SAN JOSE, Calif., Feb. 4,
2020 /PRNewswire/ -- Lumentum Holdings Inc. ("Lumentum" or the
"Company") today reported results for its fiscal second quarter of
2020 ended December 28, 2019.
Net revenue for the fiscal second quarter of 2020 was
$457.8 million, with GAAP net income
of $49.1 million, or $0.63 per diluted share. Net revenue for the
fiscal first quarter of 2020 was $449.9 million, with GAAP net income
of $47.6 million, or $0.61 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.
Non-GAAP net income for the fiscal second quarter of 2020 was
$119.4 million, or $1.53 per diluted share. Non-GAAP net income for
the fiscal first quarter of 2020 was
$111.4 million, or $1.44 per diluted share. Non-GAAP net income
for the fiscal second quarter of 2019 was
$78.0 million, or $1.15 per diluted share.
The Company held $1,315.6 million
in total cash and short-term investments at the end of the fiscal
second quarter of 2020.
"The themes of the prior quarter - strong customer demand for
our differentiated products, an improving financial model due to
increasing levels of new and innovative products and increasing
scale and acquisition synergies - drove new record revenue, gross
margin and operating margin in the second quarter," said
Alan Lowe, President and CEO.
"Adding to these themes in calendar year 2020, we are seeing
telecom transport demand strengthening, we are ramping our DCO
modules now and expect 400G and above products to ramp later in the
year, and we expect a strong expansion of the market for
world-facing 3D sensing lasers."
Financial Overview – Fiscal Second Quarter Ended
December 28, 2019
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Results ($ in
millions)
|
|
Q2
|
|
Q1
|
|
Q2
|
|
Change
|
|
FY
2020
|
|
FY
2020
|
|
FY
2019
|
|
Q/Q
|
|
Y/Y
|
Net
revenue
|
$457.8
|
|
$449.9
|
|
$373.7
|
|
1.8%
|
|
22.5%
|
Gross
margin
|
41.3%
|
|
37.3%
|
|
33.4%
|
|
400bps
|
|
790bps
|
Operating
margin
|
16.3%
|
|
13.3%
|
|
3.1%
|
|
300bps
|
|
1,320bps
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Results
($ in millions)
|
|
Q2
|
|
Q1
|
|
Q2
|
|
Change
|
|
FY
2020
|
|
FY
2020
|
|
FY
2019
|
|
Q/Q
|
|
Y/Y
|
Net
revenue
|
$457.8
|
|
$449.9
|
|
$373.7
|
|
1.8%
|
|
22.5%
|
Gross
margin
|
47.4%
|
|
45.8%
|
|
40.1%
|
|
160bps
|
|
730bps
|
Operating
margin
|
28.8%
|
|
27.3%
|
|
22.0%
|
|
150bps
|
|
680bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenue by
Segment ($ in millions)
|
|
Q2
|
|
%
of
|
|
Q1
|
|
Q2
|
|
Change
|
|
FY
2020
|
|
Net
Revenue
|
|
FY
2020
|
|
FY
2019
|
|
Q/Q
|
|
Y/Y
|
Optical
Communications
|
$
|
409.4
|
|
|
89.4
|
%
|
|
$
|
416.1
|
|
|
$
|
325.4
|
|
|
(1.6)
|
%
|
|
25.8
|
%
|
Lasers
|
48.4
|
|
|
10.6
|
%
|
|
33.8
|
|
|
48.3
|
|
|
43.2
|
%
|
|
0.2
|
%
|
Total
|
$
|
457.8
|
|
|
100.0
|
%
|
|
$
|
449.9
|
|
|
$
|
373.7
|
|
|
1.8
|
%
|
|
22.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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."
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 first and second
quarters of fiscal 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
The projections we are providing today incorporate an
approximate $15 million to
$20 million reduction in revenue at
the mid-point, and a wider than normal revenue range, due to the
anticipated impact of the 2019 novel coronavirus outbreak.
