MILPITAS, Calif., May 7,
2019 /PRNewswire/ -- Lumentum Holdings Inc. ("Lumentum" or the
"Company") today reported results for its fiscal third quarter
ended March 30, 2019.
Net revenue for the fiscal third quarter of 2019 was
$432.9 million, with GAAP net loss
attributable to common stockholders of $(74.3) million, or $(0.98) per diluted share. Net revenue for the
fiscal second quarter of 2019 was $373.7
million, with GAAP net income attributable to common
stockholders of $5.4 million, or
$0.08 per diluted share. Net revenue
for the fiscal third quarter of 2018 was $298.8 million, with GAAP net income attributable
to common stockholders of $2.4
million, or $0.04 per diluted
share.
Non-GAAP net income for the fiscal third quarter of 2019 was
$69.9 million, or $0.91 per diluted share. Non-GAAP net income for
the fiscal second quarter of 2019 was $78.3
million, or $1.15 per diluted
share. Non-GAAP net income for the fiscal third quarter of 2018 was
$50.6 million, or $0.78 per diluted share.
The Company held $697.5 million in
total cash and short-term investments at the end of the fiscal
third quarter of 2019.
"The third quarter continued a theme that started more than a
year ago for our ROADM and fiber laser product lines. For the fifth
quarter in a row, we achieved double digit sequential, quarterly
revenue growth and new record revenues for these product lines
driven by strong customer demand for our new and differentiated
products," said Alan Lowe, President
and CEO. "The third quarter was the first full quarter since
completion of the acquisition of Oclaro. We made solid
progress on integrating the companies and attaining synergies,
including the divestiture and planned exit of certain datacom
product lines. This continued progress results in our fourth
quarter projected operating margins being sequentially higher on
lower revenues after the divestiture and positions us well for
achieving our long-term strategic goals."
Financial Overview – Fiscal Third Quarter Ended
March 30, 2019
|
GAAP Results ($ in
millions)
|
|
Q3
|
|
Q2
|
|
Q3
|
|
Change
|
|
FY
2019
|
|
FY
2019
|
|
FY
2018
|
|
Q/Q
|
|
Y/Y
|
Net
revenue
|
$432.9
|
|
$373.7
|
|
$298.8
|
|
15.8%
|
|
44.9%
|
Gross
margin
|
20.4%
|
|
33.4%
|
|
32.5%
|
|
(1300)bps
|
|
(1210)bps
|
Operating margin
(loss)
|
(17.6)%
|
|
3.1%
|
|
8.5%
|
|
(2070)bps
|
|
(2610)bps
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Results
($ in millions)
|
|
Q3
|
|
Q2
|
|
Q3
|
|
Change
|
|
FY
2019
|
|
FY
2019
|
|
FY
2018
|
|
Q/Q
|
|
Y/Y
|
Net
revenue
|
$432.9
|
|
$373.7
|
|
$298.8
|
|
15.8%
|
|
44.9%
|
Gross
margin
|
39.0%
|
|
40.1%
|
|
36.3%
|
|
(110)bps
|
|
270bps
|
Operating
margin
|
17.8%
|
|
22.0%
|
|
16.5%
|
|
(420)bps
|
|
130bps
|
|
Net Revenue by
Segment ($ in millions)
|
|
Q3
|
|
%
of
|
|
Q2
|
|
Q3
|
|
Change
|
|
FY
2019
|
|
Net
Revenue
|
|
FY
2019
|
|
FY
2018
|
|
Q/Q
|
|
Y/Y
|
Optical
Communications
|
$377.9
|
|
87.3%
|
|
$325.4
|
|
$246.3
|
|
16.1%
|
|
53.4%
|
Lasers
|
55.0
|
|
12.7%
|
|
48.3
|
|
52.5
|
|
13.9%
|
|
4.8%
|
Total
|
$432.9
|
|
100.0%
|
|
$373.7
|
|
$298.8
|
|
15.8%
|
|
44.9%
|
The tables above provide comparisons of quarterly 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."
