Ciena Reports Fiscal Fourth Quarter 2021 and Year-End Financial Results
Ciena Corporation (NYSE: CIEN) reported strong financial results for its fiscal fourth quarter and full year ended October 30, 2021. Q4 revenue reached $1.04 billion, a 25.7% increase year-over-year, with a net income per share of $0.66 GAAP and $0.85 adjusted. For the fiscal year, revenue was $3.62 billion, up from $3.53 billion in 2020. The Board authorized a $1.0 billion share repurchase program, indicating confidence in future growth and commitment to returning capital to shareholders.
- Q4 revenue increased by 25.7% year-over-year to $1.04 billion.
- Net income per share rose by 41.7% year-over-year to $0.66 GAAP; $0.85 adjusted (non-GAAP).
- Authorized a new share repurchase program of up to $1.0 billion.
- Gross margin decreased from 48.8% to 45.8% year-over-year for Q4.
- Total operating expenses increased by 9.3% year-over-year in Q4.
Board Authorizes Share Repurchase up to
-
Q4 Revenue:
$1.04 billion 25.7% year over year
-
Q4 Net Income per Share:
$0.66 $0.85 41.7% year over year
-
Share Repurchases: Repurchased approximately 0.5 million shares of common stock for an aggregate price of
$26.7 million
“Our strong financial results exceeded our expectations in the fourth quarter and for the full fiscal year, driven by continued execution of our strategy and our demonstrated ability to manage supply chain challenges,” said
For fiscal fourth quarter 2021, Ciena reported revenue of
Ciena's GAAP net income for fiscal fourth quarter 2021 was
Ciena's adjusted (non-GAAP) net income for fiscal fourth quarter 2021 was
Share Repurchase Program
On
Performance Summary for the Fiscal Fourth Quarter and the Year Ended
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 |
|
Year Ended |
|
Period |
||||||||||||||
|
|
|
|
|
|
Change |
|
|
|
|
|
Change |
||||||||||
|
|
2021 |
|
2020 |
|
Y-T-Y* |
|
2021 |
|
2020 |
|
Y-T-Y* |
||||||||||
Revenue |
|
$ |
1,041.5 |
|
|
$ |
828.5 |
|
|
25.7 |
% |
|
$ |
3,620.7 |
|
|
$ |
3,532.2 |
|
|
2.5 |
% |
Gross margin |
|
45.8 |
% |
|
48.8 |
% |
|
(3.0 |
)% |
|
47.6 |
% |
|
46.8 |
% |
|
0.8 |
% |
||||
Operating expense |
|
$ |
339.7 |
|
|
$ |
310.9 |
|
|
9.3 |
% |
|
$ |
1,226.6 |
|
|
$ |
1,165.9 |
|
|
5.2 |
% |
Operating margin |
|
13.2 |
% |
|
11.3 |
% |
|
1.9 |
% |
|
13.7 |
% |
|
13.8 |
% |
|
(0.1 |
)% |
||||
|
|
Non-GAAP Results (unaudited) |
||||||||||||||||||||
|
|
Quarter Ended |
|
Period |
|
Year Ended |
|
Period |
||||||||||||||
|
|
|
|
|
|
Change |
|
|
|
|
|
Change |
||||||||||
|
|
2021 |
|
2020 |
|
Y-T-Y* |
|
2021 |
|
2020 |
|
Y-T-Y* |
||||||||||
Revenue |
|
$ |
1,041.5 |
|
|
$ |
828.5 |
|
|
25.7 |
% |
|
$ |
3,620.7 |
|
|
$ |
3,532.2 |
|
|
2.5 |
% |
Adj. gross margin |
|
