~ Record Revenues of $337.4 million
~
~ Record GAAP and Non-GAAP Earnings Per
Share of $1.60 and $1.61 ~
Ubiquiti Inc. (NYSE: UI) (“Ubiquiti” or the “Company”) today
announced results for the third quarter fiscal 2020, ended March
31, 2020.
Third Quarter Fiscal 2020 Financial Summary
- Revenues of $337.4 million, increasing 18.4%
year-over-year
- GAAP diluted EPS of $1.60, increasing 28.0% year-over-year
- Non-GAAP diluted EPS of $1.61, increasing 27.8%
year-over-year
- Repurchased 1,112,606 shares of common stock at an average
price of $133.38 per share during the quarter and an additional
99,165 shares of common stock at an average price of $138.25 per
share subsequent to March 31, 2020
Additional Financial Highlights
- The Company's Board of Directors declared a $0.30 per share
cash dividend payable on May 26, 2020 to shareholders of record at
the close of business on May 18, 2020.
- The Company has initiated a new stock repurchase program
authorizing the Company to repurchase up to $500 million of its
common stock, as disclosed in the Form 8-K filed on May 8,
2020.
Financial Highlights ($, in millions, except per share
data)
Income statement highlights
F3Q20
F2Q20
F3Q19
Revenues
337.4
308.3
284.9
Service Provider Technology
106.4
97.7
109.4
Enterprise Technology
231.0
210.6
175.5
Gross profit
159.6
145.1
132.8
Gross Profit (%)
47.3%
47.1%
46.6%
Total Operating Expenses
32.3
33.0
30.7
Income from Operations
127.3
112.1
102.1
GAAP Net Income
103.7
85.8
88.3
GAAP EPS (diluted)
1.60
1.32
1.25
Non-GAAP Net Income
104.3
91.4
88.9
Non-GAAP EPS (diluted)
1.61
1.40
1.26
Ubiquiti Inc. Revenues by
Product Type (In thousands) (Unaudited)
Three Months Ended March
31,
Nine Months Ended March
31,
2020
2019
2020
2019
Service Provider Technology
$
106,439
$
109,379
$
320,081
$
327,558
Enterprise Technology
230,978
175,532
648,897
547,534
Total revenues
$
337,417
$
284,911
$
968,978
$
875,092
Ubiquiti Inc. Revenues by
Geographical Area In thousands) (Unaudited)
Three Months Ended March
31,
Nine Months Ended March
31,
2020
2019
2020
2019
North America
$
133,917
$
109,135
$
411,834
$
349,740
Europe, the Middle East and Africa
159,436
125,662
405,883
384,985
Asia Pacific
26,232
27,138
88,753
82,308
South America
17,832
22,976
62,508
58,059
Total revenues
$
337,417
$
284,911
$
968,978
$
875,092
Income Statement Items
Revenues
Revenues for the third quarter fiscal 2020 were $337.4 million,
representing an increase from the prior quarter of 9.5% and an
increase from the comparable prior year period of 18.4%. Revenues
for the first nine months of fiscal 2020 were $969.0 million,
representing an increase of 10.7% from the first nine months of
fiscal 2019. The fiscal quarter sequential increase in revenue was
primarily due to distributor ordering patters in both Enterprise
and Service Provider Technologies.
Gross Margins
During the third quarter fiscal 2020, gross profit was $159.6
million. GAAP gross margin of 47.3% increased 0.7% versus the
comparable prior year period GAAP gross margin of 46.6% and
increased 0.2% versus the prior quarter GAAP gross margin of 47.1%.
The increase in gross profit percentage for the third quarter
fiscal 2020 as compared to the comparable prior-year period was
primarily driven by favorable changes in product mix and decreased
inventory reserves, partially offset by higher tariffs and higher
indirect costs. The increase in gross profit percentage for the
third quarter fiscal 2020 as compared to the prior quarter was
driven by decreased inventory write offs and lower warranty
reserves partially offset by higher tariffs.