On July 1, 2018, we adopted
Accounting Standards Update (ASU) 2014-09, Revenue from Contracts
with Customers (Topic 606) using the modified retrospective method
applied to all contracts that are not completed contracts at the
date of initial adoption(i.e., July 1,
2018). Results for reporting periods after July 1, 2018 are presented under Topic 606, while
prior period amounts are not adjusted and continue to be reported
in accordance with our historic accounting under Topic 605. The
adoption of Topic 606 did not have a material impact on the nature
and timing of our revenues, consolidated statements of operations,
cash flows, and balance sheet and therefore, we do not present
results for the three and nine months ended March 30, 2019 under Topic 605.
Business Outlook For Fiscal Fourth Quarter 2019
During the fiscal third quarter and in the fiscal fourth quarter
to date, Lumentum executed a series of strategic actions related to
a shift in its datacom strategy to focus on photonic chip sales.
These strategic actions include completing the divestiture of
certain datacom product lines to Cambridge Industries Group (CIG)
on April 18, 2019. A result of these
strategic actions is lower on-going revenue from its datacom
product lines.
Lumentum expects the following for the fiscal fourth
quarter 2019:
- Net revenue in the range of $405
million to $425 million which
includes a $20 million to
$25 million reduction from recent
datacom strategic actions
- Non-GAAP operating margin of 18.0% to 20.0%
- Non-GAAP diluted earnings per share of $0.85 to $1.00
We have not provided reconciliations from GAAP to non-GAAP
measures for our outlook. A large portion of non-GAAP adjustments,
such as derivative liability adjustments, restructuring charges,
stock-based compensation, acquisition-related costs, non-cash
income tax expense and credits, transferring product lines to
Thailand, amortization of fair
value adjustments, 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. For example, in the
fiscal second quarter of 2018, we had a credit of $207.0 million primarily related to a release of
a U.S. valuation allowance, which was offset by a write-down of
deferred tax assets in the amount of $83.0
million due to the lower corporate tax rate enacted under
the 2017 "Tax Cuts and Jobs Act" reform.
Conference Call
Lumentum will host a conference call on May 7, 2019, 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 May 14,
2019, at 11:59 pm ET.
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. 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's optical components and subsystems are part of virtually
every type of telecom, enterprise, and data center network.
Lumentum's lasers enable advanced manufacturing techniques and
diverse applications including next-generation 3D sensing
capabilities. Lumentum is headquartered in Milpitas, 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, future financial
performance, including the general trends 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, and
anticipated trends in our markets. 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) quarter-over-quarter product mix fluctuations which can
materially impact profitability measures due to the broad gross
margin ranges across our portfolio; (b) continued decline of
average selling prices across our businesses; (c) effects of
seasonality; (d) the ability of our suppliers and contract
manufacturers to meet production and delivery requirements for our
forecasted demand; (e) inherent uncertainty related to global
markets, including 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; (f) changes in customer
demand; (g) our ability to attract and retain new customers,
particularly in the 3D sensing market; (h) 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; (i) the risk that Lumentum's financing or operating
