Le Lézard
Classified in: Science and technology, Business, Covid-19 virus
Subject: EARNINGS

Ciena Reports Fiscal Fourth Quarter 2022 and Year-End Financial Results


Ciena® Corporation (NYSE:CIEN), a networking systems, services and software company, today announced unaudited financial results for its fiscal fourth quarter ended October 29, 2022.

"Our strong fiscal fourth quarter financial results were better than expected as we benefited from some favorable supply chain developments in the second half of the quarter," said Gary Smith, president and CEO of Ciena. "Looking ahead, we expect to deliver outsized revenue growth in fiscal 2023 given our significant backlog and continued signs of gradual supply improvement. And, we remain confident that the durability of secular demand drivers and our strategic investments to expand our addressable market position us to deliver strong revenue growth over the next several years."

For fiscal fourth quarter 2022, Ciena reported revenue of $971.0 million as compared to $1.04 billion for the fiscal fourth quarter 2021. For fiscal year 2022, Ciena reported revenue of $3.63 billion, as compared to $3.62 billion for fiscal year 2021.

Ciena's GAAP net income for the fiscal fourth quarter 2022 was $57.6 million, or $0.39 per diluted common share, which compares to a GAAP net income of $103.5 million, or $0.66 per diluted common share, for the fiscal fourth quarter 2021. For fiscal year 2022, Ciena's GAAP net income was $152.9 million, or $1.00 per diluted common share, as compared to GAAP net income of $500.2 million, or $3.19 per diluted common share, for fiscal year 2021.

Ciena's adjusted (non-GAAP) net income for the fiscal fourth quarter 2022 was $90.9 million, or $0.61 per diluted common share, which compares to an adjusted (non-GAAP) net income of $132.7 million, or $0.85 per diluted common share, for the fiscal fourth quarter 2021. For fiscal year 2022, Ciena's adjusted (non-GAAP) net income was $288.9 million, or $1.90 per diluted common share, as compared to adjusted (non-GAAP) net income of $456.5 million, or $2.91 per diluted common share, for fiscal year 2021.

Performance Summary for Fiscal Fourth Quarter and the Year Ended October 29, 2022

The tables below (in millions, except percentage data) provide comparisons of certain quarterly results to the prior year. Appendices A and B set forth reconciliations between the GAAP and adjusted (non-GAAP) measures contained in this release.

 

 

GAAP Results (unaudited)

 

 

Quarter Ended

 

Period

 

Year Ended

 

Period

 

 

October 29,

 

October 30,

 

Change

 

October 29,

 

October 30,

 

Change

 

 

 

2022

 

 

 

2021

 

 

Y-T-Y*

 

 

2022

 

 

 

2021

 

 

Y-T-Y*

Revenue

 

$

971.0

 

 

$

1,041.5

 

 

(6.8

) %

 

$

3,632.7

 

 

$

3,620.7

 

 

0.3

%

Gross margin

 

 

44.7

%

 

 

45.8

%

 

(1.1

) %

 

 

43.0

%

 

 

47.6

%

 

(4.6

) %

Operating expense

 

$

356.3

 

 

$

339.7

 

 

4.9

%

 

$

1,337.5

 

 

$

1,226.6

 

 

9.0

%

Operating margin

 

 

8.0

%

 

 

13.2

%

 

(5.2

) %

 

 

6.1

%

 

 

13.7

%

 

(7.6

) %

 

 

Non-GAAP Results (unaudited)

 

 

Quarter Ended

 

Period

 

Year Ended

 

Period

 

 

October 29,

 

October 30,

 

Change

 

October 29,

 

October 30,

 

Change

 

 

 

2022

 

 

 

2021

 

 

Y-T-Y*

 

 

2022

 

 

 

2021

 

 

Y-T-Y*

Revenue

 

$

971.0

 

 

$

1,041.5

 

 

(6.8

) %

 

$

3,632.7

 

 

$

3,620.7

 

 

0.3

%

Adj. gross margin

 

 

45.2

%

 

 

46.3

%

 

(1.1

) %

 

 

43.6

%

 

 

47.9

%

 

(4.3

) %

Adj. operating expense

 

$

312.8

 

 

$

307.1

 

 

1.9

%

 

$

1,177.0

 

 

$

1,129.3

 

 

