Delaware | 000-22874 | 94-2579683 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
430 North McCarthy Boulevard, Milpitas, CA | 95035 | |
(Address of Principal Executive Offices) | (Zip Code) |
Exhibit No. | Description | |
99.1 | Press release entitled “Viavi Announces Fourth Quarter and Fiscal 2017 Results” dated August 15, 2017. |
VIAVI SOLUTIONS INC. | ||
By: | /s/ Amar Maletira | |
Name: | Amar Maletira | |
Title: | Chief Financial Officer | |
(Duly Authorized Officer and Principal Financial and Accounting Officer) | ||
August 15, 2017 |
• | GAAP and Non-GAAP net revenue of $198.1 million, down $26.0 million or (11.6)% year-over-year |
• | GAAP operating margin of 6.1%, up 4,970 bps year-over-year |
• | Non-GAAP operating margin of 15.0%, up 150 bps year-over-year |
• | GAAP EPS from continuing operations of $0.05, up $0.33 or 117.9% year-over-year |
• | Non-GAAP EPS from continuing operations of $0.12, up $0.02 or 20.0% year-over-year |
• | GAAP and Non-GAAP net revenue of $811.4 million, down $94.9 million or (10.5)% year-over-year |
• | GAAP operating margin of 1.7%, up 1,100 bps year-over-year |
• | Non-GAAP operating margin of 13.3%, up 50 bps year-over-year |
• | GAAP EPS from continuing operations of $0.70, up $0.92 or 418.2% year-over-year |
• | Non-GAAP EPS from continuing operations of $0.40, up $0.02 or 5.3% year-over-year |
• | Completed the repurchase of 10.5 million shares of common stock |
GAAP Results | ||||||||||||||||
Q4 | Q3 | Q4 | Change | |||||||||||||
FY 2017 | FY 2017 | FY 2016 | Q/Q | Y/Y | ||||||||||||
Net revenue | $ | 198.1 | $ | 196.0 | $ | 224.1 | 1.1% | (11.6)% | ||||||||
Gross margin | 60.2 | % | 59.7 | % | 60.7 | % | 50 bps | (50) bps | ||||||||
Operating margin | 6.1 | % | (7.8 | )% | (43.6 | )% | 1,390 bps | 4,970 bps |
Non-GAAP Results | ||||||||||||||||
Q4 | Q3 | Q4 | Change | |||||||||||||
FY 2017 | FY 2017 | FY 2016 | Q/Q | Y/Y | ||||||||||||
Net revenue | $ | 198.1 | $ | 196.0 | $ | 224.1 | 1.1% | (11.6)% | ||||||||
Adj. Gross margin | 62.7 | % | 62.2 | % | 63.3 | % | 50 bps | (60) bps | ||||||||
Adj. Operating margin | 15.0 | % | 11.9 | % | 13.5 | % | 310 bps | 150 bps |
GAAP and Non-GAAP Net Revenue by Segment | ||||||||||||||||||||
Q4 | % of Net | Q3 | Q4 | Change | ||||||||||||||||
FY 2017 | revenue | FY 2017 | FY 2016 | Q/Q | Y/Y | |||||||||||||||
Network Enablement | $ | 105.0 | 53.0 | % | $ | 103.4 | $ | 127.5 | 1.5 | % | (17.6 | )% | ||||||||
Service Enablement | 29.5 | 14.9 | % | 28.7 | 33.6 | 2.8 | % | (12.2 | )% | |||||||||||
Optical Security and Performance Products | 63.6 | 32.1 | % | 63.9 | 63.0 | (0.5 | )% | 1.0 | % | |||||||||||
Total | $ | 198.1 | 100.0 | % | $ | 196.0 | $ | 224.1 | 1.1 | % | (11.6 | )% |
GAAP Results | ||||||||
FY 2017 | FY 2016 | Change Y/Y | ||||||
Net revenue | 811.4 | 906.3 | (10.5 | )% | ||||
Gross margin | 59.9 | % | 60.7 | % | (80) bps | |||
Operating margin | 1.7 | % | (9.3 | )% | 1,100 bps |
Non-GAAP Results | ||||||||
FY 2017 | FY 2016 | Change Y/Y | ||||||
Net revenue | 811.4 | 906.3 | (10.5 | )% | ||||
Adj. Gross margin | 62.4 | % | 63.1 | % | (70) bps | |||
Adj. Operating margin | 13.3 | % | 12.8 | % | 50 bps |
Non-GAAP Net Revenue by Segment | |||||||||||||
FY 2017 | % of Net revenue | FY 2016 | Change Y/Y | ||||||||||
Network Enablement | $ | 444.0 | 54.7 | % | $ | 504.6 | (12.0 | )% | |||||