strategies will not be successful; and (j) disruption related to
the acquisition and integration of Oclaro making it more difficult
to maintain customer, supplier, key personnel and other strategic
relationships. 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 30, 2019, to be 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 30, 2018, filed
by Lumentum with the Securities and Exchange Commission on August
28, 2018 and the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended December 29, 2018 filed with the Securities
and Exchange Commission on February 7, 2019. 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:
|
Chris Coldren,
408-404-0606; investor.relations@lumentum.com
|
|
Jim Fanucchi,
408-404-5400; investor.relations@lumentum.com
|
Media:
|
Sean Ogarrio,
408-404-5400; 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
|
|
Nine Months
Ended
|
|
March 30,
2019
|
|
March 31,
2018
|
|
March 30,
2019
|
|
March 31,
2018
|
Net
revenue
|
$
|
432.9
|
|
|
$
|
298.8
|
|
|
$
|
1,160.7
|
|
|
$
|
946.6
|
|
Cost of
sales
|
316.5
|
|
|
201.0
|
|
|
788.3
|
|
|
607.6
|
|
Amortization of
acquired intangibles
|
28.1
|
|
|
0.8
|
|
|
33.3
|
|
|
2.4
|
|
Gross
profit
|
88.3
|
|
|
97.0
|
|
|
339.1
|
|
|
336.6
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
57.7
|
|
|
38.2
|
|
|
135.1
|
|
|
118.3
|
|
Selling, general and
administrative
|
55.2
|
|
|
33.2
|
|
|
150.9
|
|
|
95.5
|
|
Restructuring and related
charges
|
21.1
|
|
|
0.1
|
|
|
30.2
|
|
|
3.8
|
|
Impairment
|
30.7
|
|
|
—
|
|
|
30.7
|
|
|
—
|
|
Total operating
expenses
|
164.7
|
|
|
71.5
|
|
|
346.9
|
|
|
217.6
|
|
Income/(loss) from
operations
|
(76.4)
|
|
|
25.5
|
|
|
(7.8)
|
|
|
119.0
|
|
Unrealized gain
(loss) on derivative liability
|
—
|
|
|
(20.7)
|
|
|
8.8
|
|
|
(8.6)
|
|
Interest and other
income (expense), net
|
(6.1)
|
|
|
(2.1)
|
|
|
(13.2)
|
|
|
(8.7)
|
|
Income/(loss) before
income taxes
|
(82.5)
|
|
|
2.7
|
|
|
(12.2)
|
|
|
101.7
|
|
Provision for
(benefit from) income taxes
|
(8.2)
|
|
|
—
|
|
|
(1.6)
|
|
|
(112.9)
|
|
Net
income/(loss)
|
(74.3)
|
|
|
2.7
|
|
|
(10.6)
|
|
|
214.6
|
|
|
|
|
|
|
|
|
|
Items reconciling net
income/(loss) to net income/(loss) attributable to common
stockholders:
|
|
|
|
|
|
|
|
Less: Cumulative
dividends on Series A Preferred Stock
|
—
|
|
|
(0.2)
|
|
|
(0.3)
|
|
|
(0.7)
|
|
Less: Earnings
allocated to Series A Preferred Stock
|
—
|
|
|
(0.1)
|
|
|
(1.2)
|
|
|
(4.9)
|
|
Net income/(loss)
attributable to common stockholders - Basic
|
$
|
(74.3)
|
|
|
$
|
2.4
|
|
|
$
|
(12.1)
|
|
|
$
|
209.0
|
|
Add: Earnings
allocated to Series A Preferred Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Add/Less: Unrealized
(gain) loss on derivative liability on Series A Preferred
Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Add: Cumulative
dividends on Series A Preferred Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net income/(loss)
attributable to common stockholders - Diluted
(a)
|
$
|
(74.3)
|
|
|
$
|
2.4
|
|
|
$
|
(12.1)
|
|
|
$
|
209.0
|
|
|
|
|
|
|
|
|
|
Net income/(loss) per
share attributable to common stockholders:
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.98)
|
|
|
$
|
0.04
|
|
|
$
|
(0.18)
|
|
|
$
|
3.37
|
|
Diluted
|
$
|
(0.98)
|
|
|
$
|
0.04
|
|
|
$
|
(0.18)
|
|
|
$
|
3.31
|
|
|
|
|
|
|
|
|
|
Shares used to
compute net income/(loss) per share attributable to common
stockholders:
|
|
|
|
|
|
|
|
Basic
|
76.2
|
|
|
62.4
|
|
|
68.7
|
|
|
62.1
|
|
Diluted
|
76.2
|
|
|
63.3
|
|
|
68.7
|
|
|
63.2
|
|
|
(a) For the three and
nine months ended March 30, 2019, our diluted earnings per share
attributable to common stockholders is the same as basic EPS. For
the three and nine months ended March 31, 2018, our diluted
earnings per share attributable to common stockholders is
calculated using the treasury stock method because it is more
dilutive than the if-converted method.