Research and Development
During the third quarter fiscal 2020, research and development
("R&D") expenses were $21.7 million. This reflects an increase
as compared to the R&D expenses of $21.3 million in the
comparable prior year period and a decrease as compared to R&D
expenses of $24.0 million in the prior quarter. The increase in
third quarter fiscal 2020 as compared to the prior year period was
primarily driven by higher expenses related to development
activities, partially offset by lower employee related expenses.
The decrease in third quarter fiscal 2020 as compared to the prior
quarter was primarily driven by lower employee related expenses and
development activities.
Sales, General and Administrative
The Company’s sales, general and administrative (“SG&A”)
expenses for the third quarter fiscal 2020 were $10.6 million. This
reflects an increase as compared to the SG&A expenses of $9.4
million in the comparable prior year period and an increase as
compared to the SG&A expenses of $9.0 million in the prior
quarter. The increase in SG&A costs as compared to the
comparable prior year period was primarily due to higher marketing
expense offset, in part by lower professional fees. The increase in
SG&A costs as compared to the prior quarter is primarily driven
by increased professional fees, marketing expenses and employee
related expenses.
Net Income and Earnings Per Share
During the third quarter fiscal 2020, GAAP net income was $103.7
million and non-GAAP net income was $104.3 million. This reflects
an increase in GAAP net income and non-GAAP net income from the
comparable prior year period by 17.5% and 17.3% respectively,
primarily driven by increase in revenues and a higher gross margin.
Third quarter fiscal 2020 GAAP earnings per diluted share was $1.60
and non-GAAP earnings per diluted share was $1.61. This reflects an
increase in GAAP and non-GAAP earnings per share from the
comparable prior year period by 28.0% and 27.8% respectively,
primarily driven by higher GAAP and non-GAAP net income and a
reduction in GAAP and non-GAAP diluted shares outstanding.
Impact of COVID-19
We do not believe that the COVID-19 pandemic had any material
impact on the Company's results for the third quarter fiscal 2020.
However, we have experienced a major disruption in our supply chain
as a result of the COVID-19 pandemic due to related restrictions
that have significantly impacted our suppliers' ability to
manufacture or provide key components or services. Accordingly, the
effects, if any, of the COVID-19 pandemic may not be fully
reflected in the Company's financial results until future
periods.
About Ubiquiti Inc.
Ubiquiti Inc. is focused on democratizing network technology on
a global scale — aggregate shipments over 101 million devices play
a key role in creating networking infrastructure in over 200
countries and territories around the world. Our professional
networking products are powered by our UNMS and UniFi software
platforms to provide high-capacity distributed Internet access and
unified information technology management, respectively.
Ubiquiti and the U logo are trademarks or registered trademarks
of Ubiquiti and/or its affiliates in the United States and other
countries. For more information, please visit www.ui.com.
Safe Harbor for Forward Looking Statements
Certain statements in this press release are forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. Statements other than statements of historical
fact including words such as “look”, “will”, “anticipate”,
“believe”, “estimate”, “expect”, “forecast”, “consider” and “plan”
and statements in the future tense are forward looking statements.
The statements in this press release that could be deemed
forward-looking statements include statements regarding the impact
of COVID-19 and our intentions to pay quarterly cash dividends and
any statements or assumptions underlying any of the foregoing.
Forward-looking statements are subject to certain risks and
uncertainties that could cause our actual future results to differ
materially or cause a material adverse impact on our results.