Lumentum expects the following for the fiscal third
quarter 2020:
- Net revenue in the range of $400
million to $425
million
- Non-GAAP operating margin of 21% to 23%
- Non-GAAP diluted earnings per share of $1.00 to $1.17
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 February 4, 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 February 11, 2020, at 11:59 pm ET. To listen to the live conference
call, dial (833) 287-7900 or (647) 689-4464 and reference the
passcode 8884386. A replay of the conference call will be available
through February 11, 2020. To access
the replay, dial (800) 585-8367 or (416) 621-4642. The passcode for
the replay is 8884386. 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 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, 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 December 28, 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 29, 2019, filed
by Lumentum with the Securities and Exchange Commission on August
27, 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: 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
|
|
Six Months
Ended
|
|
December 28,
2019
|
|
December 29,
2018
|
|
December 28,
2019
|
|
December 29,
2018
|
Net
revenue
|
$
|
457.8
|
|
|
$
|
373.7
|
|
|
$
|
907.7
|
|
|
$
|
727.8
|
|
Cost of
sales
|
256.3
|
|
|
244.5
|
|
|
526.0
|
|
|
471.8
|
|
Amortization of
acquired developed intangibles
|
12.4
|
|
|
4.4
|
|
|
24.9
|
|
|
5.2
|
|
Gross
profit
|
189.1
|
|
|
124.8
|
|
|
356.8
|
|
|
250.8
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
51.0
|
|
|
42.8
|
|
|
100.9
|
|
|
77.4
|
|
Selling,
general and administrative
|
62.4
|
|
|
62.7
|
|
|
119.1
|
|
|
95.7
|
|
Restructuring
and related charges
|
0.9
|
|
|
7.8
|
|
|
2.2
|
|
|
9.1
|
|
Total operating
expenses
|
114.3
|
|
|
113.3
|
|
|
222.2
|
|
|
182.2
|
|
Income from
operations
|
74.8
|
|
|
11.5
|
|
|
134.6
|
|
|
68.6
|
|
Unrealized gain on
derivative liability
|
—
|
|
|
10.9
|
|
|
—
|
|
|
8.8
|
|
Interest
expense
|
(18.3)
|
|
|
(8.5)
|
|
|
(29.7)
|
|
|
(13.6)
|
|
Other income
(expense), net
|
1.2
|
|
|
3.8
|
|
|
6.2
|
|
|
6.5
|
|
Income before income
taxes
|
57.7
|
|
|
17.7
|
|
|
111.1
|
|
|
70.3
|
|
Provision for income
taxes
|
8.6
|
|
|
1.4
|
|
|
14.4
|
|
|
6.6
|
|
Net income
|
$
|
49.1
|
|
|
$
|
16.3
|
|
|
$
|
96.7
|
|
|
$
|
63.7
|
|
|
|
|
|
|
|
|
|
Items reconciling net
income to net income attributable to common
stockholders:
|
|
|
|
|
|
|
|
Less: Cumulative
dividends on Series A Preferred Stock
|
—
|
|
|
(0.1)
|
|
|
—
|
|
|
(0.3)
|
|
Less: Earnings
allocated to Series A Preferred Stock
|
—
|
|
|
(0.1)
|
|
|
—
|
|
|
(1.2)
|
|
Net income
attributable to common stockholders - Basic
|
$
|
49.1
|
|
|
$
|
16.1
|
|
|
$
|
96.7
|
|
|
$
|
62.2
|
|
Add: Earnings