|
LUMENTUM HOLDINGS
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in millions,
except share and per share data)
|
(unaudited)
|
|
|
March 30,
2019
|
|
June 30,
2018
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
357.3
|
|
|
$
|
397.3
|
|
Short-term
investments
|
340.2
|
|
|
314.2
|
|
Accounts receivable,
net
|
302.9
|
|
|
197.1
|
|
Inventories
|
272.2
|
|
|
153.6
|
|
Prepayments and other
current assets
|
107.0
|
|
|
65.0
|
|
Assets-held-for-sale
|
38.5
|
|
|
—
|
|
Total current
assets
|
1,418.1
|
|
|
1,127.2
|
|
Property, plant and
equipment, net
|
390.6
|
|
|
306.9
|
|
Goodwill
|
359.8
|
|
|
11.3
|
|
Other intangible
assets, net
|
412.3
|
|
|
7.0
|
|
Deferred income
taxes
|
172.2
|
|
|
125.6
|
|
Other non-current
assets
|
18.4
|
|
|
3.5
|
|
Total
assets
|
$
|
2,771.4
|
|
|
$
|
1,581.5
|
|
LIABILITIES,
REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS'
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
204.1
|
|
|
$
|
126.5
|
|
Accrued payroll and
related expenses
|
41.4
|
|
|
31.5
|
|
Accrued
expenses
|
54.4
|
|
|
33.9
|
|
Term loan,
current
|
5.0
|
|
|
—
|
|
Other current
liabilities
|
46.7
|
|
|
22.1
|
|
Liabilities-held-for-sale
|
6.4
|
|
|
—
|
|
Total current
liabilities
|
358.0
|
|
|
214.0
|
|
Convertible
notes
|
347.4
|
|
|
334.2
|
|
Term loan,
non-current
|
484.9
|
|
|
—
|
|
Derivative
liability
|
—
|
|
|
52.4
|
|
Deferred tax
liability
|
55.8
|
|
|
0.3
|
|
Other non-current
liabilities
|
21.4
|
|
|
18.7
|
|
Total
liabilities
|
1,267.5
|
|
|
619.6
|
|
Redeemable
convertible preferred stock:
|
|
|
|
Non-controlling
interest redeemable convertible Series A Preferred Stock, $0.001
par value, 10,000,000 authorized shares; zero and 35,805 shares
issued and outstanding as of March 30, 2019 and June 30, 2018,
respectively
|
—
|
|
|
35.8
|
|
Total redeemable
convertible preferred stock
|
—
|
|
|
35.8
|
|
Stockholders'
equity:
|
|
|
|
Common stock, $0.001
par value, 990,000,000 authorized shares, 76,349,298 and 62,790,087
shares issued and outstanding as of March 30, 2019 and June 30,
2018, respectively
|
0.1
|
|
|
0.1
|
|
Additional paid-in
capital
|
1,341.4
|
|
|
753.2
|
|
Retained
earnings
|
154.9
|
|
|
166.4
|
|
Accumulated other
comprehensive income
|
7.5
|
|
|
6.4
|
|
Total stockholders'
equity
|
1,503.9
|
|
|
926.1
|
|
Total liabilities,
redeemable convertible preferred stock, and stockholders'
equity
|
$
|
2,771.4
|
|
|
$
|
1,581.5
|
|
Use of Non-GAAP Financial Measures
In this press release, Lumentum provides investors with gross
margin, gross profit, operating margin, operating income, income
(loss) before income taxes and certain expenses, net income, and
net income (loss) per share on a non-GAAP basis. Lumentum believes
this non-GAAP financial information provides additional insight
into the Company's on-going 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 (loss) before income taxes, non-GAAP net income, and
non-GAAP net income per share exclude (i) stock-based compensation,
(ii) acquisition related costs, (iii) inventory write-downs due to
cancelled programs, plans to exit certain lines of business and
other costs and contingencies unrelated to current and future
operations, (iv) amortization of acquired intangibles, (v)
restructuring and related charges, (vi) amortization of fair value
adjustments, (vii) non-cash interest expense, (viii) unrealized
gain (loss) on derivative liability, (ix) transferring product
lines to Thailand, (x) impairment
charges and (xi) non-cash income tax provision impacts, for
example, a release of a U.S. valuation allowance, and the write
down of deferred tax assets due to the 2017 Tax Cuts and Jobs Act.
