[March 06, 2018] |
|
Ciena Reports Fiscal First Quarter 2018 Financial Results
Ciena® Corporation
(NYSE: CIEN):
-
Q1 Revenue: $646.1 million, increasing 4% year over year
-
Q1 Net Income (Loss) per Share: $(3.29) GAAP; $0.15 adjusted
(non-GAAP)
-
GAAP loss primarily due to significant non-cash charges related to
the Tax Cuts and Jobs Act, which resulted in an estimated $476.9
million of additional tax expense
-
Share Repurchase: Commenced repurchase activity on three-year,
$300 million repurchase program during Q1
Ciena, a network strategy and
technology company, today announced unaudited financial results for its
fiscal first quarter ended January 31, 2018.
"We demonstrated a strong start toward achieving our long-term financial
goals with our fiscal first quarter results, including year-over-year
top-line growth, continued cash generation and a strengthening balance
sheet," said Gary B. Smith, president and CEO, Ciena. "We also are
confident in our ability to continue driving market share gains across
key geographies and customer segments by intersecting the industry's
demand drivers with leading innovation."
For the fiscal first quarter 2018, Ciena reported revenue of $646.1
million as compared to $621.5 million for the fiscal first quarter 2017.
Ciena's fiscal first quarter 2018 GAAP results include a non-cash $476.9
million charge related to the enactment of the Tax Cuts and Jobs Act. As
a result, Ciena's GAAP net loss for the fiscal first quarter 2018 was
$(473.4) million, or $(3.29) per diluted common share, which compares to
a GAAP net income of $3.9 million, or $0.03 per diluted common share,
for the fiscal first quarter 2017.
Ciena's adjusted (non-GAAP) net income for the fiscal first quarter 2018
was $21.9 million, or $0.15 per diluted common share, which compares to
an adjusted (non-GAAP) net income of $24.6 million, or $0.17 per diluted
common share, for the fiscal first quarter 2017.
Share Repurchase Program
On December 7, 2017, Ciena announced that its Board of Directors had
authorized a program to repurchase up to $300 million of the Company's
common stock through the end of fiscal 2020. The Company commenced
repurchases late in the fiscal first quarter 2018, and through March 5,
2018, has repurchased approximately 874,000 shares of its common stock,
for an aggregate purchase price of $19.5 million at an average price
of $22.34 per share.
Fiscal First Quarter 2018 Performance Summary
The tables below (in millions, except percentage data) provide
comparisons of certain quarterly results to the prior year. Appendix A
and B set forth reconciliations between the GAAP and adjusted (non-GAAP)
measures contained in this release.
|
|
|
|
GAAP Results
|
|
|
|
Q1
|
|
Q1
|
|
Period Change
|
|
|
|
FY 2018
|
|
FY 2017
|
|
Y-T-Y*
|
Revenue
|
|
|
$
|
646.1
|
|
|
$
|
621.5
|
|
|
4.0
|
%
|
Gross margin
|
|
|
|
42.1
|
%
|
|
|
44.1
|
%
|
|
(2.0
|
)%
|
Operating expense
|
|
|
$
|
255.0
|
|
|
$
|
254.7
|
|
|
0.1
|
%
|
Operating margin
|
|
|
|
2.6
|
%
|
|
|
3.1
|
%
|
|
(0.5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Results
|
|
|
|
Q1
|
|
Q1
|
|
Period Change
|
|
|
|
FY 2018
|
|
FY 2017
|
|
Y-T-Y*
|
Revenue
|
|
|
$
|
646.1
|
|
|
$
|
621.5
|
|
|
4.0
|
%
|
Adj. gross margin
|
|
|
|
42.6
|
%
|
|
|
44.9
|
%
|
|
(2.3
|
)%
|
