Ribbon Communications Inc. Reports Fourth Quarter and Full Year 2021 Financial Results
Ribbon Communications (RBBN) reported its Q4 2021 results, showing revenue of $231 million, down from $244 million year-over-year. For 2021, total revenue was $845 million, slightly up from $844 million in 2020. The company noted a net loss of $96 million in Q4, influenced by a $116 million goodwill impairment. IP Optical Networks revenue grew 22% sequentially. Looking forward, RBBN projects 2022 revenue of $850-$880 million, with guidance reflecting a focus on growth despite current supply chain challenges and geopolitical concerns.
- IP Optical Networks sales grew 22% sequentially in Q4 2021.
- North America revenue increased 164% year-over-year.
- Cloud & Edge revenue nearly doubled in Q4 2021 compared to the previous year.
- The company anticipates 10%+ revenue growth in IP Optical Networks for 2022.
- First significant Telco Cloud win achieved with a major Japanese carrier.
- Q4 2021 revenue declined to $231 million from $244 million in Q4 2020.
- Net loss of $96 million in Q4 2021, including a significant goodwill impairment charge.
- Projected non-GAAP diluted loss per share for Q1 2022 is between $0.10 to $0.07.
PLANO, Texas, Feb. 16, 2022 /PRNewswire/ -- Ribbon Communications Inc. (Nasdaq: RBBN), a global provider of real-time communications software and IP optical transport solutions to service providers, enterprises, and critical infrastructure sectors, today announced its financial results for the fourth quarter and full year 2021.
Revenue for the fourth quarter of 2021 was
"While our financial results for 2021 did not meet our expectations, we continue to make progress on our strategy. Our IP Optical Networks sales grew
McClelland continued, "As we enter 2022, we project
Financial Highlights1, 2
Three months ended | Year ended | ||||
In millions, except per share amounts. | December 31, | December 31, | |||
2021 | 2020 | 2021 | 2020 | ||
GAAP Revenue | $ 231 | ||||
GAAP Net (loss) income | $ (96) | ( | $ 89 | ||
Non-GAAP Net income | $ 1 | $ 27 | $ 49 | $ 62 | |
GAAP diluted (loss) earnings per share | ( | ( | |||
Weighted average shares outstanding for GAAP diluted (loss) earnings per share | 149 | 153 | 148 | 145 | |
Non-GAAP diluted earnings per share | |||||
Weighted average shares outstanding for Non-GAAP diluted earnings per share | 154 | 153 | 155 | 145 | |
Non-GAAP Adjusted EBITDA | $ 26 | $ 49 | |||
1 The Company's results include the impact of changes in the fair value of the consideration received from the sale of its Kandy Communications business (the "Kandy Sale") to American Virtual Cloud Technologies ("AVCT") and paid-in-kind interest earned on the consideration. These amounts totaled approximately |
2 Please see the reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures and additional information about non-GAAP measures in the section entitled "Discussion of Non-GAAP Financial Measures" in the attached schedules. |
Cash, cash equivalents and restricted cash was
"To support our investment in critical growth areas, we are implementing a strategic restructuring to streamline operations. We expect to reduce our operating costs by approximately
Customer and Company Highlights
- IP Optical Networks 4Q21 revenue of
$83 million , up22% from 3Q21 - Initiated major project with U.S. Tier 1 service provider to modernize their fixed voice infrastructure over the next several years that will significantly reduce the complexity and operating cost of their network
- Awarded new business with multi-service communications provider in Japan for TDM to IP migration project to begin in 2H22
- Selected as new provider of optical transport solutions by major African carrier
- Other notable new IP Optical wins:
- Selected by leading European railway operator for a major national backbone project
- Telehouse selected Ribbon's high-performance Apollo solution to power its flagship Metro Connect offer
- NamPower deployed Ribbon's IP Optical portfolio to reliably leverage high-capacity bandwidth
- IPS selected Ribbon's IP Optical Solutions to expand their long-haul submarine data transmission capacity
- Cloud & Edge 4Q21 revenue of
$147 million , up3% from 3Q21 - First significant Telco Cloud win with major Japanese mobile carrier, utilizing our cloud-native SBC for deployment in their network
- Strength in Enterprise with new wins in Financial, IT and Automotive verticals
- Partnered with Infosys to deploy Microsoft Teams at one of the world's largest automobile brands
- Enterprise product revenue increased
91% from 4Q20
Business Outlook1
The Company's outlook is based on current indications for its business, which are subject to change. For the first quarter of 2022, the Company projects revenue of
1 Please see the reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures and additional information about the non-GAAP measures in the section entitled "Discussion of Non-GAAP Financial Measures" in the attached schedules. |
Conference Call Details
Conference call to discuss the Company's financial results for the fourth quarter and year ended December 31, 2021 on February 16, 2022, via the investor section of its website at http://investors.ribboncommunications.com, where a replay will also be available shortly following the conference call.
