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Ciena Reports Fiscal Fourth Quarter 2020 and Year-End Financial Results

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Ciena® Corporation (NYSE: CIEN), a networking systems, services and software company, today announced unaudited financial results for its fiscal fourth quarter and year ended October 31, 2020.

  • Q4 Revenue: $828.5 million

  • Q4 Net Income per Share: $0.42 GAAP; $0.60 adjusted (non-GAAP), increasing 3.4% year over year

  • Share Repurchases: Reinstituting share repurchase program with the intent to resume purchases in the first quarter of 2021

"Our fiscal fourth quarter and full-year 2020 performance reported today demonstrates that we have the innovation, diversification and global scale to perform well in a challenging environment," said Gary Smith, President and CEO, Ciena. "While we expect current market conditions to persist in the near-term, we are confident in strong secular demand dynamics and our ability to continue to outperform the market."

For the fiscal fourth quarter 2020, Ciena reported revenue of $828.5 million as compared to $968.0 million for the fiscal fourth quarter 2019. For fiscal year 2020, Ciena reported revenue of $3.53 billion, as compared to $3.57 billion for fiscal year 2019.

Ciena's GAAP net income for the fiscal fourth quarter 2020 was $65.0 million or $0.42 per diluted common share, which compares to a GAAP net income of $80.3 million, or $0.51 per diluted common share, for the fiscal fourth quarter 2019. For fiscal year 2020, Ciena's GAAP net income was $361.3 million, or $2.32 per diluted common share, as compared to a GAAP net income of $253.4 million, or $1.61 per diluted common share for fiscal year 2019.

Ciena's adjusted (non-GAAP) net income for the fiscal fourth quarter 2020 was $94.5 million, or $0.60 per diluted common share, which compares to an adjusted (non-GAAP) net income of $90.4 million, or $0.58 per diluted common share, for the fiscal fourth quarter 2019. For fiscal year 2020, Ciena's adjusted (non-GAAP) net income was $460.1 million, or $2.95 per diluted common share, as compared to an adjusted (non-GAAP) net income of $331.8 million, or $2.11 per diluted common share for fiscal year 2019.

Performance Summary for the Fiscal Fourth Quarter and the Year Ended October 31, 2020

The tables below (in millions, except percentage data) provide comparisons of certain quarterly and annual results to the prior year. Appendices A and B set forth reconciliations between the GAAP and adjusted (non-GAAP) measures contained in this release.

GAAP Results (unaudited)

Quarter Ended

Period
Change

Year Ended

Period
Change

October 31,
2020

November 2,
2019

Y-T-Y*

October 31,
2020

November 2,
2019

Y-T-Y*

Revenue

$

828.5

$

968.0

(14.4

)%

$

3,532.2

$

3,572.1

(1.1

)%

Gross margin

48.8

%

43.4

%

5.4

%

46.8

%

43.2

%

3.6

%

Operating expense

$

310.9

$

326.5

(4.8

)%

$

1,165.9

$

1,195.3

(2.5

)%

Operating margin

11.3

%

9.6

%

1.7

%

13.8

%

9.7

%

4.1

%

Non-GAAP Results (unaudited)

Quarter Ended

Period
Change

Year Ended

Period
Change

October 31,
2020

November 2,
2019

Y-T-Y*

October 31,
2020

November 2,
2019

Y-T-Y*

Revenue

$

828.5

$

968.0

(14.4

)%

$

3,532.2

$

3,572.1

(1.1

)%

Adj. gross margin

49.5

%

43.8

%

5.7

%

47.4

%

43.7

%

3.7

%

Adj. operating expense

$

278.9

$

295.3

(5.6

)%

$

1,055.3

$

1,091.8

(3.3

)%

Adj. operating margin

15.8

%

13.3

%

2.5

%

17.6

%

13.1

%

4.5

%

Adj. EBITDA

$

154.5

$

151.6

1.9

%

$

713.9

$

557.3

28.1

%

* Denotes % change, or in the case of margin, absolute change

Revenue by Segment (unaudited)

