SAN JOSE, Calif., Aug. 18,
2021 /PRNewswire/ -- Lumentum Holdings Inc. ("Lumentum" or the
"Company") today reported results for its fiscal fourth quarter and
full year ended July 3, 2021.
"The fourth quarter capped off a record fiscal 2021 with strong
demand for our products that resulted in a book to bill of 1.2,"
said Alan Lowe, President and CEO.
"While demand continues to grow into the first quarter, shortages
of critical semiconductor components are negatively impacting our
first quarter revenue outlook by more than $30 million."
Mr. Lowe added, "We believe, however, the continuing shift in
our demand mix towards differentiated products that enable next
generation customer solutions is a leading indicator for growth
over the coming years."
"By all financial measures fiscal 2021 was our best year yet,
with record revenue, earnings per share, and margins, the latter
achieving our previously announced target model," said Wajid Ali, Executive Vice-President and CFO.
"Due to confidence in our long-term financial performance, during
the fourth quarter we repurchased 3.1 million shares, or 4% of our
shares outstanding, using $241
million of our current $700
million share buyback program."
_____________________________
(1) In order to give a more meaningful
perspective of our tax burden over a longer-term period, and in
accordance with the SEC Non-GAAP Financial Measures Compliance and
Disclosure Interpretations, beginning in our fiscal fourth quarter,
Lumentum is changing its method of calculating its non-GAAP income
tax provision. For this quarter only, Lumentum will provide its
non-GAAP tax provisions using both the prior method, focused on
current year taxes, and a new method. This change in methodology
will not affect the Company's non-GAAP operating profit, annual
cash tax payments, or cash flows, but should result in higher
reported non-GAAP tax provisions.
Fiscal Fourth Quarter Highlights:
Net revenue for the fiscal fourth quarter of 2021 was
$392.1 million, with GAAP net income
attributable to common stockholders of $21.5
million, or $0.28 per diluted
share. Net revenue for the fiscal third quarter of 2021 was
$419.5 million, with GAAP net income
of $225.5 million, or $2.85 per diluted share. 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.
Using the prior method of calculating non-GAAP income taxes,
non-GAAP net income for the fiscal fourth quarter of 2021 was
$89.5 million, or $1.15 per diluted share. Using the prior method
of calculating non-GAAP income taxes, non-GAAP net income for the
fiscal fourth quarter of 2020 was $91.7
million, or $1.18 per diluted
share.
Using the new method of calculating non-GAAP income taxes,
non-GAAP net income for the fiscal fourth quarter of 2021 was
$81.9 million, or $1.06 per diluted share. Using the new method of
calculating non-GAAP income taxes, non-GAAP net income for the
fiscal fourth quarter of 2020 was $80.1
million, or $1.03 per diluted
share.
The Company held $1,946.0 million
in total cash, cash equivalents, and short-term investments at the
end of the fiscal fourth quarter of 2021, down $108.6 million from the third quarter of
2021.
Full Fiscal Year 2021 Highlights:
Net revenue for fiscal year 2021 was $1,742.8 million, with GAAP net income
attributable to common stockholders of $397.3 million, or $5.07 per diluted share. 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.
Using the prior method of calculating non-GAAP income taxes,
non-GAAP net income for fiscal year 2021 was $495.0 million, or $6.31 per diluted share. Under the prior
method of calculating non-GAAP income taxes, non-GAAP net income
for fiscal year 2020 was $420.5
million, or $5.42 per diluted
share.
Using the new method of calculating non-GAAP income taxes,
non-GAAP net income for fiscal year 2021 was $458.2 million, or $5.84 per diluted share. Using the new
method of calculating non-GAAP income taxes, non-GAAP net income
for fiscal year 2020 was $384.3
million, or $4.95 per diluted
share.
The Company held $1,946.0 million
in total cash, cash equivalents, and short-term investments at the
end of the fiscal fourth quarter of 2021, up $392.2 million from the fourth quarter of
2020.
