Coherent Corp. Reports Fiscal 2023 Third Quarter Results

Coherent Corp.
Coherent Corp.
  • Revenue of $1.24 billion, Grew 50% Year-Over-Year

  • Organic Revenue Growth of 6% Year-Over-Year

  • Backlog of $2.6 billion, Grew 23% Year-Over-Year

  • Quarterly Operating Cash Flow of $152 million

  • GAAP EPS of $(0.24)

  • Non-GAAP EPS of $0.58

  • Establishes multi-year restructuring plan

PITTSBURGH, May 10, 2023 (GLOBE NEWSWIRE) --  Coherent Corp. (NYSE:COHR) ("Coherent," “We” or the "Company") today reported results for its fiscal 2023 third quarter ended March 31, 2023.

“We posted third quarter revenues of $1.24 billion up 4% year over year on a pro forma basis. Revenue grew 50% on a reported basis compared to Q3 of FY22 and declined 9% sequentially. We were intensely focused on controlling costs, managing cash and continuing our disciplined approach to capital allocation and design wins,” said Dr. Vincent D. Mattera, Jr., Chair and CEO.

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“We started the third quarter with optimism based on a strong backlog, but we experienced a sudden and unexpected deceleration in revenues in the second half of the quarter when some of our larger customers requested us to delay scheduled shipments which primarily affected our revenue in the Networking Segment as those customers began adjusting their inventory levels. The solid performance of the Materials Segment, coupled with solid performance of the legacy Coherent business, now our Lasers Segment, provided diversification and stability by exposing us to multiple and different growth markets.”

Dr. Mattera continued, “Our non GAAP EPS was $0.58, our operating cash flow was $152 million, and we invested half of our $97 million of capital expenditures into our silicon carbide business. We generated $55 million of free cash flow and retired $78 million of debt, consistent with our plans for deleveraging.

We have commenced certain restructuring actions and are planning to take additional actions that will run through the end of FY25, as we work to transform the Company. We expect these actions will drive greater scale and focus, resiliency, and lower operating costs. We have completed a rigorous analysis into this plan, a careful consideration of the effects on our people, and we believe that this plan will better position Coherent to achieve both short and long-term commitments.”

Table 1

 

 

 

 

 

 

Financial Metrics

 

 

 

 

 

 

 

 

 

 

 

$ Millions, except per share amounts and %

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

Three Months Ended

 

 

Nine Months Ended

 

 

Mar 31,

 

Dec 31,

 

Mar 31,

 

 

Mar 31,

 

Mar 31,

 

 

 

2023

 

 

 

2022

 

 

 

2022

 

 

 

 

2023

 

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

1,240.2

 

 

$

1,370.3

 

 

$

827.7

 

 

 

$

3,955.0

 

 

$

2,429.7

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Gross Profit

 

$

420.2

 

 

$

411.2

 

 

$

321.7

 

 

 

$

1,274.9

 

 

$

939.5

 

Non-GAAP Gross Profit (2)

 

$

463.2

 

 

$

545.9

 

 

$

335.7

 

 

 

$

1,551.2

 

 

$

978.1

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Operating Income (1)

 

$

67.4

 

 

$

8.2

 

 

$

106.8

 

 

 

$

118.1

 

 

$

300.0

 

Non-GAAP Operating Income (2)

 

$

217.1

 

 

$

277.8

 

 

$

172.0

 

 

 

$

781.3

 

 

$

481.6

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net Earnings (Loss)

 

$

2.5

 

 

$

(45.1

)

 

$

49.0

 

 

 

$

(81.2

)

 

$

191.1

 

Non-GAAP Net Earnings (2)

 

$

117.6

 

 

$

171.4

 

 

$

129.0

 

 

 

$

472.6

 

 

$

370.8

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Diluted Earnings (Loss) Per Share

 

$

(0.24

)

 

$

(0.58

)

 

$

0.28

 

 

 

$

(1.38

)

 

$

1.22

 

Non-GAAP Diluted Earnings Per Share (2)

 

$

0.58

 

 

$

0.95

 

 

$

0.95

 

 

 

$

2.57

 

 

$

2.73

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Selected Financial Metrics

 

 

 

 

 

 

 

 

 

 

 

GAAP gross margin

 

 

33.9%

 

 

 

30.0%

 

 

 

38.9%

 

 

 

 

32.2%

 

 

 

38.7%

 

Non-GAAP gross margin (2)

 

 

37.3%

 

 

 

39.8%

 

 

 

40.6%

 

 

 

 

39.2%

 

 

 

40.3%

 

GAAP operating margin

 

 

5.4%

 

 

 

0.6%

 

 

 

12.9%

 

 

 

 

3.0%

 

 

 

12.3%

 

Non-GAAP operating margin (2)

 

 

17.5%

 

 

 

20.3%

 

 

 

20.8%

 

 

 

 

19.8%

 

 

 

19.8%

 

GAAP return on sales

 

 

0.2%

 

 

 

(3.3)%

 

 

 

5.9%

 

 

 

 

(2.1)%

 

 

 

7.9%

 

Non-GAAP return on sales (2)

 

 

9.5%

 

 

 

12.5%

 

 

 

15.6%

 

 

 

 

11.9%

 

 

 

15.3%

 

(1) GAAP operating income (loss) is defined as earnings before income taxes, interest expense and other expense or income, net.
(2) All non-GAAP amounts exclude certain adjustments for share-based compensation, acquired intangible amortization expense, restructuring, integration and transaction expenses, and start-up costs related to the start-up of new devices for new customer applications. See Table 4 for the Reconciliation of GAAP measures to non-GAAP measures

Outlook

The outlook for the fourth fiscal quarter ending June 30, 2023 is revenue of $1,125 million to $1,175 million and earnings per diluted share on a non-GAAP basis of $0.33 to $0.43. This is at today’s exchange rates, which are subject to variability. For the non-GAAP earnings per share, we added back to the GAAP earnings pre-tax amounts of $190-$210 million, consisting of $95 million in amortization, $27 million in share-based compensation, and $70-$85 million in transaction, integration and restructuring. Refer to Table 8 for the share count range for the aforementioned outlook. Non-GAAP adjustments are by their nature highly volatile and we have low visibility as to the range that may be incurred in the future.

