Ciena reports fiscal third quarter 2018 financial results
Hanover, md.--(business wire)--ciena® corporation (nyse: cien) q3 revenue: $818.8 million, increasing 12.4% year over year q3 net income per share: $0.34 gaap; $0.48 adjusted (non-gaap) share repurchases: repurchased approximately 1.4 million shares of common stock for an aggregate price of $35.6 million during the quarter ciena today announced unaudited financial results for its fiscal third quarter ended july 31, 2018. "the combination of continued execution against our strategy and robust, broad-based customer demand resulted in outstanding fiscal third quarter performance," said gary b. smith, president and ceo of ciena. "with our diversification, global scale and innovation leadership, we remain confident in our business model and our ability to achieve our three-year financial targets.” for the fiscal third quarter 2018, ciena reported revenue of $818.8 million as compared to $728.7 million for the fiscal third quarter 2017. ciena's gaap net income for the fiscal third quarter 2018 was $50.8 million, or $0.34 per diluted common share, which compares to a gaap net income of $60.0 million, or $0.39 per diluted common share, for the fiscal third quarter 2017. ciena's adjusted (non-gaap) net income for the fiscal third quarter 2018 was $74.3 million, or $0.48 per diluted common share, which compares to an adjusted (non-gaap) net income of $56.4 million, or $0.35 per diluted common share, for the fiscal third quarter 2017. fiscal third quarter 2018 performance summary the tables below (in millions, except percentage data) provide comparisons of certain quarterly results to the prior year. appendix a and b set forth reconciliations between the gaap and adjusted (non-gaap) measures contained in this release. * denotes % change, or in the case of margin, absolute change additional performance metrics for fiscal third quarter 2018 ** denotes % of total revenue u.s. customers contributed 57.3% of total revenue three customers accounted for greater than 10% of revenue and represented 33% of total revenue cash and investments totaled $984.6 million cash flow from operations totaled $88.1 million free cash flow totaled $69.7 million average days' sales outstanding (dsos) were 80 accounts receivable balance was $728.9 million inventories totaled $227.9 million, including: raw materials: $54.0 million work in process: $11.1 million finished goods: $173.4 million deferred cost of sales: $38.5 million reserve for excess and obsolescence: $(49.1) million raw materials: $54.0 million work in process: $11.1 million finished goods: $173.4 million deferred cost of sales: $38.5 million reserve for excess and obsolescence: $(49.1) million product inventory turns were 7.0 headcount totaled 5,889 supplemental materials and live web broadcast of unaudited fiscal third quarter 2018 results today, thursday, august 30, 2018, in conjunction with this announcement, ciena has posted to the quarterly results page of the investor relations section of its website supporting materials for its unaudited fiscal third quarter 2018 results. ciena's management will also host a discussion today with investors and financial analysts that will include the company's fiscal third quarter 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: "the combination of continued execution against our strategy and robust, broad-based customer demand resulted in outstanding fiscal third quarter performance."; "with our diversification, global scale and innovation leadership, we remain confident in our business model and our ability to achieve our three-year financial targets." 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; 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 june 6, 2018 and its annual report on form 10-k filed with the sec on december 22, 2017. 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, 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 more adaptive networks 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 sophisticated networks with automation and scale. for updates on ciena, follow us on twitter @ciena, linkedin, the ciena insights blog, or visit www.ciena.com. common stock – par value $0.01; 290,000,000 shares authorized; 143,050,180 and 143,043,227 shares issued and outstanding 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. significant asset impairments and restructuring costs - costs incurred as a result of restructuring activities taken to align resources with perceived market opportunities. 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 - consist of financial, legal and accounting advisors’ costs and severance and other employment-related costs related to ciena's recent acquisition of packet design. ciena does not believe that these costs are reflective of its ongoing operating expense following its completion of these integration activities. legal settlement - costs incurred as a result of a settlement associated with a commercial dispute with a former vendor. non-cash interest expense - a non-cash debt discount expense amortized as interest expense during the term of ciena's 4.0% senior convertible notes due december 15, 2020 relating to the required separate accounting of the equity component of these convertible notes. 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 25.87% for the third fiscal quarter of 2018, and 36.5% for the third fiscal quarter of 2017. this rate may be subject to change in the future, including as a result of changes in tax policy or tax strategy.