Financial Overview – Fiscal Fourth Quarter Ended July 3,
2021
|
GAAP Results ($ in
millions)
|
|
Q4
|
|
Q3
|
|
Q4
|
|
Change
|
|
FY
2021
|
|
FY
2021
|
|
FY
2020
|
|
Q/Q
|
|
Y/Y
|
Net
revenue
|
$
|
392.1
|
|
|
$
|
419.5
|
|
|
$
|
368.1
|
|
|
(6.5)%
|
|
6.5%
|
Gross
margin
|
|
41.5
|
%
|
|
44.1
|
%
|
|
36.9
|
%
|
|
(260)bps
|
|
460bps
|
Operating
margin
|
11.7
|
%
|
|
63.6
|
%
|
|
7.3
|
%
|
|
(5,190)bps
|
|
440bps
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Results
($ in millions)
|
|
Q4
|
|
Q3
|
|
Q4
|
|
Change
|
|
FY
2021
|
|
FY
2021
|
|
FY
2020
|
|
Q/Q
|
|
Y/Y
|
Net
revenue
|
$
|
392.1
|
|
|
$
|
419.5
|
|
|
$
|
368.1
|
|
|
(6.5)%
|
|
6.5%
|
Gross
margin
|
47.7
|
%
|
|
49.9
|
%
|
|
47.2
|
%
|
|
(220)bps
|
|
50bps
|
Operating
margin
|
24.6
|
%
|
|
27.9
|
%
|
|
24.8
|
%
|
|
(330)bps
|
|
(20)bps
|
|
Net Revenue by
Segment ($ in millions)
|
|
Q4
|
|
%
of
|
|
Q3
|
|
Q4
|
|
Change
|
|
FY
2021
|
|
Net
Revenue
|
|
FY
2021
|
|
FY
2020
|
|
Q/Q
|
|
Y/Y
|
Optical
Communications
|
$
|
355.2
|
|
|
90.6
|
%
|
|
$
|
387.9
|
|
|
$
|
330.3
|
|
|
(8.4)
|
%
|
|
7.5
|
%
|
Lasers
|
36.9
|
|
|
9.4
|
%
|
|
31.6
|
|
|
37.8
|
|
|
16.8
|
%
|
|
(2.4)
|
%
|
Total
|
$
|
392.1
|
|
|
100.0
|
%
|
|
$
|
419.5
|
|
|
$
|
368.1
|
|
|
(6.5)
|
%
|
|
6.5
|
%
|
Financial Overview – Fiscal Year Ended July 3,
2021
|
GAAP Results ($ in
millions)
|
|
FY
2021
|
|
FY
2020
|
|
Change
Y/Y
|
Net
revenue
|
$
|
1,742.8
|
|
|
$
|
1,678.6
|
|
|
3.8%
|
Gross
margin
|
44.9
|
%
|
|
38.7
|
%
|
|
620bps
|
Operating
margin
|
30.2
|
%
|
|
12.2
|
%
|
|
1,800bps
|
|
Non-GAAP Results
($ in millions)
|
|
FY
2021
|
|
FY
2020
|
|
Change
Y/Y
|
Net
revenue
|
$
|
1,742.8
|
|
|
$
|
1,678.6
|
|
|
3.8%
|
Gross
margin
|
50.9
|
%
|
|
46.5
|
%
|
|
440bps
|
Operating
margin
|
30.8
|
%
|
|
26.6
|
%
|
|
420bps
|
|
Net Revenue by
Segment ($ in millions)
|
|
FY
2021
|
|
FY
2020
|
|
Change
Y/Y
|
Optical
Communications
|
$
|
1,620.7
|
|
|
$
|
1,515.1
|
|
|
7.0%
|
Lasers
|
122.1
|
|
|
163.5
|
|
|
(25.3)%
|
Total
|
$
|
1,742.8
|
|
|
$
|
1,678.6
|
|
|
3.8%
|
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."
Business Outlook
Lumentum expects the following for the fiscal first
quarter of 2022:
- Net revenue in the range of $430
million to $445
million
- Non-GAAP operating margin of 30.5% to 32.5%
- Non-GAAP diluted earnings per share of $1.47 to $1.61
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, non-cash
income tax expense and credits, integration related costs,
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 18, 2021, 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
25, 2021, at 8:59 pm PT. To
listen to the live conference call, dial (844) 802-2439 or (412)
902-4275 and reference the passcode 10158822. To access the replay,
dial (877) 344-7529 or (412) 317-0088 and reference the passcode
10158822. 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 include
statements regarding our expectations for our markets, any
anticipation or guidance as to demand for our products and
technology, and our guidance with respect to future net revenue,
earnings per share, and operating margins. 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, including trade and export restrictions 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; and (i) 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 April 3, 2021 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
July 3, 2021, 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.
