Fiscal Fourth Quarter Highlights:
- Net revenue of $308.3 million
- GAAP operating loss of 43.3%; Non-GAAP operating loss of
0.3%
- GAAP diluted net loss per share of $3.72; Non-GAAP diluted net
income per share of $0.06
Fiscal Year 2024 Highlights:
- Net revenue of $1.36 billion
- GAAP operating loss of 31.9%; Non-GAAP operating margin of
2.8%
- GAAP diluted net loss per share of $8.12; Non-GAAP diluted net
income per share of $1.01
Lumentum Holdings Inc. (“Lumentum” or the “Company”) today
reported results for its fiscal fourth quarter and full year ended
June 29, 2024.
“We exceeded our guidance midpoints for both revenue and EPS in
the fourth quarter. We booked record orders for datacom chips used
in data center applications and saw emerging positive trends in the
broader traditional networking market,” said Alan Lowe, President
and CEO. “We are making significant progress executing our strategy
to broaden our cloud and AI customer base, which will lead to
accelerated growth in calendar year 2025.”
Fiscal Fourth Quarter Highlights:
Net revenue for the fiscal fourth quarter of 2024 was $308.3
million, with GAAP net loss of $252.5 million, or $3.72 per diluted
share. Net revenue for the fiscal third quarter of 2024 was $366.5
million, with GAAP net loss of $127.0 million, or $1.88 per diluted
share. Net revenue for the fiscal fourth quarter of 2023 was $370.8
million, with GAAP net loss of $60.2 million, or $0.88 per diluted
share.
Non-GAAP net income for fiscal fourth quarter of 2024 was $4.0
million, or $0.06 per diluted share. Non-GAAP net income for fiscal
third quarter of 2024 was $19.6 million, or $0.29 per diluted
share. Non-GAAP net income for the fiscal fourth quarter of 2023
was $40.2 million, or $0.59 per diluted share.
The Company held $887.0 million in total cash, cash equivalents,
and short-term investments at the end of the fiscal fourth quarter
of 2024, an increase of $16.1 million from the third quarter of
2024.
Full Fiscal Year 2024 Highlights:
Net revenue for fiscal year 2024 was $1,359.2 million, with GAAP
net loss of $546.5 million, or $8.12 per diluted share. Net revenue
for fiscal year 2023 was $1,767.0 million, with GAAP net loss of
$131.6 million, or $1.93 per diluted share.
Non-GAAP net income for fiscal year 2024 was $68.7 million, or
$1.01 per diluted share. Non-GAAP net income for fiscal year 2023
was $315.3 million, or $4.56 per diluted share.
Cash from operations for the fiscal year of 2024 was $24.7
million.
Financial Overview – Fiscal Fourth
Quarter Ended June 29, 2024
GAAP Results ($ in
millions)
Q4
Q3
Q4
Change
FY 2024
FY 2024
FY 2023
Q/Q
Y/Y
Net revenue
$
308.3
$
366.5
$
370.8
(15.9)%
(16.9)%
GAAP gross margin
16.6
%
16.2
%
24.2
%
40bps
(760)bps
GAAP operating loss
(43.3
)%
(31.3
)%
(15.1
)%
(1,200)bps
(2,820)bps
Non-GAAP Results ($ in
millions)
Q4
Q3
Q4
Change
FY 2024
FY 2024
FY 2023
Q/Q
Y/Y
Net revenue
$
308.3
$
366.5
$
370.8
(15.9)%
(16.9)%
Non-GAAP gross margin
32.2
%
32.6
%
36.7
%
(40)bps
(450)bps
Non-GAAP operating margin (loss)
(0.3
)%
4.1
%
9.1
%
(440)bps
(940)bps
Net Revenue by Segment ($ in
millions)
Q4
% of
Q3
Q4
Change
FY 2024
Net Revenue
FY 2024
FY 2023
Q/Q
Y/Y
Cloud & Networking
$
254.7
82.6
%
$
313.8
$
286.5
(18.8
)%
(11.1
)%
Industrial Tech
53.6
17.4
%
52.7
84.3
1.7
%
(36.4
)%
Total
$
308.3
100.0
%
$
366.5
$
370.8
(15.9
)%
(16.9
)%
Financial Overview – Fiscal Year Ended
June 29, 2024
GAAP Results ($ in
millions)
FY 2024
FY 2023
Change Y/Y
Net revenue
$
1,359.2
$
1,767.0
(23.1)%
Gross margin
18.5
%
32.2
%
(1,370)bps
Operating loss
(31.9
)%
(6.5
)%
(2,540)bps
Non-GAAP Results ($ in
millions)
FY 2024
FY 2023
Change Y/Y
Net revenue
$
1,359.2
$
1,767.0
(23.1)%
Gross margin
33.0
%
43.2
%
(1,020)bps
Operating margin
2.8
%
19.2
%
(1,640)bps
Net Revenue by Segment ($ in
millions)
FY 2024
FY 2023
Change Y/Y
Cloud & Networking
$
1,084.9
$
1,322.5
(18.0)%
Industrial Tech
274.3
444.5
(38.3)%
Total
$
1,359.2
$
1,767.0
(23.1)%
The tables above provide comparisons of quarterly and annual
results 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.”
