SAN JOSE, Calif., Aug. 11, 2020 /PRNewswire/ -- Lumentum
Holdings Inc. ("Lumentum" or the "Company") today reported results
for its fiscal fourth quarter and full year ended June 27,
2020.
"Strong market demand and solid execution drove better than
projected results across all financial metrics in our fourth
quarter, especially gross margin and EPS," said Alan Lowe, President and CEO. "We head into
fiscal 2021 with demand increasingly driven by new products and
technologies, strengthened market positions, and an improving
financial model with accruing benefits from acquisition synergies.
We became a standalone public company five years ago and since then
have significantly improved our financial performance every year.
While we have accomplished a lot over the past five years, I
believe our future is brighter than ever."
Full Fiscal Year 2020 Highlights:
Net revenue for fiscal year 2020 was $1,678.6 million, with GAAP net income
attributable to common stockholders of $135.5 million, or $1.75 per diluted share. Net revenue for fiscal
year 2019 was $1,565.3 million, with
GAAP net loss attributable to common stockholders of $(37.9) million, or $(0.54) per diluted share. Results include the
impact of the Oclaro acquisition starting from December 10, 2018.
Non-GAAP net income for fiscal year 2020 was $420.5 million, or $5.42 per diluted share. Non-GAAP net income for
fiscal year 2019 was $305.4 million,
or $4.25 per diluted share.
Fiscal Fourth Quarter Highlights:
Net revenue for the fiscal fourth quarter of 2020 was
$368.1 million, with GAAP net loss
attributable to common stockholders of $(4.6) million, or $(0.06) per diluted share. Net revenue for the
fiscal third quarter of 2020 was $402.8
million, with GAAP net income of $43.4 million, or $0.56 per diluted share. Net revenue for the
fiscal fourth quarter of 2019 was $404.6
million, with GAAP net loss attributable to common
stockholders of $(25.8) million, or
$(0.34) per diluted share.
Non-GAAP net income for the fiscal fourth quarter of 2020 was
$91.7 million, or $1.18 per diluted share. Non-GAAP net income for
the fiscal third quarter of 2020 was $98.0
million, or $1.26 per diluted
share. Non-GAAP net income for the fiscal fourth quarter of 2019
was $70.4 million, or $0.91 per diluted share.
The Company held $1,553.8 million
in total cash, cash equivalents, and short-term investments at the
end of the fiscal fourth quarter of 2020, up $102.4 million from third quarter of 2020.
Financial Overview
– Fiscal Fourth Quarter Ended June 27, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Results ($ in
millions)
|
|
Q4
|
|
Q3
|
|
Q4
|
|
Change
|
|
FY
2020
|
|
FY
2020
|
|
FY
2019
|
|
Q/Q
|
|
Y/Y
|
Net
revenue
|
$
|
368.1
|
|
|
$
|
402.8
|
|
|
$
|
404.6
|
|
|
(8.6)%
|
|
(9.0)%
|
Gross
margin
|
36.9
|
%
|
|
39.2
|
%
|
|
21.5
|
%
|
|
(230)bps
|
|
1,540bps
|
Operating margin
(loss)
|
7.3
|
%
|
|
10.6
|
%
|
|
(3.4)
|
%
|
|
(330)bps
|
|
1,070bps
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Results
($ in millions)
|
|
Q4
|
|
Q3
|
|
Q4
|
|
Change
|
|
FY
2020
|
|
FY
2020
|
|
FY
2019
|
|
Q/Q
|
|
Y/Y
|
Net
revenue
|
$
|
368.1
|
|
|
$
|
402.8
|
|
|
$
|
404.6
|
|
|
(8.6)%
|
|
(9.0)%
|
Gross
margin
|
47.2
|
%
|
|
45.5
|
%
|
|
38.9
|
%
|
|
170bps
|
|
830bps
|
Operating
margin
|
24.8
|
%
|
|
25.0
|
%
|
|
19.0
|
%
|
|
(20)bps
|
|
580bps
|
|
Net Revenue by
Segment ($ in millions)
|
|
Q4
|
|
%
of
|
|
Q3
|
|
Q4
|
|
Change
|
|
FY
2020
|
|
Net
Revenue
|
|
FY
2020
|
|
FY
2019
|
|
Q/Q
|
|
Y/Y
|
Optical
Communications
|
$
|
330.3
|
|
|
89.7
|
%
|
|
$
|
359.3
|
|
|
$
|
356.8
|
|
|
(8.1)%
|
|
(7.4)%
|
Lasers
|
37.8
|
|
|
10.3
|
%
|
|
43.5
|
|
|
47.8
|
|
|
(13.1)%
|
|
(20.9)%
|
Total
|
$
|
368.1
|
|
|
100.0
|
%
|
|
$
|
402.8
|
|
|
$
|
404.6
|
|
|
(8.6)%
|
|
(9.0)%
|
Financial Overview
– Fiscal Year Ended June 27, 2020
|
|
|
|
|
GAAP Results ($ in
millions)
|
|
|
FY
2020
|
|
FY
2019
|
|
Change
Y/Y
|
|
Net
revenue
|
$
|
1,678.6
|
|
|
$
|
1,565.3
|
|
|
7.2%
|
|
Gross
margin
|
38.7
|
%
|
|
27.2
|
%
|
|
1,150bps
|
|
Operating margin
(loss)
|
12.2
|
%
|
|
(1.4)
|
%
|
|
1,360bps
|
|
|
|
|
|
|
Non-GAAP Results
($ in millions)
|
|
|
FY
2020
|
|
FY
2019
|
|
Change
Y/Y
|
|
Net
revenue
|
$
|
1,678.6
|
|
|
$
|
1,565.3
|
|
|
7.2%
|
|
Gross
margin
|
46.5
|
%
|
|
39.5
|
%
|
|
700bps
|
|
Operating
margin
|
26.6
|
%
|
|
20.5
|
%
|
|
610bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenue by
Segment ($ in millions)
|
|
|
FY
2020
|
|
FY
2019
|
|
Change
Y/Y
|
|
Optical
Communications
|
$
|
1,515.1
|
|
|
$
|
1,370.2
|
|
|
10.6%
|
|
Lasers
|
163.5
|
|
|
195.1
|
|
|
(16.2)%
|
|
Total
|
$
|
1,678.6
|
|
|
$
|
1,565.3
|
|
|
7.2%
|
|
The tables above provide comparisons of quarterly and annual
results to prior periods, including sequential quarterly and
year-over-year changes. A reconciliation between GAAP and non-GAAP
measures is contained in this release under the section titled "Use
of Non-GAAP Financial Measures."
Effective June 30, 2019, we
adopted Topic 842, using the modified retrospective transition
approach. We applied the new guidance to all leases existing as of
the date of adoption. Our reported results for the year ended
June 27, 2020 reflect the application of Topic 842, while
fiscal 2019 amounts have not been adjusted and continue to be
reported in accordance with our historical accounting under Topic
840.
Business Outlook