Potential risks and uncertainties include, but are not limited to,
the impact of public health problems, such as COVID-19, and U.S.
tariffs on results; fluctuations in our operating results; varying
demand for our products due to the financial and operating
condition of our distributors and their customers, and our
distributors' inventory management practices; political and
economic conditions and volatility affecting the stability of
business environments, economic growth, currency values, commodity
prices and other factors that may influence the ultimate demand for
our products in particular geographies or globally; impact of
counterfeiting and our ability to contain such impact; our reliance
on a limited number of distributors; inability of our contract
manufacturers and suppliers to meet our demand; our dependence on
chipset suppliers for chipsets without a short-term alternative; as
we move into new markets competition from certain of our current or
potential competitors who may be more established in such markets;
our ability to keep pace with technological and market
developments; success and timing of new product introductions by us
and the performance of our products generally; our ability to
effectively manage the significant increase in our transactional
sales volumes; we may become subject to warranty claims, product
liability and product recalls; that a substantial majority of our
sales are into countries outside the United States and we are
subject to numerous U.S. export control and economic sanctions
laws; costs related to responding to government inquiries related
to regulatory compliance; our reliance on certain key members of
our management team, including our founder and chief executive
officer, Robert J. Pera; adverse tax-related matters such as tax
audits, changes in our effective tax rate or new tax legislative
proposals; whether the final determination of our income tax
liability may be materially different from our income tax
provisions; the impact of any intellectual property litigation and
claims for indemnification; litigation related to U.S. securities
laws; and economic and political conditions in the United States
and abroad. We discuss these risks in greater detail under the
heading “Risk Factors” and elsewhere in our Annual Report on Form
10-K for the year ended June 30, 2019, and subsequent filings filed
with the U.S. Securities and Exchange Commission (the “SEC”), which
are available at the SEC's website at www.sec.gov. Copies may also
be obtained by contacting the Ubiquiti Inc. Investor Relations
Department, by email at IR@ui.com or by visiting the Investor
Relations section of the Ubiquiti Inc. website,
http://ir.ui.com.
Given these uncertainties, you should not place undue reliance
on these forward-looking statements. Also, forward-looking
statements represent our management's beliefs and assumptions only
as of the date made. Except as required by law, Ubiquiti Inc.
undertakes no obligation to update information contained herein.
You should review our SEC filings carefully and with the
understanding that our actual future results may be materially
different from what we expect.
Ubiquiti Inc. Condensed
Consolidated Statements of Operations and Comprehensive
Income (In thousands, except per share data)
(Unaudited)
Three Months Ended March
31,
Nine Months Ended March
31,
2020
2019
2020
2019
Revenues
$
337,417
$
284,911
$
968,978
$
875,092
Cost of revenues
177,782
152,081
512,866
470,425
Gross profit
$
159,635
$
132,830
$
456,112
$
404,667
Operating expenses:
Research and development
21,672
21,341
65,965
59,540
Sales, general and administrative
10,606
9,352
30,053
33,715
Litigation settlement
—
—
—
18,000
Total operating expenses
32,278
30,693
96,018
111,255
Income from operations
127,357
102,137
360,094
293,412
Interest expense and other, net
(6,618)
(3,447)
(23,356)
(9,186)
Income before income taxes
120,739
98,690
336,738
284,226
Provisions for income taxes
17,017
10,390
49,059
32,427
Net income
$
103,722
$
88,300
$
287,679
$
251,799
Net income per share of common stock:
Basic
$
1.60
$
1.25
$
4.36
$
3.50
Diluted
$
1.60
$
1.25
$
4.35
$
3.50
Weighted average shares used in computing
net income per share of common stock:
Basic
64,630
70,540
66,003
71,856
Diluted
64,699
70,692
66,094
72,036
Other comprehensive income:
Unrealized (losses) gains on
available-for-sale securities
(90)
325
$
(415)
$
177
Comprehensive income
$
103,632
$
88,625
$
287,264
$
251,976
Ubiquiti Inc.