Conference Call Details:
Date: February 16, 2022
Time: 4:30 p.m. (ET)
Dial-in number (Domestic): 877-407-2991
Dial-in number (Intl): 201-389-0925
Instant Telephone Access: Call me™
Replay information:
A telephone playback of the call will be available following the conference call until March 2, 2022 and can be accessed by calling 877-660-6853 or 201-612-7415 for international callers. The reservation number for the replay is 13726131.
Investor Relations
Tom Berry
+1 (978) 614-8050
tom.berry@rbbn.com
North American Press
Dennis Watson
+1 (214) 695-2224
dwatson@rbbn.com
APAC, CALA & EMEA Press
Catherine Berthier
+1 (646) 741-1974
cberthier@rbbn.com
Analyst Relations
Michael Cooper
+1 (708) 212-6922
mcooper@rbbn.com
About Ribbon
Ribbon Communications (Nasdaq: RBBN) delivers communications software, IP and optical networking solutions to service providers, enterprises and critical infrastructure sectors globally. We engage deeply with our customers, helping them modernize their networks for improved competitive positioning and business outcomes in today's smart, always-on and data-hungry world. Our innovative, end-to-end solutions portfolio delivers unparalleled scale, performance, and agility, including core to edge software-centric solutions, cloud-native offers, leading-edge security and analytics tools, along with IP and optical networking solutions for 5G. To learn more about Ribbon visit rbbn.com.
Important Information Regarding Forward-Looking Statements
The information in this release contains "forward-looking" statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, which are subject to several risks and uncertainties. All statements other than statements of historical facts contained in this release, including without limitation statements regarding, the financial results for 2021 and projected results for 2022 and beyond, costs and savings associated with the strategic restructuring, potential COVID-19 impacts, customer engagement and momentum, expected supply-chain related costs; plans and objectives for future operations; and plans for future product development and manufacturing, are forward-looking statements. Without limiting the foregoing, the words "anticipates", "believes", "estimates", "expects", "expectations", "intends", "may", "plans", "projects" and other similar language, whether in the negative or affirmative, are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.
Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated in these forward-looking statements due to various risks, uncertainties and other important factors, including, among others, risks related to supply chain disruptions resulting from component availability; the effects of geopolitical instabilities and disputes, including between Russia and Ukraine; risks related to the continuing COVID-19 pandemic, including delays in customer deployments as a result of rises in cases; risks that we will not realize estimated cost savings and/or anticipated benefits from the acquisition of ECI; risks that we will not realize the estimated cost savings and/or anticipated benefits from our strategic restructuring; the impact of restructuring and cost-containment activities, failure to realize anticipated benefits from the sale of our Kandy Communications business ("Kandy") or declines in the value of our ongoing investment in AVCT, the purchaser of the Kandy Communications business; unpredictable fluctuations in quarterly revenue and operating results; risks related to cybersecurity and data intrusion; failure to compete successfully against telecommunications equipment and networking companies; failure to grow our customer base or generate recurring business from our existing customers; credit risks; the timing of customer purchasing decisions and our recognition of revenues; macroeconomic conditions; litigation; market acceptance of our products and services; rapid technological and market change; our ability to protect our intellectual property rights and obtain necessary licenses; our ability to maintain partner, reseller, distribution and vendor support and supply relationships; the potential for defects in our products; risks related to the terms of our credit agreement including compliance with the financial covenants; higher risks in international operations and markets; increases in tariffs, trade restrictions or taxes on our products; currency fluctuations; and failure or circumvention of our controls and procedures.
These factors are not intended to be an all-encompassing list of risks and uncertainties that may affect the Company's business and results from operations. Additional information regarding these and other factors can be found in the Company's reports filed with the Securities and Exchange Commission, including, without limitation, its Form 10-K for the year ended December 31, 2020 and its Form 10-Q for the quarter ended September 30, 2021. In providing forward-looking statements, the Company expressly disclaims any obligation to update these statements publicly or otherwise, whether as a result of new information, future events or otherwise, except as required by law.