Lumentum expects the following for the fiscal first
quarter of 2021:
- Net revenue in the range of $430
million to $455
million
- Non-GAAP operating margin of 28.0% to 30.0%
- Non-GAAP diluted earnings per share of $1.40 to $1.55
We have not provided reconciliations from GAAP to non-GAAP
measures for our outlook. A large portion of non-GAAP adjustments,
such as restructuring charges, stock-based compensation,
acquisition-related costs, non-cash income tax expense and credits,
amortization of fair value adjustments, integration related costs,
impairment charges, inventory write down due to plans to exit
certain product lines and other costs and contingencies unrelated
to current and future operations are by their nature highly
volatile and we have low visibility as to the range that may be
incurred in the future.
Conference Call
Lumentum will host a conference call on August 11, 2020, at
5:30 am PT/8:30 am ET. A live webcast of the call and the
replay will be available on the Lumentum website at
http://investor.lumentum.com through August
18, 2020, at 11:59 pm ET. To
listen to the live conference call, dial (866) 270-1533 or (412)
317-0797 and reference the passcode 10146626. To access the replay,
dial (877) 344-7529 or (412) 317-0088 and reference the passcode
10146626. Supporting materials outlining the Company's latest
financial results will be posted on http://investor.lumentum.com
under the "Events and Presentations" section concurrently with this
earnings press release. Lumentum has used, and intends to continue
to use, its Investor Relations website as means of disclosing
material nonpublic information and for complying with its
disclosure obligations under Regulation FD. This press release is
being furnished as an exhibit to a Current Report on Form 8-K filed
with the Securities and Exchange Commission and will be available
at http://www.sec.gov/.
About Lumentum
Lumentum (NASDAQ: LITE) is a market-leading designer and
manufacturer of innovative optical and photonic products enabling
optical networking and laser applications worldwide. Lumentum
optical components and subsystems are part of virtually every type
of telecom, enterprise, and data center network. Lumentum
lasers enable advanced manufacturing techniques and diverse
applications including next-generation 3D sensing
capabilities. Lumentum is headquartered in San Jose, California with R&D,
manufacturing, and sales offices worldwide. For more
information, visit www.lumentum.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These
statements include strategies and our expectations with regard to
such strategies, our expectations for our markets, any anticipation
or guidance as to demand for our products and technology, future
financial performance, including the general trends and dynamics in
our business and the industries in which we operate, and our
guidance with respect to future net revenue, earnings per share,
and operating margins, anticipated trends in our markets and our
market position, and the impact of the COVID-19 pandemic and
related responses of businesses and governments to the pandemic on
our markets, operations, and future financial performance. These
forward-looking statements involve risks and uncertainties that
could cause actual results to differ materially from those
projected. Among the factors that could cause actual results to
differ from those contemplated are: (a) the COVID-19 pandemic and
related impacts, which may continue to adversely impact our
business, financial performance and results of operations; (b)
quarter-over-quarter product mix fluctuations which can materially
impact profitability measures due to the broad gross margin ranges
across our portfolio; (c) continued decline of average selling
prices across our businesses; (d) effects of seasonality;
(e) the ability of our suppliers and contract manufacturers to
meet production and delivery requirements for our forecasted
demand; (f) inherent uncertainty related to global markets,
including the impact of the COVID-19 pandemic, changes in the
political or economic environment and the imposition of tariffs or
other duties, and the effect of such markets on demand for our
products; (g) changes in customer demand; (h) our ability to
attract and retain new customers, particularly in the 3D sensing
market; (i) the risk that synergies and non-GAAP earnings accretion
related to the acquisition of Oclaro will not be realized or
realized to the extent anticipated or that we will incur
significant costs and charges to achieve such synergies; and (j)
the risk that Lumentum's financing or operating strategies will not
be successful. For more information on these and other risks,
please refer to the "Risk Factors" section included in the
Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 28, 2020 filed with the Securities and Exchange
Commission, and in the Company's other filings with the Securities
and Exchange Commission, including the Company's Annual Report on
Form 10-K for the fiscal year ended June 27, 2020, which will
be filed within sixty days of our fiscal year end. The
forward-looking statements and preliminary financial results
contained in this press release are made as of the date hereof and
the Company assumes no obligation to update such statements, except
as required by applicable law.