The Company expects full year revenue between $5,080 to $5,150 million, at today’s exchange rates.

Conference Call & Webcast Information

The Company will host a conference call at 9:00 a.m. Eastern Time on Wednesday, May 10, 2023 to discuss these results. Individuals wishing to participate in the webcast can access the event at the Company’s web site by visiting https://www.coherent.com/company/investor-relations/financial-webcasts or via this link. Equity analysts and others who wish to participate in the question-and-answer session of the conference call can pre-register at this link to receive dial-in numbers and a unique PIN.

The call will be recorded, and a replay will be available to interested parties who are unable to attend the live event. This service will be available on the company’s website beginning May 10, 2023, at 4:00 p.m. ET.

Additional Information and Where to Find It

In connection with the conference call described above, the Company intends to post an investor presentation on the Company’s web site at https://www.coherent.com/company/investor-relations/investor-presentations on or about May 10, 2023. We also from time to time may post important information for investors on our web site at https://www.coherent.com/company/investor-relations. We intend to use our web site as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should review the “Investor Relations” page of our web site referenced above, in addition to following the Company’s press releases, SEC filings and public conference calls, presentations and webcasts. Investors and security holders are able to obtain free copies of these documents through the Company’s web site referenced above. Copies of the documents filed by the Company with the SEC may be obtained free of charge on the Company’s web site at https://www.coherent.com/company/investor-relations/sec-filings. The information contained on, or that may be accessed through, the Company’s web site is not incorporated by reference into, and is not part of, this release.

About Coherent Corp.

Coherent Corp. (“Coherent”, the “Company,” “we,” “us” or “our”), a global leader in materials, networking and lasers, is a vertically integrated manufacturing company that develops, manufactures and markets engineered materials, optoelectronic components and devices, and lasers for use in industrial materials processing, optical communications, aerospace and defense, consumer electronics, semiconductor capital equipment, medical diagnostics and life sciences, automotive applications, machine tools, consumer goods and medical device manufacturing. Headquartered in Saxonburg, Pennsylvania, Coherent has research and development, manufacturing, sales, service, and distribution facilities worldwide. Coherent produces a wide variety of lasers, along with application-specific photonic and electronic materials and components, and deploys them in various forms, including integrated with advanced software to enable its customers. For more information, please visit us at coherent.com.

Forward-looking Statements

This press release contains forward-looking statements relating to future events and expectations, including with respect to our expectations for our future financial and operational results and our belief that the actions we take to restructure the Company will drive greater scale, focus, resiliency, lower operating costs and better position us to achieve short and long-term commitments that are based on certain assumptions and contingencies. The forward-looking statements are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 and relate to the Company’s performance on a going-forward basis. The forward-looking statements in this press release involve risks and uncertainties, which could cause actual results, performance or trends to differ materially from those expressed in the forward-looking statements herein or in previous disclosures.

The Company believes that all forward-looking statements made by it in this press release have a reasonable basis, but there can be no assurance that management’s expectations, beliefs, or projections as expressed in the forward-looking statements will actually occur or prove to be correct. In addition to general industry and global economic conditions, factors that could cause actual results to differ materially from those discussed in the forward-looking statements in this press release include but are not limited to: (i) the failure of any one or more of the assumptions stated herein to prove to be correct; (ii) the risks relating to forward-looking statements and other “Risk Factors” discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2022 and additional risk factors that may be identified from time to time in filings of the Company; (iii) the substantial indebtedness the Company incurred in connection with its acquisition of Coherent, Inc. (the “Transaction”), the need to generate sufficient cash flows to service and repay such debt and the Company’s ability to generate sufficient funds to meet its anticipated debt reduction goals; (iv) the possibility that the Company may not be able to continue its integration progress on and/or take other actions to restructure the Company, or otherwise be able to achieve expected synergies, operating efficiencies, including greater scale, focus, resiliency, and lower operating costs and other benefits within the expected time-frames or at all and ultimately to successfully fully integrate the operations of Coherent, Inc. (“Coherent”) with those of the Company; (v) the possibility that such integration and/or the restructuring actions may be more difficult, time-consuming or costly than expected or that operating costs and business disruption (including, without limitation, disruptions in relationships with employees, customers or suppliers) may be greater than expected in connection with the Transaction and/or the restructuring actions; (vi) any unexpected costs, charges or expenses resulting from the Transaction and/or the restructuring actions; (vii) the risk that disruption from the Transaction and/or the restructuring actions materially and adversely affects the respective businesses and operations of the Company and Coherent; (viii) potential adverse reactions or changes to business relationships resulting from the completion of the Transaction and/or the restructuring actions; (ix) the ability of the Company to retain and hire key employees; (x) the purchasing patterns of customers and end users; (xi) the timely release of new products, and acceptance of such new products by the market; (xii) the introduction of new products by competitors and other competitive responses; (xiii) the Company’s ability to assimilate other recently acquired businesses, and realize synergies, cost savings, and opportunities for growth in connection therewith, together with the risks, costs, and uncertainties associated with such acquisitions; (xiv) the Company’s ability to devise and execute strategies to respond to market conditions; (xv) the risks to realizing the benefits of investments in R&D and commercialization of innovations; (xvi) the risks that the Company’s stock price will not trade in line with industrial technology leaders; and/or (xvii) the risks of business and economic disruption related to the currently ongoing COVID-19 outbreak and any other worldwide health epidemics or outbreaks that may arise. The Company disclaims any obligation to update information contained in these forward-looking statements, whether as a result of new information, future events or developments, or otherwise.

Use of Non-GAAP Financial Measures

The Company has disclosed financial measurements in this press release that present financial information considered to be non-GAAP financial measures. These measurements are not a substitute for GAAP measurements, although the Company's management uses these measurements as an aid in monitoring the Company's on-going financial performance. The non-GAAP net earnings, the non-GAAP earnings per share, the non-GAAP operating income, the non-GAAP gross profit, the non-GAAP internal research and development, the non-GAAP selling, general and administration, the non-GAAP interest and other (income) expense, and the non-GAAP income tax (benefit), measure earnings and operating income (loss), respectively, excluding non-recurring or unusual items that are considered by management to be outside the Company’s standard operation and excluding certain non-cash items. EBITDA is an adjusted non-GAAP financial measurement that is considered by management to be useful in measuring the profitability between companies within the industry by reflecting operating results of the Company excluding non-operating factors. There are limitations associated with the use of non-GAAP financial measures, including that such measures may not be entirely comparable to similarly titled measures used by other companies, due to potential differences among calculation methodologies. Thus, there can be no assurance whether (i) items excluded from the non-GAAP financial measures will occur in the future or (ii) there will be cash costs associated with items excluded from the non-GAAP financial measures. The Company compensates for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by providing the reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measures. Investors should consider adjusted measures in addition to, and not as a substitute for, or superior to, financial performance measures prepared in accordance with GAAP.

