Lumentum Announces Fiscal Fourth Quarter And Full Year 2019 Results
MILPITAS, Calif., Aug. 8, 2019 /PRNewswire/ -- Lumentum Holdings Inc. ("Lumentum" or the "Company") today reported results for its fiscal fourth quarter and full year ended June 29, 2019.
"An eventful fourth quarter capped off an exciting fiscal 2019 during which we made significant progress against our strategic goals and achieved record results with revenue increasing 25% to more than $1.5 billion and operating margin expanding to more than 20%," said Alan Lowe, President and CEO. "With market leading positions in the growing telecom and 3D sensing markets, a datacom strategy that profitably benefits from growth in cloud and 5G wireless network deployments, a commercial lasers business that bucked market trends and grew to record levels, and a more profitable business model driven by the increased scale and synergies from the Oclaro acquisition, we are well positioned for fiscal 2020 and beyond."
Full Fiscal Year 2019 Highlights:
Net revenue for fiscal year 2019 was $1,565.3 million, with GAAP net loss attributable to common stockholders of $(37.9) million, or $(0.54) per diluted share. Net revenue for fiscal year 2018 was $1,247.7 million, with GAAP net income attributable to common stockholders of $241.5 million, or $3.82 per diluted share. GAAP results for fiscal year 2019 include the impact of the Oclaro acquisition starting from December 10, 2018, as well as related restructuring, write-downs, amortization of intangibles and other charges.
Non-GAAP net income for fiscal year 2019 was $304.8 million, or $4.25 per diluted share. Non-GAAP net income for fiscal year 2018 was $247.8 million, or $3.82 per diluted share.
Fiscal Fourth Quarter Highlights:
Net revenue for the fiscal fourth quarter of 2019 was $404.6 million, with GAAP net loss attributable to common stockholders of $(25.8) million, or $(0.34) per diluted share. 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 fourth quarter of 2018 was $301.1 million, with GAAP net income attributable to common stockholders of $25.7 million, or $0.40 per diluted share. GAAP results for fiscal year 2019 include the impact of the Oclaro acquisition starting from December 10, 2018, as well as related restructuring, write-downs, amortization of intangibles and other charges.
Non-GAAP net income for the fiscal fourth quarter of 2019 was $70.8 million, or $0.92 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 fourth quarter of 2018 was $61.6 million, or $0.95 per diluted share.
The Company held $768.5 million in total cash and short-term investments at the end of the fiscal fourth quarter of 2019, up $71 million from third quarter of 2019.
Financial Overview - Fiscal Fourth Quarter Ended June 29, 2019
GAAP Results ($ in millions)
Q4 Q3 Q4 Change
FY 2019 FY 2019 FY 2018 Q/Q Y/Y
Net revenue $
404.6 $
432.9 $
301.1 (6.5)% 34.4%
Gross
margin 21.5% 20.4% 31.7% 110bps (1,020)bps
Operating
margin
(loss) (3.4)% (17.6)% 6.9% 1,420bps (1,030)bps
Non-GAAP Results ($ in millions)
Q4 Q3 Q4 Change
FY 2019 FY 2019 FY 2018 Q/Q Y/Y
Net revenue $
404.6 $
432.9 $
301.1 (6.5)% 34.4%
Gross
margin 38.9% 39.0% 37.2% (10)bps 170bps
Operating
margin 19.0% 17.8% 17.8% 120bps 120bps
Net Revenue by Segment ($ in millions)
Q4 % of Q3 Q4 Change
FY 2019 Net
Revenue FY 2019 FY 2018 Q/Q Y/Y
Optical Communications $
356.8 88.2% $
377.9 $
244.9 (5.6)% 45.7%
Lasers 47.8 11.8% 55.0 56.2 (13.1)% (14.9)%
Total $
404.6 100.0% $
432.9 $
301.1 (6.5)% 34.4%
Financial Overview - Fiscal Year Ended June 29, 2019
GAAP Results ($ in millions)
FY 2019 FY 2018 Change Y/Y
Net revenue $
1,565.3 $
1,247.7 25.5%
Gross margin 27.2% 34.6% (740)bps
Operating margin (1.4)% 11.2% (1,260)bps
Non-GAAP Results ($ in millions)
---
FY 2019 FY 2018 Change Y/Y
Net revenue $
1,565.3 $
1,247.7 25.5%
Gross margin 39.5% 38.9% 60bps
Operating margin 20.5% 19.7% 80bps
Net Revenue by Segment ($ in millions)
FY 2019 FY 2018 Change Y/Y
Optical Communications $
1,370.2 $
1,059.2 29.4%
Lasers 195.1 188.5 3.5%
Total $
1,565.3 $
1,247.7 25.5%
The tables above provide comparisons of quarterly and annual results relative 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." GAAP results for fiscal year 2019 include the impact of the Oclaro acquisition starting from December 10, 2018, as well as related restructuring, write-downs, amortization of intangibles and other charges.