4.2

%

Adj. operating margin

 

 

13.0

%

 

 

16.8

%

 

(3.8

) %

 

 

11.2

%

 

 

16.8

%

 

(5.6

) %

Adj. EBITDA

 

$

153.5

 

 

$

199.2

 

 

(22.9

) %

 

$

502.4

 

 

$

702.8

 

 

(28.5

) %

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

 

 

Revenue by Segment (unaudited)

 

 

Quarter Ended

 

 

October 29, 2022

 

October 30, 2021

 

 

Revenue

 

%**

 

Revenue

 

%**

Networking Platforms

 

 

 

 

 

 

 

 

Converged Packet Optical

 

$

649.9

 

66.9

 

$

754.6

 

72.5

Routing and Switching

 

 

102.8

 

10.6

 

 

74.2

 

7.1

Total Networking Platforms

 

 

752.7

 

77.5

 

 

828.8

 

79.6

 

 

 

 

 

 

 

 

 

Platform Software and Services

 

 

71.6

 

7.4

 

 

66.1

 

6.3

 

 

 

 

 

 

 

 

 

Blue Planet Automation Software and Services

 

 

21.2

 

2.2

 

 

19.8

 

1.9

 

 

 

 

 

 

 

 

 

Global Services

 

 

 

 

 

 

 

 

Maintenance Support and Training

 

 

73.1

 

7.5

 

 

71.3

 

6.9

Installation and Deployment

 

 

36.9

 

3.8

 

 

47.2

 

4.5

Consulting and Network Design

 

 

15.5

 

1.6

 

 

8.3

 

0.8

Total Global Services

 

 

125.5

 

12.9

 

 

126.8

 

12.2

 

 

 

 

 

 

 

 

 

Total

 

$

971.0

 

100.0

 

$

1,041.5

 

100.0

 

 

Revenue by Segment (unaudited)

 

 

Year Ended

 

 

October 29, 2022

 

October 30, 2021

 

 

Revenue

 

%**

 

Revenue

 

%**

Networking Platforms

 

 

 

 

 

 

 

 

Converged Packet Optical

 

$

2,380.0

 

65.5

 

$

2,553.5

 

70.5

Routing and Switching

 

 

398.4

 

11.0

 

 

271.8

 

7.5

Total Networking Platforms

 

 

2,778.4

 

76.5

 

 

2,825.3

 

78.0

 

 

 

 

 

 

 

 

 

Platform Software and Services

 

 

277.2

 

7.6

 

 

229.6

 

6.4

 

 

 

 

 

 

 

 

 

Blue Planet Automation Software and Services

 

 

76.6

 

2.1

 

 

77.2

 

2.1

 

 

 

 

 

 

 

 

 

Global Services

 

 

 

 

 

 

 

 

Maintenance Support and Training

 

 

292.4

 

8.1

 

 

283.4

 

7.8

Installation and Deployment

 

 

157.4

 

4.3

 

 

171.5

 

4.7

Consulting and Network Design

 

 

50.7

 

1.4

 

 

33.7

 

1.0

Total Global Services

 

 

500.5

 

13.8

 

 

488.6

 

13.5

 

 

 

 

 

 

 

 

 

Total

 

$

3,632.7

 

100.0

 

$

3,620.7

 

100.0

** Denotes % of total revenue

Additional Performance Metrics for Fiscal Fourth Quarter and Year Ended October 29, 2022

 

 

Revenue by Geographic Region (unaudited)

 

 

Quarter Ended

 

 

October 29, 2022

 

October 30, 2021

 

 

Revenue

 

% **

 

Revenue

 

% **

Americas

 

$

723.5

 

74.5

 

$

748.7

 

71.9

Europe, Middle East and Africa

 

 

135.1

 

13.9

 

 

170.8

 

16.4

Asia Pacific

 

 

112.4

 

11.6

 

 

122.0

 

11.7

Total

 

$

971.0

 

100.0

 

$

1,041.5

 

100.0

 

 

Revenue by Geographic Region (unaudited)

 

 

Year Ended

 

 

October 29, 2022

 

October 30, 2021

 

 

Revenue

 

% **

 

Revenue

 

% **

Americas

 

$

2,636.9

 

72.6

 

$

2,525.6

 

69.8

Europe, Middle East and Africa

 

 

555.2

 

15.3

 

 

670.5

 

18.5

Asia Pacific

 

 

440.6

 

12.1

 

 

424.6

 

11.7

Total

 

$

3,632.7

 

100.0

 

$

3,620.7

 

100.0

** Denotes % of total revenue

Supplemental Materials and Live Web Broadcast of Unaudited Fiscal Fourth Quarter 2022 Results

Today, Thursday, December 08, 2022, 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 year 2022 results.