Quarter Ended

October 31, 2020

November 2, 2019

Revenue

%**

Revenue

% **

Networking Platforms

Converged Packet Optical

$

579.3

69.9

$

665.8

68.8

Packet Networking

$

56.0

6.8

131.9

13.6

Total Networking Platforms

$

635.3

76.7

797.7

82.4

Platform Software and Services

$

54.5

6.6

41.2

4.3

Blue Planet Automation Software and Services

$

20.9

2.5

16.6

1.7

Global Services

Maintenance Support and Training

$

67.0

8.1

65.3

6.7

Installation and Deployment

$

43.0

5.2

36.5

3.8

Consulting and Network Design

$

7.8

0.9

10.7

1.1

Total Global Services

$

117.8

14.2

112.5

11.6

Total

$

828.5

100.0

$

968.0

100.0

Revenue by Segment (unaudited)

Year Ended

October 31, 2020

November 2, 2019

Revenue

%**

Revenue

% **

Networking Platforms

Converged Packet Optical

$

2,547.6

72.1

$

2,562.8

71.8

Packet Networking

267.5

7.6

348.5

9.8

Total Networking Platforms

2,815.1

79.7

2,911.3

81.6

Platform Software and Services

197.8

5.6

155.3

4.3

Blue Planet Automation Software and Services

62.6

1.8

54.6

1.5

Global Services

Maintenance Support and Training

269.4

7.6

261.3

7.3

Installation and Deployment

152.0

4.3

148.2

4.1

Consulting and Network Design

35.3

1.0

41.4

1.2

Total Global Services

456.7

12.9

450.9

12.6

Total

$

3,532.2

100.0

$

3,572.1

100.0

Additional Performance Metrics for Fiscal Fourth Quarter and Year Ended October 31, 2020

Revenue by Geographic Region (unaudited)

Quarter Ended

October 31, 2020

November 2, 2019

Revenue

% **

Revenue

% **

Americas

$

531.6

64.2

$

715.7

73.9

Europe, Middle East and Africa

157.6

19.0

153.0

15.8

Asia Pacific

139.3

16.8

99.3

10.3

Total

$

828.5

100.0

$

968.0

100.0

Revenue by Geographic Region (unaudited)

Year Ended

October 31, 2020

November 2, 2019

Revenue

% **

Revenue

% **

Americas

$

2,469.3

69.9

$

2,503.9

70.1

Europe, Middle East and Africa

591.5

16.8

566.7

15.9

Asia Pacific

471.4

13.3

501.5

14.0

Total

$

3,532.2

100.0

$

3,572.1

100.0

** Denotes % of total revenue

  • No customer represented more than 10% of revenue for the fiscal quarter

  • One 10%-plus customer represented a total of 10.6% of revenue for the fiscal year

  • Cash and investments totaled $1.3 billion

  • Cash flow from operations totaled $187.3 million and $493.7 million for the fiscal quarter and year, respectively

  • Average days' sales outstanding (DSOs) were 88 and 82 for the fiscal quarter and year, respectively

  • Accounts receivable, net balance was $719.4 million

  • Unbilled contract asset balance was $85.8 million

  • Inventories totaled $344.4 million, including:

    • Raw materials: $119.5 million

    • Work in process: $13.7 million

    • Finished goods: $210.1 million

    • Deferred cost of sales: $40.7 million

    • Reserve for excess and obsolescence: $(39.6) million

  • Product inventory turns were 4.0 and 4.6 for the fiscal quarter and year, respectively

  • Headcount totaled 7,032

Share Repurchase Program

After temporarily suspending repurchases of our common stock during fiscal 2020, we will be reinstituting this program in first quarter of 2021 and are currently targeting repurchases in the range of $150 million during fiscal 2021. Ciena may purchase shares at management's discretion in the open market, in privately negotiated transactions, in transactions structured through investment banking institutions, or a combination of the foregoing. Ciena may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of its shares under this authorization. The amount and timing of repurchases are subject to a variety of factors including liquidity, cash flow, stock price, and general business and market conditions. The program may be modified, suspended or discontinued at any time. During fiscal year 2020, Ciena repurchased approximately 1.9 million shares of its common stock at an average price of $39.81 per share for an aggregate purchase price of $74.5 million.

