Lumentum(US:LITE)2024-11-07 23:18PART I - FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents Lumentum's unaudited condensed consolidated financial statements, including statements of operations, comprehensive loss, balance sheets, cash flows, and stockholders' equity, along with detailed notes explaining the company's business, accounting policies, acquisitions, debt, equity, and segment information for the period ended September 28, 2024 Condensed Consolidated Statements of Operations This section details Lumentum's unaudited condensed consolidated statements of operations, showing revenue, costs, expenses, and net loss for the three months ended September 28, 2024, and September 30, 2023 | Metric | Three Months Ended Sep 28, 2024 (in millions) | Three Months Ended Sep 30, 2023 (in millions) | Change (YoY) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :----------- | | Net Revenue | $336.9 | $317.6 | +$19.3 | | Cost of Sales | $236.5 | $222.9 | +$13.6 | | Amortization of acquired intangibles | $22.5 | $18.0 | +$4.5 | | Gross Profit | $77.9 | $76.7 | +$1.2 | | Total Operating Expenses | $160.3 | $157.5 | +$2.8 | | Loss from Operations | $(82.4) | $(80.8) | $(1.6) | | Interest Expense | $(5.5) | $(9.7) | +$4.2 | | Other Income, net | $8.7 | $21.2 | $(12.5) | | Loss before Income Taxes | $(79.2) | $(69.3) | $(9.9) | | Income Tax Provision (Benefit) | $3.2 | $(1.4) | +$4.6 | | Net Loss | $(82.4) | $(67.9) | $(14.5) | | Basic Net Loss per Share | $(1.21) | $(1.02) | $(0.19) | | Diluted Net Loss per Share | $(1.21) | $(1.02) | $(0.19) | - Lumentum reported a net loss of $82.4 million for the three months ended September 28, 2024, an increase from $67.9 million in the prior year period, despite a slight increase in net revenue4 Condensed Consolidated Statements of Comprehensive Loss This section presents Lumentum's unaudited condensed consolidated statements of comprehensive loss, detailing net loss and other comprehensive income components for the three months ended September 28, 2024, and September 30, 2023 | Metric | Three Months Ended Sep 28, 2024 (in millions) | Three Months Ended Sep 30, 2023 (in millions) | | :------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net Loss | $(82.4) | $(67.9) | | Foreign currency translation adjustments | — | $(0.2) | | Net change in unrealized gain on available-for-sale securities | $2.3 | $1.3 | | Other comprehensive income, net of tax | $2.3 | $1.1 | | Comprehensive Loss, net of tax | $(80.1) | $(66.8) | - The company reported a comprehensive loss of $80.1 million for the three months ended September 28, 2024, compared to $66.8 million in the prior year, primarily driven by the net loss, partially offset by an increase in unrealized gains on available-for-sale securities6 Condensed Consolidated Balance Sheets This section provides Lumentum's unaudited condensed consolidated balance sheets, outlining assets, liabilities, and stockholders' equity as of September 28, 2024, and June 29, 2024 | Metric | Sep 28, 2024 (in millions) | Jun 29, 2024 (in millions) | Change | | :----------------------------------- | :------------------------- | :------------------------- | :----- | | Assets: | | | | | Cash and cash equivalents | $489.2 | $436.7 | +$52.5 | | Short-term investments | $426.9 | $450.3 | $(23.4) | | Accounts receivable, net | $198.5 | $194.7 | +$3.8 | | Inventories | $403.3 | $398.4 | +$4.9 | | Total current assets | $1,636.2 | $1,590.1 | +$46.1 | | Property, plant and equipment, net | $638.4 | $572.5 | +$65.9 | | Goodwill | $1,060.9 | $1,055.8 | +$5.1 | | Other intangible assets, net | $573.9 | $617.5 | $(43.6) | | Total assets | $3,969.6 | $3,931.9 | +$37.7 | | Liabilities: | | | | | Total current liabilities | $305.1 | $269.3 | +$35.8 | | Long-term debt | $2,569.2 | $2,503.2 | +$66.0 | | Total liabilities | $3,073.7 | $2,974.6 | +$99.1 | | Stockholders' Equity: | | | | | Total stockholders' equity | $895.9 | $957.3 | $(61.4) | - As of September 28, 2024, Lumentum's total assets increased slightly to $3,969.6 million from $3,931.9 million as of June 29, 2024, primarily due to increases in cash and cash equivalents and property, plant and equipment, net. Total liabilities also increased, leading to a decrease in total stockholders' equity9 Condensed Consolidated Statements of Cash Flows This section outlines Lumentum's unaudited condensed consolidated statements of cash flows, detailing cash generated from or used in operating, investing, and financing activities for the three months ended September 28, 2024, and September 30, 2023 | Cash Flow Activity | Three Months Ended Sep 28, 2024 (in millions) | Three Months Ended Sep 30, 2023 (in millions) | | :------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided by (used in) operating activities | $39.6 | $(2.3) | | Net cash (used in) provided by investing activities | $(47.1) | $17.8 | | Net cash provided by (used in) financing activities | $60.0 | $(12.9) | | Decrease in cash and cash equivalents | $52.5 | $2.6 | | Cash and cash equivalents at end of period | $489.2 | $861.6 | - For the three months ended September 28, 2024, Lumentum generated $39.6 million in cash from operating activities, used $47.1 million in investing activities, and generated $60.0 million from financing activities, resulting in a net increase of $52.5 million in cash and cash equivalents11 Condensed Consolidated Statements of Stockholders' Equity This section presents Lumentum's unaudited condensed consolidated statements of stockholders' equity, showing changes in equity balances for the three months ended September 28, 2024, and June 29, 2024 | Metric | As of Jun 29, 2024 (in millions) | As of Sep 28, 2024 (in millions) | | :----------------------------------- | :------------------------------- | :------------------------------- | | Total Stockholders' Equity | $957.3 | $895.9 | | Net Loss | N/A | $(82.4) | | Other comprehensive income | N/A | $2.3 | | Stock-based compensation | N/A | $33.8 | - Total stockholders' equity decreased from $957.3 million as of June 29, 2024, to $895.9 million as of September 28, 2024, primarily due to a net loss of $82.4 million, partially offset by stock-based compensation and other comprehensive income12 Notes to Condensed Consolidated Financial Statements This section provides detailed notes to Lumentum's unaudited condensed consolidated financial statements, offering explanations for various accounts, policies, and transactions Note 1. Description of Business and Summary of Significant Accounting Policies This note describes Lumentum's business segments, the impact of the macroeconomic environment, and the acquisition of Cloud Light Technology Limited - Lumentum operates in two reportable segments: Cloud & Networking and Industrial Tech, providing optical and photonic products for AI/ML, telecommunications, consumer, and industrial applications151617 - The company's