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 months and full year ended June 29, 2019 under Topic 605.
Business Outlook
Lumentum expects the following for the fiscal first quarter 2020:
-- Net revenue in the range of $435 million to $455 million
-- Non-GAAP operating margin of 22.5% to 24.5%
-- Non-GAAP diluted earnings per share of $1.12 to $1.26
We have not provided reconciliations from GAAP to non-GAAP measures for our outlook. A large portion of non-GAAP adjustments, such as stock-based compensation, inventory write down due to plans to exit certain product lines, acquisition related costs, integration related costs, amortization of acquired intangibles, amortization of fair value adjustments, restructuring charges, impairment charges, derivative liability adjustments, transferring product lines to Thailand, 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.
Conference Call
Lumentum will host a conference call on August 8, 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 August 15, 2019. 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 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 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 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, 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, 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.
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 Twelve Months Ended
---
June 29, 2019 June 30, 2018 June 29, 2019 June 30, 2018
---
Net revenue $
404.6 $
301.1 $
1,565.3 $
1,247.7
Cost of sales 304.6 204.8 1,092.9 812.4
Amortization of
acquired intangibles 13.2 0.8 46.5 3.2
Gross profit 86.8 95.5 425.9 432.1
Operating expenses:
Research and
development 49.5 38.5 184.6 156.8
Selling, general and
administrative 49.4 32.7 200.3 128.2
Restructuring and
related charges 1.7 3.4 31.9 7.2
Impairment charges - 30.7
Total operating
expenses 100.6 74.6 447.5 292.2
Income/(loss) from
operations (13.8) 20.9 (21.6) 139.9
Unrealized gain (loss)
on derivative
liability - 7.8 8.8 (0.8)
Interest and other
income (expense), net (7.3) (1.0) (20.5) (9.7)
Income/(loss) before
income taxes (21.1) 27.7 (33.3) 129.4
Provision for (benefit
from) income taxes 4.7 (5.8) 3.1 (118.7)
Net income/(loss) (25.8) 33.5 (36.4) 248.1
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) (0.9)
Less: Earnings
allocated to Series A
Preferred Stock - (0.8) (1.2) (5.7)
Net income/(loss)
attributable to common
stockholders -Basic $
(25.8) $
32.5 $
(37.9) $
241.5
Add: Earnings allocated
to Series A Preferred
Stock - 0.8
Add/Less: Unrealized
(gain) loss on
derivative liability
on Series A Preferred
Stock - (7.8)
Add: Cumulative
dividends on Series A
Preferred Stock - 0.2
Net income/(loss)
attributable to common
stockholders -Diluted $
(25.8) $
25.7 $
(37.9) $
241.5
Net income/(loss) per share
attributable to common stockholders:
Basic $
(0.34) $
0.52 $
(0.54) $
3.88
Diluted $
(0.34) $
0.40 $
(0.54) $
3.82
Shares used to compute net income/
(loss) per share attributable to
common stockholders:
Basic 76.5 62.7 70.7 62.3
Diluted 76.5 65.0 70.7 63.3
(a) For the three and twelve months
ended June 29, 2019, our diluted
earnings per share attributable to
common stockholders is the same as
basic EPS as we are in net loss
position. For the three months ended
June 30, 2018, our diluted earnings
per share attributable to common
stockholders is calculated using the
"if-converted" method because it is
more dilutive, whereas for the
twelve months ended June 30, 2018,
our diluted earnings per share
attributable to common stockholders
is calculated using the "treasury
stock" method.