Business Outlook
Lumentum expects the following for the fiscal first quarter
of 2025:
- Net revenue in the range of $315 million to $335 million
- Non-GAAP operating margin of 0% - 3.0%
- Non-GAAP diluted earnings per share of $0.07 to $0.17
We have not provided reconciliations from GAAP to non-GAAP
measures or the equivalent GAAP measure for non-GAAP measures in
our outlook, as they cannot be provided without unreasonable
effort. A large portion of non-GAAP adjustments, such as
restructuring charges, stock-based compensation, non-GAAP income
tax reconciling adjustments, acquisition related costs, 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 today, August 14, 2024, at
2:30 pm PT / 5:30 pm ET to discuss its fiscal fourth quarter and
full year results. A live webcast of the call will be available in
the Investors section of the Lumentum website at
http://investor.lumentum.com. To listen to the live conference
call, dial (833) 470-1428 or (404) 975-4839 and reference the
conference ID 819344. 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. Lumentum has
used, and intends to continue to use, its Investor Relations
website as means of disclosing material nonpublic information and
for complying with its disclosure obligations under Regulation FD.
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 imaging and sensing capabilities.
Lumentum is headquartered in San Jose, California with R&D,
manufacturing, and sales offices worldwide. For more information,
visit www.lumentum.com and follow Lumentum on LinkedIn, X (formerly
known as Twitter), Facebook, Instagram and YouTube.
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 include
statements regarding: our belief and expectations with respect to
our strategies, our technology, any anticipation or guidance as to
demand for our products and technology from our customers and their
end customers, including drivers of that demand and demand relative
to supply, our product roadmaps and investments, our market
opportunity and expectations for our markets our future revenue and
revenue growth and trends in our markets, and our guidance with
respect to future net revenue, non-GAAP diluted earnings per share,
and non-GAAP operating margins, and related assumptions. 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) uncertainty and volatility
in the global markets, including uncertainty and volatility in the
macroeconomic environment, volatility and uncertainty in banking
and financial services sectors, inflationary pressures, changes in
the political or economic environment, such as geopolitical
conflicts, war, trade and export restrictions and the imposition of
tariffs or other duties, and the effect of such market disruptions
on demand for our products, technology spending by our customers
and our ability to obtain components for our products; (b)
quarter-over-quarter product mix fluctuations, which can materially
impact profitability measures due to the broad gross margin ranges
across our portfolio; (c) decline of average selling prices across
our businesses or increase in costs, either of which will also
decrease our margins; (d) effects of seasonality; (e) the ability
of our suppliers and contract manufacturers to meet production,
quality, and delivery requirements for our forecasted demand; (f)
changes in customer demand, including due to changes in inventory
practices and end-customer demand; (g) our ability to attract and
retain new customers, particularly in the cloud photonics and
imaging and sensing markets; (h) the risk that our markets will not
grow or develop as expected or that our strategies and ability to
compete in those markets are not successful, (i) the risk that
Lumentum’s financing or operating strategies will not be
successful; (j) risks related to restructurings and changes to our
operations; (k) failure to successfully integrate Cloud Light or
other acquisitions into our business or that we will not achieve
the expected benefits, and (l) our failure to accurately identify
liabilities and risks in Cloud Light’s business. 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, 2024 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, 2024, which will be filed with the Securities and Exchange
Commission. The forward-looking statements contained in this
presentation are made as of the date hereof and the Company assumes
no obligation to update such statements, except as required by
applicable law.