allocated to Series A Preferred Stock
|
—
|
|
|
0.1
|
|
|
—
|
|
|
1.2
|
|
Less: Unrealized gain
on derivative liability on Series A Preferred Stock
|
—
|
|
|
(10.9)
|
|
|
—
|
|
|
(8.8)
|
|
Add: Cumulative
dividends on Series A Preferred Stock
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.3
|
|
Net income
attributable to common stockholders - Diluted
|
$
|
49.1
|
|
|
$
|
5.4
|
|
|
$
|
96.7
|
|
|
$
|
54.9
|
|
|
|
|
|
|
|
|
|
Net income per share
attributable to common stockholders:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.64
|
|
|
$
|
0.24
|
|
|
$
|
1.26
|
|
|
$
|
0.96
|
|
Diluted
|
$
|
0.63
|
|
|
$
|
0.08
|
|
|
$
|
1.24
|
|
|
$
|
0.82
|
|
|
|
|
|
|
|
|
|
Shares used to
compute net income per share attributable to common
stockholders:
|
|
|
|
|
|
|
|
Basic
|
76.8
|
|
|
66.8
|
|
|
76.9
|
|
|
65.0
|
|
Diluted
|
78.0
|
|
|
67.8
|
|
|
77.8
|
|
|
66.6
|
|
LUMENTUM HOLDINGS
INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(in millions,
except share and per share data)
|
|
|
|
|
|
|
|
|
|
December 28,
2019
|
|
June 29,
2019
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
1,085.0
|
|
|
$
|
432.6
|
|
Short-term
investments
|
230.6
|
|
|
335.9
|
|
Accounts receivable,
net
|
292.0
|
|
|
238.0
|
|
Inventories
|
179.6
|
|
|
228.8
|
|
Prepayments and other
current assets
|
95.8
|
|
|
97.5
|
|
Total current
assets
|
1,883.0
|
|
|
1,332.8
|
|
Property, plant and
equipment, net
|
421.0
|
|
|
433.3
|
|
Operating lease
right-of-use assets, net
|
84.7
|
|
|
—
|
|
Goodwill
|
368.9
|
|
|
368.9
|
|
Other intangible
assets, net
|
358.0
|
|
|
395.4
|
|
Deferred income
taxes
|
101.1
|
|
|
169.6
|
|
Other non-current
assets
|
4.5
|
|
|
16.6
|
|
Total
assets
|
$
|
3,221.2
|
|
|
$
|
2,716.6
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
143.7
|
|
|
$
|
160.8
|
|
Accrued payroll and
related expenses
|
53.7
|
|
|
42.3
|
|
Accrued
expenses
|
37.2
|
|
|
46.7
|
|
Term loan,
current
|
—
|
|
|
5.0
|
|
Operating lease
liabilities, current
|
11.7
|
|
|
—
|
|
Other current
liabilities
|
57.9
|
|
|
39.2
|
|
Total current
liabilities
|
304.2
|
|
|
294.0
|
|
Convertible
notes
|
1,092
|
|
|
351.9
|
|
Term loan,
non-current
|
—
|
|
|
484.0
|
|
Operating lease
liabilities, non-current
|
62.5
|
|
|
—
|
|
Deferred tax
liability
|
47.9
|
|
|
55.9
|
|
Other non-current
liabilities
|
33.0
|
|
|
33.7
|
|
Total
liabilities
|
1,539.6
|
|
|
1,219.5
|
|
Commitments and
contingencies
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common stock, $0.001
par value, 990,000,000 authorized shares, 74,716,401 and 76,653,478
shares issued and outstanding as of December 28, 2019 and June 29,
2019, respectively
|
0.1
|
|
|
0.1
|
|
Additional paid-in
capital
|
1,648.7
|
|
|
1,360.8
|
|
Retained
earnings
|
25.8
|
|
|
