information prepared and presented in
accordance with GAAP. Ciena's non-GAAP measures and the related
adjustments may differ from non-GAAP measures used by other
companies and should only be used to evaluate Ciena's results of
operations in conjunction with our corresponding GAAP results. To
the extent not previously disclosed in a prior Ciena financial
results press release for the relevant period, Appendix A and B to
this press release set forth a complete GAAP to non-GAAP
reconciliation of the non-GAAP measures contained in this
release.
About Ciena. Ciena (NYSE: CIEN) is a networking systems,
services and software company. We provide solutions that help our
clients create the Adaptive Network™ in response to the constantly
changing demands of their users. By delivering best-in-class
networking technology through high-touch consultative
relationships, we build the world’s most agile networks with
automation, openness and scale. For updates on Ciena, follow us on
Twitter @Ciena, LinkedIn, the Ciena Insights blog, or visit
www.ciena.com.
CIENA CORPORATION
CONDENSED UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per
share data)
Quarter Ended
Year Ended
October 31,
2020
November 2,
2019
October 31,
2020
November 2,
2019
Revenue:
Products
$
668,661
$
820,007
$
2,914,790
$
2,983,815
Services
159,819
147,980
617,367
588,316
Total revenue
828,480
967,987
3,532,157
3,572,131
Cost of goods sold:
Products
343,413
469,945
1,573,791
1,716,358
Services
80,718
78,346
305,475
313,707
Total cost of goods sold
424,131
548,291
1,879,266
2,030,065
Gross profit
404,349
419,696
1,652,891
1,542,066
Operating expenses:
Research and development
137,237
141,657
529,888
548,139
Selling and marketing
113,382
117,201
416,425
423,046
General and administrative
43,415
50,307
169,548
174,399
Amortization of intangible assets
5,851
5,222
23,383
21,808
Acquisition and integration costs
(recoveries)
3,127
(735
)
4,031
3,370
Significant asset impairments and
restructuring costs
7,854
12,842
22,652
24,538
Total operating expenses
310,866
326,494
1,165,927
1,195,300
Income from operations
93,483
93,202
486,964
346,766
Interest and other income (loss), net
(249
)
(1,183
)
964
3,876
Interest expense
(7,395
)
(9,136
)
(31,321
)
(37,452
)
Loss on extinguishment and modification of
debt
—
—
(646
)
—
Income before income taxes
85,839
82,883
455,961
313,190
Provision for income taxes
20,798
2,552
94,670
59,756
Net income
$
65,041
$
80,331
$
361,291
$
253,434
Net Income per Common Share
Basic net income per common share
$
0.42
$
0.52
$
2.34
$
1.63
Diluted net income per potential common
share
$
0.42
$
0.51
$
2.32
$
1.61
Weighted average basic common shares
outstanding
154,706
154,852
154,287
155,720
Weighted average diluted potential common
shares outstanding(1)
156,563
156,612
155,955
157,612
(1) Weighted average diluted
potential common shares outstanding used in calculating GAAP
diluted net income per potential common share for the fourth
quarter of fiscal 2020 includes 1.9 million shares underlying
certain stock option and stock unit awards.
Weighted average diluted
potential common shares outstanding used in calculating GAAP
diluted net income per potential common share for fiscal 2020
includes 1.7 million shares underlying certain stock option and
stock unit awards.
Weighted average diluted
potential common shares outstanding used in calculating GAAP
diluted net income per potential common share for the fourth
quarter of fiscal 2019 includes 1.8 million shares underlying
certain stock option and stock unit awards.
Weighted average diluted
potential common shares outstanding used in calculating GAAP
diluted net income per potential common share for fiscal 2019
includes 1.9 million shares underlying certain stock option and
stock unit awards.