Category: Financial
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
|
|
July 3,
2021
|
|
June 27,
2020
|
|
July 3,
2021
|
|
June 27,
2020
|
Net
revenue
|
$
|
392.1
|
|
|
$
|
368.1
|
|
|
$
|
1,742.8
|
|
|
$
|
1,678.6
|
|
Cost of
sales
|
213.4
|
|
|
217.4
|
|
|
898.0
|
|
|
974.6
|
|
Amortization of
acquired developed intangibles
|
15.9
|
|
|
15.0
|
|
|
61.7
|
|
|
53.8
|
|
Gross
profit
|
162.8
|
|
|
135.7
|
|
|
783.1
|
|
|
650.2
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and development
|
54.1
|
|
|
49.0
|
|
|
214.5
|
|
|
198.6
|
|
Selling, general and administrative
|
58.3
|
|
|
54.8
|
|
|
241.4
|
|
|
235.2
|
|
Restructuring and related charges
|
4.6
|
|
|
3.1
|
|
|
7.7
|
|
|
8.0
|
|
Merger termination fee and related costs, net
|
—
|
|
|
—
|
|
|
(207.5)
|
|
|
—
|
|
Impairment charges
|
—
|
|
|
1.8
|
|
|
—
|
|
|
4.3
|
|
Total operating
expenses
|
117.0
|
|
|
108.7
|
|
|
256.1
|
|
|
446.1
|
|
Income from
operations
|
45.8
|
|
|
27.0
|
|
|
527.0
|
|
|
204.1
|
|
Interest
expense
|
(18.0)
|
|
|
(15.9)
|
|
|
(66.7)
|
|
|
(61.2)
|
|
Other income,
net
|
0.7
|
|
|
3.5
|
|
|
2.8
|
|
|
31.4
|
|
Income before income
taxes
|
28.5
|
|
|
14.6
|
|
|
463.1
|
|
|
174.3
|
|
Provision for income
taxes
|
7.0
|
|
|
19.2
|
|
|
65.8
|
|
|
38.8
|
|
Net income
(loss)
|
$
|
21.5
|
|
|
$
|
(4.6)
|
|
|
$
|
397.3
|
|
|
$
|
135.5
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.29
|
|
|
$
|
(0.06)
|
|
|
$
|
5.27
|
|
|
$
|
1.79
|
|
Diluted
|
$
|
0.28
|
|
|
$
|
(0.06)
|
|
|
$
|
5.07
|
|
|
$
|
1.75
|
|
|
|
|
|
|
|
|
|
Shares used to
compute net income (loss) per share:
|
|
|
|
|
|
|
|
Basic
|
74.8
|
|
|
75.0
|
|
|
75.4
|
|
|
75.9
|
|
Diluted
|
77.5
|
|
|
75.0
|
|
|
78.4
|
|
|
77.6
|
|
LUMENTUM HOLDINGS
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in millions,
except per share data)
|
(unaudited)
|
|
|
|
July 3,
2021
|
|
June 27,
2020
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
774.3
|
|
|
$
|
298.0
|
|
Short-term
investments
|
1,171.7
|
|
|
1,255.8
|
|
Accounts receivable,
net
|
212.8
|
|
|
233.5
|
|
Inventories
|
196.4
|
|
|
188.9
|
|
Prepayments and other
current assets
|
81.6
|
|
|
73.8
|
|
Total current
assets
|
2,436.8
|
|
|
2,050.0
|
|
Property, plant and
equipment, net
|
361.1
|
|
|
393.0
|
|
Operating lease
right-of-use assets, net
|
67.4
|
|
|
78.7
|
|
Goodwill
|
368.9
|
|
|
368.9
|
|
Other intangible
assets, net
|
241.2
|
|
|
316.8
|
|
Deferred tax
asset
|
72.9
|
|
|
81.2
|
|
Other non-current
assets
|
3.3
|
|
|
4.0
|
|
Total
assets
|
$
|
3,551.6
|
|
|
$
|
3,292.6
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
116.9
|
|
|
$
|
150.8
|
|
Accrued payroll and
related expenses
|
54.3
|
|
|
53.4
|
|
Accrued
expenses
|
33.1
|
|
|
23.7
|
|
Convertible notes,
current
|
390.7
|
|
|
—
|
|
Operating lease
liabilities, current
|
11.8
|
|
|
10.8
|
|
Other current
liabilities
|
57.8
|
|
|
44.3
|
|
Total current
liabilities
|
664.6
|
|
|
283.0
|
|
Convertible notes,
non-current
|
789.8
|
|
|
1,120.3
|
|
Operating lease
liabilities, non-current
|
47.6
|
|
|
57.6
|