Contact Information
Investors: Jim Fanucchi, 408-404-5400;
investor.relations@lumentum.com
Media:
Sean Ogarrio,
408-546-5405; media@lumentum.com
The following financial tables are presented in accordance with
GAAP, unless otherwise specified.
LUMENTUM HOLDINGS
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in millions,
except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
June 27,
2020
|
|
June 29,
2019
|
|
June 27,
2020
|
|
June 29,
2019
|
Net
revenue
|
$
|
368.1
|
|
|
$
|
404.6
|
|
|
$
|
1,678.6
|
|
|
$
|
1,565.3
|
|
Cost of
sales
|
217.4
|
|
|
304.6
|
|
|
974.6
|
|
|
1,092.9
|
|
Amortization of
acquired developed intangibles
|
15.0
|
|
|
13.2
|
|
|
53.8
|
|
|
46.5
|
|
Gross
profit
|
135.7
|
|
|
86.8
|
|
|
650.2
|
|
|
425.9
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
49.0
|
|
|
49.5
|
|
|
198.6
|
|
|
184.6
|
|
Selling, general and
administrative
|
54.8
|
|
|
49.4
|
|
|
235.2
|
|
|
200.3
|
|
Restructuring and related
charges
|
3.1
|
|
|
1.7
|
|
|
8.0
|
|
|
31.9
|
|
Impairment charges
|
1.8
|
|
|
—
|
|
|
4.3
|
|
|
30.7
|
|
Total operating
expenses
|
108.7
|
|
|
100.6
|
|
|
446.1
|
|
|
447.5
|
|
Income (loss) from
operations
|
27.0
|
|
|
(13.8)
|
|
|
204.1
|
|
|
(21.6)
|
|
Unrealized gain on
derivative liability
|
—
|
|
|
—
|
|
|
—
|
|
|
8.8
|
|
Interest
expense
|
(15.9)
|
|
|
(11.4)
|
|
|
(61.2)
|
|
|
(36.3)
|
|
Other income,
net
|
3.5
|
|
|
4.1
|
|
|
31.4
|
|
|
15.8
|
|
Income (loss) before
income taxes
|
14.6
|
|
|
(21.1)
|
|
|
174.3
|
|
|
(33.3)
|
|
Provision for income
taxes
|
19.2
|
|
|
4.7
|
|
|
38.8
|
|
|
3.1
|
|
Net income
(loss)
|
(4.6)
|
|
|
(25.8)
|
|
|
135.5
|
|
|
(36.4)
|
|
|
|
|
|
|
|
|
|
Items reconciling net
income (loss) to net income (loss) attributable to common
stockholders:
|
|
|
|
|
|
|
|
Less: Cumulative
dividends on Series A Preferred Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3)
|
|
Less: Earnings
allocated to Series A Preferred Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.2)
|
|
Net income (loss)
attributable to common stockholders - Basic and Diluted
|
$
|
(4.6)
|
|
|
$
|
(25.8)
|
|
|
$
|
135.5
|
|
|
$
|
(37.9)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share attributable to common stockholders:
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.06)
|
|
|
$
|
(0.34)
|
|
|
$
|
1.79
|
|
|
$
|
(0.54)
|
|
Diluted
|
$
|
(0.06)
|
|
|
$
|
(0.34)
|
|
|
$
|
1.75
|
|
|
$
|
(0.54)
|
|
|
|
|
|
|
|
|
|
Shares used to
compute net income (loss) per share attributable to common
stockholders:
|
|
|
|
|
|
|
|
Basic
|
75.0
|
|
|
76.5
|
|
|
75.9
|
|
|
70.7
|
|
Diluted
|
75.0
|
|
|
76.5
|
|
|
77.6
|
|
|
70.7
|
|
LUMENTUM HOLDINGS
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in millions,
except share and per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
June 27,
2020
|
|
June 29,
2019
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
298.0
|
|
|
$
|
432.6
|
|
Short-term
investments
|
1,255.8
|
|
|
335.9
|
|
Accounts receivable,
net
|
233.5
|
|
|
238.0
|
|
Inventories
|
188.9
|
|
|
228.8
|
|
Prepayments and other
current assets
|
73.8
|
|
|
97.5
|
|
Total current
assets
|
2,050.0
|
|
|
1,332.8
|
|
Property, plant and
equipment, net
|
393.0
|
|
|
433.3
|
|
Operating lease
right-of-use assets, net
|
78.7
|
|
|
—
|
|
Goodwill
|
368.9
|
|
|
368.9
|
|
Other intangible
assets, net
|
316.8
|
|
|
395.4
|
|
Deferred income
taxes
|
81.2
|
|
|
169.6
|
|
Other non-current
assets
|
4.0
|
|
|
16.6
|
|
Total
assets
|
$
|
3,292.6
|
|
|
$
|
2,716.6
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
150.8
|
|
|
$
|
160.8
|
|
Accrued payroll and
related expenses
|
53.4
|
|
|
42.3
|
|
Accrued
expenses
|
23.7
|
|
|
46.7
|
|
Term loan,
current
|
—
|
|
|
5.0
|
|
Operating lease
liabilities, current
|
10.8
|
|
|
—
|
|
Other current
liabilities
|
44.3
|
|
|
39.2
|
|
Total current
liabilities
|
283.0
|
|
|
294.0
|
|
Convertible
notes
|
1,120.3
|
|
|
351.9
|
|
Term loan,
non-current