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, 2024
July 1, 2023
June 29, 2024
July 1, 2023
Net revenue
$
308.3
$
370.8
$
1,359.2
$
1,767.0
Cost of sales
234.9
263.2
1,023.8
1,113.6
Amortization of acquired developed
intangibles
22.1
18.0
83.9
84.4
Gross profit
51.3
89.6
251.5
569.0
Operating expenses:
Research and development
73.2
73.9
302.2
307.8
Selling, general and administrative
74.9
68.3
310.7
348.8
Restructuring and related charges
36.6
3.3
72.6
28.1
Total operating expenses
184.7
145.5
685.5
684.7
Loss from operations
(133.4
)
(55.9
)
(434.0
)
(115.7
)
Interest expense
(5.4
)
(9.4
)
(33.8
)
(35.5
)
Other income, net
11.3
19.9
62.1
48.8
Loss before income taxes
(127.5
)
(45.4
)
(405.7
)
(102.4
)
Income tax provision
125.0
14.8
140.8
29.2
Net loss
$
(252.5
)
$
(60.2
)
$
(546.5
)
$
(131.6
)
Net loss per share:
Basic
$
(3.72
)
$
(0.88
)
$
(8.12
)
$
(1.93
)
Diluted
$
(3.72
)
$
(0.88
)
$
(8.12
)
$
(1.93
)
Shares used to compute net loss per
share:
Basic
67.8
68.3
67.3
68.3
Diluted
67.8
68.3
67.3
68.3
LUMENTUM HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in millions, except per share
data)
(unaudited)
June 29, 2024
July 1, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
436.7
$
859.0
Short-term investments
450.3
1,154.6
Accounts receivable, net
194.7
246.1
Inventories
398.4
408.6
Prepayments and other current assets
110.0
109.6
Total current assets
1,590.1
2,777.9
Property, plant and equipment, net
572.5
489.5
Operating lease right-of-use assets,
net
72.8
77.3
Goodwill
1,055.8
695.1
Other intangible assets, net
617.5
459.2
Deferred tax asset
10.7
116.3
Other non-current assets
12.5
16.8
Total assets
$
3,931.9
$
4,632.1
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
126.3
$
169.4
Accrued payroll and related expenses
36.1
39.4
Accrued expenses
52.4
51.2
Convertible notes, current
—
311.6
Operating lease liabilities, current
13.4
14.4
Other current liabilities
41.1
47.8
Total current liabilities
269.3
633.8
Convertible notes, non-current
2,503.2
2,500.0
Operating lease liabilities,
non-current
43.0
47.7
Deferred tax liability
55.7
3.4
Other non-current liabilities
103.4
91.4
Total liabilities
2,974.6
3,276.3
Stockholders’ equity:
Common stock, $0.001 par value, 990
authorized shares; 67.9 and 66.4 shares issued and outstanding as
of June 29, 2024 and July 1, 2023, respectively
0.1
0.1
Additional paid-in capital
1,835.0
1,692.2
Accumulated deficit
(887.1
)
(340.6
)
Accumulated other comprehensive income
9.3
4.1
Total stockholders’ equity
957.3
1,355.8
Total liabilities and stockholders’
equity
$
3,931.9
$
4,632.1
Use of Non-GAAP Financial Measures
In this press release, Lumentum provides investors with certain
non-GAAP financial measures: gross profit, gross margin, research
and development expense, selling, general and administrative
expense, operating margin (loss), income (loss) from operations,
interest and other income (expense), net, income before income
taxes, provision for income taxes, net income (loss), and net
income (loss) per share on a non-GAAP basis, as well as the
non-GAAP measures of EBITDA and Adjusted EBITDA. Lumentum believes
this non-GAAP financial information provides additional insight
into the Company’s on-going business operations and results, as
well as 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.
In addition, the Company believes that providing certain of these
measures allows investors to better understand the Company’s
operating performance and cash flows and, importantly, to evaluate
the methodology and information used by management to monitor,
manage, evaluate and measure the Company’s business, results of
operations, and 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.
Our non-GAAP measures used in this press release exclude (i)
stock-based compensation, (ii) acquisition related stock-based
compensation, (iii) acquisition related costs, (iv) amortization of
acquired intangibles, (v) amortization of acquired inventory fair
value adjustments, (vi) restructuring and related charges, (vii)
foreign exchange (gains) losses, net, (viii) non-cash interest
expense on convertible notes, (ix) gain on repurchase of
convertible notes, (x) non-recurring expenses related to litigation
matters, (xi) intangible assets write-off, (xii) integration
related costs, (xiii) abnormal excess capacity, (xiv) foreign
exchange gains and losses, (xv) non-GAAP income tax reconciling
adjustments, and (xvi) other (gains) charges related to
non-recurring activities.