129.1
|
|
Accumulated other
comprehensive income
|
7.0
|
|
|
7.1
|
|
Total stockholders'
equity
|
1,681.6
|
|
|
1,497.1
|
|
Total liabilities and
stockholders' equity
|
$
|
3,221.2
|
|
|
$
|
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 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 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) unrealized gain (loss) on derivative liability, (xi)
transferring product lines to Thailand, (xii) excess and obsolete inventory
charges driven by the decline in demand from Huawei, and (xiii)
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
|
|
Six Months
Ended
|
|
|
December 28,
2019
|
|
September 28,
2019
|
|
December 29,
2018
|
|
December 28,
2019
|
|
December 29,
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit on
GAAP basis
|
$
|
189.1
|
|
|
$
|
167.7
|
|
|
$
|
124.8
|
|
|
$
|
356.8
|
|
|
$
|
250.8
|
|
|
Stock-based
compensation
|
4.1
|
|
|
4.2
|
|
|
5.2
|
|
|
8.3
|
|
|
8.5
|
|
|
Inventory write down
and fixed asset impairment due to product lines exit
(3)
|
2.6
|
|
|
1.1
|
|
|
—
|
|
|
3.7
|
|
|
—
|
|
|
Integration related
costs
|
—
|
|
|
3.4
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
|
Amortization of
acquired intangibles
|
12.4
|
|
|
12.5
|
|
|
4.4
|
|
|
24.9
|
|
|
5.2
|
|
|
Amortization of fair
value adjustments (2)
|
2.1
|
|
|
2.2
|
|
|
1.3
|
|
|
4.3
|
|
|
1.3
|
|
|
Other charges
(1)
|
6.5
|
|
|
15.0
|
|
|
14.0
|
|
|
21.5
|
|
|
26.5
|
|
|
Gross profit on
non-GAAP basis
|
$
|
216.8
|
|
|
$
|
206.1
|
|
|
$
|
149.7
|
|
|
$
|
422.9
|
|
|
$
|
292.3
|
|
|
Gross margin on
non-GAAP basis
|
47.4
|
%
|
|
45.8
|
%
|
|
40.1
|
%
|
|
46.6
|
%
|
|
40.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development on GAAP basis
|
$
|
51.0
|
|
|
$
|
49.9
|
|
|
$
|
42.8
|
|
|
$
|
100.9
|
|
|
$
|
77.4
|
|
|
Stock-based
compensation
|
(4.1)
|
|
|
(3.8)
|
|
|
(3.4)
|
|
|
(7.9)
|
|
|
(6.2)
|
|
|
Other
charges
|
(0.1)
|
|
|
0.2
|
|
|
(0.1)
|
|
|
0.1
|
|
|
(0.3)
|
|
|
Research and
development on non-GAAP basis
|
$
|
46.8
|
|
|
$
|
46.3
|
|
|
$
|
39.3
|
|
|
$
|
93.1
|
|
|
$
|
70.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general
and administrative on GAAP basis
|
$
|
62.4
|
|
|
$
|
56.7
|
|
|
$
|
62.7
|
|
|
$
|
119.1
|
|
|
$
|
95.7
|
|
|
Stock-based
compensation
|
(12.0)
|
|
|
(8.7)
|
|
|
(21.1)
|
|
|
(20.7)
|
|
|
(25.8)
|
|
|
Acquisition related
costs
|
—
|
|
|
—
|
|
|
(12.0)
|
|
|
—
|
|
|
(13.1)
|
|
|
Integration related
costs
|
(2.9)
|
|
|
(3.2)
|
|
|
—
|
|
|
(6.1)
|
|
|
—
|
|
|
Amortization of
acquired intangibles
|
(6.2)
|
|
|
(6.3)
|
|
|
(0.8)
|
|
|
(12.5)
|
|
|
(0.8)
|
|
|
Other
charges
|
(3.3)
|
|
|
(1.4)
|
|
|
(0.6)
|
|
|
(4.7)
|
|
|
(1.5)
|
|
|
Selling, general
and administrative on non-GAAP basis
|
$
|
38.0
|
|
|