46.3 |
% |
|
49.5 |
% |
|
(3.2 |
)% |
|
47.9 |
% |
|
47.4 |
% |
|
0.5 |
% |
||||
Adj. operating expense |
|
$ |
307.1 |
|
|
$ |
278.9 |
|
|
10.1 |
% |
|
$ |
1,129.3 |
|
|
$ |
1,055.3 |
|
|
7.0 |
% |
Adj. operating margin |
|
16.8 |
% |
|
15.8 |
% |
|
1.0 |
% |
|
16.8 |
% |
|
17.6 |
% |
|
(0.8 |
)% |
||||
Adj. EBITDA |
|
$ |
199.2 |
|
|
$ |
154.5 |
|
|
28.9 |
% |
|
$ |
702.8 |
|
|
$ |
713.9 |
|
|
(1.6 |
)% |
* Denotes % change, or in the case of margin, absolute change |
||||||||||||||||||||||
|
|
Revenue by Segment (unaudited) |
||||||||||||
|
|
Quarter Ended |
||||||||||||
|
|
|
|
|
||||||||||
|
|
Revenue |
|
%** |
|
Revenue |
|
% ** |
||||||
Networking Platforms |
|
|
|
|
|
|
|
|
||||||
Converged Packet Optical |
|
$ |
754.6 |
|
|
72.5 |
|
|
$ |
579.3 |
|
|
69.9 |
|
Routing and Switching (1) |
|
74.2 |
|
|
7.1 |
|
|
56.0 |
|
|
6.8 |
|
||
Total Networking Platforms |
|
828.8 |
|
|
79.6 |
|
|
635.3 |
|
|
76.7 |
|
||
|
|
|
|
|
|
|
|
|
||||||
|
|
66.1 |
|
|
6.3 |
|
|
54.5 |
|
|
6.6 |
|
||
|
|
|
|
|
|
|
|
|
||||||
|
|
19.8 |
|
|
1.9 |
|
|
20.9 |
|
|
2.5 |
|
||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
Maintenance Support and Training |
|
71.3 |
|
|
6.9 |
|
|
67.0 |
|
|
8.1 |
|
||
Installation and Deployment |
|
47.2 |
|
|
4.5 |
|
|
43.0 |
|
|
5.2 |
|
||
Consulting and Network Design |
|
8.3 |
|
|
0.8 |
|
|
7.8 |
|
|
0.9 |
|
||
Total |
|
126.8 |
|
|
12.2 |
|
|
117.8 |
|
|
14.2 |
|
||
|
|
|
|
|
|
|
|
|
||||||
Total |
|
$ |
1,041.5 |
|
|
100.0 |
|
|
$ |
828.5 |
|
|
100.0 |
|
|
|
Revenue by Segment (unaudited) |
||||||||||||
|
|
Year Ended |
||||||||||||
|
|
|
|
|
||||||||||
|
|
Revenue |
|
%** |
|
Revenue |
|
% ** |
||||||
Networking Platforms |
|
|
|
|
|
|
|
|
||||||
Converged Packet Optical |
|
$ |
2,553.5 |
|
|
70.5 |
|
|
$ |
2,547.6 |
|
|
72.1 |
|
Routing and Switching (1) |
|
271.8 |
|
|
7.5 |
|
|
267.5 |
|
|
7.6 |
|
||
Total Networking Platforms |
|
2,825.3 |
|
|
78.0 |
|
|
2,815.1 |
|
|
79.7 |
|
||
|
|
|
|
|
|
|
|
|
||||||
|
|
229.6 |
|
|
6.4 |
|
|
197.8 |
|
|
5.6 |
|
||
|
|
|
|
|
|
|
|
|
||||||
|
|
77.2 |
|
|
2.1 |
|
|
62.6 |
|
|
1.8 |
|
||
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||
Maintenance Support and Training |
|
283.4 |
|
|
7.8 |
|
|
269.4 |
|
|
7.6 |
|
||
Installation and Deployment |
|
171.5 |
|
|
4.7 |
|
|
152.0 |
|
|
4.3 |
|
||
Consulting and Network Design |
|
33.7 |
|
|
1.0 |
|
|
35.3 |
|
|
1.0 |
|
||
Total |
|
488.6 |
|
|
13.5 |
|
|
456.7 |
|
|
12.9 |
|
||
|
|
|
|
|
|
|
|
|
||||||
Total |
|
$ |
3,620.7 |
|
|
100.0 |
|
|
$ |
3,532.2 |
|
|
100.0 |
|
| ** Denotes % of total revenue | |
(1) |