|
Deferred tax
liability
|
35.9
|
|
|
46.5
|
|
Other non-current
liabilities
|
40.9
|
|
|
36.0
|
|
Total
liabilities
|
1,578.8
|
|
|
1,543.4
|
|
Stockholders'
equity:
|
|
|
|
Common stock, $0.001
par value, 990 authorized shares; 73.0 and 75.1 shares issued and
outstanding as of July 3, 2021 and June 27, 2020,
respectively
|
0.1
|
|
|
0.1
|
|
Additional paid-in
capital
|
1,743.6
|
|
|
1,676.6
|
|
Retained
earnings
|
220.9
|
|
|
64.6
|
|
Accumulated other
comprehensive income
|
8.2
|
|
|
7.9
|
|
Total stockholders'
equity
|
1,972.8
|
|
|
1,749.2
|
|
Total liabilities and
stockholders' equity
|
$
|
3,551.6
|
|
|
$
|
3,292.6
|
|
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, provision for taxes, net income, and net income per
share on a non-GAAP basis as well as the non-GAAP measures of
EBITDA and 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. In addition,
the Company believes that providing certain of these measures allow
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 inventory fair value adjustments,
(vii) expenses related to COVID-19 outbreak, (viii) restructuring
and related charges, (ix) the termination fee we received in
connection with the termination of our proposed merger agreement
with Coherent, net of acquisition related charges, (x) impairment
charge, (xi) gain on sale of product lines, (xii) foreign exchange
(gains) losses, net, (xiii) non-cash interest expense, and (xiv)
other charges, which include transferring product lines to
Thailand, excess and obsolete
inventory charges driven by U.S. trade restrictions and the related
decline in demand from Huawei, and litigation related expenses. 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
|
|
July 3,
2021
|
|
April 3,
2021
|
|
June 27,
2020
|
|
July 3,
2021
|
|
June 27,
2020
|
|
|
|
|
|
|
|
|
|
|
Gross profit on
GAAP basis
|
$
|
162.8
|
|
|
$
|
185.0
|
|
|
$
|
135.7
|
|
|
$
|
783.1
|
|
|
$
|
650.2
|
|
Stock-based
compensation
|
5.4
|
|
|
5.3
|
|
|
3.5
|
|
|
19.2
|
|
|
16.1
|
|
Inventory and fixed
asset write down due to product line exits
|
—
|
|
|
—
|
|
|
1.0
|
|
|
0.4
|
|
|
7.0
|
|
Integration related
costs
|
—
|
|
|
—
|
|
|
1.8
|
|
|
—
|
|
|
4.9
|
|
Amortization of
acquired intangibles
|
15.9
|
|
|
15.8
|
|
|
15.0
|
|
|
61.7
|
|
|
53.8
|
|
Amortization of
inventory fair value adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.8
|
|
Expenses related to
COVID-19 outbreak (1)
|
—
|
|
|
—
|
|
|
5.0
|
|
|
—
|
|
|
6.6
|
|
Other charges
(2)
|
3.1
|
|
|
3.1
|
|
|
11.9
|
|
|
23.1
|
|
|
35.8
|
|
Gross profit on
non-GAAP basis
|
$
|
187.2
|
|
|
$
|
209.2
|
|
|
$
|
173.9
|
|
|
$
|
887.5
|
|
|
$
|
780.2
|
|
Gross margin on
non-GAAP basis
|
47.7
|
%
|
|
49.9
|
%
|
|
47.2
|
%
|
|
50.9
|
%
|
|
46.5
|
%
|
|
|
|
|
|
|
|
|
|
|
Research and
development on GAAP basis
|
$
|
54.1
|
|
|
$
|
57.2
|
|
|
$
|
49.0
|
|
|
$
|
214.5
|
|
|
$
|
198.6
|
|
Stock-based
compensation
|
(4.7)
|
|
|
(5.3)
|
|
|
(3.8)
|
|
|
(19.5)
|
|
|
(15.9)
|
|
Expenses related to
COVID-19 outbreak (1)
|
—
|
|
|
—
|
|
|
(0.5)
|
|
