Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): | |||||||||||
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||||||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||||||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||||||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act: | ||||||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Exhibit Number | Description of Document | ||||||||||
Exhibit 99.1 | |||||||||||
Exhibit 99.2 | |||||||||||
Exhibit 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. |
Ciena Corporation | ||||||||
Date: March 7, 2024 | By: | /s/ Sheela Kosaraju | ||||||
Sheela Kosaraju | ||||||||
Senior Vice President, General Counsel and Assistant Secretary |
GAAP Results (unaudited) | ||||||||||||||||||||
Q1 | Q1 | Period Change | ||||||||||||||||||
FY 2024 | FY 2023 | Y-T-Y* | ||||||||||||||||||
Revenue | $ | 1,037.7 | $ | 1,056.5 | (1.8) | % | ||||||||||||||
Gross margin | 45.0 | % | 43.2 | % | 1.8 | % | ||||||||||||||
Operating expense | $ | 382.3 | $ | 370.7 | 3.1 | % | ||||||||||||||
Operating margin | 8.2 | % | 8.1 | % | 0.1 | % | ||||||||||||||
Non-GAAP Results (unaudited) | ||||||||||||||||||||
Q1 | Q1 | Period Change | ||||||||||||||||||
FY 2024 | FY 2023 | Y-T-Y* | ||||||||||||||||||
Revenue | $ | 1,037.7 | $ | 1,056.5 | (1.8) | % | ||||||||||||||
Adj. gross margin | 45.7 | % | 43.7 | % | 2.0 | % | ||||||||||||||
Adj. operating expense | $ | 336.8 | $ | 329.3 | 2.3 | % | ||||||||||||||
Adj. operating margin | 13.2 | % | 12.6 | % | 0.6 | % | ||||||||||||||
Adj. EBITDA | $ | 160.0 | $ | 155.1 | 3.2 | % |
Revenue by Segment (unaudited) | ||||||||||||||||||||||||||
Q1 FY 2024 | Q1 FY 2023 | |||||||||||||||||||||||||
Revenue | %** | Revenue | %** | |||||||||||||||||||||||
Networking Platforms | ||||||||||||||||||||||||||
Optical Networking | $ | 695.8 | 67.1 | $ | 735.6 | 69.6 | ||||||||||||||||||||
Routing and Switching | 111.4 | 10.7 | 119.5 | 11.3 | ||||||||||||||||||||||
Total Networking Platforms | 807.2 | 77.8 | 855.1 | 80.9 | ||||||||||||||||||||||
Platform Software and Services | 89.7 | 8.6 | 73.4 | 6.9 | ||||||||||||||||||||||
Blue Planet Automation Software and Services | 14.0 | 1.4 | 15.4 | 1.5 | ||||||||||||||||||||||
Global Services | ||||||||||||||||||||||||||
Maintenance Support and Training | 74.1 | 7.1 | 67.9 | 6.4 | ||||||||||||||||||||||
Installation and Deployment | 42.7 | 4.1 | 34.6 | 3.3 | ||||||||||||||||||||||
Consulting and Network Design | 10.0 | 1.0 | 10.1 | 1.0 | ||||||||||||||||||||||
Total Global Services | 126.8 | 12.2 | 112.6 | 10.7 | ||||||||||||||||||||||
Total | $ | 1,037.7 | 100.0 | $ | 1,056.5 | 100.0 | ||||||||||||||||||||
Revenue by Geographic Region (unaudited) | ||||||||||||||||||||||||||
Q1 FY 2024 | Q1 FY 2023 | |||||||||||||||||||||||||
Revenue | % ** | Revenue | % ** | |||||||||||||||||||||||
Americas | $ | 718.2 | 69.2 | $ | 765.1 | 72.4 | ||||||||||||||||||||
Europe, Middle East and Africa | 207.4 | 20.0 | 152.8 | 14.5 | ||||||||||||||||||||||
Asia Pacific | 112.1 | 10.8 | 138.6 | 13.1 | ||||||||||||||||||||||
Total | $ | 1,037.7 | 100.0 | $ | 1,056.5 | 100.0 | ||||||||||||||||||||
Quarter Ended | |||||||||||
January 27, | January 28, | ||||||||||
2024 | 2023 | ||||||||||
Revenue: | |||||||||||
Products | $ | 835,777 | $ | 877,715 | |||||||
Services | 201,932 | 178,806 | |||||||||
Total revenue | 1,037,709 | 1,056,521 | |||||||||
Cost of goods sold: | |||||||||||
Products | 466,472 | 500,337 | |||||||||
Services | 104,275 | 100,238 | |||||||||
Total cost of goods sold | 570,747 | 600,575 | |||||||||
Gross profit | 466,962 | 455,946 | |||||||||
Operating expenses: | |||||||||||
Research and development | 187,269 | 181,730 | |||||||||
Selling and marketing | 128,158 | 123,807 | |||||||||