Discussion of Non-GAAP Financial Measures
The Company's management uses several different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of its business, making operating decisions, planning and forecasting future periods, and determining payments under compensation programs. The Company considers the use of non-GAAP financial measures helpful in assessing the core performance of its continuing operations and when planning and forecasting future periods. The Company's annual financial plan is prepared on a non-GAAP basis and is approved by its board of directors. In addition, budgeting and forecasting for revenue and expenses are conducted on a non-GAAP basis, and actual results on a non-GAAP basis are assessed against the annual financial plan. The Company defines continuing operations as the ongoing results of its business adjusted for certain expenses and credits, as described below. The Company believes that providing non-GAAP information to investors will allow investors to view the financial results in the way its management views them and helps investors to better understand the Company's core financial and operating performance and evaluate the efficacy of the methodology and information used by its management to evaluate and measure such performance.
While the Company's management uses non-GAAP financial measures as tools to enhance its understanding of certain aspects of the Company's financial performance, its management does not consider these measures to be a substitute for, or superior to, GAAP measures. In addition, the Company's presentations of these measures may not be comparable to similarly titled measures used by other companies. These non-GAAP financial measures should not be considered alternatives for, or in isolation from, the financial information prepared and presented in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures. In particular, many of the adjustments to the Company's financial measures reflect the exclusion of items that are recurring and will be reflected in its financial results for the foreseeable future.
Stock-Based Compensation
The expense related to stock-based awards is generally not controllable in the short-term and can vary significantly based on the timing, size and nature of awards granted. The Company believes that presenting non-GAAP operating results that exclude stock-based compensation provides investors with visibility and insight into its management's method of analysis and its core operating performance.
Amortization of Acquired Technology; Amortization of Acquired Intangible Assets
Amortization amounts are inconsistent in frequency and amount and are significantly impacted by the timing and size of acquisitions. The Company believes that excluding non-cash amortization of these intangible assets facilitates the comparison of its financial results to its historical operating results and to other companies in its industry as if the acquired intangible assets had been developed internally rather than acquired.
Acquisition-Related Inventory Adjustment
Acquisition-related inventory adjustment amounts are inconsistent in frequency and amount and are significantly impacted by the then-current market prices of such inventory items. The Company believes that excluding non-cash inventory adjustments arising from acquisitions facilitates the comparison of its financial results to its historical operating results and to other companies in its industry as if the inventory had been acquired by the Company through its normal channels rather than in connection with its acquired businesses.
Litigation Costs
The Company has been involved in litigation with a former GENBAND business partner and had reached a settlement with the other party. The Company excludes the costs of such litigation because it believes such costs are not part of its core business or ongoing operations.
Impairment of Goodwill
The Company performs its annual testing for impairment of goodwill in the fourth quarter of 2021. For the purpose of testing goodwill for impairment, all goodwill has been assigned to one of the Company's two operating segments. The Company performs a fair value analysis using both an income and market approach, which encompasses a discounted cash flow analysis and a guideline public company analysis using selected multiples. Based on the results of its recently completed impairment test, the Company determined that the carrying value of its IP Optical Networks segment exceeded its fair value, and accordingly, recorded a non-cash impartment charge of
Acquisition-, Disposal- and Integration-Related Expense
The Company considers certain acquisition-, disposal- and integration-related costs to be unrelated to the organic continuing operations of its acquired businesses and the Company. Such costs are generally not relevant to assessing or estimating the long-term performance of the acquired assets. The Company excludes such acquisition-, disposal- and integration-related costs to allow more accurate comparisons of its financial results to its historical operations and the financial results of less acquisitive peer companies and allows management and investors to consider the ongoing operations of the business both with and without such expenses.
Restructuring and Related Expense
The Company has recorded restructuring and related expense to streamline operations and reduce operating costs by closing and consolidating certain facilities and reducing its worldwide workforce. The Company believes that excluding restructuring and related expense facilitates the comparison of its financial results to its historical operating results and to other companies in its industry, as there are no future revenue streams or other benefits associated with these costs.
Interest Income on Debentures
The Company recorded paid-in-kind interest income on the Debentures through September 8, 2021, when the Debentures were converted to the Debenture Shares, which increased their fair value. The Company excludes this interest income because it believes that such a gain is not part of its core business or ongoing operations.