Ciena's management will also host a discussion today with investors and financial analysts that will include the Company's outlook. The live audio web broadcast beginning at 8:30 a.m. Eastern will be accessible via www.ciena.com. An archived replay of the live broadcast will be available shortly following its conclusion on the Investor Relations page of Ciena's website.

Notes to Investors

Forward-Looking Statements. You are encouraged to review the Investors section of our website, where we routinely post press releases, Securities and Exchange Commission ("SEC") filings, recent news, financial results, supplemental financial information, and other announcements. From time to time we exclusively post material information to this website along with other disclosure channels that we use. This press release contains certain forward-looking statements that involve risks and uncertainties. These statements are based on current expectations, forecasts, assumptions and other information available to the Company as of the date hereof. Forward-looking statements include statements regarding Ciena's expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or similar words. Forward-looking statements in this release include: "Our strong fiscal fourth quarter financial results were better than expected as we benefited from some favorable supply chain developments in the second half of the quarter," said Gary Smith, president and CEO of Ciena. "Looking ahead, we expect to deliver outsized revenue growth in fiscal 2023 given our significant backlog and continued signs of gradual supply improvement. And, we remain confident that the durability of secular demand drivers and our strategic investments to expand our addressable market position us to deliver strong revenue growth over the next several years."

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 impact of supply chain constraints or disruptions; the duration and severity of the COVID-19 pandemic and the impact of countermeasures taken to mitigate its spread on macroeconomic conditions, economic activity, demand for our technology solutions, short- and long-term changes in customer or end user needs, continuity of supply chain, our business operations, liquidity and financial results; changes in network spending or network strategy by our 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; changes in foreign currency exchange rates; factors beyond our control such as natural disasters, climate change, acts of war or terrorism, geopolitical events, including but not limited to the ongoing conflict between Ukraine and Russia, and public health emergencies; changes in tax or trade regulations, including the imposition of tariffs, duties or efforts to withdraw from or materially modify international trade agreements; and the other risk factors disclosed in Ciena's periodic reports filed with the Securities and Exchange Commission (SEC) including its Quarterly Report on Form 10-Q filed with the SEC on September 7, 2022 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, Appendices A and B to this press release set forth a complete GAAP to non-GAAP reconciliation of the non-GAAP measures contained in this release.

About Ciena. Ciena (NYSE: CIEN) is a networking systems, services and software company. We provide solutions that help our customers create the Adaptive Networktm in response to the constantly changing demands of their users. By delivering best-in-class networking technology through high-touch consultative relationships, we build the world's most agile networks with automation, openness and scale. For updates on Ciena, follow us on Twitter @Ciena, LinkedIn, the Ciena Insights blog, or visit www.ciena.com.

 

CIENA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

 

 

Quarter Ended

 

Year Ended

 

October 29,

 

October 30,

 

October 29,

 

October 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenue:

 

 

 

 

 

 

 

Products

$

779,609

 

 

$

860,925

 

 

$

2,888,848

 

 

$

2,932,602

 

Services

 

191,401

 

 

 

180,561

 

 

 

743,813

 

 

 

688,082

 

Total revenue

 

971,010

 

 

 

1,041,486

 

 

 

3,632,661

 

 

 

3,620,684

 

Cost of goods sold:

 

 

 

 

 

 

 

Products

 

440,253

 

 

 

470,334

 

 

 

1,699,631

 

 

 

1,545,269

 

Services

 

97,160

 

 

 

94,033

 

 

 

372,686

 

 

 

353,436

 

Total cost of goods sold

 

537,413

 

 

 

564,367

 

 

 

2,072,317

 

 

 

1,898,705

 

Gross profit

 

433,597

 

 

 

477,119

 

 

 

1,560,344

 

 

 

1,721,979

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

166,898

 

 

 

147,454

 

 

 

624,656

 

 

 

536,666

 

Selling and marketing

 

121,865

 

 

 

129,625

 

 

 

466,565

 

 

 

452,214

 

General and administrative

 

48,191

 

 

 

49,383

 

 

 

179,382

 

 

 

181,874

 

Significant asset impairments and restructuring costs

 

13,621

 

 

 

5,700

 

 

 

33,824

 

 

 

29,565

 

Amortization of intangible assets

 

5,754

 

 

 

5,836

 

 

 

32,511

 

 

 

23,732

 

Acquisition and integration costs

 

?