|
—
|
|
|
(0.5)
|
|
Other gains
(charges)
|
(0.3)
|
|
|
(0.6)
|
|
|
1.2
|
|
|
(0.9)
|
|
|
1.1
|
|
Research and
development on non-GAAP basis
|
$
|
49.1
|
|
|
$
|
51.3
|
|
|
$
|
45.9
|
|
|
$
|
194.1
|
|
|
$
|
183.3
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general
and administrative on GAAP basis
|
$
|
58.3
|
|
|
$
|
65.5
|
|
|
$
|
54.8
|
|
|
$
|
241.4
|
|
|
$
|
235.2
|
|
Stock-based
compensation
|
(14.1)
|
|
|
(14.5)
|
|
|
(9.8)
|
|
|
(54.2)
|
|
|
(41.2)
|
|
Integration related
costs
|
—
|
|
|
(0.2)
|
|
|
(1.1)
|
|
|
(0.7)
|
|
|
(12.2)
|
|
Amortization of
acquired intangibles
|
(6.2)
|
|
|
(6.2)
|
|
|
(6.2)
|
|
|
(24.0)
|
|
|
(24.8)
|
|
Other gains (charges)
(3)
|
3.5
|
|
|
(3.8)
|
|
|
(1.1)
|
|
|
(5.2)
|
|
|
(6.9)
|
|
Selling, general
and administrative on non-GAAP basis
|
$
|
41.5
|
|
|
$
|
40.8
|
|
|
$
|
36.6
|
|
|
$
|
157.3
|
|
|
$
|
150.1
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations on GAAP basis
|
$
|
45.8
|
|
|
$
|
266.9
|
|
|
$
|
27.0
|
|
|
$
|
527.0
|
|
|
$
|
204.1
|
|
Stock-based
compensation
|
24.2
|
|
|
25.1
|
|
|
17.1
|
|
|
92.9
|
|
|
73.2
|
|
Inventory and fixed
asset write down due to product line exits
|
—
|
|
|
—
|
|
|
1.0
|
|
|
0.4
|
|
|
7.0
|
|
Integration related
costs
|
—
|
|
|
0.2
|
|
|
2.9
|
|
|
0.7
|
|
|
17.1
|
|
Amortization of
acquired intangibles
|
22.1
|
|
|
22.0
|
|
|
21.2
|
|
|
85.7
|
|
|
78.6
|
|
Amortization of fair
inventory value adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.8
|
|
Restructuring and
related charges
|
4.6
|
|
|
2.9
|
|
|
3.1
|
|
|
7.7
|
|
|
8.0
|
|
Merger termination fee
and related costs, net (4)
|
—
|
|
|
(207.5)
|
|
|
—
|
|
|
(207.5)
|
|
|
—
|
|
Expenses related to
COVID-19 outbreak (1)
|
—
|
|
|
—
|
|
|
5.5
|
|
|
—
|
|
|
7.1
|
|
Impairment charge
(5)
|
—
|
|
|
—
|
|
|
1.8
|
|
|
—
|
|
|
4.3
|
|
Other (gains)
charges
|
(0.1)
|
|
|
7.5
|
|
|
11.8
|
|
|
29.2
|
|
|
41.6
|
|
Income from
operations on non-GAAP basis
|
$
|
96.6
|
|
|
$
|
117.1
|
|
|
$
|
91.4
|
|
|
$
|
536.1
|
|
|
$
|
446.8
|
|
Operating margin on
non-GAAP basis
|
24.6
|
%
|
|
27.9
|
%
|
|
24.8
|
%
|
|
30.8
|
%
|
|
26.6
|
%
|
|
|
|
|
|
|
|
|
|
|
Interest and other
(expense) income, net on GAAP basis
|
$
|
(17.3)
|
|
|
$
|
(14.0)
|
|
|
$
|
(12.4)
|
|
|
$
|
(63.9)
|
|
|
$
|
(29.8)
|
|
Other interest and
(income) expense adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.0)
|
|
Gain on sale of
product lines
|
(0.2)
|
|
|
—
|
|
|
(0.7)
|
|
|
(0.7)
|
|
|
(14.5)
|
|
Foreign exchange
(gains) losses, net
|
0.6
|
|
|
(1.3)
|
|
|
1.1
|
|
|
4.4
|
|
|
1.4
|
|
Non-cash interest
expense on convertible notes and term loan
|
16.2
|
|
|
14.8
|
|
|
14.3
|
|
|
60.1
|
|
|
47.6
|
|
Interest and other
(expense) income, net on non-GAAP basis
|
$
|
(0.7)
|
|
|
$
|
(0.5)
|
|
|
$
|
2.3
|
|
|
$
|
(0.1)
|
|
|
$
|
2.7
|
|
|
|
|
|
|
|
|
|
|
|
Income before
income taxes on GAAP basis
|
$
|
28.5
|
|
|
$
|
252.9
|
|
|
$
|
14.6
|
|
|
$
|
463.1
|
|
|
$
|
174.3
|
|
Stock-based
compensation
|
24.2
|
|
|
25.1
|
|
|
17.1
|
|
|
92.9
|
|
|
73.2
|
|
Inventory and fixed