Ciena renamed its former “Packet Networking” product line “Routing and Switching” effective as of the beginning of fiscal 2021. This change, affecting only the presentation of such information, was made on a prospective basis and does not impact comparability of previous financial results or the composition of this product category. |
Additional Performance Metrics for Fiscal Fourth Quarter and Year Ended
|
|
Revenue by |
||||||||||||
|
|
Quarter Ended |
||||||||||||
|
|
|
|
|
||||||||||
|
|
Revenue |
|
% ** |
|
Revenue |
|
% ** |
||||||
|
|
$ |
748.7 |
|
|
71.9 |
|
|
$ |
531.6 |
|
|
64.2 |
|
|
|
170.8 |
|
|
16.4 |
|
|
157.6 |
|
|
19.0 |
|
||
|
|
122.0 |
|
|
11.7 |
|
|
139.3 |
|
|
16.8 |
|
||
Total |
|
$ |
1,041.5 |
|
|
100.0 |
|
|
$ |
828.5 |
|
|
100.0 |
|
|
|
Revenue by |
||||||||||||
|
|
Year Ended |
||||||||||||
|
|
|
|
|
||||||||||
|
|
Revenue |
|
% ** |
|
Revenue |
|
% ** |
||||||
|
|
$ |
2,525.6 |
|
|
69.8 |
|
|
$ |
2,469.3 |
|
|
69.9 |
|
|
|
670.5 |
|
|
18.5 |
|
|
591.5 |
|
|
16.8 |
|
||
|
|
424.6 |
|
|
11.7 |
|
|
471.4 |
|
|
13.3 |
|
||
Total |
|
$ |
3,620.7 |
|
|
100.0 |
|
|
$ |
3,532.2 |
|
|
100.0 |
|
** Denotes % of total revenue |
||||||||||||||
-
One
10% -plus customer represented a total of12.9% and12.4% of revenue for the fiscal fourth quarter and fiscal year 2021, respectively -
Cash and investments totaled
$1.7 billion -
Cash flow from operations totaled
$254.9 million $541.6 million - Average days' sales outstanding (DSOs) were 85 and 98 for the fiscal fourth quarter and fiscal year 2021, respectively
-
Accounts receivable, net balance was
$885.0 million -
Unbilled contract asset balance, net was
$101.4 million -
Inventories totaled
$374.3 million -
Raw materials:
$175.4 million -
Work in process:
$10.3 million -
Finished goods:
$180.8 million -
Deferred cost of sales:
$44.7 million -
Reserve for excess and obsolescence:
$(36.9) million
-
Raw materials:
- Product inventory turns were 5.0 and 4.1 for the fiscal fourth quarter and fiscal year 2021, respectively
- Headcount totaled 7,241
Supplemental Materials and Live Web Broadcast of Unaudited Fiscal Fourth Quarter and Year-End 2021 Results
Today,
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
Notes to Investors
Forward-Looking Statements. You are encouraged to review the Investors section of our website, where we routinely post press releases,
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; factors beyond our control such as natural disasters, acts of war or terrorism, and public health emergencies, including the COVID-19 pandemic; the impact of the Tax Cuts and Jobs Act; changes in tax or trade regulations, including the imposition of tariffs, duties or efforts to withdraw from or materially modify international trade agreements; 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
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.
CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) |
||||||||||||||||
|
|
Quarter Ended |
|
Year Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Revenue: |
|
|
|
|
|
|
|
|
||||||||
Products |
|
$ |
860,925 |
|
|
$ |
668,661 |
|
|
$ |
2,932,602 |
|
|
$ |
2,914,790 |
|
Services |
|
180,561 |
|
|
159,819 |
|
|
688,082 |
|
|
617,367 |
|
||||
Total revenue |
|
1,041,486 |
|
|
828,480 |
|
|
3,620,684 |
|
|
3,532,157 |
|
||||
Cost of goods sold: |
|
|
|
|
|
|
|
|
||||||||
Products |
|
470,334 |
|
|
343,413 |
|
|
1,545,269 |
|
|
1,573,791 |
|
||||
Services |
|
94,033 |
|
|
80,718 |
|
|
353,436 |
|
|
305,475 |
|
||||
Total cost of goods sold |
|
564,367 |
|
|
424,131 |
|
|
1,898,705 |
|
|
1,879,266 |
|
||||
Gross profit |
|
477,119 |
|
|
404,349 |
|
|
1,721,979 |
|
|
1,652,891 |
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Research and development |
|
147,454 |
|
|
137,237 |
|
|
536,666 |
|
|
529,888 |
|
||||
Selling and marketing |
|
129,625 |
|
|
113,382 |
|
|
452,214 |
|
|
416,425 |
|
||||
General and administrative |
|
49,383 |
|
|
43,415 |
|
|
181,874 |
|
|
169,548 |
|
||||
Significant asset impairments and restructuring costs |
|
5,700 |
|
|
7,854 |
|
|
29,565 |
|
|
22,652 |
|
||||
Amortization of intangible assets |
|
5,836 |
|
|
5,851 |
|
|
23,732 |
|
|
23,383 |
|
||||
Acquisition and integration costs |
|
1,712 |
|
|
3,127 |
|
|
2,572 |
|
|
4,031 |
|
||||
Total operating expenses |
|
339,710 |
|
|
310,866 |
|
|
1,226,623 |
|
|
1,165,927 |
|
||||
Income from operations |
|
137,409 |
|
|
93,483 |
|
|
495,356 |
|
|
486,964 |
|
||||
Interest and other income (loss), net |
|
(168) |
|
|
(249) |
|
|
(1,768) |
|
|
964 |
|
||||
Interest expense |
|
(7,916) |
|
|
(7,395) |
|
|
(30,837) |
|
|
(31,321) |
|
||||
Loss on extinguishment and modification of debt |
|
— |
|
|
— |
|
|
— |
|
|
(646) |
|
||||
Income before income taxes |
|
129,325 |
|
|
85,839 |
|
|
462,751 |
|
|
455,961 |
|
||||
Provision (benefit) for income taxes |
|
25,826 |
|
|
20,798 |
|
|
(37,445) |
|
|
94,670 |
|
||||
Net income |
|
$ |
103,499 |
|
|
$ |
65,041 |
|
|
$ |
500,196 |
|
|
$ |
361,291 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net Income per Common Share |
|
|
|
|
|
|
|
|
||||||||
Basic net income per common share |
|
$ |
0.67 |
|
|
$ |
0.42 |
|
|
$ |
3.22 |
|
|
$ |
2.34 |
|
Diluted net income per potential common share |
|
$ |
0.66 |
|
|
$ |
0.42 |
|
|
$ |
3.19 |
|
|
$ |
2.32 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average basic common shares outstanding |
|
155,232 |
|
|
154,706 |
|
|
155,279 |
|
|
154,287 |
|
||||
Weighted average diluted potential common shares outstanding(1) |
|
156,689 |
|
|
156,563 |
|
|
156,743 |
|
|
155,955 |
|
||||
(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 2021 includes 1.5 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 2021 includes 1.5 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 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. |
CONDENSED UNAUDITED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) |
|||||||
|
|
|
|
||||
|
2021 |
|
2020 |
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
1,422,546 |
|
|
$ |
1,088,624 |
|
Short-term investments |
181,483 |
|
|
150,667 |
|
||
Accounts receivable, net |
884,958 |