$
|
37.1
|
|
|
$
|
28.2
|
|
|
$
|
75.1
|
|
|
$
|
54.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations on GAAP basis
|
$
|
74.8
|
|
|
$
|
59.8
|
|
|
$
|
11.5
|
|
|
$
|
134.6
|
|
|
$
|
68.6
|
|
|
Stock-based
compensation
|
20.2
|
|
|
16.7
|
|
|
29.7
|
|
|
36.9
|
|
|
40.5
|
|
|
Inventory write down
and fixed asset impairment due to product lines exit
(3)
|
2.6
|
|
|
1.1
|
|
|
—
|
|
|
3.7
|
|
|
—
|
|
|
Acquisition related
costs
|
—
|
|
|
—
|
|
|
12.0
|
|
|
—
|
|
|
13.1
|
|
|
Integration related
costs
|
2.9
|
|
|
6.6
|
|
|
—
|
|
|
9.5
|
|
|
—
|
|
|
Amortization of
acquired intangibles
|
18.6
|
|
|
18.8
|
|
|
5.2
|
|
|
37.4
|
|
|
6.0
|
|
|
Amortization of fair
value adjustments (2)
|
2.1
|
|
|
2.2
|
|
|
1.3
|
|
|
4.3
|
|
|
1.3
|
|
|
Restructuring and
related charges
|
0.9
|
|
|
1.3
|
|
|
7.8
|
|
|
2.2
|
|
|
9.1
|
|
|
Other
charges
|
9.9
|
|
|
16.2
|
|
|
14.7
|
|
|
26.1
|
|
|
28.3
|
|
|
Income from
operations on non-GAAP basis
|
$
|
132.0
|
|
|
$
|
122.7
|
|
|
$
|
82.2
|
|
|
$
|
254.7
|
|
|
$
|
166.9
|
|
|
Operating margin on
non-GAAP basis
|
28.8
|
%
|
|
27.3
|
%
|
|
22.0
|
%
|
|
28.1
|
%
|
|
22.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other
income (expense), net on GAAP basis
|
$
|
(17.1)
|
|
|
$
|
(6.4)
|
|
|
$
|
(4.7)
|
|
|
$
|
(23.5)
|
|
|
$
|
(7.1)
|
|
|
Other interest and
(income) expense adjustments
|
—
|
|
|
—
|
|
|
2.2
|
|
|
—
|
|
|
2.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange
(gains) losses, net (4)
|
2.1
|
|
|
(1.1)
|
|
|
(0.3)
|
|
|
1.0
|
|
|
—
|
|
|
Non-cash interest
expense on convertible notes and term loan
|
14.4
|
|
|
4.9
|
|
|
4.5
|
|
|
19.3
|
|
|
8.8
|
|
|
Interest and other
income (expense), net on non-GAAP basis
|
$
|
(0.6)
|
|
|
$
|
(2.6)
|
|
|
$
|
1.7
|
|
|
$
|
(3.2)
|
|
|
$
|
3.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before
income taxes on GAAP basis
|
$
|
57.7
|
|
|
$
|
53.4
|
|
|
$
|
17.7
|
|
|
$
|
111.1
|
|
|
$
|
70.3
|
|
|
Stock-based
compensation
|
20.2
|
|
|
16.7
|
|
|
29.7
|
|
|
36.9
|
|
|
40.5
|
|
|
Inventory write down
and fixed asset impairment due to product lines exit
(3)
|
2.6
|
|
|
1.1
|
|
|
—
|
|
|
3.7
|
|
|
—
|
|
|
Acquisition related
costs
|
—
|
|
|
—
|
|
|
12.0
|
|
|
—
|
|
|
13.1
|
|
|
Integration related
costs
|
2.9
|
|
|
6.6
|
|
|
—
|
|
|
9.5
|
|
|
—
|
|
|
Amortization of
acquired intangibles
|
18.6
|
|
|
18.8
|
|
|
5.2
|
|
|
37.4
|
|
|
6.0
|
|
|
Amortization of fair
value adjustments (2)
|
2.1
|
|
|
2.2
|
|
|
1.3
|
|
|
4.3
|
|
|
1.3
|
|
|
Restructuring and
related charges
|
0.9
|
|
|
1.3
|
|
|
7.8
|
|
|
2.2
|
|
|
9.1
|
|
|
Other interest and
(income) expense adjustments
|
—
|
|
|
—
|
|
|
2.2
|
|
|
—
|
|
|
2.0
|
|
|
Foreign exchange
(gains) losses, net (4)
|
2.1
|
|
|
(1.1)
|
|
|
(0.3)
|
|
|
1.0
|
|
|