Supplemental Materials and Live Web Broadcast of Unaudited Fiscal Fourth Quarter 2020 Results

Today, Thursday, December 10, 2020, in conjunction with this announcement, Ciena has posted to the Quarterly Results page of the Investor Relations section of its website certain related supporting materials for its unaudited fiscal fourth quarter and fiscal 2020 results.

Ciena's management will also host a discussion today with investors and financial analysts that will include the Company's outlook. The live audio web broadcast beginning at 8:30 a.m. Eastern will be accessible via www.ciena.com. An archived replay of the live broadcast will be available shortly following its conclusion on the Investor Relations page of Ciena's website.

Notes to Investors

Forward-Looking Statements. You are encouraged to review the Investors section of our website, where we routinely post press releases, SEC filings, recent news, financial results, supplemental financial information, and other announcements. From time to time we exclusively post material information to this website along with other disclosure channels that we use. This press release contains certain forward-looking statements that involve risks and uncertainties. These statements are based on current expectations, forecasts, assumptions and other information available to the Company as of the date hereof. Forward-looking statements include statements regarding Ciena's expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or similar words. Forward-looking statements in this release include: "Our fiscal fourth quarter and full-year year 2020 performance reported today demonstrates that we have the innovation, diversification and global scale to perform well in a challenging environment." "While we expect current market conditions to persist in the near-term, we are confident in strong secular demand dynamics and our ability to continue to outperform the market."

Ciena's actual results, performance or events may differ materially from these forward-looking statements made or implied due to a number of risks and uncertainties relating to Ciena's business, including: the effect of broader economic and market conditions on our customers and their business; our ability to execute our business and growth strategies; the duration and severity of the COVID-19 pandemic and the impact of countermeasures taken to mitigate its spread; the impact of COVID-19 on macroeconomic conditions, the level of economic activity, demand for our technology solutions, short- and long-term customer or end user needs and changes thereto, continuity of supply chain, logistics and business operations, liquidity and financial results; changes in network spending or network strategy by customers; seasonality and the timing and size of customer orders, including our ability to recognize revenue relating to such sales; the level of competitive pressure we encounter; the product, customer and geographic mix of sales within the period; supply chain disruptions and the level of success relating to efforts to optimize Ciena's operations; changes in foreign currency exchange rates affecting revenue and operating expense; the impact of the Tax Cuts and Jobs Act, changes in estimates of prospective income tax rates and any adjustments to Ciena's provisional estimates whether related to further guidance, analysis or otherwise, and the other risk factors disclosed in Ciena's periodic reports filed with the Securities and Exchange Commission, including its Quarterly Report on Form 10-Q filed with the SEC on September 9, 2020 and its Annual Report on Form 10-K to be filed with the SEC. Ciena assumes no obligation to update any forward-looking information included in this press release.