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
|
|
Nine Months
Ended
|
|
March 30,
2019
|
|
March 31,
2018
|
|
March 30,
2019
|
|
March 31,
2018
|
|
|
|
|
|
|
|
|
Gross profit on
GAAP basis
|
$
|
88.3
|
|
|
$
|
97.0
|
|
|
$
|
339.1
|
|
|
$
|
336.6
|
|
Stock-based
compensation (3)
|
3.2
|
|
|
2.4
|
|
|
11.7
|
|
|
9.5
|
|
Inventory write down
due to product line exit (7)
|
19.4
|
|
|
—
|
|
|
19.4
|
|
|
7.0
|
|
Integration related
costs
|
2.8
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
Amortization of
acquired intangibles
|
28.1
|
|
|
0.8
|
|
|
33.3
|
|
|
2.4
|
|
Amortization of fair
value adjustments (4)
|
14.5
|
|
|
—
|
|
|
15.8
|
|
|
—
|
|
Other charges
(1)
|
12.5
|
|
|
8.3
|
|
|
39.0
|
|
|
17.5
|
|
Gross profit on
non-GAAP basis
|
$
|
168.8
|
|
|
$
|
108.5
|
|
|
$
|
461.1
|
|
|
$
|
373.0
|
|
|
|
|
|
|
|
|
|
Research and
development on GAAP basis
|
$
|
57.7
|
|
|
$
|
38.2
|
|
|
$
|
135.1
|
|
|
$
|
118.3
|
|
Stock-based
compensation (3)
|
(4.5)
|
|
|
(3.6)
|
|
|
(10.7)
|
|
|
(10.5)
|
|
Other
charges
|
(0.4)
|
|
|
0.4
|
|
|
(0.7)
|
|
|
(1.4)
|
|
Research and
development on non-GAAP basis
|
$
|
52.8
|
|
|
$
|
35.0
|
|
|
$
|
123.7
|
|
|
$
|
106.4
|
|
|
|
|
|
|
|
|
|
Selling, general
and administrative on GAAP basis
|
$
|
55.2
|
|
|
$
|
33.2
|
|
|
$
|
150.9
|
|
|
$
|
95.5
|
|
Stock-based
compensation (3)
|
(8.3)
|
|
|
(5.0)
|
|
|
(34.1)
|
|
|
(15.1)
|
|
Acquisition related
costs
|
(2.2)
|
|
|
(2.7)
|
|
|
(15.3)
|
|
|
(2.7)
|
|
Integration related
costs
|
(1.3)
|
|
|
—
|
|
|
(1.3)
|
|
|
—
|
|
Amortization of
acquired intangibles
|
(3.6)
|
|
|
—
|
|
|
(4.4)
|
|
|
—
|
|
Other
charges
|
(0.8)
|
|
|
(1.4)
|
|
|
(2.3)
|
|
|
(3.7)
|
|
Selling, general
and administrative on non-GAAP basis
|
$
|
39.0
|
|
|
$
|
24.1
|
|
|
$
|
93.5
|
|
|
$
|
74.0
|
|
|
|
|
|
|
|
|
|
Income/(loss) from
operations on GAAP basis
|
$
|
(76.4)
|
|
|
$
|
25.5
|
|
|
$
|
(7.8)
|
|
|
$
|
119.0
|
|
Stock-based
compensation (3)
|
16.0
|
|
|
11.0
|
|
|
56.5
|
|
|
35.1
|
|
Acquisition related
costs
|
2.2
|
|
|
2.7
|
|
|
15.3
|
|
|
2.7
|
|
Integration related
costs
|
4.1
|
|
|
—
|
|
|
4.1
|
|
|
—
|
|
Inventory write down
due to product line exit (7)
|
19.4
|
|
|
—
|
|
|
19.4
|
|
|
7.0
|
|
Amortization of
acquired intangibles
|
31.7
|
|
|
0.8
|
|
|
37.7
|
|
|
2.4
|
|
Amortization of fair
value adjustments (4)
|
14.5
|
|
|
—
|
|
|