|
—
|
|
|
484.0
|
|
Operating lease
liabilities, non-current
|
57.6
|
|
|
—
|
|
Deferred tax
liability
|
46.5
|
|
|
55.9
|
|
Other non-current
liabilities
|
36.0
|
|
|
33.7
|
|
Total
liabilities
|
1,543.4
|
|
|
1,219.5
|
|
Commitments and
contingencies
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common stock, $0.001
par value, 990,000,000 authorized shares, 75,100,664 and 76,653,478
shares issued and outstanding as of June 27, 2020 and June 29,
2019, respectively
|
0.1
|
|
|
0.1
|
|
Additional paid-in
capital
|
1,676.6
|
|
|
1,360.8
|
|
Retained
earnings
|
64.6
|
|
|
129.1
|
|
Accumulated other
comprehensive income
|
7.9
|
|
|
7.1
|
|
Total stockholders'
equity
|
1,749.2
|
|
|
1,497.1
|
|
Total liabilities and
stockholders' equity
|
$
|
3,292.6
|
|
|
$
|
2,716.6
|
|
Use of Non-GAAP Financial Measures
In this press release, Lumentum provides investors with gross
margin, gross profit, research and development expense, selling,
general and administrative expense, operating margin, operating
income, interest and other income (expense), net, income before
income taxes and certain expenses, provision for taxes, net income,
and net income per share on a non-GAAP basis as well as the
non-GAAP measure of Adjusted EBITDA. Lumentum believes this
non-GAAP financial information provides additional insight into the
Company's on-going business operations and results, as well as cash
generation, and has therefore chosen to provide this information to
investors for a more consistent basis of comparison and to help
them evaluate the results of the Company's on-going operations and
enable more meaningful period to period comparisons. Specifically,
the Company believes that providing this information allows
investors to better understand the Company's cash flows and,
importantly, to evaluate the efficacy of the methodology and
information used by management to evaluate and measure such cash
flows. However, these measures may be different from non-GAAP
measures used by other companies, limiting their usefulness for
comparison purposes. The non-GAAP financial measures used in this
press release should not be considered in isolation from measures
of financial performance prepared in accordance with GAAP.
Investors are cautioned that there are material limitations
associated with the use of non-GAAP financial measures as an
analytical tool. In particular, many of the adjustments to our GAAP
financial measures reflect the exclusion of items that are
recurring and will be reflected in our financial results for the
foreseeable future. Further, these non-GAAP financial measures may
not be comparable to similarly titled measurements reported by
other companies.
Non-GAAP gross margin, non-GAAP gross profit, non-GAAP expenses,
non-GAAP operating margin, non-GAAP operating income, non-GAAP
income before income taxes, non-GAAP net income, and non-GAAP net
income per share and Adjusted EBITDA exclude (i) stock-based
compensation, (ii) inventory write-downs and fixed asset impairment
due to cancelled programs, plans to exit certain lines of business
and other costs and contingencies unrelated to current and future
operations, (iii) acquisition and disposition related costs, (iv)
integration related costs, (v) amortization of acquired
intangibles, (vi) amortization of fair value adjustments, (vii)
restructuring and related charges, (viii) non-cash interest
expense, (ix) foreign exchange (gains) losses, net, (x) impairment
charges, (xi) transferring product lines to Thailand, (xii) excess and obsolete inventory
charges driven by the decline in demand from Huawei, (xiii) certain
expenses related to the COVID-19 outbreak, and (xiv) non-cash
income tax provision impacts. The presentation of these and other
similar items in Lumentum's non-GAAP financial results should not
be interpreted as implying that these items are non-recurring,
infrequent or unusual.