LUMENTUM HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except share and per share data)
(unaudited)
June 29, 2019 June 30, 2018
ASSETS
Current assets:
Cash and cash equivalents $
432.6 $
397.3
Short-term investments 335.9 314.2
Accounts receivable, net 238.0 197.1
Inventories 228.8 174.1
Prepayments and other current
assets 97.5 44.5
Total current assets 1,332.8 1,127.2
Property, plant and equipment,
net 433.3 306.9
Goodwill 368.9 11.3
Other intangible assets, net 395.4 7.0
Deferred income taxes 169.6 125.6
Other non-current assets 16.6 3.5
Total assets $
2,716.6 $
1,581.5
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED
STOCK AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $
160.8 $
126.5
Accrued payroll and related
expenses 42.3 31.5
Accrued expenses 46.7 33.9
Term loan, current 5.0
Other current liabilities 39.2 22.1
Total current liabilities 294.0 214.0
Convertible notes 351.9 334.2
Term loan, non-current 484.0
Derivative liability - 52.4
Deferred tax liability 55.9 0.3
Other non-current liabilities 33.7 18.7
Total liabilities 1,219.5 619.6
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 June 29, 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, 76,653,478 and
62,790,087 shares issued and
outstanding as of June 29,
2019 and June 30, 2018,
respectively 0.1 0.1
Additional paid-in capital 1,360.8 753.2
Retained earnings 129.1 166.4
Accumulated other
comprehensive income 7.1 6.4
Total stockholders' equity 1,497.1 926.1
Total liabilities, redeemable
convertible preferred stock,
and stockholders' equity $
2,716.6 $
1,581.5
Use of Non-GAAP Financial Measures
In this press release, Lumentum provides investors with gross margin, gross profit, operating margin (loss), operating income (loss), income (loss) before income taxes and certain expenses, net income (loss), 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 before income taxes, non-GAAP net income, and non-GAAP net income per share exclude (i) stock-based compensation, (ii) 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, (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) impairment charges, (ix) non-cash interest expense, (x) unrealized gain (loss) on derivative liability, (xi) transferring product lines to Thailand, and (xii) 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 Twelve Months Ended
June 29, 2019 March 30, 2019 June 30, 2018 June 29, 2019 June 30, 2018
Gross profit on GAAP basis $
86.8 $
88.3 $
95.5 $
425.9 $
432.1
Stock-based compensation
(3) 3.4 3.2 3.1 15.1 12.6
Inventory write down due
to product lines exit (7) 1.4 19.4 20.8 7.0
Integration related costs 3.8 2.8 6.6
Amortization of acquired
intangibles 13.3 28.1 0.8 46.6 3.2
Amortization of fair value
adjustments (4) 38.8 14.5 54.6
Other charges (1) 9.9 12.5 12.7 48.9 30.2
Gross profit on non-GAAP
basis $
157.4 $
168.8 $
112.1 $
618.5 $
485.1
Gross margin on non-GAAP
basis 38.9% 39.0% 37.2% 39.5% 38.9%
Research and development
on GAAP basis $
49.5 $
57.7 $
38.5 $
184.6 $
156.8
Stock-based compensation
(3) (3.1) (4.5) (3.7) (13.8) (14.2)
Other charges - (0.4) (0.6) (0.7) (2.0)
Research and development
on non-GAAP basis $
46.4 $
52.8 $
34.2 $
170.1 $
140.6
Selling, general and
administrative on GAAP
basis $
49.4 $
55.2 $
32.7 $
200.3 $
128.2
Stock-based compensation