15.8
|
|
|
—
|
|
Restructuring and
related charges (2)
|
21.1
|
|
|
0.1
|
|
|
30.2
|
|
|
3.8
|
|
Impairment charge
(6)
|
30.7
|
|
|
—
|
|
|
30.7
|
|
|
—
|
|
Other charges
(1)
|
13.7
|
|
|
9.3
|
|
|
42.0
|
|
|
22.6
|
|
Income from
operations on non-GAAP basis
|
$
|
77.0
|
|
|
$
|
49.4
|
|
|
$
|
243.9
|
|
|
$
|
192.6
|
|
|
|
|
|
|
|
|
|
Interest and other
(expense) income, net on GAAP basis
|
$
|
(6.1)
|
|
|
$
|
(2.1)
|
|
|
$
|
(13.2)
|
|
|
$
|
(8.7)
|
|
Other interest and
(income) expense adjustments (5)
|
(2.5)
|
|
|
(0.1)
|
|
|
(0.5)
|
|
|
(0.1)
|
|
Non-cash interest
expense on convertible notes and term loan
|
4.8
|
|
|
4.2
|
|
|
13.6
|
|
|
12.4
|
|
Interest and other
(expense) income, net on non-GAAP basis
|
$
|
(3.8)
|
|
|
$
|
2.0
|
|
|
$
|
(0.1)
|
|
|
$
|
3.6
|
|
|
Income/(loss)
before income taxes on GAAP basis
|
$
|
(82.5)
|
|
|
$
|
2.7
|
|
|
$
|
(12.2)
|
|
|
$
|
101.7
|
|
Stock-based
compensation (3)
|
16.0
|
|
|
11.0
|
|
|
56.5
|
|
|
35.1
|
|
Acquisition related
costs
|
2.2
|
|
|
2.7
|
|
|
15.3
|
|
|
2.7
|
|
Integration related
costs
|
4.1
|
|
|
—
|
|
|
4.1
|
|
|
—
|
|
Inventory write down
due to product line exit (7)
|
19.4
|
|
|
—
|
|
|
19.4
|
|
|
7.0
|
|
Amortization of
acquired intangibles
|
31.7
|
|
|
0.8
|
|
|
37.7
|
|
|
2.4
|
|
Amortization of fair
value adjustments (4)
|
14.5
|
|
|
—
|
|
|
15.8
|
|
|
—
|
|
Restructuring and
related charges (2)
|
21.1
|
|
|
0.1
|
|
|
30.2
|
|
|
3.8
|
|
Impairment charge
(6)
|
30.7
|
|
|
—
|
|
|
30.7
|
|
|
—
|
|
Other interest and
(income) expense adjustments (5)
|
(2.5)
|
|
|
(0.1)
|
|
|
(0.5)
|
|
|
(0.1)
|
|
Non-cash interest
expense on convertible notes and term loan
|
4.8
|
|
|
4.2
|
|
|
13.6
|
|
|
12.4
|
|
Unrealized (gain)
loss on derivative liability
|
—
|
|
|
20.7
|
|
|
(8.8)
|
|
|
8.6
|
|
Other charges
(1)
|
13.7
|
|
|
9.3
|
|
|
42.0
|
|
|
22.6
|
|
Income before
income taxes on non-GAAP basis
|
$
|
73.2
|
|
|
$
|
51.4
|
|
|
$
|
243.8
|
|
|
$
|
196.2
|
|
|
|
|
|
|
|
|
|
Provision for
(benefit from) income taxes on GAAP basis
|
$
|
(8.2)
|
|
|
$
|
—
|
|
|
$
|
(1.6)
|
|
|
$
|
(112.9)
|
|
Income tax
adjustments
|
11.5
|
|
|
0.8
|
|
|
11.4
|
|
|
122.9
|
|
Provision for
(benefit from) income taxes on non-GAAP basis
|
$
|
3.3
|
|
|
$
|
0.8
|
|
|
$
|
9.8
|
|
|
$
|
10.0
|
|
|
|
|
|
|
|
|
|
Net income/(loss)
on GAAP basis
|
$
|
(74.3)
|
|
|
$
|
2.7
|
|