Gain on Sale of Business
On May 12, 2021, the Company sold its QualiTech business, which it had acquired as part of the ECI Acquisition, to Hermon Laboratories, Ltd. As consideration, the Company received
Decrease (Increase) in Fair Value of Investments
The Company calculates the fair values of the Debentures and the Warrants (prior to September 8, 2021) and the Debenture Shares and Warrants (effective September 8, 2021) at each quarter-end and records any adjustments to their fair values in Other (expense) income, net. The Company excludes these and any subsequent gains and losses from the change in fair value of this investment because it believes that such gains or losses are not part of its core business or ongoing operations.
Tax Effect of Non-GAAP Adjustments
The Non-GAAP income tax benefit (provision) is presented based on an estimated tax rate applied against forecasted annual non-GAAP income. The Non-GAAP income tax benefit (provision) assumes no available net operating losses or valuation allowances for the U.S. because of reporting significant cumulative non-GAAP income over the past several years. The Company is reporting its non-GAAP quarterly income taxes by computing an annual rate for the Company and applying that single rate (rather than multiple rates by jurisdiction) to its consolidated quarterly results. The Company expects that this methodology will provide a consistent rate throughout the year and allow investors to better understand the impact of income taxes on its results. Due to the methodology applied to its estimated annual tax rate, the Company's estimated tax rate on non-GAAP income will differ from its GAAP tax rate and from its actual tax liabilities.
Adjusted EBITDA
The Company uses Adjusted EBITDA as a supplemental measure to review and assess its performance. The Company calculates Adjusted EBITDA by excluding from (Loss) income from operations: depreciation; amortization of acquired intangible assets; stock-based compensation; acquisition-related inventory adjustments; certain litigation costs; impairment of goodwill; acquisition-, disposal- and integration-related expense; and restructuring and related expense. In general, the Company excludes the expenses that considers to be non-cash and/or not part of its ongoing operations. The Company may exclude other items in the future that have those characteristics. Adjusted EBITDA is a non-GAAP financial measure that is used by the investing community for comparative and valuation purposes. The Company discloses this metric to support and facilitate dialogue with research analysts and investors. Other companies may calculate Adjusted EBITDA differently than the Company does, limiting its usefulness as a comparative measure.
RIBBON COMMUNICATIONS INC. | ||||||||
Condensed Consolidated Statements of Operations | ||||||||
(in thousands, except percentages and per share amounts) | ||||||||
(unaudited) | ||||||||
Three months ended | ||||||||
December 31, | September 30, | December 31, | ||||||
2021 | 2021 | 2020 | ||||||
Revenue: | ||||||||
Product | $ 130,298 | $ 111,726 | $ 142,225 | |||||
Service | 100,279 | 98,672 | 101,977 | |||||
Total revenue | 230,577 | 210,398 | 244,202 | |||||
Cost of revenue: | ||||||||
Product | 70,165 | 53,494 | 59,669 | |||||
Service | 36,711 | 36,576 | 40,171 | |||||
Amortization of acquired technology | 8,908 | 9,674 | 10,743 | |||||
Total cost of revenue | 115,784 | 99,744 | 110,583 | |||||
Gross profit | 114,793 | 110,654 | 133,619 | |||||
Gross margin | ||||||||
Operating expenses: | ||||||||
Research and development | 51,609 | 49,132 | 51,321 | |||||
Sales and marketing | 42,067 | 36,113 | 37,551 | |||||
General and administrative | 13,226 | 12,148 | 14,966 | |||||
Amortization of acquired intangible assets | 7,493 | 7,547 | 4,815 | |||||
Impairment of goodwill | 116,000 | - | - | |||||