CIENA CORPORATION
CONDENSED UNAUDITED
CONSOLIDATED BALANCE SHEETS
(in thousands, except share
data)
October 31,
2020
November 2,
2019
ASSETS
Current assets:
Cash and cash equivalents
$
1,088,624
$
904,045
Short-term investments
150,667
109,940
Accounts receivable, net
719,405
724,854
Inventories
344,379
345,049
Prepaid expenses and other
308,084
297,914
Total current assets
2,611,159
2,381,802
Long-term investments
82,226
10,014
Equipment, building, furniture and
fixtures, net
272,377
286,884
Operating lease right-of-use assets
57,026
—
Goodwill
310,847
297,937
Other intangible assets, net
96,647
112,781
Deferred tax asset, net
647,805
714,942
Other long-term assets
102,830
88,986
Total assets
$
4,180,917
$
3,893,346
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
291,904
$
344,819
Accrued liabilities and other short-term
obligations
334,132
382,740
Deferred revenue
108,700
111,381
Operating lease liabilities
19,035
—
Current portion of long-term debt
6,930
7,000
Total current liabilities
760,701
845,940
Long-term deferred revenue
49,663
45,492
Other long-term obligations
123,185
148,747
Long-term operating lease liabilities
61,415
—
Long-term debt, net
676,356
680,406
Total liabilities
$
1,671,320
$
1,720,585
Stockholders’ equity:
Preferred stock — par value $0.01;
20,000,000 shares authorized; zero shares issued and
outstanding
—
—
Common stock — par value $0.01;
290,000,000 shares authorized; 154,563,005 and 154,403,850 shares
issued and outstanding
1,546
1,544
Additional paid-in capital
6,826,531
6,837,714
Accumulated other comprehensive loss
(35,358
)
(22,084
)
Accumulated deficit
(4,283,122
)
(4,644,413
)
Total stockholders’ equity
2,509,597
2,172,761
Total liabilities and stockholders’
equity
$
4,180,917
$
3,893,346
CIENA CORPORATION
CONDENSED UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended
October 31, 2020
November 2, 2019
Cash flows from operating activities:
Net income
$
361,291
$
253,434
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation of equipment, furniture and
fixtures, and amortization of leasehold improvements
93,908
87,576
Share-based compensation costs
67,758
59,736
Amortization of intangible assets
38,619
35,136
Deferred taxes
64,339
19,865
Provision for doubtful accounts
8,855
6,740
Provision for inventory excess and
obsolescence
24,701
28,085
Provision for warranty
22,417
23,105
Other
11,628
(910
)
Changes in assets and liabilities:
Accounts receivable
(17,299
)
65,712
Inventories
(25,044
)
(112,941
)
Prepaid expenses and other
(38,998
)
(96,618
)
Operating lease right-of-use assets
16,787
—
Accounts payable, accruals and other
obligations
(117,931
)
27,740
Deferred revenue
2,519
16,480
Short and long-term operating lease
liabilities
(19,896
)
—
Net cash provided by operating
activities
493,654
413,140
Cash flows provided by (used in) investing
activities:
Payments for equipment, furniture,
fixtures and intellectual property
(82,667
)
(62,579
)
Purchase of available for sale
securities
(223,196
)
(158,074
)
Proceeds from maturities of available for
sale securities
110,390
248,748
Settlement of foreign currency forward
contracts, net
3,531
(1,351
)
Purchase of equity investment
—
(2,667
)
Acquisition of businesses, net of cash
acquired
(28,300
)
—
Net cash provided by (used in) investing
activities
(220,242
)
24,077
Cash flows from financing activities:
Payment of long-term debt
(5,198
)
(7,000
)
Payment for debt conversion liability
—
(111,268
)
Payment of debt issuance costs
(382
)
(1,191
)
Payment of finance lease obligations
(2,703
)
(3,319
)
Shares repurchased for tax withholdings on
vesting of restricted stock units
(32,472
)
(29,059
)
Repurchases of common stock - repurchase
program
(74,535
)
(150,076
)
Proceeds from issuance of common stock
28,068
22,947
Net cash used in financing activities
(87,222
)
(278,966
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(1,643
)
476
Net increase in cash, cash equivalents and
restricted cash