|
$
|
(10.6)
|
|
|
$
|
214.6
|
|
Stock-based
compensation (3)
|
16.0
|
|
|
11.0
|
|
|
56.5
|
|
|
35.1
|
|
Acquisition related
costs
|
2.2
|
|
|
2.7
|
|
|
15.3
|
|
|
2.7
|
|
Integration related
costs
|
4.1
|
|
|
—
|
|
|
4.1
|
|
|
—
|
|
Inventory write down
due to product line exit (7)
|
19.4
|
|
|
—
|
|
|
19.4
|
|
|
7.0
|
|
Amortization of
acquired intangibles
|
31.7
|
|
|
0.8
|
|
|
37.7
|
|
|
2.4
|
|
Amortization of fair
value adjustments (4)
|
14.5
|
|
|
—
|
|
|
15.8
|
|
|
—
|
|
Restructuring and
related charges (2)
|
21.1
|
|
|
0.1
|
|
|
30.2
|
|
|
3.8
|
|
Other interest and
(income) expense adjustments (5)
|
(2.5)
|
|
|
(0.1)
|
|
|
(0.5)
|
|
|
(0.1)
|
|
Non-cash interest
expense on convertible notes and term loan
|
4.8
|
|
|
4.2
|
|
|
13.6
|
|
|
12.4
|
|
Unrealized (gain)
loss on derivative liability
|
—
|
|
|
20.7
|
|
|
(8.8)
|
|
|
8.6
|
|
Impairment charge
(6)
|
30.7
|
|
|
—
|
|
|
30.7
|
|
|
—
|
|
Income tax
adjustments
|
(11.5)
|
|
|
(0.8)
|
|
|
(11.4)
|
|
|
(122.9)
|
|
Other charges
(1)
|
13.7
|
|
|
9.3
|
|
|
42.0
|
|
|
22.6
|
|
Net income on
non-GAAP basis
|
$
|
69.9
|
|
|
$
|
50.6
|
|
|
$
|
234.0
|
|
|
$
|
186.2
|
|
|
|
|
|
|
|
|
|
Net income per
share on non-GAAP basis
|
$
|
0.91
|
|
|
$
|
0.78
|
|
|
$
|
3.34
|
|
|
$
|
2.88
|
|
|
|
|
|
|
|
|
|
Shares used in per
share calculation - diluted on GAAP basis
|
76.2
|
|
|
63.3
|
|
|
68.7
|
|
|
63.2
|
|
Non-GAAP adjustment
(8)
|
0.5
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
Effect of diluted
securities from Series A Preferred Stock (9)
|
—
|
|
|
1.5
|
|
|
0.7
|
|
|
1.5
|
|
Shares used in per
share calculation - diluted on non-GAAP basis
|
76.7
|
|
|
64.8
|
|
|
70.0
|
|
|
64.7
|
|
|
(1) Other charges for
the three and nine months ended March 30, 2019, primarily include
costs of transferring product lines to Thailand of $12.6 million
and $40.8 million, respectively. Other charges for the three and
nine months ended March 31, 2018, primarily includes set-up costs
for our facility in Thailand of $9.5 million and $17.6 million
respectively as well as inventory write-downs due to canceled
programs and business sanctions.
|
(2) During the three
and nine months ended March 30, 2019 we recorded restructuring and
related charges of $21.1 million, primarily in connection with the
decision to exit Lithium Niobate and Datacom module product lines.