A quantitative reconciliation between GAAP and non-GAAP
financial data with respect to historical periods is included in
the supplemental financial table attached to this press
release.
LUMENTUM HOLDINGS
INC.
|
RECONCILIATION OF
GAAP MEASURES TO NON-GAAP MEASURES
|
(in millions,
except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
June 27, 2020
|
|
March 28,
2020
|
|
June 29, 2019
|
|
June 27, 2020
|
|
June 29, 2019
|
|
|
|
|
|
|
|
|
|
|
Gross profit on
GAAP basis
|
$
|
135.7
|
|
|
$
|
157.7
|
|
|
$
|
86.8
|
|
|
$
|
650.2
|
|
|
$
|
425.9
|
|
Stock-based
compensation
|
3.5
|
|
|
4.3
|
|
|
3.4
|
|
|
16.1
|
|
|
15.1
|
|
Inventory and fixed
asset write down due to product lines exit
(1)
|
1.0
|
|
|
2.3
|
|
|
1.4
|
|
|
7.0
|
|
|
20.8
|
|
Integration related
costs
|
1.8
|
|
|
(0.3)
|
|
|
3.8
|
|
|
4.9
|
|
|
6.6
|
|
Amortization of
acquired intangibles
|
15.0
|
|
|
13.9
|
|
|
13.3
|
|
|
53.8
|
|
|
46.6
|
|
Amortization of fair
value adjustments (2)
|
—
|
|
|
1.5
|
|
|
38.8
|
|
|
5.8
|
|
|
54.6
|
|
Expenses related to
COVID-19 outbreak (3)
|
5.0
|
|
|
1.6
|
|
|
—
|
|
|
6.6
|
|
|
—
|
|
Other charges
(4)
|
11.9
|
|
|
2.4
|
|
|
9.9
|
|
|
35.8
|
|
|
48.9
|
|
Gross profit on
non-GAAP basis
|
$
|
173.9
|
|
|
$
|
183.4
|
|
|
$
|
157.4
|
|
|
$
|
780.2
|
|
|
$
|
618.5
|
|
Gross margin on
non-GAAP basis
|
47.2
|
%
|
|
45.5
|
%
|
|
38.9
|
%
|
|
46.5
|
%
|
|
39.5
|
%
|
|
|
|
|
|
|
|
|
|
|
Research and
development on GAAP basis
|
$
|
49.0
|
|
|
$
|
48.7
|
|
|
$
|
49.5
|
|
|
$
|
198.6
|
|
|
$
|
184.6
|
|
Stock-based
compensation
|
(3.8)
|
|
|
(4.2)
|
|
|
(3.1)
|
|
|
(15.9)
|
|
|
(13.8)
|
|
Expenses related to
COVID-19 outbreak (3)
|
(0.5)
|
|
|
—
|
|
|
—
|
|
|
(0.5)
|
|
|
—
|
|
Other
charges
|
1.2
|
|
|
(0.2)
|
|
|
—
|
|
|
1.1
|
|
|
(0.7)
|
|
Research and
development on non-GAAP basis
|
$
|
45.9
|
|
|
$
|
44.3
|
|
|
$
|
46.4
|
|
|
$
|
183.3
|
|
|
$
|
170.1
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general
and administrative on GAAP basis
|
$
|
54.8
|
|
|
$
|
61.3
|
|
|
$
|
49.4
|
|
|
$
|
235.2
|
|
|
$
|
200.3
|
|
Stock-based
compensation
|
(9.8)
|
|
|
(10.7)
|
|
|
(7.7)
|
|
|
(41.2)
|
|
|
(41.8)
|
|
Acquisition related
costs
|
—
|
|
|
—
|
|
|
(0.3)
|
|
|
—
|
|
|
(15.6)
|
|
Integration related
costs
|
(1.1)
|
|
|
(5.0)
|
|
|
(1.7)
|
|
|
(12.2)
|
|
|
(3.0)
|
|
Amortization of
acquired intangibles
|
(6.2)
|
|
|
(6.1)
|
|
|
(3.6)
|
|
|
(24.8)
|
|
|
(8.0)
|
|
Other
charges
|
(1.1)
|
|
|
(1.1)
|
|
|
(1.8)
|
|
|
(6.9)
|
|
|
(4.1)
|
|
Selling, general
and administrative on non-GAAP basis
|
$
|
36.6
|
|
|
$
|
38.4
|
|
|
$
|
34.3
|
|
|
$
|
150.1
|
|
|
$
|
127.8
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations on GAAP basis
|
$
|
27.0
|
|
|
$
|
42.5
|
|
|
$
|
(13.8)
|
|
|
$
|
204.1
|
|
|
$
|
(21.6)
|
|
Stock-based
compensation
|
17.1
|
|
|
19.2
|
|
|
14.2
|
|
|
73.2
|
|
|
70.7
|
|
Inventory and fixed
asset write down due to product lines exit
(1)
|
1.0
|
|
|
2.3
|
|
|
1.4
|
|
|
7.0
|
|
|
20.8
|
|
Acquisition related
costs
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
15.6
|
|
Integration related
costs
|
2.9
|
|
|
4.7
|
|
|
5.5