|
|
719,405 |
|
||
Inventories |
374,265 |
|
|
344,379 |
|
||
Prepaid expenses and other |
325,654 |
|
|
308,084 |
|
||
Total current assets |
3,188,906 |
|
|
2,611,159 |
|
||
Long-term investments |
70,038 |
|
|
82,226 |
|
||
Equipment, building, furniture and fixtures, net |
284,968 |
|
|
272,377 |
|
||
Operating lease right-of-use assets |
44,285 |
|
|
57,026 |
|
||
|
311,645 |
|
|
310,847 |
|
||
Other intangible assets, net |
65,314 |
|
|
96,647 |
|
||
Deferred tax asset, net |
800,180 |
|
|
647,805 |
|
||
Other long-term assets |
99,891 |
|
|
102,830 |
|
||
Total assets |
$ |
4,865,227 |
|
|
$ |
4,180,917 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
356,176 |
|
|
$ |
291,904 |
|
Accrued liabilities and other short-term obligations |
409,285 |
|
|
334,132 |
|
||
Deferred revenue |
118,007 |
|
|
108,700 |
|
||
Operating lease liabilities |
18,632 |
|
|
19,035 |
|
||
Current portion of long-term debt |
6,930 |
|
|
6,930 |
|
||
Total current liabilities |
909,030 |
|
|
760,701 |
|
||
Long-term deferred revenue |
57,457 |
|
|
49,663 |
|
||
Other long-term obligations |
166,803 |
|
|
123,185 |
|
||
Long-term operating lease liabilities |
41,564 |
|
|
61,415 |
|
||
Long-term debt, net |
670,355 |
|
|
676,356 |
|
||
Total liabilities |
$ |
1,845,209 |
|
|
$ |
1,671,320 |
|
|
|
|
|
||||
Stockholders’ equity: |
|
|
|
||||
Preferred stock — par value |
— |
|
|
— |
|
||
Common stock — par value |
1,549 |
|
|
1,546 |
|
||
Additional paid-in capital |
6,803,162 |
|
|
6,826,531 |
|
||
Accumulated other comprehensive income (loss) |
439 |
|
|
(35,358 |
) |
||
Accumulated deficit |
(3,785,132 |
) |
|
(4,283,122 |
) |
||
Total stockholders’ equity |
3,020,018 |
|
|
2,509,597 |
|
||
Total liabilities and stockholders’ equity |
$ |
4,865,227 |
|
|
$ |
4,180,917 |
|
CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) |
|||||||
|
Year Ended |
||||||
|
|
|
|
||||
Cash flows provided by operating activities: |
|
|
|
||||
Net income |
$ |
500,196 |
|
|
$ |
361,291 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements |
96,233 |
|
|
93,908 |
|
||
Share-based compensation costs |
84,336 |
|
|
67,758 |
|
||
Amortization of intangible assets |
36,033 |
|
|
38,619 |
|
||
Deferred taxes |
(156,469 |
) |
|
64,339 |
|
||
Provision for inventory excess and obsolescence |
17,850 |
|
|
24,701 |
|
||
Provision for warranty |
17,093 |
|
|
22,417 |
|
||
Other |
14,525 |
|
|
20,483 |
|
||
Changes in assets and liabilities: |
|
|
|
||||
Accounts receivable |
(174,377 |
) |
|
(17,299 |
) |
||
Inventories |
(47,567 |
) |
|
(25,044 |
) |
||
Prepaid expenses and other |
(19,691 |
) |
|
(38,998 |
) |
||
Operating lease right-of-use assets |
16,632 |
|
|
16,787 |
|
||
Accounts payable, accruals and other obligations |
162,134 |
|
|
(117,931 |
) |
||
Deferred revenue |
16,822 |
|
|
2,519 |
|
||
Short and long-term operating lease liabilities |
(22,104 |
) |
|
(19,896 |
) |
||
Net cash provided by operating activities |
541,646 |
|
|
493,654 |
|
||
Cash flows used in investing activities: |
|
|
|
||||
Payments for equipment, furniture, fixtures and intellectual property |
(79,550 |
) |
|
(82,667 |
) |
||
Purchase of available for sale securities |
(172,778 |
) |
|
(223,196 |
) |
||