During the nine months ended March 30, 2019 we also recorded
restructuring and related charges of $5.7 million primarily
attributable to severance and employee related benefits associated
with Oclaro's executive severance and retention
agreements
|
(3) During the nine
months ended March 30, 2019 we recorded stock-based compensation of
$15.2 million primarily attributable to severance and employee
related benefits associated with Oclaro's executive severance and
retention agreements.
|
(4) In connection
with the acquisition of Oclaro, we recorded a fair value adjustment
of $60.3 million to inventory, resulting in $14.5 million and $15.8
million of amortization expense of the fair value adjustment during
the three and nine months ended March 30, 2019,
respectively.
|
(5) For the three and
nine months ended March 30, 2019, interest and other (expense)
income includes a one-time benefit of $2.5 million related to a
non-trade reimbursement.
|
(6) For each of the
three and nine months ended March 30, 2019, we recorded an
impairment charge of $30.7 million of Property Plant and Equipment,
related to the decision to exit the Datacom module product
line.
|
(7) For each of the
three and nine months ended March 30, 2019, we recorded an
inventory write down charge of $19.4 million, related to the
decision to exit the Datacom module product line.
|
(8) 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.
|
(9) For the
three and nine months ended March 31, 2018, 1.5 million shares
related to the potential conversion of the Series A Preferred Stock
were added to the calculation of diluted shares available on a
non-GAAP basis because their inclusion results in more dilutive
earnings per share.
|
LUMENTUM HOLDINGS
INC.
|
RECONCILIATION OF
GAAP NET INCOME (LOSS) TO EBITDA
|
(in millions,
except per share data)
|
(unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
March 30,
2019
|
|
March 31,
2018
|
|
March 30,
2019
|
|
March 31,
2018
|
GAAP Net
income/(loss)
|
$
|
(74.3)
|
|
|
$
|
2.7
|
|
|
$
|
(10.6)
|
|
|
$
|
214.6
|
|
Interest and other
expense (income), net
|
6.1
|
|
|
2.1
|
|
|
13.2
|
|
|
8.7
|
|
Provision for
(benefit from) income taxes
|
(8.2)
|
|
|
—
|
|
|
(1.6)
|
|
|
(112.9)
|
|
Depreciation
|
29.0
|
|
|
18.4
|
|
|
74.7
|
|
|
53.3
|
|
Amortization of
acquired intangibles
|
31.7
|
|
|
0.8
|
|
|
37.7
|
|
|
2.4
|
|
EBITDA
|
(15.7)
|
|
|
24.0
|
|
|
113.4
|
|
|
166.1
|
|
Amortization of fair
value adjustments
|
14.5
|
|
|
—
|
|
|
15.8
|
|
|
—
|
|
Restructuring and
related charges
|
21.1
|
|
|
0.1
|
|
|
30.2
|
|
|
3.8
|
|
Stock-based
compensation
|
16.0
|
|
|
11.0
|
|
|
56.5
|
|
|
35.1
|
|
Acquisition related
costs
|
2.2
|
|
|
2.7
|
|
|
15.3
|
|
|
2.7
|
|
Other
charges
|
13.7
|
|
|
9.3
|
|
|
42.0
|
|
|
29.6
|
|
Unrealized
gain/(loss) on derivative liabilities
|
—
|
|
|
20.7
|
|
|
(8.8)
|
|
|
8.6
|
|
Inventory write down
due to product line exit
|
19.4
|
|
|
—
|
|
|
19.4
|
|
|
—
|
|
Integration related
costs
|
4.1
|
|
|
—
|
|
|
4.1
|
|
|
—
|
|
Impairment
charges
|
30.7
|
|
|
—
|
|
|
30.7
|
|
|
—
|
|
Adjusted
EBITDA
|
$
|
106.0
|
|
|
$
|
67.8
|
|
|
$
|
318.6
|
|
|
$
|
245.9
|
|
View original
content:http://www.prnewswire.com/news-releases/lumentum-announces-fiscal-third-quarter-2019-results-300844891.html
SOURCE Lumentum