|
|
|
17.1
|
|
|
9.6
|
|
Amortization of
acquired intangibles
|
21.2
|
|
|
20.0
|
|
|
16.9
|
|
|
78.6
|
|
|
54.6
|
|
Amortization of fair
value adjustments (2)
|
—
|
|
|
1.5
|
|
|
38.8
|
|
|
5.8
|
|
|
54.6
|
|
Restructuring and
related charges
|
3.1
|
|
|
2.7
|
|
|
1.7
|
|
|
8.0
|
|
|
31.9
|
|
Expenses related to
COVID-19 outbreak (3)
|
5.5
|
|
|
1.6
|
|
|
—
|
|
|
7.1
|
|
|
—
|
|
Impairment charge
(5)
|
1.8
|
|
|
2.5
|
|
|
—
|
|
|
4.3
|
|
|
30.7
|
|
Other
charges
|
11.8
|
|
|
3.7
|
|
|
11.7
|
|
|
41.6
|
|
|
53.7
|
|
Income from
operations on non-GAAP basis
|
$
|
91.4
|
|
|
$
|
100.7
|
|
|
$
|
76.7
|
|
|
$
|
446.8
|
|
|
$
|
320.6
|
|
Operating margin on
non-GAAP basis
|
24.8
|
%
|
|
25.0
|
%
|
|
19.0
|
%
|
|
26.6
|
%
|
|
20.5
|
%
|
|
Interest and other
(expense) income, net on GAAP basis
|
$
|
(12.4)
|
|
|
$
|
6.1
|
|
|
$
|
(7.3)
|
|
|
$
|
(29.8)
|
|
|
$
|
(20.5)
|
|
Other interest and
(income) expense adjustments
|
—
|
|
|
(2.0)
|
|
|
—
|
|
|
(2.0)
|
|
|
(0.5)
|
|
Gain on sale of
product lines
|
(0.7)
|
|
|
(13.8)
|
|
|
—
|
|
|
(14.5)
|
|
|
—
|
|
Foreign exchange
(gains) losses, net (6)
|
1.1
|
|
|
(0.7)
|
|
|
(0.4)
|
|
|
1.4
|
|
|
0.6
|
|
Non-cash interest
expense on convertible notes and term loan
|
14.3
|
|
|
14.0
|
|
|
4.9
|
|
|
47.6
|
|
|
18.5
|
|
Interest and other
(expense) income, net on non-GAAP basis
|
$
|
2.3
|
|
|
$
|
3.6
|
|
|
$
|
(2.8)
|
|
|
$
|
2.7
|
|
|
$
|
(1.9)
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
before income taxes on GAAP basis
|
$
|
14.6
|
|
|
$
|
48.6
|
|
|
$
|
(21.1)
|
|
|
$
|
174.3
|
|
|
$
|
(33.3)
|
|
Stock-based
compensation
|
17.1
|
|
|
19.2
|
|
|
14.2
|
|
|
73.2
|
|
|
70.7
|
|
Inventory and fixed
asset write down due to product lines exit
(1)
|
1.0
|
|
|
2.3
|
|
|
1.4
|
|
|
7.0
|
|
|
20.8
|
|
Acquisition related
costs
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
15.6
|
|
Integration related
costs
|
2.9
|
|
|
4.7
|
|
|
5.5
|
|
|
17.1
|
|
|
9.6
|
|
Amortization of
acquired intangibles
|
21.2
|
|
|
20.0
|
|
|
16.9
|
|
|
78.6
|
|
|
54.6
|
|
Amortization of fair
value adjustments (2)
|
—
|
|
|
1.5
|
|
|
38.8
|
|
|
5.8
|
|
|
54.6
|
|
Restructuring and
related charges
|
3.1
|
|
|
2.7
|
|
|
1.7
|
|
|
8.0
|
|
|
31.9
|
|
Expenses related to
COVID-19 outbreak (3)
|
5.5
|
|
|
1.6
|
|
|
—
|
|
|
7.1
|
|
|
—
|
|
Impairment charge
(5)
|
1.8
|
|
|
2.5
|
|
|
—
|
|
|
4.3
|
|
|
30.7
|
|
Other interest and
(income) expense adjustments
|
—
|
|
|
(2.0)
|
|
|
—
|
|
|
(2.0)
|
|
|
(0.5)
|
|
Gain on sale of
product lines
|
(0.7)
|
|
|
(13.8)
|
|
|
—
|
|
|
(14.5)
|
|
|
—
|
|
Foreign exchange
(gains) losses, net (6)
|
1.1
|
|
|
(0.7)
|
|
|
(0.4)
|
|
|
1.4
|
|
|
0.6
|
|
Non-cash interest
expense on convertible notes and term loan
|
14.3
|
|
|
14.0
|
|
|
4.9
|
|
|
47.6
|
|
|
18.5
|
|
Unrealized gain on
derivative liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8.8)
|
|
Other
charges
|
11.8
|
|
|
3.7
|
|
|
11.7
|
|
|
41.6
|
|
|
53.7
|
|
Income before
income taxes on non-GAAP basis
|
$
|
93.7
|
|
|
$
|
104.3
|
|
|
$
|
73.9
|
|
|
$
|
449.5
|
|
|
$
|
318.7
|
|
|
|
|
|
|
|
|
|
|
|
Provision for