Acquisition-, disposal- and integration-related expense | 3,428 | 1,955 | 2,557 | |||||
Restructuring and related expense | 1,106 | 1,767 | 5,509 | |||||
Total operating expenses | 234,929 | 108,662 | 116,719 | |||||
(Loss) income from operations | (120,136) | 1,992 | 16,900 | |||||
Interest expense, net | (3,995) | (2,969) | (5,393) | |||||
Other (expense) income, net | (8,546) | (57,702) | 115,534 | |||||
(Loss) income before income taxes | (132,677) | (58,679) | 127,041 | |||||
Income tax benefit (provision) | 36,369 | (752) | (3,281) | |||||
Net (loss) income | $ (96,308) | $ (59,431) | $ 123,760 | |||||
(Loss) earnings per share: | ||||||||
Basic | $ (0.65) | $ (0.40) | $ 0.85 | |||||
Diluted | $ (0.65) | $ (0.40) | $ 0.81 | |||||
Weighted average shares used to compute (loss) earnings per share: | ||||||||
Basic | 148,675 | 148,184 | 145,311 | |||||
Diluted | 148,675 | 148,184 | 153,441 | |||||
RIBBON COMMUNICATIONS INC. | ||||||
Condensed Consolidated Statements of Operations | ||||||
(in thousands, except percentages and per share amounts) | ||||||
(unaudited) | ||||||
Year ended | ||||||
December 31, | December 31, | |||||
2021 | 2020 | |||||
Revenue: | ||||||
Product | $ 453,042 | $ 467,912 | ||||
Service | 391,915 | 375,883 | ||||
Total revenue | 844,957 | 843,795 | ||||
Cost of revenue: | ||||||
Product | 214,745 | 204,772 | ||||
Service | 147,209 | 145,916 | ||||
Amortization of acquired technology | 38,343 | 42,290 | ||||
Total cost of revenue | 400,297 | 392,978 | ||||
Gross profit | 444,660 | 450,817 | ||||
Gross margin | ||||||
Operating expenses: | ||||||
Research and development | 194,948 | 194,525 | ||||
Sales and marketing | 150,279 | 139,318 | ||||
General and administrative | 53,661 | 63,286 | ||||
Amortization of acquired intangible assets | 28,283 | 18,620 | ||||
Impairment of goodwill | 116,000 | - | ||||
Acquisition-, disposal- and integration-related expense | 7,632 | 17,164 | ||||
Restructuring and related expense | 11,653 | 16,235 | ||||
Total operating expenses | 562,456 | 449,148 | ||||
(Loss) income from operations | (117,796) | 1,669 | ||||
Interest expense, net | (15,831) | (21,042) | ||||
Other (expense) income, net | (74,516) | 112,690 | ||||
(Loss) income before income taxes | (208,143) | 93,317 | ||||
Income tax benefit (provision) | 30,958 | (4,726) | ||||
Net (loss) income | $ (177,185) | $ 88,591 | ||||
(Loss) earnings per share: | ||||||
Basic | $ (1.20) | $ 0.64 | ||||
Diluted | $ (1.20) | $ 0.61 | ||||
Weighted average shares used to compute (loss) earnings per share: | ||||||
Basic | 147,575 | 138,967 | ||||
Diluted | 147,575 | 144,650 | ||||
RIBBON COMMUNICATIONS INC. | ||||||
Condensed Consolidated Balance Sheets | ||||||
(in thousands) | ||||||
(unaudited) | ||||||
December 31, | December 31, | |||||
2021 | 2020 | |||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ 103,915 | $ 128,428 | ||||
Restricted cash | 2,570 | 7,269 | ||||
Accounts receivable, net | 282,917 | 237,738 | ||||
Inventory | 54,043 | 45,750 | ||||
Other current assets | 37,545 | 28,461 | ||||
Total current assets | 480,990 | 447,646 | ||||
Property and equipment, net | 47,685 | 48,888 | ||||
Intangible assets, net | 350,730 | 417,356 | ||||
Goodwill | 300,892 | 416,892 | ||||
Investments | 43,931 | 115,183 | ||||
Deferred income taxes | 47,287 | 10,651 | ||||
Operating lease right-of-use assets | 53,147 | 69,757 | ||||
Other assets | 23,075 | 20,892 | ||||
$ 1,347,737 | $ 1,547,265 | |||||
Liabilities and Stockholders' Equity | ||||||
Current liabilities: | ||||||
Current portion of term debt | $ 20,058 | $ 15,531 | ||||
Accounts payable | 97,121 | 63,387 | ||||
Accrued expenses and other | 100,752 | 134,865 | ||||
Operating lease liabilities | 17,403 | 17,023 | ||||
Deferred revenue | 109,119 | 96,824 | ||||
Total current liabilities | 344,453 | 327,630 | ||||
Long-term debt, net of current | 350,217 | 369,035 | ||||