Non-GAAP Presentation of Quarterly and Annual Results. This release includes non-GAAP measures of Ciena's gross profit, operating expense, income from operations, earnings before interest, tax, depreciation and amortization (EBITDA), Adjusted EBITDA, and measures of net income and net income per share. In evaluating the operating performance of Ciena's business, management excludes certain charges and credits that are required by GAAP. These items share one or more of the following characteristics: they are unusual and Ciena does not expect them to recur in the ordinary course of its business; they do not involve the expenditure of cash; they are unrelated to the ongoing operation of the business in the ordinary course; or their magnitude and timing is largely outside of Ciena's control. Management believes that the non-GAAP measures below provide management and investors useful information and meaningful insight to the operating performance of the business. The presentation of these non-GAAP financial measures should be considered in addition to Ciena's GAAP results and these measures are not intended to be a substitute for the financial information prepared and presented in accordance with GAAP. Ciena's non-GAAP measures and the related adjustments may differ from non-GAAP measures used by other companies and should only be used to evaluate Ciena's results of operations in conjunction with our corresponding GAAP results. To the extent not previously disclosed in a prior Ciena financial results press release for the relevant period, Appendix A and B to this press release set forth a complete GAAP to non-GAAP reconciliation of the non-GAAP measures contained in this release.

About Ciena. Ciena (NYSE: CIEN) is a networking systems, services and software company. We provide solutions that help our clients create the Adaptive Network™ in response to the constantly changing demands of their users. By delivering best-in-class networking technology through high-touch consultative relationships, we build the world’s most agile networks with automation, openness and scale. For updates on Ciena, follow us on Twitter @Ciena, LinkedIn, the Ciena Insights blog, or visit www.ciena.com.

CIENA CORPORATION

CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

Quarter Ended

Year Ended

October 31,
2020

November 2,
2019

October 31,
2020

November 2,
2019

Revenue:

Products

$

668,661

$

820,007

$

2,914,790

$

2,983,815

Services

159,819

147,980

617,367

588,316

Total revenue

828,480

967,987

3,532,157

3,572,131

Cost of goods sold:

Products

343,413

469,945

1,573,791

1,716,358

Services

80,718

78,346

305,475

313,707

Total cost of goods sold

424,131

548,291

1,879,266

2,030,065

Gross profit

404,349

419,696

1,652,891

1,542,066

Operating expenses:

Research and development

137,237

141,657

529,888

548,139

Selling and marketing

113,382

117,201

416,425

423,046

General and administrative

43,415

50,307

169,548

174,399

Amortization of intangible assets

5,851

5,222

23,383

21,808

Acquisition and integration costs (recoveries)

3,127

(735

)

4,031

3,370

Significant asset impairments and restructuring costs

7,854

12,842

22,652

24,538

Total operating expenses

310,866

326,494

1,165,927

1,195,300

Income from operations

93,483

93,202

486,964

346,766

Interest and other income (loss), net

(249

)

(1,183

)

964

3,876

Interest expense

(7,395

)

(9,136

)

(31,321

)

(37,452

)

Loss on extinguishment and modification of debt

(646

)

Income before income taxes

85,839

82,883

455,961

313,190

Provision for income taxes

20,798

2,552

94,670

59,756

Net income

$

65,041

$

80,331

$

361,291

$

253,434

Net Income per Common Share

Basic net income per common share

$

0.42

$

0.52

$

2.34

$

1.63

Diluted net income per potential common share

$

0.42

$

0.51

$

2.32

$

1.61

Weighted average basic common shares outstanding

154,706

154,852

154,287

155,720

Weighted average diluted potential common shares outstanding(1)

156,563

156,612

155,955

157,612

(1) Weighted average diluted potential common shares outstanding used in calculating GAAP diluted net income per potential common share for the fourth quarter of fiscal 2020 includes 1.9 million shares underlying certain stock option and stock unit awards.

Weighted average diluted potential common shares outstanding used in calculating GAAP diluted net income per potential common share for fiscal 2020 includes 1.7 million shares underlying certain stock option and stock unit awards.

Weighted average diluted potential common shares outstanding used in calculating GAAP diluted net income per potential common share for the fourth quarter of fiscal 2019 includes 1.8 million shares underlying certain stock option and stock unit awards.

Weighted average diluted potential common shares outstanding used in calculating GAAP diluted net income per potential common share for fiscal 2019 includes 1.9 million shares underlying certain stock option and stock unit awards.