Service Enablement | 135.2 | 16.7 | % | 153.6 | (12.0 | )% | |||||||
Optical Security and Performance Products | 232.2 | 28.6 | % | 248.1 | (6.4 | )% | |||||||
Total | $ | 811.4 | 100.0 | % | $ | 906.3 | (10.5 | )% |
• | Americas, Asia-Pacific and EMEA customers represented 45.4%, 20.6% and 34.0%, respectively, of total net revenue for the quarter ended July 1, 2017. Americas, Asia-Pacific and EMEA customers represented 46.7%, 21.3% and 32.0%, respectively, of total net revenue for the year ended July 1, 2017. |
• | As of July 1, 2017, the Company held $1,447.8 million in total cash and investments. As of July 1, 2017, the Company also had $1,070 million aggregate principal amount of Senior Convertible Notes with a net carrying value of $931.4 million classified as long-term debt. |
• | During the fiscal quarter and year ended July 1, 2017 the Company sold 0.4 million and 7.2 million shares, respectively, of the 11.7 million shares of Lumentum common stock retained as part of the spin-off of Lumentum. The Company generated net proceeds from these sales of $19.7 million and $265.1 million, respectively. As of July 1, 2017, the Company had sold all of its ownership of Lumentum shares. |
• | During the fiscal quarter and year ended July 1, 2017, the Company generated $33.8 million and $80.0 million of cash from operations, respectively. |
• | The Company adjusted its historical Condensed Consolidated Statements of Operations, Condensed Consolidated Balance Sheets and reportable segment information to reflect the spin-off of the Lumentum business (formerly the Company’s communications and commercial optical products business segment and WaveReady product line) on August 1, 2015. The Lumentum business’ adjusted results are reflected as discontinued operations for the periods reported in the Company’s GAAP Condensed Consolidated Statement of Operations and reportable segment information. |
• | Subsequent to fiscal 2017, on August 9, 2017, the Company acquired Trilithic, Inc. (“Trilithic”), a privately-held provider of electronic test and measurement equipment for telecommunications service providers, which will be part of the NE business segment. The Company expects the acquisition to be accretive to earnings on a non-GAAP basis in fiscal 2018. |
Three Months Ended | Years Ended | ||||||||||||||
July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | ||||||||||||
Net revenue | $ | 198.1 | $ | 224.1 | $ | 811.4 | $ | 906.3 | |||||||
Cost of revenues | 75.7 | 83.7 | 311.1 | 339.3 | |||||||||||
Amortization of acquired technologies | 3.2 | 4.3 | 14.3 | 17.3 | |||||||||||
Gross profit | 119.2 | 136.1 | 486.0 | 549.7 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 30.2 | 40.4 | 136.3 | 166.4 | |||||||||||
Selling, general and administrative | 72.0 | 89.8 | 300.5 | 351.1 | |||||||||||
Impairment of goodwill | — | 91.4 | — | 91.4 | |||||||||||
Amortization of other intangibles | 3.6 | 3.5 | 14.0 | 14.6 | |||||||||||
Restructuring and related charges | 1.4 | 8.8 | 21.6 | 10.5 | |||||||||||
Total operating expenses | 107.2 | 233.9 | 472.4 | 634.0 | |||||||||||
Income (loss) from operations | 12.0 | (97.8 | ) | 13.6 | (84.3 | ) | |||||||||
Interest and other income (expense), net | 3.0 | 1.1 | 13.1 | 2.5 | |||||||||||
Gain on sale of investments | 16.5 | 31.8 | 203.1 | 71.6 | |||||||||||