Proceeds from maturities of available for sale securities |
152,253 |
|
|
110,390 |
|
||
Settlement of foreign currency forward contracts, net |
4,680 |
|
|
3,531 |
|
||
Proceeds from sale of equity investment |
4,678 |
|
|
— |
|
||
Acquisition of businesses, net of cash acquired |
— |
|
|
(28,300 |
) |
||
Net cash used in investing activities |
(90,717 |
) |
|
(220,242 |
) |
||
Cash flows used in financing activities: |
|
|
|
||||
Payment of long-term debt |
(6,929 |
) |
|
(5,198 |
) |
||
Payment of debt issuance costs |
— |
|
|
(382 |
) |
||
Payment of finance lease obligations |
(3,004 |
) |
|
(2,703 |
) |
||
Shares repurchased for tax withholdings on vesting of stock unit awards |
(44,071 |
) |
|
(32,472 |
) |
||
Repurchases of common stock - repurchase program |
(91,288 |
) |
|
(74,535 |
) |
||
Proceeds from issuance of common stock |
28,457 |
|
|
28,068 |
|
||
Net cash used in financing activities |
(116,835 |
) |
|
(87,222 |
) |
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
(198 |
) |
|
(1,643 |
) |
||
Net increase in cash, cash equivalents and restricted cash |
333,896 |
|
|
184,547 |
|
||
Cash, cash equivalents and restricted cash at beginning of fiscal year |
1,088,708 |
|
|
904,161 |
|
||
Cash, cash equivalents and restricted cash at end of fiscal year |
$ |
1,422,604 |
|
|
$ |
1,088,708 |
|
Supplemental disclosure of cash flow information |
|
|
|
||||
Cash paid during the fiscal year for interest |
$ |
29,864 |
|
|
$ |
32,837 |
|
Cash paid during the fiscal year for income taxes, net |
$ |
73,127 |
|
|
$ |
53,076 |
|
Operating lease payments |
$ |
24,058 |
|
|
$ |
22,089 |
|
Non-cash investing and financing activities |
|
|
|
||||
Purchase of equipment in accounts payable |
$ |
10,138 |
|
|
$ |
7,854 |
|
Repurchase of common stock in accrued liabilities from repurchase program |
$ |
800 |
|
|
$ |
— |
|
Operating lease right-of-use assets subject to lease liability |
$ |
4,356 |
|
|
$ |
24,160 |
|
Unrealized gain on equity investment |
$ |
— |
|
|
$ |
2,681 |
|
APPENDIX A - Reconciliation of Adjusted (Non-GAAP) Measurements (unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Quarter Ended |
|
Year Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Gross Profit Reconciliation (GAAP/non-GAAP) |
|
|
|
|
|
|
|
|
||||||||
GAAP gross profit |
|
$ |
477,119 |
|
|
$ |
404,349 |
|
|
$ |
1,721,979 |
|
|
$ |
1,652,891 |
|
Share-based compensation-products |
|
920 |
|
|
724 |
|
|
3,408 |
|
|
3,182 |
|
||||
Share-based compensation-services |
|
1,240 |
|
|
968 |
|
|
5,181 |
|
|
3,853 |
|
||||
Canadian Emergency Wage Subsidy-products |
|
— |
|
|
— |
|
|
(4,283 |
) |
|
— |
|
||||
Canadian Emergency Wage Subsidy-services |
|
— |
|
|
— |
|
|
(2,667 |
) |
|
— |
|
||||
Amortization of intangible assets |
|
2,856 |
|
|
3,732 |
|
|
12,301 |
|
|
15,235 |
|
||||
Total adjustments related to gross profit |
|
5,016 |
|
|
5,424 |
|
|
13,940 |
|
|
22,270 |
|
||||
Adjusted (non-GAAP) gross profit |
|
$ |
482,135 |
|
|
$ |
409,773 |
|
|
$ |
1,735,919 |
|
|
$ |
1,675,161 |
|
Adjusted (non-GAAP) gross profit percentage |
|
46.3 |
% |
|
49.5 |
% |
|
47.9 |
% |
|
47.4 |
% |
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating Expense Reconciliation (GAAP/non-GAAP) |
|
|
|
|
|
|
|
|
||||||||
GAAP operating expense |