Adj. operating expense
|
|
|
$
|
234.4
|
|
|
$
|
226.2
|
|
|
3.6
|
%
|
Adj. operating margin
|
|
|
|
6.3
|
%
|
|
|
8.5
|
%
|
|
(2.2
|
)%
|
Adj. EBITDA
|
|
|
$
|
61.8
|
|
|
$
|
69.9
|
|
|
(11.6
|
)%
|
|
* Denotes % change, or in the case of margin, absolute change
|
|
|
|
|
|
Revenue by Segment
|
|
|
|
Q1 FY 2018
|
|
Q1 FY 2017
|
|
|
|
Revenue
|
|
%**
|
|
Revenue
|
|
%**
|
Networking Platforms
|
|
|
|
|
|
|
|
|
|
Converged Packet Optical 1
|
|
|
$
|
427.4
|
|
|
66.1
|
|
|
$
|
417.8
|
|
|
67.2
|
Packet Networking
|
|
|
68.6
|
|
|
10.6
|
|
|
72.2
|
|
|
11.6
|
Total Networking Platforms
|
|
|
496.0
|
|
|
76.7
|
|
|
490.0
|
|
|
78.8
|
|
|
|
|
|
|
|
|
|
|
Software and Software-Related Services
|
|
|
|
|
|
|
|
|
|
Software Platforms
|
|
|
29.6
|
|
|
4.6
|
|
|
17.0
|
|
|
2.7
|
Software-Related Services
|
|
|
23.9
|
|
|
3.7
|
|
|
22.3
|
|
|
3.6
|
Total Software and Software-Related Services
|
|
|
53.5
|
|
|
8.3
|
|
|
39.3
|
|
|
6.3
|
|
|
|
|
|
|
|
|
|
|
Global Services
|
|
|
|
|
|
|
|
|
|
Maintenance Support and Training
|
|
|
56.0
|
|
|
8.7
|
|
|
55.0
|
|
|
8.9
|
Installation and Deployment
|
|
|
30.0
|
|
|
4.7
|
|
|
27.9
|
|
|
4.5
|
Consulting and Network Design
|
|
|
10.6
|
|
|
1.6
|
|
|
9.3
|
|
|
1.5
|
Total Global Services
|
|
|
96.6
|
|
|
15.0
|
|
|
92.2
|
|
|
14.9
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
646.1
|
|
|
100.0
|
|
|
$
|
621.5
|
|
|
100.0
|
|
1. As of the first fiscal quarter of 2018, sales of Optical
Transport products are reflected within the Converged Packet Optical
product line for all periods presented.
|
|
Additional Performance Metrics for Fiscal First Quarter 2018
|
|
|
|
Revenue by Geographic Region
|
|
|
|
Q1 FY 2018
|
|
Q1 FY 2017
|
|
|
|
Revenue
|
|
% **
|
|
Revenue
|
|
% **
|
North America
|
|
|
$
|
402.9
|
|
62.4
|
|
$
|
405.9
|
|
65.3
|
Europe, Middle East and Africa
|
|
|
|
97.8
|
|
15.1
|
|
|
91.5
|
|
14.7
|
Caribbean and Latin America
|
|
|
|
34.6
|
|
5.4
|
|
|
35.2
|
|
5.7
|
Asia Pacific
|
|
|
|
110.8
|
|
17.1
|
|
|
88.9
|
|
14.3
|
Total
|
|
|
$
|
646.1
|
|
100.0
|
|
$
|
621.5
|
|
100.0
|
|
** Denotes % of total revenue
|
|
-
U.S. customers contributed 59.3% of total revenue
-
Two customers each accounted for greater than 10% of revenue and in
aggregate represented 25% of total revenue
-
Cash and investments totaled $986.8 million
-
Cash flow from operations totaled $35.7 million
-
Free cash flow totaled $10.0 million
-
Average days' sales outstanding (DSOs) were 77
-
Accounts receivable balance was $553.7 million
-
Inventories totaled $255.3 million, including:
-
Raw materials: $47.7 million
-
Work in process: $16.5 million
-
Finished goods: $176.5 million
-
Deferred cost of sales: $64.4 million
-
Reserve for excess and obsolescence: $(49.8) million
-
Product inventory turns were 4.9
-
Headcount totaled 5,712
Impact of the Tax Cuts and Jobs Act
The first fiscal quarter 2018 provision for income taxes includes the
following significant non-cash charges related to the enactment of the
Tax Cuts and Jobs Act:
-
$431.3 million charge related to the remeasurement of U.S. net
deferred tax assets at the lower statutory rate under the Tax Cuts and
Jobs Act; and
-
$45.6 million charge related to a transition tax on accumulated
historical foreign earnings and its deemed repatriation to the U.S.