Interest expense | (13.9 | ) | (9.0 | ) | (43.2 | ) | (35.7 | ) | |||||||
Income (loss) from continuing operations before taxes | 17.6 | (73.9 | ) | 186.6 | (45.9 | ) | |||||||||
Provision for (benefit from) income taxes | 5.5 | (9.4 | ) | 21.3 | 4.5 | ||||||||||
Income (loss) from continuing operations, net of taxes | 12.1 | (64.5 | ) | 165.3 | (50.4 | ) | |||||||||
Income (loss) from discontinued operations, net of taxes | 1.6 | (3.4 | ) | 1.6 | (48.8 | ) | |||||||||
Net income (loss) | $ | 13.7 | $ | (67.9 | ) | $ | 166.9 | $ | (99.2 | ) | |||||
Net income (loss) per share from - basic: | |||||||||||||||
Continuing operations | $ | 0.05 | $ | (0.28 | ) | $ | 0.72 | $ | (0.22 | ) | |||||
Discontinued operations | 0.01 | (0.01 | ) | 0.01 | (0.20 | ) | |||||||||
Net income (loss) | $ | 0.06 | $ | (0.29 | ) | $ | 0.73 | $ | (0.42 | ) | |||||
Net income (loss) per share from - diluted: | |||||||||||||||
Continuing operations | $ | 0.05 | $ | (0.28 | ) | $ | 0.70 | $ | (0.22 | ) | |||||
Discontinued operations | 0.01 | (0.01 | ) | 0.01 | (0.20 | ) | |||||||||
Net income (loss) | $ | 0.06 | $ | (0.29 | ) | $ | 0.71 | $ | (0.42 | ) | |||||
Shares used in per share calculation - basic | 227.3 | 232.7 | 229.9 | 234.0 | |||||||||||
Shares used in per-share calculation - diluted | 232.5 | 232.7 | 234.5 | 234.0 |
July 1, 2017 | July 2, 2016 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,004.4 | $ | 482.9 | |||
Short-term investments | 432.2 | 484.7 | |||||
Restricted cash | 11.2 | 12.2 | |||||
Accounts receivable, net | 120.4 | 148.4 | |||||
Inventories, net | 48.0 | 51.4 | |||||
Prepayments and other current assets | 50.8 | 32.1 | |||||
Total current assets | 1,667.0 | 1,211.7 | |||||
Property, plant and equipment, net | 136.9 | 133.0 | |||||
Goodwill | 151.6 | 152.1 | |||||
Intangibles, net | 31.1 | 59.9 | |||||
Deferred income taxes | 109.5 | 108.8 | |||||
Other non-current assets | 14.4 | 12.6 | |||||
Total assets | $ | 2,110.5 | $ | 1,678.1 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 32.6 | $ | 47.0 | |||
Accrued payroll and related expenses | 43.8 | 44.9 | |||||
Deferred revenue | 60.2 | 78.6 | |||||
Accrued expenses | 30.8 | 24.9 | |||||
Other current liabilities | 61.4 | 31.0 | |||||
Total current liabilities | 228.8 | 226.4 | |||||
Long-term debt | 931.4 | 583.3 | |||||
Other non-current liabilities | 163.9 | 179.1 | |||||
Total stockholders’ equity | 786.4 | 689.3 | |||||
Total liabilities and stockholders’ equity | $ | 2,110.5 | $ | 1,678.1 |
Three Months Ended July 1, 2017 | |||||||||||||||||||||||||||
Network and Service Enablement | |||||||||||||||||||||||||||
Network Enablement | Service Enablement | Network and Service Enablement | Optical Security and Performance Products | Total Segment Measures | Reconciling Items | Consolidated GAAP Measures | |||||||||||||||||||||
Net revenue | $ | 105.0 | $ | 29.5 | $ | 134.5 | $ | 63.6 | $ | 198.1 | $ | — | $ | 198.1 | |||||||||||||
Gross profit | 66.8 | 20.1 | 86.9 | 37.3 | 124.2 | (5.0 | ) | 119.2 | |||||||||||||||||||
Gross margin | 63.6 | % | 68.1 | % | 64.6 | % | 58.6 | % | 62.7 | % | 60.2 | % | |||||||||||||||
Operating income | 1.6 | 28.2 | 29.8 | (17.8 | ) | 12.0 | |||||||||||||||||||||
Operating margin | 1.2 | % | 44.3 | % | 15.0 | % | 6.1 | % |
Three Months Ended July 2, 2016 | |||||||||||||||||||||||||||
