Ribbon Communications Reports Preliminary Fourth Quarter 2020 Financial Results; Meets and Exceeds Prior Guidance
The following table summarizes these preliminary highlights compared to the previous financial guidance provided for the three months ended
Three months ended |
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Preliminary Results |
Previously Provided Guidance |
|
GAAP Revenue |
|
|
GAAP Operating expenses1 |
|
|
Non-GAAP Operating expenses2 |
|
|
GAAP Income from operations |
|
Not provided |
Non-GAAP Income from operations2 |
|
Not provided |
Adjusted EBITDA1 |
|
|
Cash balance at quarter-end |
|
Not provided |
(1) Preliminary results include approximately (2) Please see the reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures and additional information about non-GAAP measures in the press release appendix.
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"We are very pleased with our excellent financial performance in the second half of 2020, culminating in fourth quarter record profitability and ending cash significantly exceeding our previous estimates. Strong sales and gross margins, combined with operating expenses lower than our previous projections, resulted in a record adjusted EBITDA achievement for the company," said
"The board is delighted with the continued strong execution of the Ribbon team during this unprecedented time, navigating the challenges presented by the COVID-19 virus while merging Ribbon and
Conference Call Details and Replay Information
The Company will offer a live, listen-only webcast of the conference call via the investor section of its website at https://investors.ribboncommunications.com/press-and-events/events-and-presentations, where a replay will also be available shortly following the conference call.
Conference call details:
Date:
Time:
Dial-in number (Domestic): 877-407-2991
Dial-in number (International): 201-389-0925
Instant Telephone Access: Call me™
Replay information:
A telephone playback of the call will be available following the conference call until
About Ribbon
Important Information Regarding Forward-Looking Statements
The information in this release contains "forward-looking" statements within the meaning of the
Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated in these forward-looking statements due to various risks, uncertainties and other important factors, including, among others, adjustments as part of the standard review and audit of the financial statements; risks related to the COVID-19 pandemic; risks that the businesses of ECI will not be integrated successfully or that the combined companies will not realize estimated cost savings; failure to realize anticipated benefits of the merger with ECI; disruptions from the integration efforts that could harm our business; failure to realize anticipated benefits from the sale of the Kandy business; disruptions from the sale of the Kandy business that could harm our continuing business; our ability to recruit and retain key personnel; reductions in customer spending; geopolitical tensions, including those in India, that could disrupt shipments to customers; a slowdown in customer payments and changes in customer requirements, including the timing of customer purchasing decisions and our recognition of revenues; conditions in the credit markets, credit risks and risks related to the terms of our credit agreement; our international operations, which are subject to the risks of currency fluctuations and foreign exchange controls; unpredictable fluctuations in quarterly revenue and business from our existing customers; increases in tariffs, trade restrictions or taxes on our products; and currency fluctuations.
These factors are not intended to be an all-encompassing list of risks and uncertainties that may affect our business and results from operations. Additional information regarding these and other factors can be found in our reports filed with the
Discussion of Non-GAAP Financial Measures
While our management uses non-GAAP financial measures as a tool to enhance their understanding of certain aspects of our financial performance, our management does not consider these measures to be a substitute for, or superior to, GAAP measures. In addition, our presentation of these measures may not be comparable to similarly titled measures used by other companies. These non-GAAP financial measures should not be considered alternatives for, or in isolation from, the financial information prepared and presented in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures. In particular, many of the adjustments to our financial measures reflect the exclusion of items that are recurring and will be reflected in our financial results for the foreseeable future.
Stock-Based Compensation
The expense related to stock-based awards is generally not controllable in the short-term and can vary significantly based on the timing, size and nature of awards granted. We believe that presenting non-GAAP operating results that exclude stock-based compensation provides investors with visibility and insight into our management's method of analysis and the Company's core operating performance.
Amortization of Acquired Intangible Assets
Amortization amounts are inconsistent in frequency and amount and are significantly impacted by the timing and size of acquisitions. We believe that excluding non-cash amortization of intangible assets facilitates the comparison of our financial results to our historical operating results and to other companies in our industry as if the acquired intangible assets had been developed internally rather than acquired.
