MILPITAS, Calif., May 20, 2019 /PRNewswire/ -- Lumentum
Holdings Inc. ("Lumentum" or the "Company") today announced it
intends to fully comply with the recent United States Department of
Commerce imposed license requirements for the export, reexport
and/or in-country transfer of all items subject to U.S. export
control regulations to Huawei Technologies Co., Ltd. and designated
affiliates of Huawei ("Huawei"). Lumentum has discontinued
all shipments to Huawei effective as of the date the licensing
requirements went into effect and cannot predict when it will be
able to resume shipments.
The financial guidance ranges Lumentum provided for its fourth
quarter 2019 in the Company's fiscal third quarter earnings release
and earnings conference call on May 7,
2019 did not contemplate this Department of Commerce order,
the discontinuation of sales to Huawei, or the time required to
repurpose manufacturing capacity to other customers.
Accordingly, the Company is providing revised net revenue, non-GAAP
operating margin, and non-GAAP diluted net income per share
expectations.
Updated and prior business outlook for fiscal fourth
quarter 2019:
|
Updated
Range
|
Prior
Range
|
Net
revenue
|
$375 million to $390
million
|
$405 million to $425
million
|
Non-GAAP operating
margin
|
15.5% to
17.0%
|
18.0% to
20.0%
|
Non-GAAP diluted net
income per share
|
$0.65 to
$0.77
|
$0.85 to
$1.00
|
For the fiscal year ended June 30,
2018, sales to Huawei represented 11% of total revenue. For
the fiscal third quarter of 2019, ended March 30, 2019, sales to Huawei represented
approximately 18% of total revenue and for fiscal year 2019 year to
date sales to Huawei represented approximately 15% of total
revenue.
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, litigation, acquisition-related costs,
non-cash income tax expense and credits, 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.
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 our revised guidance for the fourth quarter of
fiscal 2019, our expectations regarding any future shipments to
Huawei, our ability to repurpose manufacturing capacity and any
developments regarding the licensing requirements. 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 the legal
requirements related to the sale of our products, including
developments regarding the executive order and Department of
Commerce licensing requirements applicable to Huawei, (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; (j) the risk that Lumentum's
financing or operating strategies will not be successful; and (k)
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, filed with the Securities
and Exchange Commission on May 7, 2019, 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 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.
Use of Non-GAAP Financial Measures
In this press release, Lumentum provides guidance for operating
margin, 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 ongoing performance and
expectations regarding such ongoing performance, 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 ongoing 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 financial performance and, importantly, to
evaluate the efficacy of the methodology and information used by
management to evaluate and measure such operating performance.
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 operating margin, non-GAAP net income, and non-GAAP net
income per share, non-GAAP gross profit, non-GAAP operating income,
non-GAAP income (loss) before income taxes and non-GAAP expenses
exclude (i) stock-based compensation, (ii) acquisition related
costs, (iii) other charges comprised mainly of set-up costs of our
Thailand facility, including costs
of transferring product lines to Thailand, as well as inventory write-downs due
to cancelled programs and other costs and contingencies unrelated
to current and future operations, (iv) amortization of acquired
developed technologies, (v) workforce related charges such as
severance, retention bonuses and employee relocation costs related
to formal restructuring plans, (vi) non-cash interest expense,
(vii) unrealized gain (loss) on derivative liability, and (viii)
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 financial guidance should not
be interpreted as implying that these items are non-recurring,
infrequent or unusual.
Contact
Investors: Jim
Fanucchi, 408-404-5400; investor.relations@lumentum.com
Media:
Sean Ogarrio, 408-546-5405;
media@lumentum.com
View original
content:http://www.prnewswire.com/news-releases/lumentum-provides-update-on-us-department-of-commerce-entity-list-designation-of-huawei-and-affiliates-and-the-impact-to-fiscal-fourth-quarter-ending-june-29-2019-outlook-300852913.html
SOURCE Lumentum