|
$ |
339,710 |
|
|
$ |
310,866 |
|
|
$ |
1,226,623 |
|
|
$ |
1,165,927 |
|
Share-based compensation-research and development |
|
5,684 |
|
|
4,030 |
|
|
21,863 |
|
|
16,987 |
|
||||
Share-based compensation-sales and marketing |
|
6,192 |
|
|
5,137 |
|
|
25,152 |
|
|
20,194 |
|
||||
Share-based compensation-general and administrative |
|
7,466 |
|
|
5,982 |
|
|
28,804 |
|
|
23,424 |
|
||||
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 |
|
5,700 |
|
|
7,854 |
|
|
29,565 |
|
|
22,652 |
|
||||
Amortization of intangible assets |
|
5,836 |
|
|
5,851 |
|
|
23,732 |
|
|
23,383 |
|
||||
Acquisition and integration costs |
|
1,712 |
|
|
3,127 |
|
|
2,572 |
|
|
4,031 |
|
||||
Total adjustments related to operating expense |
|
$ |
32,590 |
|
|
$ |
31,981 |
|
|
$ |
97,358 |
|
|
$ |
110,671 |
|
Adjusted (non-GAAP) operating expense |
|
$ |
307,120 |
|
|
$ |
278,885 |
|
|
$ |
1,129,265 |
|
|
$ |
1,055,256 |
|
|
|
|
|
|
|
|
|
|
||||||||
Income from Operations Reconciliation (GAAP/non-GAAP) |
|
|
|
|
|
|
|
|
||||||||
GAAP income from operations |
|
$ |
137,409 |
|
|
$ |
93,483 |
|
|
$ |
495,356 |
|
|
$ |
486,964 |
|
Total adjustments related to gross profit |
|
5,016 |
|
|
5,424 |
|
|
13,940 |
|
|
22,270 |
|
||||
Total adjustments related to operating expense |
|
32,590 |
|
|
31,981 |
|
|
97,358 |
|
|
110,671 |
|
||||
Total adjustments related to income from operations |
|
37,606 |
|
|
37,405 |
|
|
111,298 |
|
|
132,941 |
|
||||
Adjusted (non-GAAP) income from operations |
|
$ |
175,015 |
|
|
$ |
130,888 |
|
|
$ |
606,654 |
|
|
$ |
619,905 |
|
Adjusted (non-GAAP) operating margin percentage |
|
16.8 |
% |
|
15.8 |
% |
|
16.8 |
% |
|
17.6 |
% |
||||
Net Income Reconciliation (GAAP/non-GAAP) |
|
|
|
|
|
|
|
|
||||||||
GAAP net income |
|
$ |
103,499 |
|
|
$ |
65,041 |
|
|
$ |
500,196 |
|
|
$ |
361,291 |
|
Exclude GAAP provision (benefit) for income taxes |
|
25,826 |
|
|
20,798 |
|
|
(37,445 |
) |
|
94,670 |
|
||||
Income before income taxes |
|
129,325 |
|
|
85,839 |
|
|
462,751 |
|
|
455,961 |
|
||||
Total adjustments related to income from operations |
|
37,606 |
|
|
37,405 |
|
|
111,298 |
|
|
132,941 |
|
||||
Loss on extinguishment and modification of debt |
|
— |
|
|
— |
|
|
— |
|
|
646 |
|
||||
Unrealized (gain) loss on equity investment |
|
— |
|
|
(2,681 |
) |
|
165 |
|
|
(2,681 |
) |
||||
Adjusted income before income taxes |
|
166,931 |
|
|
120,563 |
|
|
574,214 |
|
|
586,867 |
|
||||
Non-GAAP tax provision on adjusted income before income taxes |
|
34,221 |
|
|
26,042 |
|
|
117,714 |
|
|
126,763 |
|
||||
Adjusted (non-GAAP) net income |
|
$ |
132,710 |
|
|
$ |
94,521 |
|
|
$ |
456,500 |
|
|
$ |
460,104 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average basic common shares outstanding |
|
155,232 |
|
|
154,706 |
|
|
155,279 |
|
|
154,287 |
|
||||
Weighted average diluted potential common shares outstanding(1) |
|
156,689 |
|
|
156,563 |
|
|
156,743 |
|
|
155,955 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net Income per Common Share |
|
|
|
|
|
|
|
|
||||||||
GAAP diluted net income per potential common share |
|
$ |
0.66 |
|
|
$ |
0.42 |
|
|
$ |
3.19 |
|
|
$ |
2.32 |
|
Adjusted (non-GAAP) diluted net income per potential common share |
|
$ |
0.85 |
|