Coherent Corp. and Subsidiaries

Condensed Consolidated Statements of Earnings (Loss) (Unaudited)

($000 except per share data)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Mar 31,

 

Dec 31,

 

Mar 31,

 

 

 

2023

 

 

 

2022

 

 

 

2022

 

 

 

 

 

 

 

 

Revenues

 

$

1,240,194

 

 

$

1,370,285

 

 

$

827,724

 

 

 

 

 

 

 

 

Costs, Expenses & Other Expense

 

 

 

 

 

 

Cost of goods sold

 

 

820,038

 

 

 

959,097

 

 

 

506,051

 

Internal research and development

 

 

126,382

 

 

 

128,791

 

 

 

96,895

 

Selling, general and administrative

 

 

226,386

 

 

 

274,151

 

 

 

118,009

 

Interest expense

 

 

75,183

 

 

 

70,904

 

 

 

43,499

 

Other expense (income), net

 

 

(3,048

)

 

 

3,696

 

 

 

241

 

Total Costs, Expenses, & Other Expense

 

 

1,244,941

 

 

 

1,436,639

 

 

 

764,695

 

 

 

 

 

 

 

 

Earnings (Loss) Before Income Taxes

 

 

(4,747

)

 

 

(66,354

)

 

 

63,029

 

 

 

 

 

 

 

 

Income Taxes

 

 

(7,293

)

 

 

(21,282

)

 

 

14,027

 

 

 

 

 

 

 

 

Net Earnings (Loss)

 

$

2,546

 

 

$

(45,072

)

 

$

49,002

 

 

 

 

 

 

 

 

Less: Dividends on Preferred Stock

 

 

36,071

 

 

 

35,889

 

 

 

17,148

 

Net Earnings (Loss) Available to the Common Shareholders

 

$

(33,525

)

 

$

(80,961

)

 

$

31,854

 

 

 

 

 

 

 

 

Basic Earnings (Loss) Per Share

 

$

(0.24

)

 

$

(0.58

)

 

$

0.30

 

 

 

 

 

 

 

 

Diluted Earnings (Loss) Per Share

 

$

(0.24

)

 

$

(0.58

)

 

$

0.28

 

 

 

 

 

 

 

 

Average Shares Outstanding - Basic

 

 

139,113

 

 

 

138,623

 

 

 

106,323

 

Average Shares Outstanding - Diluted

 

 

139,113

 

 

 

138,623

 

 

 

116,949

 


Coherent Corp. and Subsidiaries

Condensed Consolidated Statements of Earnings (Loss) (Unaudited)

($000 except per share data)

 

 

 

 

 

 

 

Nine Months Ended

 

 

March 31,

 

March 31,

 

 

 

2023

 

 

 

2022

 

 

 

 

 

 

Revenues

 

$

3,955,049

 

 

$

2,429,654

 

 

 

 

 

 

Costs, Expenses & Other Expense

 

 

 

 

Cost of goods sold

 

 

2,680,131

 

 

 

1,490,190

 

Internal research and development

 

 

376,257

 

 

 

281,189

 

Selling, general and administrative

 

 

780,551

 

 

 

358,234

 

Interest expense

 

 

207,976

 

 

 

72,752

 

Other expense (income), net

 

 

32,253

 

 

 

(5,535

)

Total Costs, Expenses, & Other Expense

 

 

4,077,168

 

 

 

2,196,830

 

 

 

 

 

 

Earnings (Loss) Before Income Taxes

 

 

(122,119

)

 

 

232,824

 

 

 

 

 

 

Income Taxes

 

 

(40,895

)

 

 

41,701

 

 

 

 

 

 

Net Earnings (Loss)

 

$

(81,224

)

 

$

191,123

 

 

 

 

 

 

Less: Dividends on Preferred Stock

 

 

107,537

 

 

 

50,933

 

Net Earnings (Loss) Available to the Common Shareholders

 

$

(188,761

)

 

$

140,190

 

 

 

 

 

 

Basic Earnings (Loss) Per Share

 

$

(1.38

)

 

$

1.32

 

Diluted Earnings (Loss) Per Share

 

$

(1.38

)

 

$

1.22

 

 

 

 

 

 

Average Shares Outstanding - Basic

 

 

136,990

 

 

 

106,079

 

Average Shares Outstanding - Diluted

 

 

136,990

 

 

 

116,410

 


Coherent Corp. and Subsidiaries

 

 

 

 

Condensed Consolidated Balance Sheets (Unaudited)

 

 

 

 

($000)

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

June 30,

 

 

 

2023

 

 

 

2022

 

Assets

 

 

 

 

Current Assets

 

 

 

 

Cash, cash equivalents, and restricted cash

 

$

901,028

 

 

$

2,582,371

 

Accounts receivable

 

 

924,369

 

 

 

700,331

 

Inventories

 

 

1,394,103

 

 

 

902,559

 

Prepaid and refundable income taxes

 

 

26,237

 

 

 

19,585

 

Prepaid and other current assets

 

 

160,907

 

 

 

100,346

 

Total Current Assets

 

 

3,406,644

 

 

 

4,305,192

 

Property, plant & equipment, net

 

 

1,910,561

 

 

 

1,363,195

 

Goodwill

 

 

4,505,137

 

 

 

1,285,759

 

Other intangible assets, net

 

 

3,954,198

 

 

 

635,404

 

Deferred income taxes

 

 

34,169

 

 

 

31,714

 

Other assets

 

 

306,923

 

 

 

223,582

 

Total Assets

 

$

14,117,632

 

 

$

7,844,846

 

 

 

 

 

 