 

 

 

1,712

 

 

 

598

 

 

 

2,572

 

Total operating expenses

 

356,329

 

 

 

339,710

 

 

 

1,337,536

 

 

 

1,226,623

 

Income from operations

 

77,268

 

 

 

137,409

 

 

 

222,808

 

 

 

495,356

 

Interest and other income (loss), net

 

1,887

 

 

 

(168

)

 

 

6,747

 

 

 

(1,768

)

Interest expense

 

(13,775

)

 

 

(7,916

)

 

 

(47,050

)

 

 

(30,837

)

Income before income taxes

 

65,380

 

 

 

129,325

 

 

 

182,505

 

 

 

462,751

 

Provision (benefit) for income taxes

 

7,735

 

 

 

25,826

 

 

 

29,603

 

 

 

(37,445

)

Net income

$

57,645

 

 

$

103,499

 

 

$

152,902

 

 

$

500,196

 

 

 

 

 

 

 

 

 

Net Income per Common Share

 

 

 

 

 

 

 

Basic net income per common share

$

0.39

 

 

$

0.67

 

 

$

1.01

 

 

$

3.22

 

Diluted net income per potential common share

$

0.39

 

 

$

0.66

 

 

$

1.00

 

 

$

3.19

 

 

 

 

 

 

 

 

 

Weighted average basic common shares outstanding

 

148,548

 

 

 

155,232

 

 

 

151,208

 

 

 

155,279

 

Weighted average dilutive potential common shares outstanding 1

 

149,111

 

 

 

156,689

 

 

 

152,193

 

 

 

156,743

 

1 Weighted average dilutive potential common shares outstanding used in calculating GAAP diluted net income per potential common share includes the following number of shares underlying certain stock option and stock unit awards: (i) 0.6 million and 1.0 million for the fourth quarter of fiscal 2022 and fiscal 2022, respectively; and (ii) 1.5 million shares for each of the fourth quarter of fiscal 2021 and fiscal 2021.

 

CIENA CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

 

 

October 29,
2022

 

October 30,
2021

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

994,352

 

 

$

1,422,546

 

Short-term investments

 

153,989

 

 

 

181,483

 

Accounts receivable, net

 

920,772

 

 

 

884,958

 

Inventories

 

946,730

 

 

 

374,265

 

Prepaid expenses and other

 

370,053

 

 

 

325,654

 

Total current assets

 

3,385,896

 

 

 

3,188,906

 

Long-term investments

 

35,385

 

 

 

70,038

 

Equipment, building, furniture and fixtures, net

 

267,779

 

 

 

284,968

 

Operating lease right-of-use assets

 

45,108

 

 

 

44,285

 

Goodwill

 

328,322

 

 

 

311,645

 

Other intangible assets, net

 

69,517

 

 

 

65,314

 

Deferred tax asset, net

 

824,008

 

 

 

800,180

 

Other long-term assets

 

113,617

 

 

 

99,891

 

Total assets

$

5,069,632

 

 

$

4,865,227

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

516,047

 

 

$

356,176

 

Accrued liabilities and other short-term obligations

 

360,782

 

 

 

409,285

 

Deferred revenue

 

137,899

 

 

 

118,007

 

Operating lease liabilities

 

18,925

 

 

 

18,632

 

Current portion of long-term debt

 

6,930

 

 

 

6,930

 

Total current liabilities

 

1,040,583

 

 

 

909,030

 

Long-term deferred revenue

 

62,336

 

 

 

57,457

 

Other long-term obligations

 

150,335

 

 

 

166,803

 

Long-term operating lease liabilities

 

42,392

 

 

 

41,564

 

Long-term debt, net

 

1,061,125

 

 

 

670,355

 