Acquisition- and Integration-Related Expense
We consider certain acquisition- and integration-related costs to be unrelated to the organic continuing operations of our acquired businesses and the Company, and such costs are generally not relevant to assessing or estimating the long-term performance of the acquired assets. We exclude such acquisition- and integration-related costs to allow more accurate comparisons of our financial results to our historical operations and the financial results of less acquisitive peer companies. In addition, we believe that providing supplemental non-GAAP measures that exclude these items allows management and investors to consider the ongoing operations of the business both with and without such expenses.
Restructuring and Related Expense
We have recorded restructuring and related expense to streamline operations and reduce operating costs by closing and consolidating certain facilities and reducing our worldwide workforce. We believe that excluding restructuring and related expense facilitates the comparison of our financial results to our historical operating results and to other companies in our industry, as there are no future revenue streams or other benefits associated with these costs.
Adjusted EBITDA
We use Adjusted EBITDA as a supplemental measure to review and assess our performance. We have calculated Adjusted EBITDA "Preliminary Results" by excluding from income from operations: depreciation; amortization of acquired intangible assets; stock-based compensation; acquisition- and integration-related expense; and restructuring and related expense. We have calculated Adjusted EBITDA "Previously Provided Guidance" by excluding from net income (loss): interest expense, net; income tax provision; depreciation; amortization of acquired intangible assets; stock-based compensation; acquisition- and integration-related expense; restructuring and related expense; and other income (expense), net. In general, we add back the expenses that we consider to be non-cash and/or not part of our ongoing operations. Adjusted EBITDA is a non-GAAP financial measure that is used by our investing community for comparative and valuation purposes. We disclose this metric to support and facilitate our dialogue with research analysts and investors. Other companies may calculate Adjusted EBITDA differently than we do, limited its usefulness as a comparative measure.
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Reconciliation of Non-GAAP and GAAP Financial Measures |
|||||||
$ millions |
|||||||
(unaudited) |
|||||||
Thee months ended |
|||||||
Preliminary Results |
Previously Provided Guidance |
||||||
Revenue |
$ 243 |
to |
$ 245 |
$ 235 |
to |
$ 245 |
|
GAAP Operating expenses |
$ 125 |
to |
$ 130 |
$ 118 |
|||
Stock-based compensation |
(3) |
(4) |
(4) |
||||
Amortization of acquired intangible assets |
(15) |
(17) |
(5) |
||||
Acquisition- and integration-related expense |
(2) |
(3) |
(2) |
||||
Restructuring and related expense |
(5) |
(6) |
(2) |
||||
Non-GAAP Operating expenses |
$ 100 |
$ 100 |
$ 105 |
||||
GAAP Income from operations |
$ 17 |
Not provided |
|||||
Stock-based compensation |
4 |
||||||
Amortization of acquired intangible assets |
16 |
||||||
Acquisition- and integration-related expense |
2 |
||||||
Restructuring and related expense |
5 |
||||||
Non-GAAP Income from operations |
$ 44 |
||||||
Adjusted EBITDA |
|||||||
GAAP Income from operations |
$ 17 |
||||||
Depreciation |
5 |
||||||
Amortization of acquired intangible assets |
16 |
||||||
Stock-based compensation |
4 |
||||||
Acquisition- and integration-related expense |
2 |
||||||
Restructuring and related expense |
5 |
||||||
Non-GAAP Adjusted EBITDA |
$ 49 |
||||||
GAAP Net income (loss) |
$ (2) |
to |
$ 2 |
||||
Interest expense, net |
6 |
6 |
|||||
Income tax provision |
2 |
2 |
|||||
Depreciation |
4 |
4 |
|||||
Amortization of intangible assets |
16 |
16 |
|||||
Stock-based compensation |
4 |
4 |
|||||
Acquisition- and integration-related expense |
2 |
2 |
|||||
Restructuring and related expense |
2 |
2 |
|||||
Other (income) expense, net |
2 |
2 |
|||||
Non-GAAP Adjusted EBITDA |
$ 36 |
$ 40 |
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Investor Relations
+1 (978) 614-8050
tom.berry@rbbn.com
+1 (214) 695-2224
dwatson@rbbn.com
+1 (646) 741-1974
cberthier@rbbn.com
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