Ciena continues to evaluate the impact of the Tax Cuts and Jobs Act. At
this time, Ciena does not expect to pay substantial cash taxes for U.S.
federal income tax for the foreseeable future primarily due to its
deferred tax asset balance. As of January 31, 2018, Ciena has net
deferred tax assets of approximately $739.4 million, and consequently,
over the near term, Ciena's cash taxes will continue to be primarily
related to the state taxes and tax expense of Ciena's foreign
subsidiaries, which amounts have not historically been significant.
Ciena's foreign and domestic income tax expense for the first quarter of
fiscal 2018 and 2017 expected to be paid using cash was $1.0 million and
$0.4 million, respectively.
Supplemental Materials and Live Web Broadcast of Unaudited Fiscal
First Quarter 2018 Results
Today, Tuesday, March 6, 2018, in conjunction with this announcement,
Ciena has posted to the Quarterly
Results page of the Investor Relations section of its website
supporting materials for its unaudited fiscal first quarter 2018
results, including prepared remarks from management and a related
investor presentation.
Ciena's management will also host a discussion today with investors and
financial analysts that will include the Company's fiscal second quarter
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: "We demonstrated a strong start
toward achieving our long-term financial goals with our fiscal first
quarter results, including year-over-year top-line growth, continued
cash generation and a strengthening balance sheet"; "We also are
confident in our ability to continue driving market share gains across
key geographies and customer segments by intersecting the industry's
demand drivers with leading innovation".
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; changes in network spending or network strategy by large
communication service providers; 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
Report on Form 10-K, which Ciena filed with the Securities and Exchange
Commission on December 22, 2017. 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, 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 network strategy
and technology company. We translate best-in-class technology into value
through a high-touch, consultative business model - with a relentless
drive to create exceptional experiences measured by outcomes. For
updates on Ciena, follow us on Twitter @Ciena,
LinkedIn, the Ciena
Insights blog, or visit www.ciena.com.
|
CIENA CORPORATION
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in thousands, except per share data)
|
(unaudited)
|
|
|
|
|
Quarter Ended January 31,
|
|
|
|
2018
|
|
2017
|
Revenue:
|
|
|
|
|
|
Products
|
|
|
$
|
525,609
|
|
|
$
|
506,993
|
|
Services
|
|
|
|
120,526
|
|
|
|
114,504
|
|
Total revenue
|
|
|
|
646,135
|
|
|
|
621,497
|
|
Cost of goods sold:
|
|
|
|
|
|
Products
|
|
|
|
313,120
|
|
|
|
286,811
|
|
Services
|
|
|
|
61,250
|
|
|
|
60,901
|
|
Total cost of goods sold
|
|
|
|
374,370
|
|
|
|
347,712
|
|
Gross profit
|
|
|
|
271,765
|
|
|
|
273,785
|
|
Operating expenses:
|
|
|
|
|
|
Research and development
|
|
|
|
118,524
|
|
|
|
116,869
|
|
Selling and marketing
|
|
|
|
88,515
|
|
|
|
85,002
|
|
General and administrative
|
|
|
|
38,406
|
|
|
|
35,864
|
|
Amortization of intangible assets
|
|
|
|
3,623
|
|
|
|
14,551
|
|
Significant asset impairments and restructuring costs
|
|
|
|
5,961
|
|
|
|
2,395
|
|
Total operating expenses
|
|
|
|
255,029
|
|
|
|
254,681
|
|
Income from operations
|
|
|
|
16,736
|
|
|
|
19,104
|
|
Interest and other income (loss), net
|
|
|
|
1,575
|
|
|
|
370
|
|
Interest expense
|
|
|
|
(13,734
|
)
|
|
|
(15,203
|
)
|
Income before income taxes
|
|
|
|
4,577
|
|
|
|
4,271
|
|
Provision for income taxes 1
|
|
|
|
477,940
|
|
|
|
410
|
|
Net income (loss)
|
|
|
$
|
(473,363
|
)
|
|
$
|
3,861
|
|
|
|
|
|
|
|
Net Income (Loss) per Common Share
|
|
|
|
|
|
Basic net income (loss) per common share
|
|
|
$
|
(3.29
|
)
|
|
$
|
0.03
|
|
Diluted net income (loss) per potential common share
|
|
|
$
|
(3.29
|
)
|
|
$
|
0.03
|
|
|
|
|
|
|
|
Weighted average basic common shares outstanding
|
|
|
|
143,922
|
|
|
|
140,682
|
|
Weighted average dilutive potential common shares outstanding 2
|
|
|
|
143,922
|
|
|
|
142,184
|
|
|
|
|
|
|
|
1. The provision for income taxes for the first quarter of fiscal
2018 is primarily related to the enactment of the Tax Cuts and Jobs
Act. These amounts are provisional and reflect management's current
estimates and current interpretations of the Tax Cuts and Jobs Act.