Reconciliation of GAAP Net Income to
Non-GAAP Net Income
(In thousands, except per share
data)
(Unaudited)
Three Months Ended
Nine Months Ended March
31,
March 31, 2020
December 31, 2019
March 31, 2019
2020
2019
Net Income
$
103,722
$
85,811
$
88,300
$
287,679
$
251,799
Stock-based compensation:
Cost of revenues
29
33
26
94
320
Research and development
499
527
555
1,507
1,519
Sales, general and administrative
197
170
171
543
467
Tax Regulation changes
—
—
—
—
2,765
Litigation settlement
—
—
—
—
18,000
Impairment of cost-based investment
—
5,000
—
5,000
—
Tax effect of Non-GAAP adjustments
(170)
(172)
(177)
(503)
(4,617)
Non-GAAP net income
$
104,277
$
91,369
$
88,875
$
294,320
$
270,253
Non-GAAP diluted EPS
$
1.61
$
1.40
$
1.26
$
4.45
$
3.75
Weighted-average shares used in Non-GAAP
diluted EPS
64,699
65,071
70,692
66,094
72,036
Use of Non-GAAP Financial Information
To supplement our condensed consolidated financial results
prepared under generally accepted accounting principles, or GAAP,
we use non-GAAP measures of net income and earnings per diluted
share that are adjusted to exclude certain costs, expenses and
gains such as stock-based compensation expense, Tax Regulation
changes, Litigation settlement, impairment of cost-based investment
and the tax effects of these non-GAAP adjustments.
Reconciliations of the adjustments to GAAP results for the
periods presented are provided above. In addition, an explanation
of the ways in which management uses non-GAAP financial information
to evaluate its business, the substance behind management's
decision to use this non-GAAP financial information, material
limitations associated with the use of non-GAAP financial
information, the manner in which management compensates for those
limitations, and the substantive reasons management believes that
this non-GAAP financial information provides useful information to
investors is included under the paragraphs below.
Usefulness of Non-GAAP Financial Information to
Investors
We believe that the presentation of non-GAAP net income and
non-GAAP earnings per diluted share provides important supplemental
information regarding non-cash expenses, significant items that we
believe are important to understanding our financial, and business
trends relating to our financial condition and results of
operations. Non-GAAP net income and non-GAAP earnings per diluted
share are among the primary indicators used by management as a
basis for planning and forecasting future periods and by management
and our board of directors to determine whether our operating
performance has met specified targets and thresholds. Management
uses non-GAAP net income and non-GAAP earnings per diluted share
when evaluating operating performance because it believes that the
exclusion of the items described below, for which the amounts or
timing may vary significantly depending upon the Company's
activities and other factors, facilitates comparability of the
Company's operating performance from period to period. We have
chosen to provide this information to investors so they can analyze
our operating results in the same way that management does and use
this information in their assessment of our business and the
valuation of our Company.
About our Non-GAAP Net Income and Non-GAAP Earnings per
Diluted Share
We compute non-GAAP net income and non-GAAP earnings per diluted
share by adjusting GAAP net income and GAAP earnings per diluted
share to remove the impact of certain adjustments and the tax
effect of those adjustments. Items excluded from net income
are:
- Stock-based compensation expense
- Tax Regulation changes
- Litigation Settlement
- Impairment of cost-based investment
- Tax effect of non-GAAP adjustments, applying the principles of
ASC 740
These non-GAAP measures are not in accordance with, or an
alternative to, GAAP and may be materially different from other
non-GAAP measures, including similarly titled non-GAAP measures
used by other companies. The presentation of this additional
information should not be considered in isolation from, as a
substitute for, or superior to, net income or earnings per diluted
share prepared in accordance with GAAP. Non-GAAP financial measures
have limitations in that they do not reflect certain items that may
have a material impact upon our reported financial results.
For more information on the non-GAAP adjustments, please see the
table captioned “Reconciliation of GAAP Net Income to non-GAAP Net
Income” included in this press release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200508005091/en/
Investor Relations Ubiquiti Inc. Investor Relations
ir@ui.com Ph. 1-646-780-7958
United Industrial (NYSE:UIC)
Historical Stock Chart
From Jun 2024 to Jul 2024
United Industrial (NYSE:UIC)
Historical Stock Chart
From Jul 2023 to Jul 2024