Total liabilities

$

2,356,771

 

 

$

1,845,209

 

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; 148,412,943 and 154,858,981 shares issued and outstanding

 

1,484

 

 

 

1,549

 

Additional paid-in capital

 

6,390,252

 

 

 

6,803,162

 

Accumulated other comprehensive income (loss)

 

(46,645

)

 

 

439

 

Accumulated deficit

 

(3,632,230

)

 

 

(3,785,132

)

Total stockholders' equity

 

2,712,861

 

 

 

3,020,018

 

Total liabilities and stockholders' equity

$

5,069,632

 

 

$

4,865,227

 

 

 

 

 

 

CIENA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands) (unaudited)

 

 

Year Ended

 

October 29,

 

October 30,

 

 

2022

 

 

 

2021

 

Cash flows provided by (used in) operating activities:

 

 

 

Net income

$

152,902

 

 

$

500,196

 

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

 

 

 

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

 

95,922

 

 

 

96,233

 

Share-based compensation expense

 

105,131

 

 

 

84,336

 

Amortization of intangible assets

 

44,281

 

 

 

36,033

 

Deferred taxes

 

(27,502

)

 

 

(156,469

)

Provision for inventory excess and obsolescence

 

16,184

 

 

 

17,850

 

Provision for warranty

 

17,440

 

 

 

17,093

 

Other

 

?

 

 

 

14,525

 

Changes in assets and liabilities:

 

 

 

Accounts receivable

 

(47,069

)

 

 

(174,377

)

Inventories

 

(589,113

)

 

 

(47,567

)

Prepaid expenses and other

 

(58,996

)

 

 

(19,691

)

Operating lease right-of-use assets

 

16,453

 

 

 

16,632

 

Accounts payable, accruals and other obligations

 

100,327

 

 

 

162,134

 

Deferred revenue

 

26,380

 

 

 

16,822

 

Short and long-term operating lease liabilities

 

(20,096

)

 

 

(22,104

)

Net cash provided by (used in) operating activities

 

(167,756

)

 

 

541,646

 

Cash flows used in investing activities:

 

 

 

Payments for equipment, furniture, fixtures and intellectual property

 

(90,818

)

 

 

(79,550

)

Purchase of available for sale securities

 

(643,971

)

 

 

(172,778

)

Proceeds from maturities of available for sale securities

 

698,642

 

 

 

152,253

 

Settlement of foreign currency forward contracts, net

 

4,942

 

 

 

4,680

 

Acquisition of business, net of cash acquired

 

(62,043

)

 

 

?

 

Purchase of cost method equity investments

 

(8,000

)

 

 

?

 

Proceeds from sale of cost method equity investments

 

?

 

 

 

4,678

 

Net cash used in investing activities

 

(101,248

)

 

 

(90,717

)

Cash flows used in financing activities:

 

 

 

Proceeds from issuance of senior notes

 

400,000

 

 

 

?

 

Payment of long term debt

 

(5,197

)

 

 

(6,929

)

Payment of debt issuance costs

 

(5,484

)

 

 

?

 

Payment of finance lease obligations

 

(3,468

)

 

 

(3,004

)

Shares repurchased for tax withholdings on vesting of stock unit awards

 

(48,454

)

 

 

(44,071

)

Repurchases of common stock - repurchase program

 

(500,800

)

 

 

(91,288

)

Proceeds from issuance of common stock

 

30,348

 

 

 

28,457

 

Net cash used in financing activities

 

(133,055

)

 

 

(116,835

)

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

 

(26,167

)

 

 

(198

)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

(428,226

)

 

 

333,896

 

Cash, cash equivalents and restricted cash at beginning of period

 

1,422,604

 

 

 

1,088,708

 

Cash, cash equivalents and restricted cash at end of period

$

994,378

 

 

$

1,422,604

 

Supplemental disclosure of cash flow information

 

 

 

Cash paid during the period for interest

$

42,812

 

 

$

29,864

 

Cash paid during the period for income taxes, net

$

34,967

 

 

$

73,127

 

Operating lease payments

$

21,661

 

 

$

24,058

 

Non-cash investing and financing activities

 

 

 

Purchase of equipment in accounts payable

$

12,373

 

 

$

10,138

 

Repurchase of common stock in accrued liabilities from repurchase program

$

?