Network and Service Enablement | |||||||||||||||||||||||||||
Network Enablement | Service Enablement | Network and Service Enablement | Optical Security and Performance Products | Total Segment Measures | Reconciling Items | Consolidated GAAP Measures | |||||||||||||||||||||
Net revenue | $ | 127.5 | $ | 33.6 | $ | 161.1 | $ | 63.0 | $ | 224.1 | $ | — | $ | 224.1 | |||||||||||||
Gross profit | 82.7 | 21.7 | 104.4 | 37.4 | 141.8 | (5.7 | ) | 136.1 | |||||||||||||||||||
Gross margin | 64.9 | % | 64.6 | % | 64.8 | % | 59.4 | % | 63.3 | % | 60.7 | % | |||||||||||||||
Operating income (loss) | 2.4 | 27.8 | 30.2 | (128.0 | ) | (97.8 | ) | ||||||||||||||||||||
Operating margin | 1.5 | % | 44.1 | % | 13.5 | % | (43.6 | )% |
Three Months Ended | |||||||
July 1, 2017 | July 2, 2016 | ||||||
Corporate reconciling items impacting gross profit: | |||||||
Total segment gross profit | $ | 124.2 | $ | 141.8 | |||
Stock-based compensation | (0.9 | ) | (1.1 | ) | |||
Amortization of intangibles | (3.2 | ) | (4.3 | ) | |||
Other charges unrelated to core operating performance (1) | (0.9 | ) | (0.3 | ) | |||
GAAP gross profit | $ | 119.2 | $ | 136.1 | |||
Corporate reconciling items impacting operating income: | |||||||
Total segment operating income | $ | 29.8 | $ | 30.2 | |||
Stock-based compensation | (7.3 | ) | (8.4 | ) | |||
Amortization of intangibles | (6.8 | ) | (7.8 | ) | |||
Impairment of goodwill | — | (91.4 | ) | ||||
Other charges unrelated to core operating performance (1) | (2.3 | ) | (11.6 | ) | |||
Restructuring and related charges | (1.4 | ) | (8.8 | ) | |||
GAAP operating income (loss) from continuing operations | $ | 12.0 | $ | (97.8 | ) |
(1) | During the three months ended July 1, 2017 and July 2, 2016, other charges unrelated to core operating performance primarily consisted of loss on disposal of long-lived assets, Viavi-specific incremental charges for professional fees and additional personnel costs to complete the separation, transformational initiatives such as the implementation of simplified automated processes, site consolidations, reorganizations, and the insourcing or outsourcing of activities. Additionally, during the three months ended July 2, 2016, the Company incurred an $8.4 million non-recurring charge related to a court decision impacting our U.K. pension obligation. |
Year Ended July 1, 2017 | |||||||||||||||||||||||||||
Network and Service Enablement | |||||||||||||||||||||||||||
Network Enablement | Service Enablement | Network and Service Enablement | Optical Security and Performance Products | Total Segment Measures | Reconciling Items | Consolidated GAAP Measures | |||||||||||||||||||||
Net revenue | $ | 444.0 | $ | 135.2 | $ | 579.2 | $ | 232.2 | $ | 811.4 | $ | — | $ | 811.4 | |||||||||||||
Gross profit | 286.3 | 86.2 | 372.5 | 133.8 | 506.3 | (20.3 | ) | 486.0 | |||||||||||||||||||
Gross margin | 64.5 | % | 63.8 | % | 64.3 | % | 57.6 | % | 62.4 | % | 59.9 | % | |||||||||||||||
Operating income | 7.3 | 100.3 | 107.6 | (94.0 | ) | 13.6 | |||||||||||||||||||||
Operating margin | 1.3 | % | 43.2 | % | 13.3 | % | 1.7 | % |
Year Ended July 2, 2016 | |||||||||||||||||||||||||||
Network and Service Enablement | |||||||||||||||||||||||||||
Network Enablement | Service Enablement | Network and Service Enablement | Optical Security and Performance Products | Total Segment Measures | Reconciling Items | Consolidated GAAP Measures | |||||||||||||||||||||