(3) (7.7) (8.3) (4.9) (41.8) (20.0)
Acquisition related costs (0.3) (2.2) (2.1) (15.6) (4.8)
Integration related costs (1.7) (1.3) (3.0)
Amortization of acquired
intangibles (3.6) (3.6) (8.0)
Other charges (1.8) (0.8) (1.4) (4.1) (5.1)
Selling, general and
administrative on non-
GAAP basis $
34.3 $
39.0 $
24.3 $
127.8 $
98.3
Income/(loss) from
operations on GAAP basis $
(13.8) $
(76.4) $
20.9 $
(21.6) $
139.9
Stock-based compensation
(3) 14.2 16.0 11.7 70.7 46.8
Inventory write down due
to product lines exit (7) 1.4 19.4 20.8 7.0
Acquisition related costs 0.3 2.2 2.1 15.6 4.8
Integration related costs 5.5 4.1 9.6
Amortization of acquired
intangibles 16.9 31.7 0.8 54.6 3.2
Amortization of fair value
adjustments (4) 38.8 14.5 54.6
Restructuring and related
charges (2) 1.7 21.1 3.4 31.9 7.2
Impairment charge (6) - 30.7 30.7
Other charges (1) 11.7 13.7 14.7 53.7 37.3
Income from operations on
non-GAAP basis $
76.7 $
77.0 $
53.6 $
320.6 $
246.2
Operating margin on non-
GAAP basis 19.0% 17.8% 17.8% 20.5% 19.7%
Interest and other
(expense) income, net on
GAAP basis $
(7.3) $
(6.1) $
(1.0) $
(20.5) $
(9.7)
Other interest and
(income) expense
adjustments (5) - (2.5) (0.5) (0.1)
Non-cash interest expense
on convertible notes and
term loan 4.9 4.8 4.3 18.5 16.7
Interest and other
(expense) income, net on
non-GAAP basis $
(2.4) $
(3.8) $
3.3 $
(2.5) $
6.9
Income/(loss) before
income taxes on GAAP
basis $
(21.1) $
(82.5) $
27.7 $
(33.3) $
129.4
Stock-based compensation
(3) 14.2 16.0 11.7 70.7 46.8
Inventory write down due
to product lines exit (7) 1.4 19.4 20.8 7.0
Acquisition related costs 0.3 2.2 2.1 15.6 4.8
Integration related costs 5.5 4.1 9.6
Amortization of acquired
intangibles 16.9 31.7 0.8 54.6 3.2
Amortization of fair value
adjustments (4) 38.8 14.5 54.6
Restructuring and related
charges (2) 1.7 21.1 3.4 31.9 7.2
Impairment charge (6) - 30.7 30.7
Other interest and
(income) expense
adjustments (5) - (2.5) (0.5) (0.1)
Non-cash interest expense
on convertible notes and
term loan 4.9 4.8 4.3 18.5 16.7
Unrealized (gain) loss on
derivative liability - (7.8) (8.8) 0.8
Other charges (1) 11.7 13.7 14.7 53.7 37.3
Income before income taxes
on non-GAAP basis $
74.3 $
73.2 $
56.9 $
318.1 $
253.1
Provision for (benefit
from) income taxes on
GAAP basis $
4.7 $
(8.2) $
(5.8) $
3.1 $
(118.7)
Income tax adjustments (1.2) 11.5 1.1 10.2 124.0
Provision for (benefit
from) income taxes on
non-GAAP basis $
3.5 $
3.3 $
(4.7) $
13.3 $
5.3
Net income/(loss) on GAAP
basis $
(25.8) $
(74.3) $
33.5 $
(36.4) $
248.1
Stock-based compensation
(3) 14.2 16.0 11.7 70.7 46.8
Inventory write down due
to product lines exit (7) 1.4 19.4 20.8 7.0
Acquisition related costs 0.3 2.2 2.1 15.6 4.8
Integration related costs 5.5 4.1 9.6
Amortization of acquired
intangibles 16.9 31.7 0.8 54.6 3.2
Amortization of fair value
adjustments (4) 38.8 14.5 54.6
Restructuring and related
charges (2) 1.7 21.1 3.4 31.9 7.2
Impairment charge (6) - 30.7 30.7
Other interest and
(income) expense
adjustments (5) - (2.5) (0.5) (0.1)
Non-cash interest expense
on convertible notes and
term loan 4.9 4.8 4.3 18.5 16.7
Unrealized (gain) loss on
derivative liability - (7.8) (8.8) 0.8
Other charges (1) 11.7 13.7 14.7 53.7 37.3
Income tax adjustments 1.2 (11.5) (1.1) (10.2) (124.0)
Net income on non-GAAP
basis $