income taxes on GAAP basis
|
$
|
19.2
|
|
|
$
|
5.2
|
|
|
$
|
4.7
|
|
|
$
|
38.8
|
|
|
$
|
3.1
|
|
Income tax
adjustments
|
(17.2)
|
|
|
1.1
|
|
|
(1.2)
|
|
|
(9.8)
|
|
|
10.2
|
|
Provision for
income taxes on non-GAAP basis
|
$
|
2.0
|
|
|
$
|
6.3
|
|
|
$
|
3.5
|
|
|
$
|
29.0
|
|
|
$
|
13.3
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
on GAAP basis
|
$
|
(4.6)
|
|
|
$
|
43.4
|
|
|
$
|
(25.8)
|
|
|
$
|
135.5
|
|
|
$
|
(36.4)
|
|
Stock-based
compensation
|
17.1
|
|
|
19.2
|
|
|
14.2
|
|
|
73.2
|
|
|
70.7
|
|
Inventory and fixed
asset write down due to product lines exit
(1)
|
1.0
|
|
|
2.3
|
|
|
1.4
|
|
|
7.0
|
|
|
20.8
|
|
Acquisition related
costs
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
15.6
|
|
Integration related
costs
|
2.9
|
|
|
4.7
|
|
|
5.5
|
|
|
17.1
|
|
|
9.6
|
|
Amortization of
acquired intangibles
|
21.2
|
|
|
20.0
|
|
|
16.9
|
|
|
78.6
|
|
|
54.6
|
|
Amortization of fair
value adjustments (2)
|
—
|
|
|
1.5
|
|
|
38.8
|
|
|
5.8
|
|
|
54.6
|
|
Restructuring and
related charges
|
3.1
|
|
|
2.7
|
|
|
1.7
|
|
|
8.0
|
|
|
31.9
|
|
Expenses related to
COVID-19 outbreak (3)
|
5.5
|
|
|
1.6
|
|
|
—
|
|
|
7.1
|
|
|
—
|
|
Impairment charge
(5)
|
1.8
|
|
|
2.5
|
|
|
—
|
|
|
4.3
|
|
|
30.7
|
|
Other interest and
(income) expense adjustments
|
—
|
|
|
(2.0)
|
|
|
—
|
|
|
(2.0)
|
|
|
(0.5)
|
|
Gain on sale of
product lines
|
(0.7)
|
|
|
(13.8)
|
|
|
—
|
|
|
(14.5)
|
|
|
—
|
|
Foreign exchange
(gains) losses, net (6)
|
1.1
|
|
|
(0.7)
|
|
|
(0.4)
|
|
|
1.4
|
|
|
0.6
|
|
Non-cash interest
expense on convertible notes and term loan
|
14.3
|
|
|
14.0
|
|
|
4.9
|
|
|
47.6
|
|
|
18.5
|
|
Unrealized gain on
derivative liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8.8)
|
|
Other
charges
|
11.8
|
|
|
3.7
|
|
|
11.7
|
|
|
41.6
|
|
|
53.7
|
|
Income tax
adjustments
|
17.2
|
|
|
(1.1)
|
|
|
1.2
|
|
|
9.8
|
|
|
(10.2)
|
|
Net income on
non-GAAP basis
|
$
|
91.7
|
|
|
$
|
98.0
|
|
|
$
|
70.4
|
|
|
$
|
420.5
|
|
|
$
|
305.4
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share on non-GAAP basis
|
$
|
1.18
|
|
|
$
|
1.26
|
|
|
$
|
0.91
|
|
|
$
|
5.42
|
|
|
$
|
4.25
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per
share calculation - diluted on GAAP basis
|
75.0
|
|
|
77.5
|
|
|
76.5
|
|
|
77.6
|
|
|
70.7
|
|
Non-GAAP adjustment
(7)
|
2.5
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
Effect of diluted
securities from Series A Preferred Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
Shares used in per
share calculation - diluted on non-GAAP basis
|
77.5
|
|
|
77.5
|
|
|
77.1
|
|
|
77.6
|
|
|
71.8
|
|
|
(1) For the three and
twelve months ended June 27, 2020, we recorded inventory and
fixed asset write down charges of $1.0 million and $7.0 million,
respectively, related to the decision to exit the Datacom module
and Lithium Niobate product lines.
|
|
(2) In connection
with the acquisition of Oclaro in fiscal 2019, we recorded a fair
value adjustment of $60.3 million to inventory, resulting in $5.8
million of amortization expense of the fair value adjustment during
the twelve months ended June 27, 2020.