184,547
158,727
Cash, cash equivalents and restricted cash
at beginning of fiscal year
904,161
745,434
Cash, cash equivalents and restricted cash
at end of fiscal year
$
1,088,708
$
904,161
Supplemental disclosure of cash flow
information
Cash paid during the fiscal year for
interest
$
32,837
$
39,579
Cash paid during the fiscal year for
income taxes, net
$
53,076
$
33,570
Operating lease payments
$
22,089
$
—
Non-cash investing and financing
activities
Purchase of equipment in accounts
payable
$
7,854
$
16,549
Conversion of debt conversion liability
into 1,585,140 shares of common stock
$
—
$
52,944
Operating lease right-of-use assets
subject to lease liability
$
24,160
$
—
Unrealized gain on equity investment
$
2,681
$
—
APPENDIX A - Reconciliation of
Adjusted (Non-GAAP) Measurements (unaudited)
Quarter Ended
Year Ended
October 31, 2020
November 2, 2019
October 31, 2020
November 2, 2019
Gross Profit Reconciliation
(GAAP/non-GAAP)
GAAP gross profit
$
404,349
$
419,696
$
1,652,891
$
1,542,066
Share-based compensation-products
724
748
3,182
2,868
Share-based compensation-services
968
715
3,853
3,175
Amortization of intangible assets
3,732
3,303
15,235
13,327
Total adjustments related to gross
profit
5,424
4,766
22,270
19,370
Adjusted (non-GAAP) gross profit
$
409,773
$
424,462
$
1,675,161
$
1,561,436
Adjusted (non-GAAP) gross profit
percentage
49.5
%
43.8
%
47.4
%
43.7
%
Operating Expense Reconciliation
(GAAP/non-GAAP)
GAAP operating expense
$
310,866
$
326,494
$
1,165,927
$
1,195,300
Share-based compensation-research and
development
4,030
3,287
16,987
14,321
Share-based compensation-sales and
marketing
5,137
4,151
20,194
16,474
Share-based compensation-general and
administrative
5,982
6,425
23,424
22,841
Amortization of intangible assets
5,851
5,222
23,383
21,808
Acquisition and integration costs
(recoveries)
3,127
(735
)
4,031
3,370
Significant asset impairments and
restructuring costs
7,854
12,842
22,652
24,538
Legal settlements
—
—
—
137
Total adjustments related to operating
expense
$
31,981
$
31,192
$
110,671
$
103,489
Adjusted (non-GAAP) operating expense
$
278,885
$
295,302
$
1,055,256
$
1,091,811
Income from Operations Reconciliation
(GAAP/non-GAAP)
GAAP income from operations
$
93,483
$
93,202
$
486,964
$
346,766
Total adjustments related to gross
profit
5,424
4,766
22,270
19,370
Total adjustments related to operating
expense
31,981
31,192
110,671
103,489
Total adjustments related to income from
operations
37,405
35,958
132,941
122,859
Adjusted (non-GAAP) income from
operations
$
130,888
$
129,160
$
619,905
$
469,625
Adjusted (non-GAAP) operating margin
percentage
15.8
%
13.3
%
17.6
%
13.1
%
Net Income Reconciliation
(GAAP/non-GAAP)
GAAP net income
$
65,041
$
80,331
$
361,291
$
253,434
Exclude GAAP provision for income
taxes
20,798
2,552
94,670
59,756
Income before income taxes
85,839
82,883
455,961
313,190
Total adjustments related to income from
operations
37,405
35,958
132,941
122,859
Loss on extinguishment and modification of
debt
—
—
646
—
Unrealized gain on equity investment
(2,681
)
—
(2,681
)
—
Adjusted income before income taxes
120,563
118,841
586,867
436,049
Non-GAAP tax provision on adjusted income
before income taxes
26,042
28,403
126,763
104,216
Adjusted (non-GAAP) net income
$
94,521
$
90,438
$
460,104
$
331,833
Weighted average basic common shares
outstanding
154,706
154,852
154,287
155,720
Weighted average diluted potential common
shares outstanding(1)
156,563
156,612
155,955
157,612
Net Income per Common Share
GAAP diluted net income per potential
common share
$
0.42
$
0.51
$
2.32
$
1.61
Adjusted (non-GAAP) diluted net income per
potential common share
$
0.60
$
0.58
$
2.95
$
2.11
(1) Weighted average diluted
potential common shares outstanding used in calculating Adjusted
(non-GAAP) diluted net income per potential common share for the
fourth quarter of fiscal 2020 includes 1.9 million shares
underlying certain stock option and stock unit awards.