CIENA CORPORATION

CONDENSED UNAUDITED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

October 31,
2020

November 2,
2019

ASSETS

Current assets:

Cash and cash equivalents

$

1,088,624

$

904,045

Short-term investments

150,667

109,940

Accounts receivable, net

719,405

724,854

Inventories

344,379

345,049

Prepaid expenses and other

308,084

297,914

Total current assets

2,611,159

2,381,802

Long-term investments

82,226

10,014

Equipment, building, furniture and fixtures, net

272,377

286,884

...

Operating lease right-of-use assets

57,026

Goodwill

310,847

297,937

Other intangible assets, net

96,647

112,781

Deferred tax asset, net

647,805

714,942

Other long-term assets

102,830

88,986

Total assets

$

4,180,917

$

3,893,346

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

291,904

$

344,819

Accrued liabilities and other short-term obligations

334,132

382,740

Deferred revenue

108,700

111,381

Operating lease liabilities

19,035

Current portion of long-term debt

6,930

7,000

Total current liabilities

760,701

845,940

Long-term deferred revenue

49,663

45,492

Other long-term obligations

123,185

148,747

Long-term operating lease liabilities

61,415

Long-term debt, net

676,356

680,406

Total liabilities

$

1,671,320

$

1,720,585

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; 154,563,005 and 154,403,850 shares issued and outstanding

1,546

1,544

Additional paid-in capital

6,826,531

6,837,714

Accumulated other comprehensive loss

(35,358

)

(22,084

)

Accumulated deficit

(4,283,122

)

(4,644,413

)

Total stockholders’ equity

2,509,597

2,172,761

Total liabilities and stockholders’ equity

$

4,180,917

$

3,893,346

CIENA CORPORATION

CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Year Ended

October 31,
2020

November 2,
2019

Cash flows from operating activities:

Net income

$

361,291

$

253,434

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation of equipment, furniture and fixtures, and amortization of leasehold improvements

93,908

87,576

Share-based compensation costs

67,758

59,736

Amortization of intangible assets

38,619

35,136

Deferred taxes

64,339

19,865

Provision for doubtful accounts

8,855

6,740

Provision for inventory excess and obsolescence

24,701

28,085

Provision for warranty

22,417

23,105

Other

11,628

(910

)

Changes in assets and liabilities:

Accounts receivable

(17,299

)

65,712

Inventories

(25,044

)

(112,941

)

Prepaid expenses and other

(38,998

)

(96,618

)

Operating lease right-of-use assets

16,787

Accounts payable, accruals and other obligations

(117,931

)

27,740

Deferred revenue

2,519

16,480

Short and long-term operating lease liabilities

(19,896

)

Net cash provided by operating activities

493,654

413,140

Cash flows provided by (used in) investing activities:

Payments for equipment, furniture, fixtures and intellectual property

(82,667

)

(62,579

)

Purchase of available for sale securities

(223,196

)

(158,074

)

Proceeds from maturities of available for sale securities

110,390

248,748

Settlement of foreign currency forward contracts, net

3,531

(1,351

)

Purchase of equity investment

(2,667

)

Acquisition of businesses, net of cash acquired

(28,300

)

Net cash provided by (used in) investing activities

(220,242

)

24,077

Cash flows from financing activities:

Payment of long-term debt

(5,198

)

(7,000

)

Payment for debt conversion liability

(111,268

)

Payment of debt issuance costs

(382

)

(1,191

)

Payment of finance lease obligations

(2,703

)

(3,319

)

Shares repurchased for tax withholdings on vesting of restricted stock units

(32,472

)

(29,059

)

Repurchases of common stock - repurchase program

(74,535

)

(150,076

)

Proceeds from issuance of common stock

28,068

22,947

Net cash used in financing activities

(87,222

)

(278,966

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(1,643

)