General and administrative | 54,683 | 50,896 | |||||||||
Significant asset impairments and restructuring costs | 4,971 | 4,298 | |||||||||
Amortization of intangible assets | 7,252 | 7,441 | |||||||||
Acquisition and integration costs | — | 2,558 | |||||||||
Total operating expenses | 382,333 | 370,730 | |||||||||
Income from operations | 84,629 | 85,216 | |||||||||
Interest and other income, net | 10,650 | 31,973 | |||||||||
Interest expense | (23,776) | (15,870) | |||||||||
Income before income taxes | 71,503 | 101,319 | |||||||||
Provision for income taxes | 21,956 | 25,078 | |||||||||
Net income | $ | 49,547 | $ | 76,241 | |||||||
Net Income per Common Share | |||||||||||
Basic net income per common share | $ | 0.34 | $ | 0.51 | |||||||
Diluted net income per potential common share | $ | 0.34 | $ | 0.51 | |||||||
Weighted average basic common shares outstanding | 145,291 | 149,081 | |||||||||
Weighted average dilutive potential common shares outstanding 1 | 145,848 | 149,551 |
January 27, 2024 | October 28, 2023 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 1,264,751 | $ | 1,010,618 | |||||||
Short-term investments | 106,678 | 104,753 | |||||||||
Accounts receivable, net | 865,239 | 1,003,876 | |||||||||
Inventories, net | 984,886 | 1,050,838 | |||||||||
Prepaid expenses and other | 387,193 | 405,694 | |||||||||
Total current assets | 3,608,747 | 3,575,779 | |||||||||
Long-term investments | 103,862 | 134,278 | |||||||||
Equipment, building, furniture and fixtures, net | 280,357 | 280,147 | |||||||||
Operating lease right-of-use assets | 35,679 | 35,140 | |||||||||
Goodwill | 445,084 | 444,765 | |||||||||
Other intangible assets, net | 195,682 | 205,627 | |||||||||
Deferred tax asset, net | 814,098 | 809,306 | |||||||||
Other long-term assets | 109,701 | 116,453 | |||||||||
Total assets | $ | 5,593,210 | $ | 5,601,495 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 316,094 | $ | 317,828 | |||||||
Accrued liabilities and other short-term obligations | 329,910 | 431,419 | |||||||||
Deferred revenue | 166,714 | 154,419 | |||||||||
Operating lease liabilities | 16,888 | 16,655 | |||||||||
Current portion of long-term debt | 11,700 | 11,700 | |||||||||
Total current liabilities | 841,306 | 932,021 | |||||||||
Long-term deferred revenue | 76,556 | 74,041 | |||||||||
Other long-term obligations | 176,313 | 170,407 | |||||||||
Long-term operating lease liabilities | 32,418 | 33,259 | |||||||||
Long-term debt, net | 1,543,118 | 1,543,406 | |||||||||
Total liabilities | 2,669,711 | 2,753,134 | |||||||||
Stockholders’ equity: | |||||||||||
Preferred stock – par value $0.01; 20,000,000 shares authorized; zero shares issued and outstanding | — | — | |||||||||
Common stock – par value $0.01; 290,000,000 shares authorized; 144,946,510 and 144,829,938 shares issued and outstanding | 1,449 | 1,448 | |||||||||
Additional paid-in capital | 6,274,773 | 6,262,083 | |||||||||
Accumulated other comprehensive loss | (24,867) | (37,767) | |||||||||
Accumulated deficit | (3,327,856) | (3,377,403) | |||||||||
Total stockholders’ equity | 2,923,499 | 2,848,361 | |||||||||
Total liabilities and stockholders’ equity | $ | 5,593,210 | $ | 5,601,495 | |||||||
Quarter Ended | |||||||||||
January 27, | January 28, | ||||||||||
2024 | 2023 | ||||||||||
Cash flows provided by (used in) operating activities: | |||||||||||
Net income | $ | 49,547 | $ | 76,241 | |||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||
Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements | 22,808 | 22,208 | |||||||||
Share-based compensation expense | 37,827 | 30,512 | |||||||||
Amortization of intangible assets | 10,016 | 10,325 | |||||||||
Deferred taxes | (4,368) | (7,247) | |||||||||