—
|
|
|
Non-cash interest
expense on convertible notes and term loan
|
14.4
|
|
|
4.9
|
|
|
4.5
|
|
|
19.3
|
|
|
8.8
|
|
|
Unrealized gain on
derivative liability
|
—
|
|
|
—
|
|
|
(10.9)
|
|
|
—
|
|
|
(8.8)
|
|
|
Other
charges
|
9.9
|
|
|
16.2
|
|
|
14.7
|
|
|
26.1
|
|
|
28.3
|
|
|
Income before
income taxes on non-GAAP basis
|
$
|
131.4
|
|
|
$
|
120.1
|
|
|
$
|
83.9
|
|
|
$
|
251.5
|
|
|
$
|
170.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for
income taxes on GAAP basis
|
$
|
8.6
|
|
|
$
|
5.8
|
|
|
$
|
1.4
|
|
|
$
|
14.4
|
|
|
$
|
6.6
|
|
|
Income tax
adjustments
|
3.4
|
|
|
2.9
|
|
|
4.5
|
|
|
6.3
|
|
|
(0.1)
|
|
|
Provision for
income taxes on non-GAAP basis
|
$
|
12.0
|
|
|
$
|
8.7
|
|
|
$
|
5.9
|
|
|
$
|
20.7
|
|
|
$
|
6.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income on GAAP
basis
|
$
|
49.1
|
|
|
$
|
47.6
|
|
|
$
|
16.3
|
|
|
$
|
96.7
|
|
|
$
|
63.7
|
|
|
Stock-based
compensation
|
20.2
|
|
|
16.7
|
|
|
29.7
|
|
|
36.9
|
|
|
40.5
|
|
|
Inventory write down
and fixed asset impairment due to product lines exit
(3)
|
2.6
|
|
|
1.1
|
|
|
—
|
|
|
3.7
|
|
|
—
|
|
|
Acquisition related
costs
|
—
|
|
|
—
|
|
|
12.0
|
|
|
—
|
|
|
13.1
|
|
|
Integration related
costs
|
2.9
|
|
|
6.6
|
|
|
—
|
|
|
9.5
|
|
|
—
|
|
|
Amortization of
acquired intangibles
|
18.6
|
|
|
18.8
|
|
|
5.2
|
|
|
37.4
|
|
|
6.0
|
|
|
Amortization of fair
value adjustments (2)
|
2.1
|
|
|
2.2
|
|
|
1.3
|
|
|
4.3
|
|
|
1.3
|
|
|
Restructuring and
related charges
|
0.9
|
|
|
1.3
|
|
|
7.8
|
|
|
2.2
|
|
|
9.1
|
|
|
Other interest and
(income) expense adjustments
|
—
|
|
|
—
|
|
|
2.2
|
|
|
—
|
|
|
2.0
|
|
|
Foreign exchange
(gains) losses, net (4)
|
2.1
|
|
|
(1.1)
|
|
|
(0.3)
|
|
|
1.0
|
|
|
—
|
|
|
Non-cash interest
expense on convertible notes and term loan
|
14.4
|
|
|
4.9
|
|
|
4.5
|
|
|
19.3
|
|
|
8.8
|
|
|
Unrealized gain on
derivative liability
|
—
|
|
|
—
|
|
|
(10.9)
|
|
|
—
|
|
|
(8.8)
|
|
|
Other
charges
|
9.9
|
|
|
16.2
|
|
|
14.7
|
|
|
26.1
|
|
|
28.3
|
|
|
Income tax
adjustments
|
(3.4)
|
|
|
(2.9)
|
|
|
(4.5)
|
|
|
(6.3)
|
|
|
0.1
|
|
|
Net income on
non-GAAP basis
|
$
|
119.4
|
|
|
$
|
111.4
|
|
|
$
|
78.0
|
|
(4)
|
$
|
230.8
|
|
|
$
|
164.1
|
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share on non-GAAP basis
|
$
|
1.53
|
|
|
$
|
1.44
|
|
|
$
|
1.15
|
|
(4)
|
$
|
2.97
|
|
|
$
|
2.46
|
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per
share calculation - diluted on GAAP basis and non-GAAP
basis
|
78.0
|
|
|
77.6
|
|
|
67.8
|
|
|
77.8
|
|
|
66.6
|
|
|
|
(1) Other charges for
the three and six months ended December 28, 2019, primarily include
costs of transferring product lines to new production facilities,
including Thailand of $2.0 million and $8.1 million, respectively.