Weighted average diluted
potential common shares outstanding used in calculating adjusted
(non-GAAP) diluted net income per potential common share for fiscal
2020 includes 1.7 million shares underlying certain stock option
and stock unit awards.
Weighted average diluted
potential common shares outstanding used in calculating Adjusted
(non-GAAP) diluted net income per potential common share for the
fourth quarter of fiscal 2019 includes 1.8 million shares
underlying certain stock option and stock unit awards.
Weighted average diluted
potential common shares outstanding used in calculating adjusted
(non-GAAP) diluted net income per potential common share for fiscal
2019 includes 1.9 million shares underlying certain stock option
and stock unit awards.
APPENDIX B - Calculation of
EBITDA and Adjusted EBITDA (unaudited)
Quarter Ended
Year Ended
October 31, 2020
November 2, 2019
October 31, 2020
November 2, 2019
Earnings Before Interest, Tax,
Depreciation and Amortization (EBITDA)
Net income (GAAP)
$
65,041
$
80,331
$
361,291
$
253,434
Add: Interest expense
7,395
9,136
31,321
37,452
Less: Interest and other income (loss),
net
(249
)
(1,183
)
964
3,876
Add: Loss on extinguishment and
modification of debt
—
—
(646
)
—
Add: Provision for income taxes
20,798
2,552
94,670
59,756
Add: Depreciation of equipment, building,
furniture and fixtures, and amortization of leasehold
improvements
23,538
22,505
93,908
87,576
Add: Amortization of intangible assets
9,584
8,525
38,619
35,136
EBITDA
$
126,605
$
124,232
$
619,491
$
469,478
Add: Share-based compensation cost
16,920
15,290
67,758
59,736
Add: Significant asset impairments and
restructuring costs
7,854
12,842
22,652
24,538
Add: Acquisition and integration costs
(recoveries)
3,127
(735
)
4,031
3,370
Add: Legal settlement
—
—
—
137
Adjusted EBITDA
$
154,506
$
151,629
$
713,932
$
557,259
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.
- 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) - consist of
expenses for financial, legal and accounting advisors, severance
and other employee-related costs associated with our acquisitions
of DonRiver and Centina, including costs and recoveries of
acquisition consideration 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.
- 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.
- Legal settlements - costs incurred as a result of settlements,
during the first quarter of fiscal 2019.
- Unrealized gain on equity investment - reflects a change in the
carrying value of a certain cost method equity investment.
- Non-GAAP tax provision - consists of current and deferred
income tax expense commensurate with the level of adjusted income
before income taxes and utilizes a current, blended U.S. and
foreign statutory annual tax rate of 21.6% for fiscal 2020, and
23.9% for fiscal 2019. This rate may be subject to change in the
future, including as a result of changes in tax policy or tax
strategy.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201210005427/en/
Press: Nicole Anderson Ciena Corporation +1 (410) 694-5761
pr@ciena.com
Investors: Gregg Lampf Ciena Corporation +1 (410) 694-5700
ir@ciena.com
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