We utilize a long-term projected non-GAAP tax rate to compute
our non-GAAP income tax provision. The long-term projected non-GAAP
tax rate is based on a multi-year projection of our estimated
annual GAAP income tax forecast, adjusted to account for the tax
effect of non-GAAP pretax adjustments as well as the effects of
significant non-recurring and period specific tax items. Our
non-GAAP tax provision for fiscal year 2024 is 14.5%. The
difference between our GAAP income tax provision and our non-GAAP
income tax provision is presented as non-GAAP income tax
reconciling adjustments.
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, 2024
March 30, 2024
July 1, 2023
June 29, 2024
July 1, 2023
Gross profit on GAAP basis
$
51.3
$
59.5
$
89.6
$
251.5
$
569.0
Stock-based compensation
8.2
8.5
11.0
31.7
30.1
Integration related costs
4.6
6.4
2.6
24.5
12.1
Amortization of acquired intangibles
22.1
22.3
18.0
83.9
84.4
Amortization of inventory fair value
adjustments
—
4.9
—
8.3
17.8
Abnormal excess capacity (1)
7.0
11.9
—
20.7
—
Intangible asset write-off
—
—
6.8
—
6.8
Other charges, net (2)
6.0
5.8
8.1
28.3
43.3
Gross profit on non-GAAP basis
$
99.2
$
119.3
$
136.1
$
448.9
$
763.5
Gross margin on non-GAAP basis
32.2
%
32.6
%
36.7
%
33.0
%
43.2
%
Research and development on GAAP
basis
$
73.2
$
77.2
$
73.9
$
302.2
$
307.8
Stock-based compensation
(8.0
)
(9.8
)
(10.2
)
(38.1
)
(41.4
)
Integration related costs
—
(0.4
)
(0.6
)
(0.7
)
(1.9
)
Amortization of acquired intangibles
(0.4
)
(0.4
)
—
(1.5
)
—
Intangible asset write-off
—
—
(1.4
)
—
(12.9
)
Acquisition related costs
—
—
—
(0.4
)
—
Other charges, net
0.1
(0.4
)
—
(1.1
)
(2.6
)
Research and development on non-GAAP
basis
$
64.9
$
66.2
$
61.7
$
260.4
$
249.0
Selling, general and administrative on
GAAP basis
$
74.9
$
77.7
$
68.3
$
310.7
$
348.8
Stock-based compensation
(14.3
)
(13.3
)
(10.9
)
(59.0
)
(65.0
)
Stock-based compensation - acquisition
related
—
—
—
—
(11.9
)
Acquisition related (costs) reversal
0.2
(0.5
)
4.7
(12.9
)
(11.5
)
Integration related costs
(2.8
)
(3.4
)
(6.2
)
(11.9
)
(14.6
)
Litigation matters
—
—
—
—
(7.8
)
Intangible asset write-off
—
—
(1.6
)
—
(1.6
)
Amortization of acquired intangibles
(19.4
)
(19.4
)
(11.4
)
(65.2
)
(43.3
)
Other charges, net (2)
(3.5
)
(3.0
)
(2.2
)
(11.0
)
(17.8
)
Selling, general and administrative on
non-GAAP basis
$
35.1
$
38.1
$
40.7
$
150.7
$
175.3
Loss from operations on GAAP
basis
$
(133.4
)
$
(114.6
)
$
(55.9
)
$
(434.0
)
$
(115.7
)
Stock-based compensation
30.5
31.6
32.1
128.8
136.5
Stock-based compensation - acquisition
related
—
—
—
—
11.9
Acquisition related costs (reversal)
(0.2
)
0.5
(4.7
)
13.3
11.5
Integration related costs
7.4
10.2
9.4
37.1
28.6
Litigation matters
—
—
—
—
7.8
Amortization of acquired intangibles
41.9
42.1
29.4
150.6
127.7
Amortization of inventory fair value
adjustments
—
4.9
—
8.3
17.8
Restructuring and related charges (3)
36.6
19.2
3.3
72.6
28.1
Intangible asset write-off
—
—
9.8
—
21.3
Abnormal excess capacity (1)
7.0
11.9
—
20.7
—
Other charges, net (2)
9.4
9.2
10.3
40.4
63.7
Income (loss) from operations on
non-GAAP basis
$
(0.8
)
$
15.0
$
33.7
$
37.8
$
339.2
Operating margin (loss) on non-GAAP
basis
(0.3
)%
4.1
%
9.1
%
2.8
%
19.2
%
Interest and other income, net on GAAP
basis
$
5.9
$
7.2
$
10.5
$
28.3
$
13.3
Foreign exchange gains, net
(1.2
)
(3.7
)
(2.6
)
(0.7
)
(7.0
)
Gain on repurchase of convertible
notes
—
—
(1.0
)
—
(1.0
)