These amounts may require adjustment in future periods as additional
guidance under the Tax Cuts and Jobs Act becomes available and
analysis of its provisions is completed.
|
|
2. Weighted average dilutive potential common shares outstanding
used in calculating GAAP diluted net income per common share for the
first quarter of fiscal 2017 includes 1.5 million shares underlying
certain stock options and restricted stock units.
|
|
|
CIENA CORPORATION
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(in thousands, except share data)
|
(unaudited)
|
|
|
|
|
January 31, 2018
|
|
October 31, 2017
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
648,867
|
|
|
$
|
640,513
|
|
Short-term investments
|
|
|
|
278,743
|
|
|
|
279,133
|
|
Accounts receivable, net
|
|
|
|
553,724
|
|
|
|
622,183
|
|
Inventories
|
|
|
|
255,251
|
|
|
|
267,143
|
|
Prepaid expenses and other
|
|
|
|
186,837
|
|
|
|
197,339
|
|
Total current assets
|
|
|
|
1,923,422
|
|
|
|
2,006,311
|
|
Long-term investments
|
|
|
|
59,151
|
|
|
|
49,783
|
|
Equipment, building, furniture and fixtures, net
|
|
|
|
318,835
|
|
|
|
308,465
|
|
Goodwill
|
|
|
|
267,899
|
|
|
|
267,458
|
|
Other intangible assets, net
|
|
|
|
96,485
|
|
|
|
100,997
|
|
Deferred tax asset, net
|
|
|
|
739,446
|
|
|
|
1,155,104
|
|
Other long-term assets
|
|
|
|
64,146
|
|
|
|
63,593
|
|
Total assets
|
|
|
$
|
3,469,384
|
|
|
$
|
3,951,711
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
209,243
|
|
|
$
|
260,098
|
|
Accrued liabilities and other short-term obligations
|
|
|
|
268,164
|
|
|
|
322,934
|
|
Deferred revenue
|
|
|
|
103,216
|
|
|
|
102,418
|
|
Current portion of long-term debt
|
|
|
|
352,753
|
|
|
|
352,293
|
|
Total current liabilities
|
|
|
|
933,376
|
|
|
|
1,037,743
|
|
Long-term deferred revenue
|
|
|
|
79,297
|
|
|
|
82,589
|
|
Other long-term obligations
|
|
|
|
115,970
|
|
|
|
111,349
|
|
Long-term debt, net
|
|
|
|
584,601
|
|
|
|
583,688
|
|
Total liabilities
|
|
|
$
|
1,713,244
|
|
|
$
|
1,815,369
|
|
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;
144,180,782 and 143,043,227 shares issued and outstanding
|
|
|
|
1,442
|
|
|
|
1,430
|
|
Additional paid-in capital
|
|
|
|
6,828,648
|
|
|
|
6,810,182
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
2,375
|
|
|
|
(11,017
|
)
|
Accumulated deficit
|
|
|
|
(5,076,325
|
)
|
|
|
(4,664,253
|
)
|
Total stockholders' equity
|
|
|
|
1,756,140
|
|
|
|
2,136,342
|
|
Total liabilities and stockholders' equity
|
|
|
$
|
3,469,384
|
|
|
$
|
3,951,711
|
|
|
|
|
|
|
|
|
CIENA CORPORATION
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in thousands)
|
(unaudited)
|
|
|
|
|
Three Months Ended January 31,
|
|
|
|
2018
|
|
2017
|
Cash flows provided by (used in) operating activities:
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
(473,363
|
)
|
|
$
|
3,861
|
|
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
|
|
|
|
|
|
Depreciation of equipment, building, furniture and fixtures, and
amortization of leasehold improvements
|
|
|
|
20,833
|