Net revenue | $ | 504.6 | $ | 153.6 | $ | 658.2 | $ | 248.1 | $ | 906.3 | $ | — | $ | 906.3 | |||||||||||||
Gross profit | 329.7 | 99.4 | 429.1 | 143.1 | 572.2 | (22.5 | ) | 549.7 | |||||||||||||||||||
Gross margin | 65.3 | % | 64.7 | % | 65.2 | % | 57.7 | % | 63.1 | % | 60.7 | % | |||||||||||||||
Operating income (loss) | 12.7 | 102.9 | 115.6 | (199.9 | ) | (84.3 | ) | ||||||||||||||||||||
Operating margin | 1.9 | % | 41.5 | % | 12.8 | % | (9.3 | )% |
Years Ended | |||||||
July 1, 2017 | July 2, 2016 | ||||||
Corporate reconciling items impacting gross profit: | |||||||
Total segment gross profit | $ | 506.3 | $ | 572.2 | |||
Stock-based compensation | (3.6 | ) | (4.8 | ) | |||
Amortization of intangibles | (14.3 | ) | (17.3 | ) | |||
Other charges unrelated to core operating performance (1) | (2.4 | ) | (0.4 | ) | |||
GAAP gross profit | $ | 486.0 | $ | 549.7 | |||
Corporate reconciling items impacting operating income: | |||||||
Total segment operating income | $ | 107.6 | $ | 115.6 | |||
Stock-based compensation | (33.2 | ) | (42.4 | ) | |||
Amortization of intangibles | (28.3 | ) | (31.9 | ) | |||
Impairment of goodwill | — | (91.4 | ) | ||||
Other charges unrelated to core operating performance (1) | (10.9 | ) | (23.7 | ) | |||
Restructuring and related charges | (21.6 | ) | (10.5 | ) | |||
GAAP operating income (loss) from continuing operations | $ | 13.6 | $ | (84.3 | ) |
(1) | During the fiscal year ended July 1, 2017 and July 2, 2016, other charges unrelated to core operating performance primarily consisted of loss on disposal of long-lived assets, Viavi-specific incremental charges for professional fees and additional personnel costs to complete the separation as well as transformational initiatives such as the implementation of simplified automated processes, site consolidations, reorganizations, the insourcing or outsourcing of activities. Additionally, during the fiscal year ended July 2, 2016, the Company incurred an $8.4 million non-recurring charge related to a court decision impacting our U.K. pension obligation and $3.5 million of non-recurring incremental severance and related costs upon the exit of a key executive. |
Three Months Ended | Years Ended | ||||||||||||||||||||||||||||||
July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | ||||||||||||||||||||||||||||
Net income (loss) | Diluted EPS | Net income (loss) | Diluted EPS | Net income (loss) | Diluted EPS | Net income (loss) | Diluted EPS | ||||||||||||||||||||||||
GAAP measures from continuing operations | $ | 12.1 | $ | 0.05 | $ | (64.5 | ) | $ | (0.28 | ) | $ | 165.3 | $ | 0.70 | $ | (50.4 | ) | $ | (0.22 | ) | |||||||||||
Items reconciling GAAP net income (loss) and EPS from continuing operations to non-GAAP net income and EPS: | |||||||||||||||||||||||||||||||
Related to cost of revenues: | |||||||||||||||||||||||||||||||
Stock-based compensation | 0.9 | — | 1.1 | — | 3.6 | 0.02 | 4.8 | 0.02 | |||||||||||||||||||||||
Other charges unrelated to core operating performance (1) | 0.9 | — | 0.3 | — | 2.4 | 0.01 | 0.4 | — | |||||||||||||||||||||||
Amortization of acquired technologies | 3.2 | 0.01 | 4.3 | 0.02 | 14.3 | 0.06 | 17.3 | 0.07 | |||||||||||||||||||||||
Total related to gross profit | 5.0 | 0.02 | 5.7 | 0.02 | 20.3 | 0.09 | 22.5 | 0.09 | |||||||||||||||||||||||