|
|
(3) During the three
and twelve months ended June 27, 2020, we recorded expenses of
$5.5 million and $7.1 million, respectively, related to the
COVID-19 outbreak, which included incremental costs for payroll
expense such as overtime pay, pay for employees who are not
working, facilities costs such as gloves, masks and temperature
gauges, and under-utilized capacity at certain facilities, in which
manufacturing output was impacted. These COVID-19 related costs
were partially offset by benefits realized from government credits
for employers' payroll tax.
|
|
(4) Other adjustments
to gross profit on a non-GAAP basis for the three and twelve months
ended June 27, 2020, primarily include costs of transferring
product lines to new production facilities, including Thailand of
$3.0 million and $11.5 million, respectively. We also incurred
excess and obsolete inventory charges driven by the decline in
demand from Huawei $12.8 million during the twelve months ended
June 27, 2020. In addition, during the three months ended
June 27, 2020, we incurred $6.2 million impairment charges
associated with excess capacity related to our Fiber laser
business. Other charges to gross profit on a non-GAAP basis for the
three and twelve months ended June 29, 2019, included costs of
transferring product lines to Thailand of $7.3 million and $45.8
million, respectively.
|
|
(5) For the twelve
months ended June 27, 2020 and June 29, 2019, we recorded
impairment charges of $4.3 million and $30.7 million, respectively,
in property, plant and equipment related to the decision to exit
the Datacom module product line.
|
|
(6) The non-GAAP
financial measures for the three and twelve months ended June 29,
2019 have been adjusted to conform to the current period
presentation, by removing foreign exchange (gains) losses,
net.
|
|
(7) This adjustment
represents weighted-average potentially dilutive securities from
our stock-based benefit plans excluded from the computation of
diluted net loss per share attributable to common stockholders on a
GAAP basis because the effect would have been anti-dilutive. This
adjustment amount is added for the computation of diluted net
income per share on a non-GAAP basis as we had a net income on a
non-GAAP basis.
|
LUMENTUM HOLDINGS
INC.
|
RECONCILIATION OF
GAAP NET INCOME (LOSS) TO EBITDA
|
(in millions,
except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
June 27, 2020
|
|
March
28, 2020
|
|
June 29, 2019
|
|
June 27, 2020
|
|
June 29, 2019
|
GAAP Net income
(loss)
|
$
|
(4.6)
|
|
|
$
|
43.4
|
|
|
$
|
(25.8)
|
|
|
$
|
135.5
|
|
|
$
|
(36.4)
|
|
Interest and other
expense (income), net
|
12.4
|
|
|
(6.1)
|
|
|
7.3
|
|
|
29.8
|
|
|
20.5
|
|
Provision for
(benefit from) income taxes
|
19.2
|
|
|
5.2
|
|
|
4.7
|
|
|
38.8
|
|
|
3.1
|
|
Depreciation
|
25.5
|
|
|
27.5
|
|
|
28.2
|
|
|
113.3
|
|
|
102.9
|
|
Amortization of
acquired intangibles
|
21.2
|
|
|
20.0
|
|
|
16.9
|
|
|
78.6
|
|
|
54.6
|
|
EBITDA
|
73.7
|
|
|
90.0
|
|
|
31.3
|
|
|
396.0
|
|
|
144.7
|
|
Amortization of fair
value adjustments
|
—
|
|
|
1.5
|
|
|
38.8
|
|
|
5.8
|
|
|
54.6
|
|
Restructuring and
related charges
|
3.1
|
|
|
2.7
|
|
|
1.7
|
|
|
8.0
|
|
|
31.9
|
|
Stock-based
compensation
|
17.1
|
|
|
19.2
|
|
|
14.2
|
|
|
73.2
|
|
|
70.7
|
|
Acquisition related
costs
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
15.6
|
|
Unrealized gain on
derivative liability
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8.8)
|
|
Inventory and fixed
asset write down due to product lines exit
|
1.0
|
|
|
2.3
|
|
|
1.4
|
|
|
7.0
|
|
|
20.8
|
|
Integration related
costs
|
2.9
|
|
|
4.7
|
|
|
5.5
|
|
|
17.1
|
|
|
9.6
|
|
Impairment
charges
|
1.8
|
|
|
2.5
|
|
|
—
|
|
|
4.3
|
|
|
30.7
|
|
Expenses related to
COVID-19 outbreak
|
5.5
|
|
|
1.6
|
|
|
—
|
|
|
7.1
|
|
|
—
|
|
Other
charges
|
11.8
|
|
|
3.7
|
|
|
11.7
|
|
|
41.6
|
|
|
53.7
|
|
Adjusted
EBITDA
|
$
|
116.9
|
|
|
$
|
128.2
|
|
|
$
|
104.9
|
|
|
$
|
560.1
|
|
|
$
|
423.5
|
|
View original
content:http://www.prnewswire.com/news-releases/lumentum-announces-fiscal-fourth-quarter-and-full-year-2020-results-301109609.html
SOURCE Lumentum