|
|
|
16,699
|
|
Share-based compensation costs
|
|
|
|
12,393
|
|
|
|
12,825
|
|
Amortization of intangible assets
|
|
|
|
5,912
|
|
|
|
18,864
|
|
Deferred taxes
|
|
|
|
476,897
|
|
|
|
-
|
|
Provision for inventory excess and obsolescence
|
|
|
|
6,804
|
|
|
|
5,431
|
|
Provision for warranty
|
|
|
|
4,657
|
|
|
|
553
|
|
Other
|
|
|
|
2,269
|
|
|
|
4,452
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
Accounts receivable
|
|
|
|
72,439
|
|
|
|
(21,956
|
)
|
Inventories
|
|
|
|
5,199
|
|
|
|
(78,749
|
)
|
Prepaid expenses and other
|
|
|
|
16,120
|
|
|
|
(1,004
|
)
|
Accounts payable, accruals and other obligations
|
|
|
|
(111,476
|
)
|
|
|
4,037
|
|
Deferred revenue
|
|
|
|
(2,981
|
)
|
|
|
8,737
|
|
Net cash provided by (used in) operating activities
|
|
|
|
35,703
|
|
|
|
(26,250
|
)
|
Cash flows used in investing activities:
|
|
|
|
|
|
Payments for equipment, furniture, fixtures and intellectual property
|
|
|
|
(25,662
|
)
|
|
|
(25,706
|
)
|
Purchase of available for sale securities
|
|
|
|
(118,877
|
)
|
|
|
(89,897
|
)
|
Proceeds from maturities of available for sale securities
|
|
|
|
110,000
|
|
|
|
95,000
|
|
Settlement of foreign currency forward contracts, net
|
|
|
|
1,061
|
|
|
|
440
|
|
Net cash used in investing activities
|
|
|
|
(33,478
|
)
|
|
|
(20,163
|
)
|
Cash flows provided by (used in) financing activities:
|
|
|
|
|
|
Payment of long term debt
|
|
|
|
(1,000
|
)
|
|
|
(46,296
|
)
|
Payment of capital lease obligations
|
|
|
|
(914
|
)
|
|
|
(605
|
)
|
Repurchases of common stock-repurchase program
|
|
|
|
(4,103
|
)
|
|
|
-
|
|
Proceeds from issuance of common stock
|
|
|
|
11,008
|
|
|
|
9,708
|
|
Net cash provided by (used in) financing activities
|
|
|
|
4,991
|
|
|
|
(37,193
|
)
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
1,138
|
|
|
|
(156
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
8,354
|
|
|
|
(83,762
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
|
640,513
|
|
|
|
777,615
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
648,867
|
|
|
$
|
693,853
|
|
Supplemental disclosure of cash flow information
|
|
|
|
|
|
Cash paid during the period for interest
|
|
|
$
|
10,020
|
|
|
$
|
11,831
|
|
Cash paid during the period for income taxes, net
|
|
|
$
|
3,498
|
|
|
$
|
5,521
|
|
Non-cash investing activities
|
|
|
|
|
|
Purchase of equipment in accounts payable
|
|
|
$
|
2,014
|
|
|
$
|
5,293
|
|
Non-cash financing activities
|
|
|
|
|
|
Repurchase of common stock in accrued liabilities from repurchase
program
|
|
|
$
|
1,652
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
APPENDIX A - Reconciliation of Adjusted (Non- GAAP) Quarterly
Measures (unaudited)
|
|
|
|
|
|
|
|
|
|
Quarter Ended January 31,
|
|
|
|
2018
|
|
2017
|
Gross Profit Reconciliation (GAAP/non-GAAP)
|
|
|
|
|
|
GAAP gross profit
|
|
|
$
|
271,765
|
|
|
$
|
273,785
|
|
Share-based compensation-products
|
|
|
|
672
|
|
|
|
561
|
|
Share-based compensation-services
|
|
|
|
625
|
|
|
|
628
|
|
Amortization of intangible assets