 

 

$

800

 

Operating right-of-use assets subject to lease liability

$

23,242

 

 

$

4,356

 

Unrealized gain on equity investment

$

4,120

 

 

$

?

 

APPENDIX A - Reconciliation of Adjusted (Non- GAAP) Measurements

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

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Year Ended

 

 

October 29,

 

October 30,

 

October 29,

 

October 30,

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Gross Profit Reconciliation (GAAP/non-GAAP)

 

 

 

 

 

 

 

 

GAAP gross profit

 

$

433,597

 

 

$

477,119

 

 

$

1,560,344

 

 

$

1,721,979

 

Share-based compensation-products

 

 

907

 

 

 

920

 

 

 

3,867

 

 

 

3,408

 

Share-based compensation-services

 

 

2,066

 

 

 

1,240

 

 

 

7,533

 

 

 

5,181

 

Canadian Emergency Wage Subsidy-products

 

 

?

 

 

 

?

 

 

 

?

 

 

 

(4,283

)

Canadian Emergency Wage Subsidy-services

 

 

?

 

 

 

?

 

 

 

?

 

 

 

(2,667

)

Amortization of intangible assets

 

 

2,005

 

 

 

2,856

 

 

 

11,770

 

 

 

12,301

 

Total adjustments related to gross profit

 

 

4,978

 

 

 

5,016

 

 

 

23,170

 

 

 

13,940

 

Adjusted (non-GAAP) gross profit

 

$

438,575

 

 

$

482,135

 

 

$

1,583,514

 

 

$

1,735,919

 

Adjusted (non-GAAP) gross profit percentage

 

 

45.2

%

 

 

46.3

%

 

 

43.6

%

 

 

47.9

%

 

 

 

 

 

 

 

 

 

Operating Expense Reconciliation (GAAP/non-GAAP)

 

 

 

 

 

 

 

 

GAAP operating expense

 

$

356,329

 

 

$

339,710

 

 

$

1,337,536

 

 

$

1,226,623

 

Share-based compensation-research and development

 

 

8,507

 

 

 

5,684

 

 

 

31,879

 

 

 

21,863

 

Share-based compensation-sales and marketing

 

 

8,084

 

 

 

6,192

 

 

 

31,280

 

 

 

25,152

 

Share-based compensation-general and administrative

 

 

7,610

 

 

 

7,466

 

 

 

30,435

 

 

 

28,804

 

Canadian Emergency Wage Subsidy-research and development

 

 

?

 

 

 

?

 

 

 

?

 

 

 

(29,519

)

Canadian Emergency Wage Subsidy-sales and marketing

 

 

?

 

 

 

?

 

 

 

?

 

 

 

(2,604

)

Canadian Emergency Wage Subsidy-general and administrative

 

 

?

 

 

 

?

 

 

 

?

 

 

 

(2,207

)

Significant asset impairments and restructuring costs

 

 

13,621

 

 

 

5,700

 

 

 

33,824

 

 

 

29,565

 

Amortization of intangible assets

 

 

5,754

 

 

 

5,836

 

 

 

32,511

 

 

 

23,732

 

Acquisition and integration costs

 

 

?

 

 

 

1,712

 

 

 

598

 

 

 

2,572

 

Total adjustments related to operating expense

 

 

43,576

 

 

 

32,590

 

 

 

160,527

 

 

 

97,358

 

Adjusted (non-GAAP) operating expense

 

$

312,753

 

 

$

307,120

 

 

$

1,177,009

 

 

$

1,129,265

 

 

 

 

 

 

 

 

 

 

Income from Operations Reconciliation (GAAP/non-GAAP)

 

 

 

 

 

 

 

 

GAAP income from operations

 

$

77,268

 

 

$

137,409

 

 

$

222,808

 

 

$

495,356

 

Total adjustments related to gross profit

 

 

4,978

 

 

 

5,016

 

 

 

23,170

 

 

 

13,940

 

Total adjustments related to operating expense

 

 

43,576

 

 

 

32,590

 

 

 

160,527

 

 

 

97,358

 

Total adjustments related to income from operations

 

 

48,554

 

 

 

37,606

 

 

 

183,697

 

 

 

111,298

 

Adjusted (non-GAAP) income from operations

 

$

125,822

 

 

$

175,015

 