Related to operating expenses: | |||||||||||||||||||||||||||||||
Research and development: | |||||||||||||||||||||||||||||||
Stock-based compensation | 1.1 | — | 1.7 | 0.01 | 5.7 | 0.02 | 8.4 | 0.04 | |||||||||||||||||||||||
Other charges unrelated to core operating performance (1) | 0.3 | — | 0.8 | — | 3.4 | 0.01 | 3.7 | 0.02 | |||||||||||||||||||||||
Selling, general and administrative: | |||||||||||||||||||||||||||||||
Stock-based compensation | 5.3 | 0.02 | 5.6 | 0.02 | 23.9 | 0.10 | 29.2 | 0.12 | |||||||||||||||||||||||
Other charges unrelated to core operating performance (1) | 1.1 | — | 10.5 | 0.04 | 5.1 | 0.02 | 19.6 | 0.08 | |||||||||||||||||||||||
Impairment of goodwill (2) | — | — | 91.4 | 0.39 | — | — | 91.4 | 0.39 | |||||||||||||||||||||||
Amortization of other intangibles | 3.6 | 0.02 | 3.5 | 0.01 | 14.0 | 0.06 | 14.6 | 0.06 | |||||||||||||||||||||||
Restructuring and related charges | 1.4 | 0.01 | 8.8 | 0.04 | 21.6 | 0.09 | 10.5 | 0.04 | |||||||||||||||||||||||
Total related to operating expenses | 12.8 | 0.06 | 122.3 | 0.52 | 73.7 | 0.31 | 177.4 | 0.75 | |||||||||||||||||||||||
Gain on sale of investments (3) | (16.5 | ) | (0.07 | ) | (31.8 | ) | (0.13 | ) | (203.1 | ) | (0.87 | ) | (71.6 | ) | (0.30 | ) | |||||||||||||||
Non-cash interest expense and other expense | 11.4 | 0.05 | 6.7 | 0.03 | 33.3 | 0.14 | 26.6 | 0.11 | |||||||||||||||||||||||
Income taxes | 2.1 | 0.01 | (14.6 | ) | (0.06 | ) | 4.6 | 0.02 | (14.5 | ) | (0.06 | ) | |||||||||||||||||||
Total related to net income (loss) and EPS | 14.8 | 0.06 | 88.3 | 0.37 | (71.2 | ) | (0.30 | ) | 140.4 | 0.59 | |||||||||||||||||||||
Non-GAAP measures from continuing operations | $ | 26.9 | $ | 0.12 | $ | 23.8 | $ | 0.10 | $ | 94.1 | $ | 0.40 | $ | 90.0 | $ | 0.38 | |||||||||||||||
Shares used in per share calculation for Non-GAAP EPS | 232.5 | 236.5 | 234.5 | 237.3 | |||||||||||||||||||||||||||
Note: Certain totals may not add due to rounding |
(1) | During the fiscal year ended July 1, 2017 and July 2, 2016, other charges unrelated to core operating performance primarily consisted of loss on disposal of long-lived assets, Viavi-specific incremental charges for professional fees and additional personnel costs to complete the separation as well as transformational initiatives such as the implementation of simplified automated processes, site consolidations, reorganizations, the insourcing or outsourcing of activities. Additionally, during the fiscal year ended July 2, 2016, the Company incurred an $8.4 million non-recurring charge related to a court decision impacting our U.K. pension obligation and $3.5 million of non-recurring incremental severance and related costs upon the exit of a key executive. |
(2) | During the fiscal quarter and year ending July 2, 2016, the Company recorded a $91.4 million goodwill impairment charge related to our Service Enablement segment as a result of the annual impairment test required under U.S. GAAP. This is a non-cash charge and has no direct effect on the Company’s current cash balance or operating cash flows. |