|
|
|
|
2,289
|
|
|
|
4,313
|
|
Total adjustments related to gross profit
|
|
|
|
3,586
|
|
|
|
5,502
|
|
Adjusted (non-GAAP) gross profit
|
|
|
$
|
275,351
|
|
|
$
|
279,287
|
|
Adjusted (non-GAAP) gross profit percentage
|
|
|
|
42.6
|
%
|
|
|
44.9
|
%
|
|
|
|
|
|
|
Operating Expense Reconciliation (GAAP/non-GAAP)
|
|
|
|
|
|
GAAP operating expense
|
|
|
$
|
255,029
|
|
|
$
|
254,681
|
|
Share-based compensation-research and development
|
|
|
|
3,255
|
|
|
|
3,209
|
|
Share-based compensation-sales and marketing
|
|
|
|
3,328
|
|
|
|
2,873
|
|
Share-based compensation-general and administrative
|
|
|
|
4,474
|
|
|
|
5,453
|
|
Amortization of intangible assets
|
|
|
|
3,623
|
|
|
|
14,551
|
|
Significant asset impairments and restructuring costs
|
|
|
|
5,961
|
|
|
|
2,395
|
|
Total adjustments related to operating expense
|
|
|
|
20,641
|
|
|
|
28,481
|
|
Adjusted (non-GAAP) operating expense
|
|
|
$
|
234,388
|
|
|
$
|
226,200
|
|
|
|
|
|
|
|
Income from Operations Reconciliation (GAAP/non-GAAP)
|
|
|
|
|
|
GAAP income from operations
|
|
|
$
|
16,736
|
|
|
$
|
19,104
|
|
Total adjustments related to gross profit
|
|
|
|
3,586
|
|
|
|
5,502
|
|
Total adjustments related to operating expense
|
|
|
|
20,641
|
|
|
|
28,481
|
|
Total adjustments related to income from operations
|
|
|
|
24,227
|
|
|
|
33,983
|
|
Adjusted (non-GAAP) income from operations
|
|
|
$
|
40,963
|
|
|
$
|
53,087
|
|
Adjusted (non-GAAP) operating margin percentage
|
|
|
|
6.3
|
%
|
|
|
8.5
|
%
|
|
|
|
|
|
|
Net Income (Loss) Reconciliation (GAAP/non-GAAP)
|
|
|
|
|
|
GAAP net income (loss)
|
|
|
$
|
(473,363
|
)
|
|
$
|
3,861
|
|
Exclude GAAP provision for income taxes
|
|
|
|
477,940
|
|
|
|
410
|
|
Income before income taxes
|
|
|
$
|
4,577
|
|
|
$
|
4,271
|
|
Total adjustments related to income from operations
|
|
|
|
24,227
|
|
|
|
33,983
|
|
Loss on extinguishment of debt
|
|
|
|
-
|
|
|
|
41
|
|
Non-cash interest expense
|
|
|
|
749
|
|
|
|
513
|
|
Adjusted income before income taxes
|
|
|
$
|
29,553
|
|
|
$
|
38,808
|
|
Non-GAAP tax provision on adjusted income before income taxes
|
|
|
|
7,645
|
|
|
|
14,165
|
|
Adjusted (non-GAAP) net income
|
|
|
$
|
21,908
|
|
|
$
|
24,643
|
|
|
|
|
|
|
|
Weighted average basic common shares outstanding
|
|
|
|
143,922
|
|
|
|
140,682
|
|
Weighted average dilutive potential common shares outstanding 1
|
|
|
|
145,558
|
|
|
|
165,104
|
|
|
|
|
|
|
|
Net Income (Loss) per Common Share
|
|
|
|
|
|
GAAP diluted net income (loss) per common share
|
|
|
$
|
(3.29
|
)
|
|
$
|
0.03
|
|
Adjusted (non-GAAP) diluted net income per common share 2
|
|
|
$
|
0.15
|
|
|
$
|
0.17
|
|
|
|
|
|
|
|
1.
|
|
Weighted average dilutive potential common shares outstanding used
in calculating Adjusted (non-GAAP) diluted net income per common
share for the first quarter of fiscal 2018 includes 0.9 million
shares underlying certain stock options and restricted stock units
and 0.7 million shares underlying Ciena's "New" 3.75% convertible
senior notes, due October 15, 2018.