70.8 $
69.9 $
61.6 $
304.8 $
247.8
Net income per share on
non-GAAP basis $
0.92 $
0.91 $
0.95 $
4.25 $
3.82
Shares used in per share
calculation -diluted on
GAAP basis 76.5 76.2 65.0 70.7 63.3
Non-GAAP adjustment (8) 0.6 0.5 0.6
Effect of diluted
securities from Series A
Preferred Stock (9) - 0.5 1.5
Shares used in per share
calculation - diluted on
non-GAAP basis 77.1 76.7 65.0 71.8 64.8
(1) Other charges for the three and
twelve months ended June 29, 2019,
primarily include costs of
transferring product lines to
Thailand of $7.9 million and $48.7
million, respectively. Other charges
for the three and twelve months ended
June 30, 2018 primarily relate to
set-up costs of our Thailand
facility, including costs of
transferring product lines to
Thailand of $12.7 million and $30.5
million, respectively.
(2) During the twelve months ended
June 29, 2019, we recorded
restructuring and related charges of
$31.9 million, primarily in
connection with the decision to exit
Lithium Niobate and Datacom module
product lines as well as employee
related benefits associated with
Oclaro's executive severance and
retention agreements.
(3) During the fiscal second quarter
of 2019, we recorded one-time stock-
based compensation of $15.2 million
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 $38.8 million
and $54.6 million of amortization
expense of the fair value adjustment
during the three and twelve months
ended June 29, 2019, respectively.
(5) During the twelve months ended
June 29, 2019, interest and other
(expense) income includes a one-time
benefit of $2.5 million related to a
non-trade reimbursement, offset by a
one-time charge of $2.7 million,
related to a ticking fee to Deutsche
bank.
(6) During the twelve months ended
June 29, 2019, we recorded an
impairment charge of $30.7 million in
Property Plant and Equipment, related
to the decision to exit the Datacom
module product line.
(7) During the three and twelve months
ended June 29, 2019, we recorded an
inventory write down charge of $1.4
million and $20.8 million,
respectively, related to the decision
to exit the Datacom module and
Lithium Niobate product lines.
(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) During the twelve months ended
June 30, 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 Twelve Months Ended
---
June 29, 2019 March 30, 2019 June 30, 2018 June 29, 2019 June 30, 2018
---
GAAP Net income/
(loss) $
(25.8) $
(74.3) $
33.5 $
(36.4) $
248.1
Interest and other
expense (income),
net 7.3 6.1 1.0 20.5 9.7
Provision for
(benefit from)
income taxes 4.7 (8.2) (5.8) 3.1 (118.7)
Depreciation 28.2 29.0 20.7 102.9 74.0
Amortization of
acquired
intangibles 16.9 31.7 0.8 54.6 3.2
EBITDA 31.3 (15.7) 50.2 144.7 216.3
Amortization of fair
value adjustments 38.8 14.5 54.6
Restructuring and
related charges 1.7 21.1 3.4 31.9 7.2
Stock-based
compensation 14.2 16.0 11.7 70.7 46.8
Acquisition related
costs 0.3 2.2 2.1 15.6 4.8
Other charges 11.7 13.7 14.7 53.7 36.6
Unrealized gain/
(loss) on
derivative
liabilities - (7.8) (8.8) 0.8
Inventory write down
due to product
lines exit 1.4 19.4 20.8 7.7
Integration related
costs 5.5 4.1 9.6
Impairment charges - 30.7 30.7
Adjusted EBITDA $
104.9 $
106.0 $
74.3 $
423.5 $
320.2
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SOURCE Lumentum