We also incurred excess and obsolete inventory charges driven by
the decline in demand from Huawei of $6.0 million and $12.7 million
during the three and six months ended December 28, 2019. Other
charges for the three and six months ended December 29, 2018,
including costs of transferring product lines to Thailand of $14.5
million and $27.2 million, respectively.
|
|
(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 $2.1
million and $4.3 million of amortization expense of the fair value
adjustment during the three and six months ended December 28, 2019,
respectively.
|
|
(3) For the three and
six months ended December 28, 2019, we recorded an inventory write
down charge and fixed assets impairment of $2.6 million and $3.7
million, respectively, related to the decision to exit the Datacom
module and Lithium Niobate product lines.
|
|
(4) The non-GAAP
financial measures for the three and six months ended December 29,
2018 have been adjusted to conform to the current period
presentation, by removing foreign exchange (gains) losses,
net.
|
LUMENTUM HOLDINGS
INC.
RECONCILIATION OF
GAAP NET INCOME TO EBITDA
(in millions,
except per share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
December 28,
2019
|
|
September 28,
2019
|
|
December 28,
2019
|
|
December 29,
2018
|
GAAP Net
income
|
$
|
49.1
|
|
|
$
|
47.6
|
|
|
$
|
96.7
|
|
|
$
|
63.7
|
|
Interest and other
expense (income), net
|
17.1
|
|
|
6.4
|
|
|
23.5
|
|
|
7.1
|
|
Provision for income
taxes
|
8.6
|
|
|
5.8
|
|
|
14.4
|
|
|
6.6
|
|
Depreciation
|
28.7
|
|
|
31.6
|
|
|
60.3
|
|
|
45.7
|
|
Amortization of
acquired intangibles
|
18.6
|
|
|
18.8
|
|
|
37.4
|
|
|
6.0
|
|
EBITDA
|
122.1
|
|
|
110.2
|
|
|
232.3
|
|
|
129.1
|
|
Amortization of fair
value adjustments
|
2.1
|
|
|
2.2
|
|
|
4.3
|
|
|
1.3
|
|
Restructuring and
related charges
|
0.9
|
|
|
1.3
|
|
|
2.2
|
|
|
9.1
|
|
Stock-based
compensation
|
20.2
|
|
|
16.7
|
|
|
36.9
|
|
|
40.5
|
|
Acquisition related
costs
|
—
|
|
|
—
|
|
|
—
|
|
|
13.1
|
|
Unrealized gain on
derivative liability
|
—
|
|
|
—
|
|
|
—
|
|
|
(8.8)
|
|
Inventory write down
and fixed asset impairment due to product lines exit
|
2.6
|
|
|
1.1
|
|
|
3.7
|
|
|
—
|
|
Integration related
costs
|
2.9
|
|
|
6.6
|
|
|
9.5
|
|
|
—
|
|
Other
charges
|
9.9
|
|
|
16.2
|
|
|
26.1
|
|
|
28.3
|
|
Adjusted
EBITDA
|
$
|
160.7
|
|
|
$
|
154.3
|
|
|
$
|
315.0
|
|
|
$
|
212.6
|
|
View original
content:http://www.prnewswire.com/news-releases/lumentum-announces-fiscal-second-quarter-2020-financial-results-300998177.html
SOURCE Lumentum