|
|
|
|
|
|
Weighted average dilutive potential common shares outstanding used
in calculating Adjusted (non-GAAP) diluted net income per common
share for the first quarter of fiscal 2017 includes 1.5 million
shares underlying certain stock options and restricted stock units,
5.6 million shares underlying Ciena's 0.875% convertible senior
notes, which were paid at maturity during the third quarter of
fiscal 2017 and 17.4 million shares underlying Ciena's "Original"
3.75% convertible senior notes, due October 15, 2018.
|
|
|
|
2.
|
|
The calculation of Adjusted (non-GAAP) diluted net income per common
share for the first quarter of fiscal 2017 requires adding back
interest expense of approximately $0.4 million associated with
Ciena's 0.875% convertible senior notes, which were paid at maturity
during the third quarter of fiscal 2017 and approximately $2.3
million associated with Ciena's "Original" 3.75% convertible senior
notes, due October 15, 2018 to the Adjusted (non-GAAP) net income in
order to derive the numerator for the Adjusted earnings per common
share calculation.
|
|
|
|
|
APPENDIX B - Calculation of EBITDA and Adjusted EBITDA (unaudited)
|
|
|
|
|
|
|
|
|
|
Quarter Ended January 31,
|
|
|
|
2018
|
|
2017
|
Earnings Before Interest, Tax, Depreciation and Amortization
(EBITDA)
|
|
|
|
|
|
Net income (loss) (GAAP)
|
|
|
$
|
(473,363
|
)
|
|
$
|
3,861
|
Add: Interest expense
|
|
|
|
13,734
|
|
|
|
15,203
|
Less: Interest and other income (loss), net
|
|
|
|
1,575
|
|
|
|
370
|
Add: Provision for income taxes
|
|
|
|
477,940
|
|
|
|
410
|
Add: Depreciation of equipment, building, furniture and fixtures,
and amortization of leasehold improvements
|
|
|
|
20,833
|
|
|
|
16,699
|
Add: Amortization of intangible assets
|
|
|
|
5,912
|
|
|
|
18,864
|
EBITDA
|
|
|
$
|
43,481
|
|
|
$
|
54,667
|
Add: Shared-based compensation cost
|
|
|
|
12,393
|
|
|
|
12,825
|
Add: Significant asset impairments and restructuring costs
|
|
|
|
5,961
|
|
|
|
2,395
|
Adjusted EBITDA
|
|
|
$
|
61,835
|
|
|
$
|
69,887
|
|
|
|
|
|
|
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.
-
Significant asset impairments and restructuring costs - costs
incurred as a result of restructuring activities taken to align
resources with perceived market opportunities.
-
Non-cash loss on extinguishment of debt - related to certain
private repurchases conducted with several holders of Ciena's 0.875%
convertible senior notes, which were paid at maturity during the third
quarter of fiscal 2017.
-
Non-cash interest expense - a non-cash debt discount expense
amortized as interest expense during the term of Ciena's 4.0% senior
convertible notes due December 15, 2020 relating to the required
separate accounting of the equity component of these convertible notes.
-
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 25.87% for the first fiscal quarter of
2018, and 36.5% for the first fiscal quarter of 2017. This rate may be
subject to change in the future, including as a result of changes in
tax policy or tax strategy. In calculating, the Non-GAAP tax provision
for the first fiscal quarter of 2018, Ciena excluded certain
significant non-cash charges resulting from the enactment of Tax Cuts
and Jobs Act. Specifically, during the first quarter of fiscal 2018,
Ciena recorded a provisional, non-cash charge of $476.9 million,
consisting of a $431.3 million charge related to the re-measurement of
net deferred tax assets at the lower statutory rate, and a $45.6
million charge related to the U.S. transition tax described above.
These amounts are provisional in nature based on Securities and
Exchange Commission Staff Accounting Bulletin No. 118 and therefore
subject to adjustment in future periods, including as a result of the
availability of additional guidance and further analysis by Ciena
under the Tax Cuts and Jobs Act.
View source version on businesswire.com: http://www.businesswire.com/news/home/20180306005883/en/
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