Operating lease liabilities, net of current | 55,196 | 72,614 | ||||
Deferred revenue, net of current | 20,619 | 26,010 | ||||
Deferred income taxes | 8,116 | 16,842 | ||||
Other long-term liabilities | 41,970 | 48,281 | ||||
Total liabilities | 820,571 | 860,412 | ||||
Commitments and contingencies | ||||||
Stockholders' equity: | ||||||
Common stock | 15 | 15 | ||||
Additional paid-in capital | 1,875,234 | 1,870,256 | ||||
Accumulated deficit | (1,355,661) | (1,178,476) | ||||
Accumulated other comprehensive income (loss) | 7,578 | (4,942) | ||||
Total stockholders' equity | 527,166 | 686,853 | ||||
$ 1,347,737 | $ 1,547,265 | |||||
RIBBON COMMUNICATIONS INC. | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
Year ended | |||||||
December 31, | December 31, | ||||||
2021 | 2020 | ||||||
Cash flows from operating activities: | |||||||
Net (loss) income | $ (177,185) | $ 88,591 | |||||
Adjustments to reconcile net (loss) income to cash flows provided by operating activities: | |||||||
Depreciation and amortization of property and equipment | 16,962 | 17,188 | |||||
Amortization of intangible assets | 66,626 | 60,910 | |||||
Amortization of debt issuance costs | 4,763 | 5,673 | |||||
Impairment of goodwill | 116,000 | - | |||||
Stock-based compensation | 19,418 | 13,899 | |||||
Deferred income taxes | (45,596) | (4,616) | |||||
Gain on sale of business | (2,772) | (83,552) | |||||
Decrease (increase) in fair value of investments | 71,252 | (30,296) | |||||
Reduction to deferred purchase consideration | - | (70) | |||||
Foreign currency exchange losses | 5,002 | 2,961 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (47,279) | 9,578 | |||||
Inventory | (9,029) | 11,842 | |||||
Other operating assets | 9,958 | 44,343 | |||||
Accounts payable | 34,482 | (49,561) | |||||
Accrued expenses and other long-term liabilities | (50,324) | 20,629 | |||||
Deferred revenue | 6,904 | (5,955) | |||||
Net cash provided by operating activities | 19,182 | 101,564 | |||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (17,132) | (26,721) | |||||
Business acqusitions, net of cash acquired | - | (346,852) | |||||
Proceeds from sale of business | 2,944 | - | |||||
Proceeds from the sale of fixed assets | - | 43,500 | |||||
Net cash used in investing activities | (14,188) | (330,073) | |||||
Cash flows from financing activities: | |||||||
Borrowings under revolving line of credit | - | 615 | |||||
Principal payments on revolving line of credit | - | (8,615) | |||||
Proceeds from issuance of term debt | 74,625 | 478,500 | |||||
Principal payments of term debt | (92,176) | (134,188) | |||||
Principal payments of finance leases | (903) | (1,258) | |||||
Payment of debt issuance costs | (789) | (14,147) | |||||
Proceeds from the exercise of stock options | 24 | 70 | |||||
Payment of tax withholding obligations related to net share settlements of restricted stock awards | (14,464) | (1,674) | |||||
Net cash (used in) provided by financing activities | (33,683) | 319,303 | |||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (523) | 260 | |||||
Net (decrease) increase in cash, cash equivalents and restricted cash | (29,212) | 91,054 | |||||
Cash, cash equivalents and restricted cash, beginning of year | 135,697 | 44,643 | |||||
Cash, cash equivalents and restricted cash, end of year | $ 106,485 | $ 135,697 | |||||
RIBBON COMMUNICATIONS INC. | ||||||||||||
Supplemental Information | ||||||||||||
(in thousands) | ||||||||||||
(unaudited) | ||||||||||||
The following tables provide the details of stock-based compensation included as components of other line items in the Company's Condensed Consolidated Statements of Operations and the line items in which these amounts are reported. | ||||||||||||
Three months ended | Year ended | |||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||