Non-cash interest expense on convertible
notes and other expenses
0.7
4.5
6.4
14.9
24.3
Interest and other income, net on
non-GAAP basis
$
5.4
$
8.0
$
13.3
$
42.5
$
29.6
Loss before income taxes on GAAP
basis
$
(127.5
)
$
(107.4
)
$
(45.4
)
$
(405.7
)
$
(102.4
)
Stock-based compensation
30.5
31.6
32.1
128.8
136.5
Stock-based compensation - acquisition
related
—
—
—
—
11.9
Acquisition related costs (reversal)
(0.2
)
0.5
(4.7
)
13.3
11.5
Integration related costs
7.4
10.2
9.4
37.1
28.6
Litigation matters
—
—
—
—
7.8
Amortization of acquired intangibles
41.9
42.1
29.4
150.6
127.7
Amortization of inventory fair value
adjustments
—
4.9
—
8.3
17.8
Restructuring and related charges (3)
36.6
19.2
3.3
72.6
28.1
Abnormal excess capacity (1)
7.0
11.9
—
20.7
—
Intangible asset write-off
—
—
9.8
—
21.3
Foreign exchange gains, net
(1.2
)
(3.7
)
(2.6
)
(0.7
)
(7.0
)
Gain on repurchase of convertible
notes
—
—
(1.0
)
—
(1.0
)
Non-cash interest expense on convertible
notes and other expenses
0.7
4.5
6.4
14.9
24.3
Other charges, net (2)
9.4
9.2
10.3
40.4
63.7
Income before income taxes on non-GAAP
basis
$
4.6
$
23.0
$
47.0
$
80.3
$
368.8
Income tax provision on GAAP
basis
$
125.0
$
19.6
$
14.8
$
140.8
$
29.2
Non-GAAP income tax reconciling
adjustments (4)
(124.4
)
(16.2
)
(8.0
)
(129.2
)
24.3
Income tax provision on non-GAAP
basis
$
0.6
$
3.4
$
6.8
$
11.6
$
53.5
Net loss on GAAP basis
$
(252.5
)
(127.0
)
(60.2
)
$
(546.5
)
$
(131.6
)
Stock-based compensation
30.5
31.6
32.1
128.8
136.5
Stock-based compensation - acquisition
related
—
—
—
—
11.9
Acquisition related costs (reversal)
(0.2
)
0.5
(4.7
)
13.3
11.5
Integration related costs
7.4
10.2
9.4
37.1
28.6
Litigation matters
—
—
—
—
7.8
Amortization of acquired intangibles
41.9
42.1
29.4
150.6
127.7
Amortization of inventory fair value
adjustments
—
4.9
—
8.3
17.8
Restructuring and related charges (3)
36.6
19.2
3.3
72.6
28.1
Intangible asset write-off
—
—
9.8
—
21.3
Abnormal excess capacity (1)
7.0
11.9
—
20.7
—
Foreign exchange gains, net
(1.2
)
(3.7
)
(2.6
)
(0.7
)
(7.0
)
Gain on repurchase of convertible
notes
—
—
(1.0
)
—
(1.0
)
Non-cash interest expense on convertible
notes and other expenses
0.7
4.5
6.4
14.9
24.3
Other charges, net (2)
9.4
9.2
10.3
40.4
63.7
Non-GAAP income tax reconciling
adjustments (4)
124.4
16.2
8.0
129.2
(24.3
)
Net income on non-GAAP basis
$
4.0
$
19.6
$
40.2
$
68.7
$
315.3
Net income per share on non-GAAP
basis
$
0.06
$
0.29
$
0.59
$
1.01
$
4.56
Shares used in per share calculation -
diluted on GAAP basis
67.8
67.5
68.3
67.3
68.3
Non-GAAP adjustment (5)
0.5
0.6
0.3
0.4
0.8
Shares used in per share calculation -
diluted on non-GAAP basis
68.3
68.1
68.6
67.7
69.1
(1) Abnormal excess capacity for the three and twelve months ended
June 29, 2024 represents excess capacity attributable to a
near-term reduction in our manufacturing production, primarily
driven by our non-recurring inventory reduction effort following
the disruptions in the supply chain due to the COVID-19 pandemic
and factory consolidation efforts. (2) Other charges, net
for the three months ended June 29, 2024 primarily relate to a $3.4
million one-time charge as a result of contract termination with
one of our vendors due to a change in our manufacturing strategy,
$2.2 million of non-recurring legal and tax related fees and $0.5
million of incremental costs of sales related to components
previously acquired from various brokers to satisfy customer