Liabilities, Mezzanine Equity and Shareholders’ Equity

 

 

 

 

Current Liabilities

 

 

 

 

Current portion of long-term debt

 

$

74,910

 

 

$

403,212

 

Accounts payable

 

 

428,860

 

 

 

434,917

 

Operating lease current liabilities

 

 

40,309

 

 

 

27,574

 

Accruals and other current liabilities

 

 

563,377

 

 

 

401,256

 

Total Current Liabilities

 

 

1,107,456

 

 

 

1,266,959

 

Long-term debt

 

 

4,349,923

 

 

 

1,897,214

 

Deferred income taxes

 

 

847,212

 

 

 

77,259

 

Operating lease liabilities

 

 

148,010

 

 

 

110,214

 

Other liabilities

 

 

213,953

 

 

 

109,922

 

Total Liabilities

 

 

6,666,554

 

 

 

3,461,568

 

Total Mezzanine Equity

 

 

2,211,642

 

 

 

766,803

 

Total Shareholders' Equity

 

 

5,239,436

 

 

 

3,616,475

 

Total Liabilities, Mezzanine Equity and Shareholders’ Equity

 

$

14,117,632

 

 

$

7,844,846

 


Coherent Corp. and Subsidiaries

 

 

 

 

Condensed Consolidated Statements of Cash Flows (Unaudited)

 

 

 

 

($000)

 

 

 

Nine Months Ended

 

 

March 31,

 

 

 

2023

 

 

 

2022

 

 

 

 

 

 

Cash Flows from Operating Activities

 

 

 

 

Net cash provided by operating activities

 

$

452,493

 

 

$

276,007

 

 

 

 

 

 

Cash Flows from Investing Activities

 

 

 

 

Additions to property, plant & equipment

 

 

(342,999

)

 

 

(195,991

)

Purchases of businesses, net of cash acquired

 

 

(5,488,556

)

 

 

 

Other investing activities

 

 

(2,261

)

 

 

(5,750

)

Net cash used in investing activities

 

 

(5,833,816

)

 

 

(201,741

)

 

 

 

 

 

Cash Flows from Financing Activities

 

 

 

 

Proceeds from borrowings of Term A Facility

 

 

850,000

 

 

 

 

Proceeds from borrowings of Term B Facility

 

 

2,800,000

 

 

 

 

Proceeds from borrowings of Revolving Credit Facility

 

 

65,000

 

 

 

 

Proceeds from issuance of Series B Preferred Shares

 

 

1,400,000

 

 

 

 

Payments on Finisar Notes

 

 

 

 

 

(14,888

)

Payments on existing debt

 

 

(1,144,025

)

 

 

(46,538

)

Payments on borrowings under Revolving Credit Facility

 

 

(65,000

)

 

 

 

Debt issuance costs

 

 

(126,516

)

 

 

(10,197

)

Equity issuance costs

 

 

(42,000

)

 

 

 

Proceeds from issuance of Senior Notes

 

 

 

 

 

990,000

 

Proceeds from exercises of stock options and purchases of stock under employee stock plan

 

 

21,509

 

 

 

17,177

 

Payment on convertible notes

 

 

(3,561

)

 

 

 

Payments in satisfaction of employees' minimum tax obligations

 

 

(51,836

)

 

 

(14,948

)

Payment of dividends

 

 

(20,700

)

 

 

(27,608

)

Other financing activities

 

 

(866

)

 

 

(1,715

)

Net cash provided by financing activities

 

 

3,682,005

 

 

 

891,283

 

 

 

 

 

 

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

 

 

22,532

 

 

 

42,874

 

 

 

 

 

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

 

(1,676,786

)

 

 

1,008,423

 

 

 

 

 

 

Cash, Cash Equivalents, and Restricted Cash at Beginning of Period

 

 

2,582,371

 

 

 

1,591,892

 

 

 

 

 

 

Cash, Cash Equivalents, and Restricted Cash at End of Period(1)

 

$

905,585

 

 

$

2,600,315

 

(1) Restricted cash, non-current is included in the condensed consolidated balance sheets under 'Other Assets'.

Table 2

 

 

 

 

 

 

 

 

 

 

 

Segment Revenues, GAAP Operating Income (Loss) & Margins, and

 

 

 

 

 

 

 

Non-GAAP Operating Income (Loss) & Margins*

 

 

 

 

 

 

 

$ Millions, except %

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

Three Months Ended

 

 

Nine Months Ended

 

 

Mar 31,

 

Dec 31,

 

Mar 31,

 

 

Mar 31,

 

Mar 31,

 

 

 

2023

 

 

 

2022

 

 

 

2022

 

 

 

 

2023

 

 

 

2022

 

Revenues:(1)

 

 

 

 

 

 

 

 

 

 

 

Networking

 

$

551.1

 

 

$

608.7

 

 

$

559.5

 

 

 

$

1,756.3

 

 

$

1,607.1

 

Materials

 

 

323.8

 

 

 

382.4

 

 

 

268.2

 

 

 

 

1,061.8

 

 

 

822.6

 

Lasers

 

 

365.3

 

 

 

379.2

 

 

 

 

 

 

 

1,136.9

 

 

 

 

Consolidated

 

$

1,240.2

 

 

$

1,370.3

 

 

$

827.7

 

 

 

$

3,955.0

 

 

$

2,429.7

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Operating Income (Loss):(1)

 

 

 

 

 

 

 

 

 

 

 

Networking

 

$

49.5

 

 

$

90.0

 

 

$

54.6

 

 

 

$

230.5

 

 

$

164.5

 

Materials

 

 

67.8

 

 

 

81.5

 

 

 

61.8

 

 

 

 

224.6

 

 

 

165.0

 

Lasers

 

 

(49.9

)

 

 

(163.3

)

 

 

 

 

 

 

(337.0

)

 

 

 

Unallocated and Other

 

 

 

 

 

 

 

 

(9.6

)

 

 

 

 

 

 

(29.5

)

Consolidated

 

$

67.4

 

 

$

8.2

 

 

$

106.8

 

 

 

$

118.1

 

 

$

300.0

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Operating Income:(1)

 

 

 

 

 

 

 

 

 

 

 

Networking

 

$

74.7

 

 

$

117.8

 

 

$

81.8

 

 

 

$

310.2

 