2021 | 2021 | 2020 | 2021 | 2020 | ||||||||
Stock-based compensation | ||||||||||||
Cost of revenue - product | $ 97 | $ 96 | $ 51 | $ 313 | $ 174 | |||||||
Cost of revenue - service | 488 | 492 | 208 | 1,684 | 701 | |||||||
Cost of revenue | 585 | 588 | 259 | 1,997 | 875 | |||||||
Research and development | 1,243 | 1,223 | 804 | 4,253 | 2,968 | |||||||
Sales and marketing | 2,011 | 1,581 | 1,177 | 7,218 | 4,129 | |||||||
General and administrative | 1,168 | 1,169 | 1,492 | 5,950 | 5,927 | |||||||
Operating expense | 4,422 | 3,973 | 3,473 | 17,421 | 13,024 | |||||||
Total stock-based compensation | $ 5,007 | $ 4,561 | $ 3,732 | $ 19,418 | $ 13,899 | |||||||
RIBBON COMMUNICATIONS INC. | |||||
Reconciliation of Non-GAAP and GAAP Financial Measures | |||||
(in thousands, except per share amounts) | |||||
(unaudited) | |||||
Three months ended | |||||
December 31, | September 30, | December 31, | |||
2021 | 2021 | 2020 | |||
GAAP Gross margin | |||||
Stock-based compensation | |||||
Amortization of acquired technology | |||||
Non-GAAP Gross margin | |||||
GAAP Net (loss) income | $ (96,308) | $ (59,431) | $ 123,760 | ||
Stock-based compensation | 5,007 | 4,561 | 3,732 | ||
Amortization of acquired intangible assets | 16,401 | 17,221 | 15,558 | ||
Impairment of goodwill | 116,000 | - | - | ||
Acquisition-, disposal- and integration-related expense | 3,428 | 1,955 | 2,557 | ||
Restructuring and related expense | 1,106 | 1,767 | 5,509 | ||
Interest income on debentures | - | (901) | - | ||
Gain on sale of business | - | - | (83,552) | ||
Decrease (increase) in fair value of investments | 6,508 | 56,475 | (30,296) | ||
Tax effect of non-GAAP adjustments | (50,830) | (5,294) | (10,000) | ||
Non-GAAP Net income | $ 1,312 | $ 16,353 | $ 27,268 | ||
GAAP Diluted (loss) earnings per share | $ (0.65) | $ (0.40) | $ 0.81 | ||
Stock-based compensation | 0.03 | 0.03 | 0.02 | ||
Amortization of acquired intangible assets | 0.12 | 0.12 | 0.10 | ||
Impairment of goodwill | 0.77 | - | - | ||
Acquisition-, disposal- and integration-related expense | 0.02 | 0.01 | 0.02 | ||
Restructuring and related expense | 0.01 | 0.01 | 0.04 | ||
Interest income on debentures | - | (0.01) | - | ||
Gain on sale of business | - | - | (0.54) | ||
Decrease (increase) in fair value of investments | 0.04 | 0.38 | (0.20) | ||
Tax effect of non-GAAP adjustments | (0.33) | (0.03) | (0.07) | ||
Non-GAAP Diluted earnings per share | $ 0.01 | $ 0.11 | $ 0.18 | ||
Weighted average shares used to compute diluted (loss) earnings per share | |||||
Shares used to compute GAAP diluted (loss) earnings per share | 148,675 | 148,184 | 153,441 | ||
Shares used to compute Non-GAAPdiluted earnings per share | 153,898 | 154,061 | 153,441 | ||
GAAP (Loss) income from operations | $ (120,136) | $ 1,992 | $ 16,900 | ||
Depreciation | 4,278 | 4,209 | 4,434 | ||
Amortization of acquired intangible assets | 16,401 | 17,221 | 15,558 | ||
Stock-based compensation | 5,007 | 4,561 | 3,732 | ||
Impairment of goodwill | 116,000 | ||||
Acquisition-, disposal- and integration-related expense | 3,428 | 1,955 | 2,557 | ||
Restructuring and related expense | 1,106 | 1,767 | 5,509 | ||
Non-GAAP Adjusted EBITDA | $ 26,084 | $ 31,705 | $ 48,690 | ||
RIBBON COMMUNICATIONS INC. | |||
Reconciliation of Non-GAAP and GAAP Financial Measures | |||
(in thousands, except per share amounts) | |||
(unaudited) | |||
Year ended | |||
December 31, | December 31, | ||
2021 | 2020 | ||
GAAP Total gross margin | |||
Stock-based compensation | |||
Amortization of acquired technology | |||
Acquisition-related inventory adjustment | |||
Non-GAAP Total gross margin | |||
GAAP Net (loss) income | $ (177,185) | $ 88,591 | |
Stock-based compensation | 19,418 | 13,899 | |
Amortization of acquired intangible assets | 66,626 | 60,910 | |
Acquisition-related inventory adjustment | - | 2,000 | |
Litigation costs | - | 2,101 | |