Provision for inventory excess and obsolescence | 10,350 | 5,503 | |||||||||
Provision for warranty | 4,841 | 8,230 | |||||||||
Gain on cost method equity investments, net | — | (26,455) | |||||||||
Other | 5,051 | 7,325 | |||||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable | 135,160 | (133,067) | |||||||||
Inventories | 56,157 | (235,059) | |||||||||
Prepaid expenses and other | 17,116 | 4,667 | |||||||||
Operating lease right-of-use assets | 3,084 | 3,891 | |||||||||
Accounts payable, accruals and other obligations | (90,915) | (56,979) | |||||||||
Deferred revenue | 14,022 | 29,459 | |||||||||
Short and long-term operating lease liabilities | (4,620) | (5,193) | |||||||||
Net cash provided by (used in) operating activities | 266,076 | (265,639) | |||||||||
Cash flows provided by (used in) investing activities: | |||||||||||
Payments for equipment, furniture, fixtures and intellectual property | (16,599) | (30,030) | |||||||||
Purchases of investments | (21,213) | (35,411) | |||||||||
Proceeds from sales and maturities of investments | 53,674 | 123,249 | |||||||||
Settlement of foreign currency forward contracts, net | 2,271 | (4,001) | |||||||||
Acquisition of business, net of cash acquired | — | (230,048) | |||||||||
Net cash provided by (used in) investing activities | 18,133 | (176,241) | |||||||||
Cash flows provided by (used in) financing activities: | |||||||||||
Proceeds from issuance of term loan, net | — | 497,500 | |||||||||
Payment of long term debt | — | (1,732) | |||||||||
Payment of debt issuance costs | (2,402) | (3,996) | |||||||||
Payment of finance lease obligations | (981) | (913) | |||||||||
Shares repurchased for tax withholdings on vesting of stock unit awards | (10,076) | (12,980) | |||||||||
Repurchases of common stock - repurchase program | (38,195) | — | |||||||||
Proceeds from issuance of common stock | 16,934 | 14,315 | |||||||||
Net cash provided by (used in) financing activities | (34,720) | 492,194 | |||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 4,646 | 9,884 | |||||||||
Net increase in cash, cash equivalents and restricted cash | 254,135 | 60,198 | |||||||||
Cash, cash equivalents and restricted cash at beginning of period | 1,010,786 | 994,378 | |||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 1,264,921 | $ | 1,054,576 | |||||||
Supplemental disclosure of cash flow information | |||||||||||
Cash paid during the period for interest, net | $ | 18,582 | $ | 10,536 | |||||||
Cash paid during the period for income taxes, net | $ | 8,260 | $ | 8,383 | |||||||
Operating lease payments | $ | 5,080 | $ | 5,638 | |||||||
Non-cash investing and financing activities | |||||||||||
Purchase of equipment in accounts payable | $ | 4,225 | $ | 7,354 | |||||||
Repurchase of common stock in accrued liabilities from repurchase program | $ | 3,110 | $ | — | |||||||
Operating right-of-use assets subject to lease liability | $ | 3,498 | $ | 6,244 | |||||||
Gain on cost method equity investments, net | $ | — | $ | 26,455 |
APPENDIX A - Reconciliation of Adjusted (Non- GAAP) Measurements | ||||||||||||||
(in thousands, except per share data) (unaudited) | ||||||||||||||
Quarter Ended | ||||||||||||||
January 27, | January 28, | |||||||||||||
2024 | 2023 | |||||||||||||
Gross Profit Reconciliation (GAAP/non-GAAP) | ||||||||||||||
GAAP gross profit | $ | 466,962 | $ | 455,946 | ||||||||||
Share-based compensation-products | 1,318 | 1,051 | ||||||||||||
Share-based compensation-services | 3,020 | 2,297 | ||||||||||||
Amortization of intangible assets | 2,764 | 2,883 | ||||||||||||
Total adjustments related to gross profit | 7,102 | 6,231 | ||||||||||||
Adjusted (non-GAAP) gross profit | $ | 474,064 | $ | 462,177 | ||||||||||