 

$

246.0

 

Materials

 

 

89.0

 

 

 

100.3

 

 

 

90.2

 

 

 

 

286.1

 

 

 

235.5

 

Lasers

 

 

53.4

 

 

 

59.7

 

 

 

 

 

 

 

185.0

 

 

 

 

Consolidated

 

$

217.1

 

 

$

277.8

 

 

$

172.0

 

 

 

$

781.3

 

 

$

481.6

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Operating Margin (Loss):(1)

 

 

 

 

 

 

 

 

 

 

 

Networking

 

 

9.0%

 

 

 

14.8%

 

 

 

9.8%

 

 

 

 

13.1%

 

 

 

10.2%

 

Materials

 

 

20.9%

 

 

 

21.3%

 

 

 

23.0%

 

 

 

 

21.2%

 

 

 

20.1%

 

Lasers

 

 

(13.7)%

 

 

 

(43.1)%

 

 

N/A

 

 

 

(29.6)%

 

 

N/A

Consolidated

 

 

5.4%

 

 

 

0.6%

 

 

 

12.9%

 

 

 

 

3.0%

 

 

 

12.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Operating Margin:(1)

 

 

 

 

 

 

 

 

 

 

 

Networking

 

 

13.6%

 

 

 

19.4%

 

 

 

14.6%

 

 

 

 

17.7%

 

 

 

15.3%

 

Materials

 

 

27.5%

 

 

 

26.2%

 

 

 

33.6%

 

 

 

 

26.9%

 

 

 

28.6%

 

Lasers

 

 

14.6%

 

 

 

15.7%

 

 

N/A

 

 

 

16.3%

 

 

N/A

Consolidated

 

 

17.5%

 

 

 

20.3%

 

 

 

20.8%

 

 

 

 

19.8%

 

 

 

19.8%

 

*Amounts may not recalculate due to rounding.

(1) Segment results for prior periods have been updated to include the movement of two businesses between Materials and Networking.

Table 3

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of GAAP Segment Operating Income (Loss) to

 

 

 

 

 

 

 

Segment Non-GAAP Operating Income (Loss)*

 

 

 

 

 

 

 

 

 

 

 

$ Millions

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

Three Months Ended

 

 

Nine Months Ended

 

 

Mar 31,

 

Dec 31,

 

Mar 31,

 

 

Mar 31,

 

Mar 31,

 

 

 

2023

 

 

 

2022

 

 

 

2022

 

 

 

 

2023

 

 

 

2022

 

Networking GAAP Operating Income

 

$

49.5

 

 

$

90.0

 

 

$

54.6

 

 

 

$

230.5

 

 

$

164.5

 

Share-based compensation

 

 

6.9

 

 

 

8.9

 

 

 

8.8

 

 

 

 

26.0

 

 

 

27.8

 

Amortization of acquired intangibles

 

 

16.5

 

 

 

16.4

 

 

 

16.5

 

 

 

 

49.4

 

 

 

49.8

 

Integration and other(1)

 

 

1.8

 

 

 

2.5

 

 

 

1.9

 

 

 

 

4.3

 

 

 

3.9

 

Non-GAAP Networking Operating Income

 

$

74.7

 

 

$

117.8

 

 

$

81.8

 

 

 

$

310.2

 

 

$

246.0

 

 

 

 

 

 

 

 

 

 

 

 

 

Materials GAAP Operating Income

 

$

67.8

 

 

$

81.5

 

 

$

61.8

 

 

 

$

224.6

 

 

 

165.0

 

Share-based compensation

 

 

10.7

 

 

 

12.8

 

 

 

9.2

 

 

 

 

40.7

 

 

 

31.7

 

Amortization of acquired intangibles

 

 

3.2

 

 

 

3.3

 

 

 

2.9

 

 

 

 

9.7

 

 

 

10.0

 

Integration and other(1)

 

 

7.3

 

 

 

2.8

 

 

 

1.7

 

 

 

 

11.1

 

 

 

2.9

 

Start-up costs(3)

 

 

 

 

 

 

 

 

14.6

 

 

 

 

 

 

 

25.9

 

Non-GAAP Materials Operating Income

 

$

89.0

 

 

$

100.3

 

 

$

90.2

 

 

 

$

286.1

 

 

$

235.5

 

 

 

 

 

 

 

 

 

 

 

 

 

Lasers GAAP Operating Income (Loss)

 

$

(49.9

)

 

$

(163.3

)

 

$

 

 

 

$

(337.0

)

 

$

 

Share-based compensation

 

 

17.5

 

 

 

13.2

 

 

 

 

 

 

 

56.5

 

 

 

 

Amortization of acquired intangibles

 

 

73.0

 

 

 

85.7

 

 

 

 

 

 

 

221.5

 

 

 

 

Integration and other(1)

 

 

12.8

 

 

 

12.0

 

 

 

 

 

 

 

47.8

 

 

 

 

Transaction fees and financing(2)

 

 

 

 

 

 

 

 

 

 

 

 

38.7

 

 

 

 

Preliminary fair value adjustment on acquired inventory

 

 

 

 

 

112.0

 

 

 

 

 

 

 

157.5

 

 

 

 

Non-GAAP Lasers Operating Income

 

$

53.4

 

 

$

59.7

 

 

$

 

 

 

$

185.0

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

Unallocated and Other GAAP Operating Income (Loss)

 

$

 

 

$

 

 

$

(9.6

)

 

 

$

 

 

$

(29.5

)

Transaction fees and financing(2)

 

 

 

 

 

 

 

 

9.6

 

 

 

 

 

 

 

29.5

 

Non-GAAP Unallocated and Other GAAP Operating Income (Loss)

 

$

 

 

$

 

 

$

 

 

 

$

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

Total GAAP Operating Income

 

$

67.4

 

 

$

8.2

 

 

$

106.8

 

 

 

$

118.1

 

 

$

300.0

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Operating Income

 

$

217.1

 

 

$

277.8

 

 

$

172.0

 

 

 

$

781.3

 

 

$

481.6

 

*Amounts may not recalculate due to rounding.

(1) During fiscal year 2023, Integration and Other includes one-time retention and severance payments, as well as other integration costs related to the Coherent transaction. During fiscal year 2022, Integration and other includes integration and restructuring charges from the Finisar acquisition.