demand, offset by various miscellaneous gains. The excess and
obsolete inventory charges relate to charges that are not
attributable to our operating segments due to their unusual nature,
primarily those charges driven by U.S. trade restrictions whereby
we are no longer able to sell certain products to one of our
customers. Other charges, net for the twelve months ended
June 29, 2024 primarily relate to $11.2 million of net excess and
obsolete inventory, $12.4 million of non-recurring legal and tax
related fees, $4.9 million of incremental costs of sales related to
components previously acquired from various brokers to satisfy
customer demand and $3.4 million of one-time charge as a result of
contract termination with one of our vendors due to a change in our
manufacturing strategy, offset by various miscellaneous gains. The
excess and obsolete inventory charges relate to charges that are
not attributable to our operating segments due to their unusual
nature, primarily those charges driven by U.S. trade restrictions
whereby we are no longer able to sell certain products to one of
our customers. (3) We discontinued in-house development of
coherent digital signal processors (“DSPs”) and radio-frequency
integrated circuits (“RFICs”). As a result, we recorded $35.8
million of restructuring and related charges during the fiscal
fourth quarter of 2024, which includes a $29.1 million write-off of
in-process research and development (“IPR&D”) assets, as well
as $6.7 million of contract exit costs and asset write-off.
(4) The non-GAAP income tax reconciling adjustments for the three
months ended June 29, 2024 include $139.8 million of income tax
expense due to recognizing a valuation allowance against our U.S.
federal and state deferred tax assets. (5) Shares used for
net income per share on non-GAAP basis include incremental dilutive
shares that would occur upon conversion of our convertible notes
assuming we settle the face value of the notes in cash as the
Company intends, and shares related to restricted stock units
(“RSUs”) and shares issuable under our Employee Stock Purchase Plan
that are anti-dilutive on GAAP basis.
LUMENTUM HOLDINGS INC.
RECONCILIATION OF GAAP NET
INCOME (LOSS) TO ADJUSTED EBITDA
(in millions, except per share
data)
(unaudited)
Three Months Ended
Twelve Months Ended
June 29, 2024
March 30, 2024
July 1, 2023
June 29, 2024
July 1, 2023
GAAP net loss
$
(252.5
)
$
(127.0
)
$
(60.2
)
$
(546.5
)
$
(131.6
)
Interest and other income, net
(5.9
)
(7.2
)
(10.5
)
(28.3
)
(13.3
)
Income tax provision
125.0
19.6
14.8
140.8
29.2
Depreciation
28.2
27.0
28.0
110.6
106.6
Amortization of acquired intangibles
41.9
42.1
29.4
150.6
127.7
EBITDA
(63.3
)
(45.5
)
1.5
(172.8
)
118.6
Amortization of inventory fair value
adjustments
—
4.9
—
8.3
17.8
Restructuring and related charges
36.6
19.2
3.3
72.6
28.1
Stock-based compensation
30.5
31.6
32.1
128.8
148.4
Acquisition related costs
(0.2
)
0.5
(4.7
)
13.3
11.5
Integration related costs
7.4
10.2
9.4
37.1
28.6
Intangible asset write-off
—
—
9.8
—
21.3
Abnormal excess capacity
7.0
11.9
—
20.7
—
Other charges, net
7.9
8.2
8.0
32.5
57.4
Adjusted EBITDA
$
25.9
$
41.0
$
59.4
$
140.5
$
431.7
Category: Financial
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240814894445/en/
Investors: Kathy Ta, (408) 750-3853;
investor.relations@lumentum.com
Media: Noël Bilodeau, 408-439-2140;
noel.bilodeau@lumentum.com
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