Adjusted (non-GAAP) gross profit percentage | 45.7 | % | 43.7 | % | ||||||||||
Operating Expense Reconciliation (GAAP/non-GAAP) | ||||||||||||||
GAAP operating expense | $ | 382,333 | $ | 370,730 | ||||||||||
Share-based compensation-research and development | 12,880 | 9,234 | ||||||||||||
Share-based compensation-sales and marketing | 10,305 | 8,424 | ||||||||||||
Share-based compensation-general and administrative | 10,079 | 9,468 | ||||||||||||
Significant asset impairments and restructuring costs | 4,971 | 4,298 | ||||||||||||
Amortization of intangible assets | 7,252 | 7,441 | ||||||||||||
Acquisition and integration costs | — | 2,558 | ||||||||||||
Total adjustments related to operating expense | 45,487 | 41,423 | ||||||||||||
Adjusted (non-GAAP) operating expense | $ | 336,846 | $ | 329,307 | ||||||||||
Income from Operations Reconciliation (GAAP/non-GAAP) | ||||||||||||||
GAAP income from operations | $ | 84,629 | $ | 85,216 | ||||||||||
Total adjustments related to gross profit | 7,102 | 6,231 | ||||||||||||
Total adjustments related to operating expense | 45,487 | 41,423 | ||||||||||||
Total adjustments related to income from operations | 52,589 | 47,654 | ||||||||||||
Adjusted (non-GAAP) income from operations | $ | 137,218 | $ | 132,870 | ||||||||||
Adjusted (non-GAAP) operating margin percentage | 13.2 | % | 12.6 | % | ||||||||||
Net Income Reconciliation (GAAP/non-GAAP) | ||||||||||||||
GAAP net income | $ | 49,547 | $ | 76,241 | ||||||||||
Exclude GAAP provision for income taxes | 21,956 | 25,078 | ||||||||||||
Income before income taxes | 71,503 | 101,319 | ||||||||||||
Total adjustments related to income from operations | 52,589 | 47,654 | ||||||||||||
Gain on cost method equity investments, net | — | (26,455) | ||||||||||||
Adjusted income before income taxes | 124,092 | 122,518 | ||||||||||||
Non-GAAP tax provision on adjusted income before income taxes | 27,300 | 26,954 | ||||||||||||
Adjusted (non-GAAP) net income | $ | 96,792 | $ | 95,564 | ||||||||||
Weighted average basic common shares outstanding | 145,291 | 149,081 | ||||||||||||
Weighted average dilutive potential common shares outstanding 1 | 145,848 | 149,551 | ||||||||||||
APPENDIX A - Reconciliation of Adjusted (Non- GAAP) Measurements | ||||||||||||||
(in thousands, except per share data) (unaudited) | ||||||||||||||
Quarter Ended | ||||||||||||||
January 27, | January 28, | |||||||||||||
2024 | 2023 | |||||||||||||
Net Income per Common Share | ||||||||||||||
GAAP diluted net income per potential common share | $ | 0.34 | $ | 0.51 | ||||||||||
Adjusted (non-GAAP) diluted net income per potential common share | $ | 0.66 | $ | 0.64 |
APPENDIX B - Calculation of EBITDA and Adjusted EBITDA (unaudited) | ||||||||||||||
(in thousands) (unaudited) | ||||||||||||||
Quarter Ended | ||||||||||||||
January 27, | January 28, | |||||||||||||
2024 | 2023 | |||||||||||||
Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) | ||||||||||||||
Net income (GAAP) | $ | 49,547 | $ | 76,241 | ||||||||||
Add: Interest expense | 23,776 | 15,870 | ||||||||||||
Less: Interest and other income, net | 10,650 | 31,973 | ||||||||||||
Add: Provision for income taxes | 21,956 | 25,078 | ||||||||||||
Add: Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements | 22,808 | 22,208 | ||||||||||||
Add: Amortization of intangible assets | 10,016 | 10,325 | ||||||||||||
EBITDA | $ | 117,453 | $ | 117,749 | ||||||||||
Add: Share-based compensation cost | 37,602 | 30,474 | ||||||||||||
Add: Significant asset impairments and restructuring costs | 4,971 | 4,298 | ||||||||||||
Add: Acquisition and integration costs | — | 2,558 | ||||||||||||
Adjusted EBITDA | $ | 160,026 | $ | 155,079 |
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