(2) Transaction fees and financing in fiscal year 2023 includes debt extinguishment costs and various fees related to closing the Coherent transaction. Transaction fees and financing in fiscal year 2022 includes incremental interest expense related to the financing for the Coherent transaction which were included as an adjustment in arriving at non-GAAP earnings through the closing of the Coherent transaction, as the associated funding was contingent on transaction close.

(3) Start-up costs in operating expenses were related to the start-up of new devices for new customer applications.

Table 4

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of GAAP Measures to non-GAAP Measures*

 

 

 

 

 

 

 

$ Millions

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

Three Months Ended

 

 

Nine Months Ended

 

 

Mar 31,

 

Dec 31,

 

Mar 31,

 

 

Mar 31,

 

Mar 31,

 

 

 

2023

 

 

 

2022

 

 

 

2022

 

 

 

 

2023

 

 

 

2022

 

Gross profit on GAAP basis

 

$

420.2

 

 

$

411.2

 

 

$

321.7

 

 

 

$

1,274.9

 

 

$

939.5

 

Share-based compensation

 

 

6.5

 

 

 

6.2

 

 

 

1.3

 

 

 

 

18.0

 

 

 

4.2

 

Amortization of acquired intangibles

 

 

30.7

 

 

 

15.3

 

 

 

9.4

 

 

 

 

93.4

 

 

 

28.7

 

Preliminary fair value adjustment on acquired inventory

 

 

 

 

 

112.0

 

 

 

 

 

 

 

157.5

 

 

 

 

Start-up costs(3)

 

 

 

 

 

 

 

 

1.6

 

 

 

 

 

 

 

2.8

 

Integration and other(1)

 

 

5.8

 

 

 

1.2

 

 

 

1.7

 

 

 

 

7.4

 

 

 

2.9

 

Gross profit on non-GAAP basis

 

$

463.2

 

 

$

545.9

 

 

$

335.7

 

 

 

$

1,551.2

 

 

$

978.1

 

 

 

 

 

 

 

 

 

 

 

 

 

Internal research and development on GAAP basis

 

$

126.4

 

 

$

128.8

 

 

$

96.9

 

 

 

$

376.3

 

 

$

281.2

 

Share-based compensation

 

 

(5.9

)

 

 

(6.0

)

 

 

(2.0

)

 

 

 

(17.3

)

 

 

(6.3

)

Amortization of acquired intangibles

 

 

(0.4

)

 

 

 

 

 

 

 

 

 

(0.4

)

 

 

 

Start-up costs(3)

 

 

 

 

 

 

 

 

(13.0

)

 

 

 

 

 

 

(23.1

)

Integration and other(1)

 

 

(0.2

)

 

 

 

 

 

 

 

 

 

(0.2

)

 

 

 

Internal research and development on non-GAAP basis

 

$

119.9

 

 

$

122.8

 

 

$

81.9

 

 

 

$

358.4

 

 

$

251.8

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative on GAAP basis

 

$

226.4

 

 

$

274.2

 

 

$

118.0

 

 

 

$

780.6

 

 

$

358.2

 

Share-based compensation

 

 

(22.7

)

 

 

(22.7

)

 

 

(14.9

)

 

 

 

(87.9

)

 

 

(49.1

)

Amortization of acquired intangibles

 

 

(61.6

)

 

 

(90.1

)

 

 

(10.0

)

 

 

 

(186.8

)

 

 

(31.1

)

Transaction fees and financing (2)

 

 

 

 

 

 

 

 

(9.6

)

 

 

 

(38.7

)

 

 

(29.5

)

Integration and other(1)

 

 

(15.9

)

 

 

(16.0

)

 

 

(1.9

)

 

 

 

(55.6

)

 

 

(3.9

)

Selling, general and administrative on non-GAAP basis

 

$

126.2

 

 

$

145.4

 

 

$

81.6

 

 

 

$

411.6

 

 

$

244.6

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income on GAAP basis

 

$

67.4

 

 

$

8.2

 

 

$

106.8

 

 

 

$

118.1

 

 

$

300.0

 

Share-based compensation

 

 

35.1

 

 

 

34.9

 

 

 

18.2

 

 

 

 

123.2

 

 

 

59.6

 

Amortization of acquired intangibles

 

 

92.7

 

 

 

105.4

 

 

 

19.4

 

 

 

 

280.6

 

 

 

59.8

 

Preliminary fair value adjustment on acquired inventory

 

 

 

 

 

112.0

 

 

 

 

 

 

 

157.5

 

 

 

 

Start-up costs(3)

 

 

 

 

 

 

 

 

14.6

 

 

 

 

 

 

 

25.9

 

Transaction fees and financing(2)

 

 

 

 

 

 

 

 

9.6

 

 

 

 

38.7

 

 

 

29.5

 

Integration and other(1)

 

 

21.9

 

 

 

17.2

 

 

 

3.6

 

 

 

 

63.2

 

 

 

6.9

 

Operating income on non-GAAP basis

 

$

217.1

 

 

$

277.8

 

 

$

172.0

 

 

 

$

781.3

 

 

$

481.6

 


Table 4

 

 

 

 

 

 

 

 

 

 

Reconciliation of GAAP Measures to non-GAAP Measures (Continued)*

 

 

 

 

 

 

 

$ Millions

 

 

 

 

 

 

 

 

 

 

(Unaudited)

Three Months Ended

 

 

Nine Months Ended

 

Mar 31,

 

Dec 31,

 

Mar 31,

 

 

Mar 31,

 

Mar 31,

 

 

2023

 

 

 

2022

 

 

 

2022

 

 

 

 

2023

 

 

 

2022

 

Interest and other (income) expense, net on GAAP basis

$

72.1

 

 

$

74.6

 

 

$

43.7

 

 

 

$

240.2

 

 

$

67.2

 

Foreign currency exchange gains (losses), net

 

(0.8

)

 

 

(7.3

)

 

 

(1.1

)

 

 

 

(5.1

)

 

 

3.6

 

Integration and other(1)

 

 

 

 

 

 

 

(33.3

)

 

 

 

 

 

 

(43.0

)

Transaction fees and financing(2)

 

 

 

 

 

 

 

 

 

 

 