asset write down due to product line exits
|
—
|
|
|
—
|
|
|
1.0
|
|
|
0.4
|
|
|
7.0
|
|
Integration related
costs
|
—
|
|
|
0.2
|
|
|
2.9
|
|
|
0.7
|
|
|
17.1
|
|
Amortization of
acquired intangibles
|
22.1
|
|
|
22.0
|
|
|
21.2
|
|
|
85.7
|
|
|
78.6
|
|
Amortization of
inventory fair value adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.8
|
|
Restructuring and
related charges
|
4.6
|
|
|
2.9
|
|
|
3.1
|
|
|
7.7
|
|
|
8.0
|
|
Merger termination fee
and related costs, net (4)
|
—
|
|
|
(207.5)
|
|
|
—
|
|
|
(207.5)
|
|
|
—
|
|
Expenses related to
COVID-19 outbreak (1)
|
—
|
|
|
—
|
|
|
5.5
|
|
|
—
|
|
|
7.1
|
|
Impairment charge
(5)
|
—
|
|
|
—
|
|
|
1.8
|
|
|
—
|
|
|
4.3
|
|
Other interest and
(income) expense adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.0)
|
|
Gain on sale of
product lines
|
(0.2)
|
|
|
—
|
|
|
(0.7)
|
|
|
(0.7)
|
|
|
(14.5)
|
|
Foreign exchange
(gains) losses, net
|
0.6
|
|
|
(1.3)
|
|
|
1.1
|
|
|
4.4
|
|
|
1.4
|
|
Non-cash interest
expense on convertible notes and term loan
|
16.2
|
|
|
14.8
|
|
|
14.3
|
|
|
60.1
|
|
|
47.6
|
|
Other (gains)
charges
|
(0.1)
|
|
|
7.5
|
|
|
11.8
|
|
|
29.2
|
|
|
41.6
|
|
Income before
income taxes on non-GAAP basis
|
$
|
95.9
|
|
|
$
|
116.6
|
|
|
$
|
93.7
|
|
|
$
|
536.0
|
|
|
$
|
449.5
|
|
|
|
(Prior
Method)
|
|
(New
Method)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
July 3,
2021
|
|
April 3,
2021
|
|
June 27,
2020
|
|
July 3,
2021
|
|
June 27,
2020
|
|
July 3,
2021
|
|
April 3,
2021
|
|
June 27,
2020
|
|
July 3,
2021
|
|
June 27,
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for
income taxes on GAAP basis
|
|
$
|
7.0
|
|
|
$
|
27.4
|
|
|
$
|
19.2
|
|
|
$
|
65.8
|
|
|
$
|
38.8
|
|
|
$
|
7.0
|
|
|
$
|
27.4
|
|
|
$
|
19.2
|
|
|
$
|
65.8
|
|
|
$
|
38.8
|
|
Income tax adjustments
|
|
(0.6)
|
|
|
(21.4)
|
|
|
(17.2)
|
|
|
(24.8)
|
|
(9.8)
|
|
|
7.0
|
|
|
(10.5)
|
|
|
(5.6)
|
|
|
12.0
|
|
|
26.4
|
|
Provision for
income taxes on non-GAAP basis
|
|
$
|
6.4
|
|
|
$
|
6.0
|
|
|
$
|
2.0
|
|
|
$
|
41.0
|
|
|
$
|
29.0
|
|
|
$
|
14.0
|
|
|
$
|
16.9
|
|
|
$
|
13.6
|
|
|
$
|
77.8
|
|
|
$
|
65.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
on GAAP basis
|
|
$
|
21.5
|
|
|
$
|
225.5
|
|
|
$
|
(4.6)
|
|
|
$
|
397.3
|
|
|
$
|
135.5
|
|
|
$
|
21.5
|
|
|
$
|
225.5
|
|
|
$
|
(4.6)
|
|
|
$
|
397.3
|
|
|
$
|
135.5
|
|
Stock-based
compensation
|
|
24.2
|
|
|
25.1
|
|
|
17.1
|
|
|
92.9
|
|
|
73.2
|
|
|
24.2
|
|
|
25.1
|
|
|
17.1
|
|
|
92.9
|
|
|
73.2
|
|
Inventory and fixed
asset write down due to product line exits
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|
0.4
|
|
|
7.0
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
|
0.4
|
|
|
7.0
|
|
Integration related
costs
|
|
—
|
|
|
0.2
|
|
|
2.9
|
|
|
0.7
|
|
|
17.1
|
|
|
—
|
|
|
0.2
|
|
|
2.9
|
|
|
0.7
|
|
|
17.1
|
|
Amortization of
acquired intangibles
|
|
22.1
|
|
|
22.0
|
|
|
21.2
|
|
|
85.7
|
|
|
78.6
|
|
|
22.1
|
|
|
22.0
|
|
|
21.2
|
|
|
85.7
|
|
|
78.6
|
|
Amortization of
inventory fair value adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.8