Impairment of goodwill | 116,000 | - | |
Acquisition-, disposal- and integration-related expense | 7,632 | 17,164 | |
Restructuring and related expense | 11,653 | 16,235 | |
Interest income on debentures | (3,556) | - | |
Gain on sale of business | (2,772) | (83,552) | |
Decrease (increase) in fair value of investments | 74,809 | (30,296) | |
Tax effect of non-GAAP adjustments | (63,209) | (25,335) | |
Non-GAAP Net income | $ 49,416 | $ 61,717 | |
GAAP diluted (loss) earnings per share | $ (1.20) | $ 0.61 | |
Stock-based compensation | 0.14 | 0.11 | |
Amortization of acquired intangible assets | 0.44 | 0.42 | |
Acquisition-related inventory adjustment | - | 0.01 | |
Litigation costs | - | 0.01 | |
Impairment of goodwill | 0.77 | - | |
Acquisition-, disposal- and integration-related expense | 0.05 | 0.12 | |
Restructuring and related expense | 0.08 | 0.11 | |
Interest income on debentures | (0.02) | - | |
Gain on sale of business | (0.02) | (0.58) | |
Decrease (increase) in fair value of investments | 0.50 | (0.21) | |
Tax effect of non-GAAP adjustments | (0.42) | (0.17) | |
Non-GAAP Diluted earnings per share | $ 0.32 | $ 0.43 | |
Weighted average shares used to compute diluted (loss) earnings per share: | |||
Shares used to compute GAAP diluted (loss) earnings per share | 147,575 | 144,650 | |
Shares used to compute Non-GAAP diluted earnings per share | 154,527 | 144,650 | |
GAAP (Loss) income from operations | $ (117,796) | $ 1,669 | |
Depreciation | 16,962 | 17,188 | |
Amortization of acquired intangible assets | 66,626 | 60,910 | |
Stock-based compensation | 19,418 | 13,899 | |
Acquisition-related inventory adjustment | - | 2,000 | |
Litigation costs | - | 2,101 | |
Impairment of goodwill | 116,000 | - | |
Acquisition-, disposal- and integration-related expense | 7,632 | 17,164 | |
Restructuring and related expense | 11,653 | 16,235 | |
Non-GAAP Adjusted EBITDA | $ 120,495 | $ 131,166 | |
RIBBON COMMUNICATIONS INC. | |||||||||
Reconciliation of Non-GAAP and GAAP Financial Measures - Outlook | |||||||||
(unaudited) | |||||||||
Three months ending | Year ending | ||||||||
March 31, 2022 | December 31, 2022 | ||||||||
Range | Range | ||||||||
Revenue ($ millions) | $ 165 | $ 180 | $ 850 | $ 880 | |||||
Gross margin: | |||||||||
GAAP outlook | |||||||||
Stock-based compensation | |||||||||
Amortization of acquired technology | |||||||||
Non-GAAP outlook | |||||||||
Earnings per share: | |||||||||
GAAP outlook | $ (0.30) | $ (0.27) | $ (0.31) | $ (0.27) | |||||
Stock-based compensation | 0.04 | 0.04 | 0.16 | 0.16 | |||||
Amortization of acquired intangible assets | 0.10 | 0.10 | 0.39 | 0.39 | |||||
Acquisition-, disposal- and integration-related expense | 0.01 | 0.01 | 0.02 | 0.02 | |||||
Restructuring and related expense | 0.02 | 0.02 | 0.13 | 0.13 | |||||
Tax effect of non-GAAP adjustments | 0.03 | 0.03 | (0.09) | (0.09) | |||||
Non-GAAP outlook | $ (0.10) | $ (0.07) | $ 0.30 | $ 0.34 | |||||
Weighted average shares used to compute GAAP diluted loss per share (in thousands) | 149,000 | 149,000 | 151,000 | 151,000 | |||||
Weighted average shares used to compute Non-GAAP diluted (loss) earnings per share (in thousands) | 149,000 | 149,000 | 157,000 | 157,000 | |||||
Adjusted EBITDA ($ millions): | |||||||||
GAAP income from operations | $ (40.6) | $ (34.6) | $ (16.3) | $ (6.3) | |||||
Depreciation | 4.0 | 4.0 | 16.9 | 16.9 | |||||
Amortization of acquired intangible assets | 15.5 | 15.5 | 60.4 | 60.4 | |||||
Stock-based compensation | 5.5 | 5.5 | 25.7 | 25.7 | |||||
Acquisition-, disposal- and integration-related expense | 1.3 | 1.3 | 3.3 | 3.3 | |||||
Restructuring and related expense | 3.3 | 3.3 | 20.0 | 20.0 | |||||
Non-GAAP outlook | $ (11.0) | $ (5.0) | $ 110.0 | $ 120.0 | |||||
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SOURCE Ribbon Communications Inc.
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