(34.8

)

 

 

 

Interest and other (income) expense, net on non-GAAP basis

$

71.3

 

 

$

67.3

 

 

$

9.3

 

 

 

$

200.3

 

 

$

27.8

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes on GAAP basis

$

(7.3

)

 

$

(21.3

)

 

$

14.0

 

 

 

$

(40.9

)

 

$

41.7

 

Tax impact of non-GAAP measures

 

35.5

 

 

 

60.3

 

 

 

19.8

 

 

 

 

149.3

 

 

 

41.3

 

Income taxes on non-GAAP basis

$

28.2

 

 

$

39.0

 

 

$

33.8

 

 

 

$

108.4

 

 

$

83.0

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) on GAAP basis

$

2.5

 

 

$

(45.1

)

 

$

49.0

 

 

 

$

(81.2

)

 

$

191.1

 

Share-based compensation

 

35.1

 

 

 

34.9

 

 

 

18.2

 

 

 

 

123.2

 

 

 

59.6

 

Amortization of acquired intangibles

 

92.7

 

 

 

105.4

 

 

 

19.4

 

 

 

 

280.6

 

 

 

59.8

 

Preliminary fair value adjustment on acquired inventory

 

 

 

 

112.0

 

 

 

 

 

 

 

157.5

 

 

 

 

Start-up costs(3)

 

 

 

 

 

 

 

14.6

 

 

 

 

 

 

 

25.9

 

Foreign currency exchange (gains) losses

 

0.8

 

 

 

7.3

 

 

 

1.1

 

 

 

 

5.1

 

 

 

(3.6

)

Integration and other(1)

 

21.9

 

 

 

17.2

 

 

 

37.0

 

 

 

 

63.2

 

 

 

49.9

 

Transaction fees and financing(2)

 

 

 

 

 

 

 

9.6

 

 

 

 

73.5

 

 

 

29.5

 

Tax impact of non-GAAP measures

 

(35.5

)

 

 

(60.3

)

 

 

(19.8

)

 

 

 

(149.3

)

 

 

(41.3

)

Net earnings on non-GAAP basis

$

117.6

 

 

$

171.4

 

 

$

129.0

 

 

 

$

472.6

 

 

$

370.8

 

 

 

 

 

 

 

 

 

 

 

 

Per share data:

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) on GAAP basis

 

 

 

 

 

 

 

 

 

 

Basic Earnings (Loss) Per Share

$

(0.24

)

 

$

(0.58

)

 

$

0.30

 

 

 

$

(1.38

)

 

$

1.32

 

Diluted Earnings (Loss) Per Share

$

(0.24

)

 

$

(0.58

)

 

$

0.28

 

 

 

$

(1.38

)

 

$

1.22

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings on non-GAAP basis

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Share

$

0.59

 

 

$

0.98

 

 

$

1.05

 

 

 

$

2.67

 

 

$

3.02

 

Diluted Earnings Per Share

$

0.58

 

 

$

0.95

 

 

$

0.95

 

 

 

$

2.57

 

 

$

2.73

 

*Amounts may not recalculate due to rounding.
(1) During fiscal year 2023, Integration and other includes one-time retention and severance payments and other integration costs related to the Coherent transaction. During fiscal year 2022, Integration and other includes integration and restructuring charges from the Finisar acquisition.
(2) Transaction fees and financing in fiscal year 2023 includes debt extinguishment costs, various fees related to closing the Coherent transaction. Transaction fees and financing in fiscal year 2022 includes incremental interest expense related to the financing for the Coherent transaction which were included as an adjustment in arriving at non-GAAP earnings through the closing of the Coherent transaction, as the associated funding was contingent on transaction close.
(3) Start-up costs in operating expenses were related to the start-up of new devices for new customer applications.

Table 5

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of GAAP Net Income (Loss), EBITDA and Adjusted EBITDA*

 

 

 

 

 

$ Millions

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

Three Months Ended

 

 

Nine Months Ended

 

 

Mar 31,

 

Dec 31,

 

Mar 31,

 

 

Mar 31,

 

Mar 31,

 

 

 

2023

 

 

 

2022

 

 

 

2022

 

 

 

 

2023

 

 

 

2022

 

Net earnings (loss) on GAAP basis

 

$

2.5

 

 

$

(45.1

)

 

$

49.0

 

 

 

$

(81.2

)

 

$

191.1

 

Income taxes

 

 

(7.3

)

 

 

(21.3

)

 

 

14.0

 

 

 

 

(40.9

)

 

 

41.7

 

Depreciation and amortization

 

 

160.9

 

 

 

169.9

 

 

 

72.8

 

 

 

 

478.1

 

 

 

213.5

 

Interest expense

 

 

75.2

 

 

 

70.9

 

 

 

43.5

 

 

 

 

208.0

 

 

 

72.8

 

EBITDA (1)

 

$

231.3

 

 

$

174.4

 

 

$

179.3

 

 

 

$

564.0

 

 

$

519.1

 

EBITDA margin

 

 

18.7

%

 

 

12.7

%

 

 

21.7

%

 

 

 

14.3

%

 

 

21.4

%

 

 

 

 

 

 

 

 

 

 

 

 

Preliminary fair value adjustment on acquired inventory

 

 

 

 

 

112.0

 

 

 

 

 

 

 

157.5

 

 

 

 

Share-based compensation

 

 

35.1

 

 

 

34.9

 

 

 

18.2

 

 

 

 

123.2

 

 

 

59.6

 

Foreign currency exchange (gains) losses

 

 

0.8

 

 

 

7.3

 

 

 

1.1

 

 

 

 

5.1

 

 

 

(3.6

)

Start-up costs

 

 

 

 

 

 

 

 

14.6

 

 

 

 

 

 

 

25.9

 

Transaction fees and financing(4)

 

 

 

 

 

 

 

 

9.6

 

 

 

 

73.5

 

 

 

29.5

 

Integration and other(3)

 

 

21.9

 

 

 

17.2

 

 

 

3.6

 

 

 

 

63.2

 

 

 

9.2

 

Adjusted EBITDA (2)

 

$

289.1

 

 

$

345.8

 

 

$

226.4

 

 

 

$

986.5

 

 

$

639.7

 

Adjusted EBITDA margin

 

 

23.3

%

 

 

25.2

%

 

 

27.4

%

 

 

 

24.9

%

 

 

26.3

%

*Amounts may not recalculate due to rounding.