|
|
Restructuring and
related charges
|
|
4.6
|
|
|
2.9
|
|
|
3.1
|
|
|
7.7
|
|
|
8.0
|
|
|
4.6
|
|
|
2.9
|
|
|
3.1
|
|
|
7.7
|
|
|
8.0
|
|
Merger termination fee
and related costs, net (4)
|
|
—
|
|
|
(207.5)
|
|
|
—
|
|
|
(207.5)
|
|
|
—
|
|
|
—
|
|
|
(207.5)
|
|
|
—
|
|
|
(207.5)
|
|
|
—
|
|
Expenses related to
COVID-19 outbreak (1)
|
|
—
|
|
|
—
|
|
|
5.5
|
|
|
—
|
|
|
7.1
|
|
|
—
|
|
|
—
|
|
|
5.5
|
|
|
—
|
|
|
7.1
|
|
Impairment charge
(5)
|
|
—
|
|
|
—
|
|
|
1.8
|
|
|
—
|
|
|
4.3
|
|
|
—
|
|
|
—
|
|
|
1.8
|
|
|
—
|
|
|
4.3
|
|
Other interest and
(income) expense adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.0)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.0)
|
|
Gain on sale of
product lines
|
|
(0.2)
|
|
|
—
|
|
|
(0.7)
|
|
|
(0.7)
|
|
|
(14.5)
|
|
|
(0.2)
|
|
|
—
|
|
|
(0.7)
|
|
|
(0.7)
|
|
|
(14.5)
|
|
Foreign exchange
(gains) losses, net
|
|
0.6
|
|
|
(1.3)
|
|
|
1.1
|
|
|
4.4
|
|
|
1.4
|
|
|
0.6
|
|
|
(1.3)
|
|
|
1.1
|
|
|
4.4
|
|
|
1.4
|
|
Non-cash interest
expense on convertible notes and term loan
|
|
16.2
|
|
|
14.8
|
|
|
14.3
|
|
|
60.1
|
|
|
47.6
|
|
|
16.2
|
|
|
14.8
|
|
|
14.3
|
|
|
60.1
|
|
|
47.6
|
|
Other (gains)
charges
|
|
(0.1)
|
|
|
7.5
|
|
|
11.8
|
|
|
29.2
|
|
|
41.6
|
|
|
(0.1)
|
|
|
7.5
|
|
|
11.8
|
|
|
29.2
|
|
|
41.6
|
|
Income tax
adjustments
|
|
0.6
|
|
|
21.4
|
|
|
17.2
|
|
|
24.8
|
|
9.8
|
|
|
(7.0)
|
|
|
10.5
|
|
|
5.6
|
|
|
(12.0)
|
|
|
(26.4)
|
|
Net income on
non-GAAP basis
|
|
$
|
89.5
|
|
|
$
|
110.6
|
|
|
$
|
91.7
|
|
|
$
|
495.0
|
|
|
$
|
420.5
|
|
|
$
|
81.9
|
|
|
$
|
99.7
|
|
|
$
|
80.1
|
|
|
$
|
458.2
|
|
|
$
|
384.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share on non-GAAP basis
|
|
$
|
1.15
|
|
|
$
|
1.40
|
|
|
$
|
1.18
|
|
|
$
|
6.31
|
|
|
$
|
5.42
|
|
|
$
|
1.06
|
|
|
$
|
1.26
|
|
|
$
|
1.03
|
|
|
$
|
5.84
|
|
|
$
|
4.95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per
share calculation - diluted on GAAP basis
|
|
77.5
|
|
|
79.2
|
|
|
75.0
|
|
|
78.4
|
|
|
77.6
|
|
|
77.5
|
|
|
79.2
|
|
|
75.0
|
|
|
78.4
|
|
|
77.6
|
|
Non-GAAP adjustment
(6)
|
|
—
|
|
|
—
|
|
|
2.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.5
|
|
|
—
|
|
|
—
|
|
Shares used in per
share calculation - diluted on non-GAAP basis
|
|
77.5
|
|
|
79.2
|
|
|
77.5
|
|
|
78.4
|
|
|
77.6
|
|
|
77.5
|
|
|
79.2
|
|
|
77.5
|
|
|
78.4
|
|
|
77.6
|
|
In order to give a more meaningful perspective of our tax burden
over a longer-term period, and in accordance with the SEC Non-GAAP
Financial Measures Compliance and Disclosure Interpretations,
beginning in our fiscal fourth quarter, Lumentum is changing its
method of calculating its non-GAAP income tax provision. For this
quarter only, Lumentum will provide its non-GAAP tax provisions
using both the prior method, focused on current year taxes, and a
new method. This change in methodology will not affect the
Company's non-GAAP operating profit, annual cash tax payments, or
cash flows, but should result in higher reported non-GAAP tax
provisions.