476

Net increase in cash, cash equivalents and restricted cash

184,547

158,727

Cash, cash equivalents and restricted cash at beginning of fiscal year

904,161

745,434

Cash, cash equivalents and restricted cash at end of fiscal year

$

1,088,708

$

904,161

Supplemental disclosure of cash flow information

Cash paid during the fiscal year for interest

$

32,837

$

39,579

Cash paid during the fiscal year for income taxes, net

$

53,076

$

33,570

Operating lease payments

$

22,089

$

Non-cash investing and financing activities

Purchase of equipment in accounts payable

$

7,854

$

16,549

Conversion of debt conversion liability into 1,585,140 shares of common stock

$

$

52,944

Operating lease right-of-use assets subject to lease liability

$

24,160

$

Unrealized gain on equity investment

$

2,681

$

APPENDIX A - Reconciliation of Adjusted (Non-GAAP) Measurements (unaudited)

Quarter Ended

Year Ended

October 31,
2020

November 2,
2019

October 31,
2020

November 2,
2019

Gross Profit Reconciliation (GAAP/non-GAAP)

GAAP gross profit

$

404,349

$

419,696

$

1,652,891

$

1,542,066

Share-based compensation-products

724

748

3,182

2,868

Share-based compensation-services

968

715

3,853

3,175

Amortization of intangible assets

3,732

3,303

15,235

13,327

Total adjustments related to gross profit

5,424

4,766

22,270

19,370

Adjusted (non-GAAP) gross profit

$

409,773

$

424,462

$

1,675,161

$

1,561,436

Adjusted (non-GAAP) gross profit percentage

49.5

%

43.8

%

47.4

%

43.7

%

Operating Expense Reconciliation (GAAP/non-GAAP)

GAAP operating expense

$

310,866

$

326,494

$

1,165,927

$

1,195,300

Share-based compensation-research and development

4,030

3,287

16,987

14,321

Share-based compensation-sales and marketing

5,137

4,151

20,194

16,474

Share-based compensation-general and administrative

5,982

6,425

23,424

22,841

Amortization of intangible assets

5,851

5,222

23,383

21,808

Acquisition and integration costs (recoveries)

3,127

(735

)

4,031

3,370

Significant asset impairments and restructuring costs

7,854

12,842

22,652

24,538

Legal settlements

137

Total adjustments related to operating expense

$

31,981

$

31,192

$

110,671

$

103,489

Adjusted (non-GAAP) operating expense

$

278,885

$

295,302

$

1,055,256

$

1,091,811

Income from Operations Reconciliation (GAAP/non-GAAP)

GAAP income from operations

$

93,483

$

93,202

$

486,964

$

346,766

Total adjustments related to gross profit

5,424

4,766

22,270

19,370

Total adjustments related to operating expense

31,981

31,192

110,671

103,489

Total adjustments related to income from operations

37,405

35,958

132,941

122,859

Adjusted (non-GAAP) income from operations

$

130,888

$

129,160

$

619,905

$

469,625

Adjusted (non-GAAP) operating margin percentage

15.8

%

13.3

%

17.6

%

13.1

%

Net Income Reconciliation (GAAP/non-GAAP)

GAAP net income

$

65,041

$

80,331

$

361,291

$

253,434

Exclude GAAP provision for income taxes

20,798

2,552

94,670

59,756

Income before income taxes

85,839

82,883

455,961

313,190

Total adjustments related to income from operations

37,405

35,958

132,941

122,859

Loss on extinguishment and modification of debt

646

Unrealized gain on equity investment

(2,681

)

(2,681

)

Adjusted income before income taxes

120,563

118,841

586,867

436,049

Non-GAAP tax provision on adjusted income before income taxes

26,042

28,403

126,763

104,216

Adjusted (non-GAAP) net income

$

94,521

$

90,438

$

460,104

$

331,833

Weighted average basic common shares outstanding

154,706

154,852

154,287

155,720

Weighted average diluted potential common shares outstanding(1)

156,563

156,612

155,955

157,612

Net Income per Common Share

GAAP diluted net income per potential common share

$

0.42

$

0.51

$

2.32

$

1.61

Adjusted (non-GAAP) diluted net income per potential common share

$

0.60

$

0.58

$

2.95

$

2.11

(1) Weighted average diluted potential common shares outstanding used in calculating Adjusted (non-GAAP) diluted net income per potential common share for the fourth quarter of fiscal 2020 includes 1.9 million shares underlying certain stock option and stock unit awards.