(3) | During the fiscal quarter and year ended July 1, 2017, the Company sold 0.4 million shares and 7.2 million shares, respectively, of the 11.7 million shares of Lumentum common stock which was retained as part of the separation of Lumentum. The Company recognized a realized gain of $16.5M and $203.0M on the sale, respectively. During the fiscal quarter and year ended July 2, 2016, the Company sold 2.0 million shares and 4.5 million shares, respectively of the 11.7 million shares of Lumentum common stock which was retained as part of the separation of Lumentum. The Company recognized a realized gain of $31.8 million and $71.5 million on the sale, respectively. |
Three Months Ended | Years Ended | ||||||||||||||
July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | ||||||||||||
GAAP measures from continuing operations | $ | 12.1 | $ | (64.5 | ) | $ | 165.3 | $ | (50.4 | ) | |||||
Interest and other income (expense), net | (3.0 | ) | (1.1 | ) | (13.1 | ) | (2.5 | ) | |||||||
Gain on sale of investments (1) | (16.5 | ) | (31.8 | ) | (203.1 | ) | (71.6 | ) | |||||||
Interest expense | 13.9 | 9.0 | 43.2 | 35.7 | |||||||||||
Income taxes | 5.5 | (9.4 | ) | 21.3 | 4.5 | ||||||||||
Depreciation | 7.2 | 8.3 | 29.4 | 34.4 | |||||||||||
Amortization | 6.8 | 7.8 | 28.3 | 31.9 | |||||||||||
EBITDA from continuing operations | 26.0 | (81.7 | ) | 71.3 | (18.0 | ) | |||||||||
Costs related to restructuring and related charges | 1.4 | 8.8 | 21.6 | 10.5 | |||||||||||
Costs related to stock-based compensation | 7.3 | 8.4 | 33.2 | 42.4 | |||||||||||
Impairment of goodwill (2) | — | 91.4 | — | 91.4 | |||||||||||
Other charges unrelated to core operating performance (3) | 2.3 | 11.6 | 10.9 | 23.7 | |||||||||||
Adjusted EBITDA from continuing operations | $ | 37.0 | $ | 38.5 | $ | 137.0 | $ | 150.0 |
(1) | During the fiscal quarter and year ended July 1, 2017, the Company sold 0.4 million shares and 7.2 million shares, respectively of the 11.7 million shares of Lumentum common stock which was retained as part of the separation of Lumentum. The Company recognized a realized gain of $16.5M and $203.0M on this sale, respectively. During the fiscal quarter and year ended July 2, 2016, the Company sold 2.0 million shares and 4.5 million shares, respectively of the 11.7 million shares of Lumentum common stock which was retained as part of the separation of Lumentum. The Company recognized a realized gain of $31.8 million and $71.5 million on the sale, respectively. |
(2) | During the fiscal quarter and year ending July 2, 2016 , the Company recorded a $91.4 million goodwill impairment charge related to our SE segment as a result of the annual impairment test required under U.S. GAAP. This is a non-cash charge and has no direct effect on the Company’s current cash balance or operating cash flows. |
(3) | During the fiscal year ended July 1, 2017 and July 2, 2016, other charges unrelated to core operating performance primarily consisted of loss on disposal of long-lived assets, Viavi-specific incremental charges for professional fees and additional personnel costs to complete the separation as well as transformational initiatives such as the implementation of simplified automated processes, site consolidations, reorganizations, the insourcing or outsourcing of activities. Additionally, during the fiscal year ended July 2, 2016, the Company incurred an $8.4 million non-recurring charge related to a court decision impacting our U.K. pension obligation and $3.5 million of non-recurring incremental severance and related costs upon the exit of a key executive. |