(1) EBITDA is defined as earnings before interest expense, income taxes, depreciation and amortization.
(2) Adjusted EBITDA excludes non-GAAP adjustments for share-based compensation, certain one-time restructuring, integration, and transaction expenses, debt extinguishment charges, start-up costs, and the impact of foreign currency exchange gains and losses.
(3) During fiscal year 2023, Integration and other includes one-time retention and severance payments, and other integration costs related to the Coherent transaction. During fiscal year 2022, Integration and other includes integration and restructuring charges from the Finisar acquisition.
(4) Transaction fees and financing includes debt extinguishment costs and various fees related to closing the Coherent transaction.

Table 6

 

 

 

 

 

 

 

 

 

 

 

GAAP Earnings Per Share Calculation*

 

 

 

 

 

 

 

 

 

 

 

$ Millions

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

Three Months Ended

 

 

Nine Months Ended

 

 

Mar 31,

 

Dec 31,

 

Mar 31,

 

 

Mar 31,

 

Mar 31,

 

 

 

2023

 

 

 

2022

 

 

 

2022

 

 

 

 

2023

 

 

 

2022

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

$

2.5

 

 

$

(45.1

)

 

$

49.0

 

 

 

$

(81.2

)

 

$

191.1

 

Deduct Series A preferred stock dividends

 

 

(6.9

)

 

 

(6.9

)

 

 

(6.9

)

 

 

 

(20.7

)

 

 

(20.7

)

Deduct Series B redeemable preferred dividends

 

 

(29.2

)

 

 

(29.0

)

 

 

(10.2

)

 

 

 

(86.8

)

 

$

(30.2

)

Basic earnings (loss) available to common shareholders

 

$

(33.5

)

 

$

(81.0

)

 

$

31.9

 

 

 

$

(188.8

)

 

$

140.2

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

 

 

Add back interest on convertible notes

 

$

 

 

$

 

 

$

0.6

 

 

 

$

 

 

$

1.7

 

Diluted earnings (loss) available to common shareholders

 

$

(33.5

)

 

$

(81.0

)

 

$

32.4

 

 

 

$

(188.8

)

 

$

141.8

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares

 

 

139.1

 

 

 

138.6

 

 

 

106.3

 

 

 

 

137.0

 

 

 

106.1

 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

 

 

Common stock equivalents

 

 

 

 

 

 

 

 

3.3

 

 

 

 

 

 

 

3.0

 

Convertible notes

 

 

 

 

 

 

 

 

7.3

 

 

 

 

 

 

 

7.3

 

Diluted weighted average common shares

 

 

139.1

 

 

 

138.6

 

 

 

116.9

 

 

 

 

137.0

 

 

 

116.4

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per common share

 

$

(0.24

)

 

$

(0.58

)

 

$

0.30

 

 

 

$

(1.38

)

 

$

1.32

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per common share

 

$

(0.24

)

 

$

(0.58

)

 

$

0.28

 

 

 

$

(1.38

)

 

$

1.22

 

*Amounts may not recalculate due to rounding.

Table 7

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Earnings Per Share Calculation*

 

 

 

 

 

 

 

 

 

 

 

$ Millions

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

Three Months Ended

 

 

Nine Months Ended

 

 

Mar 31,

 

Dec 31,

 

Mar 31,

 

 

Mar 31,

 

Mar 31,

 

 

 

2023

 

 

 

2023

 

 

 

2022

 

 

 

 

2023

 

 

 

2022

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

Net earnings on non-GAAP basis

 

$

117.6

 

 

$

171.4

 

 

$

129.0

 

 

 

$

472.6

 

 

$

370.8

 

Deduct Series A preferred stock dividends

 

 

(6.9

)

 

 

(6.9

)

 

 

(6.9

)

 

 

 

(20.7

)

 

 

(20.7

)

Deduct Series B redeemable preferred dividends

 

 

(29.2

)

 

 

(29.0

)

 

 

(10.2

)

 

 

 

(86.9

)

 

 

(30.2

)

Basic earnings available to common shareholders

 

$

81.5

 

 

$

135.5

 

 

$

111.9

 

 

 

$

365.1

 

 

$

319.9

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

 

 

Add back interest on convertible notes

 

$

 

 

$

 

 

$

0.6

 

 

 

$

0.3

 

 

$

1.7

 

Add back Series A preferred stock dividends

 

 

 

 

 

6.9

 

 

 

6.9

 

 

 

 

20.7

 

 

 

20.7

 

Diluted earnings available to common shareholders

 

$

81.5

 

 

$

142.4

 

 

$

119.4

 

 

 

$

386.1

 

 

$

342.2

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares

 

 

139.1

 

 

 

138.6

 

 

 

106.3

 

 

 

 

137.0

 

 

 

106.1

 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

 

 

Common stock equivalents

 

 

1.7

 

 

 

0.9

 

 

 

3.3

 

 

 

 

1.4

 

 

 

3.0

 

Convertible notes

 

 

0.0

 

 

 

0.0

 

 

 

7.3

 

 

 

 

1.5

 

 

 

7.3

 

Series A Mandatory Convertible Preferred Stock

 

 

0.0

 

 

 

10.7

 

 

 

8.9

 

 

 

 

10.3

 

 

 

8.9

 

Diluted weighted average common shares

 

 

140.8

 

 

 

150.2

 

 

 

125.9

 

 

 

 

150.2

 

 

 

125.3

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share on non-GAAP basis

 

$

0.59

 

 

$

0.98

 

 

$

1.05

 

 

 

$

2.67

 

 

$

3.02

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share on non-GAAP basis

 

$

0.58

 

 

$

0.95

 

 

$

0.95

 

 

 

$

2.57

 

 

$

2.73

 

*Amounts may not recalculate due to rounding.

Table 8

 

 

 

 

 

 

 

 

 

 

 

Example EPS Calculations (1)

 

 

 

 

 

 

$ Millions

 

 

 

 

 

 

 

 

 

 

 

 

 

Hypothetical Earnings Level for Q4 FY23

Non-GAAP net earnings

 

$

83.0

 

 

$

90.0