 

$

406,505

 

 

$

606,654

 

Adjusted (non-GAAP) operating margin percentage

 

 

13.0

%

 

 

16.8

%

 

 

11.2

%

 

 

16.8

%

 

 

 

 

 

 

 

 

 

Net Income Reconciliation (GAAP/non-GAAP)

 

 

 

 

 

 

 

 

GAAP net income

 

$

57,645

 

 

$

103,499

 

 

$

152,902

 

 

$

500,196

 

Exclude GAAP provision (benefit) for income taxes

 

 

7,735

 

 

 

25,826

 

 

 

29,603

 

 

 

(37,445

)

Income before income taxes

 

 

65,380

 

 

 

129,325

 

 

 

182,505

 

 

 

462,751

 

Total adjustments related to income from operations

 

 

48,554

 

 

 

37,606

 

 

 

183,697

 

 

 

111,298

 

Unrealized (gain) loss on cost method equity investment

 

 

?

 

 

 

?

 

 

 

(4,120

)

 

 

165

 

Adjusted income before income taxes

 

 

113,934

 

 

 

166,931

 

 

 

362,082

 

 

 

574,214

 

Non-GAAP tax provision on adjusted income before income taxes

 

 

23,015

 

 

 

34,221

 

 

 

73,141

 

 

 

117,714

 

Adjusted (non-GAAP) net income

 

$

90,919

 

 

$

132,710

 

 

$

288,941

 

 

$

456,500

 

 

 

 

 

 

 

 

 

 

Weighted average basic common shares outstanding

 

 

148,548

 

 

 

155,232

 

 

 

151,208

 

 

 

155,279

 

Weighted average dilutive potential common shares outstanding 1

 

 

149,111

 

 

 

156,689

 

 

 

152,193

 

 

 

156,743

 

 

 

 

 

 

 

 

 

 

Net Income per Common Share

 

 

 

 

 

 

 

 

GAAP diluted net income per potential common share

 

$

0.39

 

 

$

0.66

 

 

$

1.00

 

 

$

3.19

 

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

 

$

0.61

 

 

$

0.85

 

 

$

1.90

 

 

$

2.91

 

1 Weighted average dilutive potential common shares outstanding used in calculating Adjusted (non-GAAP) diluted net income per potential common share includes the following number of shares underlying certain stock option and stock unit awards: (i) 0.6 million and 1.0 million for the fourth quarter of fiscal 2022 and fiscal 2022, respectively; and (ii) 1.5 million each for the fourth quarter of fiscal 2021 and fiscal 2021.

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

(in thousands) (unaudited)

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Year Ended

 

 

October 29,

 

October 30,

 

October 29,

 

October 30,

 

 

 

2022

 

 

2021

 

 

 

2022

 

 

2021

 

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

 

 

 

 

 

 

 

 

Net income (GAAP)

 

$

57,645

 

$

103,499

 

 

$

152,902

 

$

500,196

 

Add: Interest expense

 

 

13,775

 

 

7,916

 

 

 

47,050

 

 

30,837

 

Less: Interest and other income (loss), net

 

 

1,887

 

 

(168

)

 

 

6,747

 

 

(1,768

)

Add: Provision (benefit) for income taxes

 

 

7,735

 

 

25,826

 

 

 

29,603

 

 

(37,445

)

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

 

 

27,642

 

 

24,315

 

 

 

95,922

 

 

96,233

 

Add: Amortization of intangible assets

 

 

7,759

 

 

8,692

 

 

 

44,281

 

 

36,033

 

EBITDA

 

$

112,669

 

$

170,416

 

 

$

363,011

 

$

627,622

 

Less: Canadian Emergency Wage Subsidy

 

 

?

 

 

?

 

 

 

?

 

 

41,280

 

Add: Share-based compensation cost

 

 

27,174

 

 

21,366

 

 

 

104,994

 

 

84,336

 

Add: Significant asset impairments and restructuring costs

 

 

13,621

 

 

5,700

 

 

 

33,824

 

 

29,565

 

Add: Acquisition and integration costs

 

 

?

 

 

1,712

 

 

 

598

 

 

2,572

 

Adjusted EBITDA

 

$

153,464

 

$

199,194

 

 

$

502,427

 

$

702,815

 

* * *

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:

 


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