(1) 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.
(2) Other charges excluded from gross profit on non-GAAP basis
for the three and twelve months ended July
3, 2021 include costs of transferring product lines to new
production facilities of $0.4 million
and $6.9 million, respectively. In
addition, during the three and twelve months ended July 3, 2021, we incurred a $2.8 million write-down of an idle asset. During
the three months ended July 3, 2021,
we benefited from a $1.1 million sale
of inventory to Huawei that was previously written down due to U.S.
trade restrictions and the related decline in demand. We incurred
excess and obsolete inventory charges related to the decline in
demand from Huawei of $4.5 million
during the twelve months ended July 3,
2021. During the twelve months ended July 3, 2021, we recorded $5.0 million impairment charge associated with
excess capacity related to our Fiber laser business.
Other charges excluded from 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.
(3) Other gains (charges) excluded from selling, general and
administrative on non-GAAP basis for the three and twelve months
ended July 3, 2021 include an $8.3
million gain on the sale of land and building in
San Jose, California.
(4) For the twelve months ended July 3, 2021, we recorded a
$217.6 million gain related to the
receipt of a termination fee from Coherent in March 2021 as a result of the termination of our
merger agreement. This gain was offset by $10.1 million of Coherent acquisition related
charges.
(5) For the three and twelve months ended June 27, 2020, we recorded impairment charges of
$1.8 million and $4.3 million, respectively for property, plant
and equipment related to the decision to exit the Datacom module
product line.
(6) 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 ADJUSTED EBITDA
|
(in millions,
except per share data)
|
(unaudited)
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
July 3,
2021
|
|
April 3,
2021
|
|
June 27,
2020
|
|
July 3,
2021
|
|
June 27,
2020
|
GAAP net income
(loss)
|
$
|
21.5
|
|
|
$
|
225.5
|
|
|
$
|
(4.6)
|
|
|
$
|
397.3
|
|
|
$
|
135.5
|
|
Interest and other
expense (income), net
|
17.3
|
|
|
14.0
|
|
|
12.4
|
|
|
63.9
|
|
|
29.8
|
|
Provision for income
taxes
|
7.0
|
|
|
27.4
|
|
|
19.2
|
|
|
65.8
|
|
|
38.8
|
|
Depreciation
|
21.0
|
|
|
22.8
|
|
|
25.5
|
|
|
91.4
|
|
|
113.3
|
|
Amortization of
acquired intangibles
|
22.1
|
|
|
22.0
|
|
|
21.2
|
|
|
85.7
|
|
|
78.6
|
|
EBITDA
|
88.9
|
|
|
311.7
|
|
|
73.7
|
|
|
704.1
|
|
|
396.0
|
|
Amortization of
inventory fair value adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.8
|
|
Restructuring and
related charges
|
4.6
|
|
|
2.9
|
|
|
3.1
|
|
|
7.7
|
|
|
8.0
|
|
Stock-based
compensation
|
24.2
|
|
|
25.1
|
|
|
17.1
|
|
|
92.9
|
|
|
73.2
|
|
Inventory and fixed
asset write down due to product line exits
|
—
|
|
|
—
|
|
|
1.0
|
|
|
0.4
|
|
|
7.0
|
|
Integration related
costs
|
—
|
|
|
0.2
|
|
|
2.9
|
|
|
0.7
|
|
|
17.1
|
|
Merger termination
fee and related costs, net
|
—
|
|
|
(207.5)
|
|
|
—
|
|
|
(207.5)
|
|
|
—
|
|
Impairment
charges
|
—
|
|
|
—
|
|
|
1.8
|
|
|
—
|
|
|
4.3
|
|
Expenses related to
COVID-19 outbreak
|
—
|
|
|
—
|
|
|
5.5
|
|
|
—
|
|
|
7.1
|
|
Other (gains) and
charges
|
(0.2)
|
|
|
5.9
|
|
|
10.0
|
|
|
22.7
|
|
|
32.6
|
|
Adjusted
EBITDA
|
$
|
117.5
|
|
|
$
|
138.3
|
|
|
$
|
115.1
|
|
|
$
|
621.0
|
|
|
$
|
551.1
|
|
View original
content:https://www.prnewswire.com/news-releases/lumentum-announces-fiscal-fourth-quarter-and-full-year-2021-results-301357585.html
SOURCE Lumentum