|
$ |
0.60 |
|
|
$ |
2.91 |
|
|
$ |
2.95 |
|
(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 2021 includes 1.5 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 2021 includes 1.5 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 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. |
APPENDIX B - Calculation of EBITDA and Adjusted EBITDA (unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Quarter Ended |
|
Year Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) |
|
|
|
|
|
|
|
|
||||||||
Net income (GAAP) |
|
$ |
103,499 |
|
|
$ |
65,041 |
|
|
$ |
500,196 |
|
|
$ |
361,291 |
|
Add: Interest expense |
|
7,916 |
|
|
7,395 |
|
|
30,837 |
|
|
31,321 |
|
||||
Less: Interest and other income (loss), net |
|
(168 |
) |
|
(249 |
) |
|
(1,768 |
) |
|
964 |
|
||||
Add: Loss on extinguishment and modification of debt |
|
— |
|
|
— |
|
|
— |
|
|
(646 |
) |
||||
Add: Provision (benefit) for income taxes |
|
25,826 |
|
|
20,798 |
|
|
(37,445 |
) |
|
94,670 |
|
||||
Add: Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements |
|
24,315 |
|
|
23,538 |
|
|
96,233 |
|
|
93,908 |
|
||||
Add: Amortization of intangible assets |
|
8,692 |
|
|
9,584 |
|
|
36,033 |
|
|
38,619 |
|
||||
EBITDA |
|
$ |
170,416 |
|
|
$ |
126,605 |
|
|
$ |
627,622 |
|
|
$ |
619,491 |
|
Less: Canadian Emergency Wage Subsidy |
|
— |
|
|
— |
|
|
41,280 |
|
|
— |
|
||||
Add: Share-based compensation cost |
|
21,366 |
|
|
16,920 |
|
|
84,336 |
|
|
67,758 |
|
||||
Add: Significant asset impairments and restructuring costs |
|
5,700 |
|
|
7,854 |
|
|
29,565 |
|
|
22,652 |
|
||||
Add: Acquisition and integration costs |
|
1,712 |
|
|
3,127 |
|
|
2,572 |
|
|
4,031 |
|
||||
Adjusted EBITDA |
|
$ |
199,194 |
|
|
$ |
154,506 |
|
|
$ |
702,815 |
|
|
$ |
713,932 |
|
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.
-
Canadian Emergency Wage Subsidy - a program introduced by the
Government of Canada to offset a portion of employee wages for a limited period in response to COVID-19 outbreak. - 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.
- 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 - includes expenses for financial, legal and accounting advisors, severance and other employee-related costs associated with our acquisition of
Centina in fiscal 2020, and costs and recoveries of acquisition consideration and compensation 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. -
Loss on extinguishment and modification of debt - reflects extinguishment and modification of debt expenses related to refinancing of our Term Loan due
September 28, 2025 . - Unrealized (gain)loss on equity investment - reflects a change in the carrying value of certain cost method equity investments.
-
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 of20.5% for fiscal 2021 and21.6% for fiscal 2020. This rate may be subject to change in the future, including as a result of changes in tax policy or tax strategy.
Ciena's GAAP tax provision for fiscal 2021 benefited from recording a
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Press:
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Investor:
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Source:
FAQ
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