Weighted average diluted potential common shares outstanding used in calculating adjusted (non-GAAP) diluted net income per potential common share for fiscal 2020 includes 1.7 million shares underlying certain stock option and stock unit awards.

Weighted average diluted potential common shares outstanding used in calculating Adjusted (non-GAAP) diluted net income per potential common share for the fourth quarter of fiscal 2019 includes 1.8 million shares underlying certain stock option and stock unit awards.

Weighted average diluted potential common shares outstanding used in calculating adjusted (non-GAAP) diluted net income per potential common share for fiscal 2019 includes 1.9 million shares underlying certain stock option and stock unit awards.

APPENDIX B - Calculation of EBITDA and Adjusted EBITDA (unaudited)

Quarter Ended

Year Ended

October 31,
2020

November 2,
2019

October 31,
2020

November 2,
2019

Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)

Net income (GAAP)

$

65,041

$

80,331

$

361,291

$

253,434

Add: Interest expense

7,395

9,136

31,321

37,452

Less: Interest and other income (loss), net

(249

)

(1,183

)

964

3,876

Add: Loss on extinguishment and modification of debt

(646

)

Add: Provision for income taxes

20,798

2,552

94,670

59,756

Add: Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements

23,538

22,505

93,908

87,576

Add: Amortization of intangible assets

9,584

8,525

38,619

35,136

EBITDA

$

126,605

$

124,232

$

619,491

$

469,478

Add: Share-based compensation cost

16,920

15,290

67,758

59,736

Add: Significant asset impairments and restructuring costs

7,854

12,842

22,652

24,538

Add: Acquisition and integration costs (recoveries)

3,127

(735

)

4,031

3,370

Add: Legal settlement

137

Adjusted EBITDA

$

154,506

$

151,629

$

713,932

$

557,259

The adjusted (non-GAAP) measures above and their reconciliation to Ciena's GAAP results for the periods presented reflect adjustments relating to the following items:

  • Share-based compensation - a non-cash expense incurred in accordance with share-based compensation accounting guidance.

  • Amortization of intangible assets - a non-cash expense arising from the acquisition of intangible assets, principally developed technologies and customer-related intangibles, that Ciena is required to amortize over its expected useful life.

  • Acquisition and integration costs (recoveries) - consist of expenses for financial, legal and accounting advisors, severance and other employee-related costs associated with our acquisitions of DonRiver and Centina, including costs and recoveries of acquisition consideration associated with a three-year earn-out arrangement related to the DonRiver acquisition in fiscal 2018. Ciena does not believe that these costs are reflective of its ongoing operating expense following its completion of these integration activities.

  • Significant asset impairments and restructuring costs - costs incurred as a result of restructuring activities taken to align resources with perceived market opportunities and the redesign of business processes.

  • Legal settlements - costs incurred as a result of settlements, during the first quarter of fiscal 2019.

  • Unrealized gain on equity investment - reflects a change in the carrying value of a certain cost method equity investment.

  • Non-GAAP tax provision - consists of current and deferred income tax expense commensurate with the level of adjusted income before income taxes and utilizes a current, blended U.S. and foreign statutory annual tax rate of 21.6% for fiscal 2020, and 23.9% for fiscal 2019. This rate may be subject to change in the future, including as a result of changes in tax policy or tax strategy.

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Contacts

Press:
Nicole Anderson
Ciena Corporation
+1 (410) 694-5761
pr@ciena.com

Investors:
Gregg Lampf
Ciena Corporation
+1 (410) 694-5700
ir@ciena.com