Press Release: Ubiquiti Inc. Reports Second -2-

· 02/05/2021 07:11

CONTACT: Investor Relations-- Stock-based compensation expense -- Litigation settlement -- Impairment of cost-based investment -- Tax effect of non-GAAP adjustments, applying the principles of ASC 740Ubiquiti Inc. Condensed Consolidated Statements of Operations and Comprehensive Income (In thousands, except per share data) (Unaudited) Three Months Ended Six Months Ended December 31, December 31, ------------------ -------------------- 2020 2019 2020 2019 -------- -------- -------- ---------- Revenues $479,436 $308,284 $952,969 $631,561 Cost of revenues 248,762 163,198 494,179 335,084 -------- -------- -------- -------- Gross profit $230,674 $145,086 $458,790 $296,477 ------- ------- ------- ------- Operating expenses: Research and development 28,912 24,041 54,725 44,293 Sales, general and administrative 10,951 8,997 23,301 19,447 -------- -------- -------- -------- Total operating expenses 39,863 33,038 78,026 63,740 -------- -------- -------- -------- Income from operations 190,811 112,048 380,764 232,737 Interest expense and other, net (3,613) (12,085) (7,530) (16,738) -------- -------- -------- -------- Income before income taxes 187,198 99,963 373,234 215,999 Provision for income taxes 27,530 14,152 57,057 32,042 -------- -------- -------- -------- Net income $159,668 $ 85,811 $316,177 $183,957 ======= ======= ======= ======= Net income per share of common stock: Basic $ 2.54 $ 1.32 $ 5.00 $ 2.76 ======= ======= ======= ======= Diluted $ 2.54 $ 1.32 $ 5.00 $ 2.75 ======= ======= ======= ======= Weighted average shares used in computing net income per share of common stock: Basic 62,823 64,973 63,217 66,682 ======== ======== -------- -------- Diluted 62,889 65,071 63,282 66,781 ======== ======== ======== ======== Ubiquiti Inc. Reconciliation of GAAP Net Income to Non-GAAP Net Income (In thousands, except per share data) (Unaudited) Six Months Ended Three Months Ended December 31, --------------------------------- -------------------- December 31, September December 2020 30, 2020 31, 2019 2020 2019 -------- ----------- ---------- -------- ---------- Net Income $159,668 $ 156,509 $ 85,811 $316,177 $183,957 Stock-based compensation: Cost of revenues 29 28 33 57 65 Research and development 512 510 527 1,022 1,008 Sales, general and administrative 209 202 170 411 346 Litigation settlement (1,625) -- -- (1,625) -- Impairment of cost-based investment -- -- 5,000 -- 5,000 Tax effect of Non-GAAP adjustments 206 (174) (172) 32 (334) -------- ----------- ---------- -------- -------- Non-GAAP net income $158,999 $ 157,075 $ 91,369 $316,074 $190,042 ======= ======= ====== ======= ======= Non-GAAP diluted EPS $ 2.53 $ 2.47 $ 1.40 $ 4.99 $ 2.85 ======= ======= ====== ======= ======= Weighted-average shares used in Non-GAAP diluted EPS 62,889 63,673 65,071 63,282 66,781 ======== =========== ========== ======== ========

and we are subject to numerous U.S. export control and economic sanctions laws; costs related to responding to government inquiries related to regulatory compliance; our reliance on certain key members of our management team, including our founder and chief executive officer, Robert J. Pera; adverse tax-related matters such as tax audits, changes in our effective tax rate or new tax legislative proposals; whether the final determination of our income tax liability may be materially different from our income tax provisions; the impact of any intellectual property litigation and claims for indemnification; litigation related to U.S. securities laws; and economic and political conditions in the United States and abroad. We discuss these risks in greater detail under the heading "Risk Factors" and elsewhere in our Annual Report on Form 10-K for the year ended June 30, 2020, and subsequent filings filed with the U.S. Securities and Exchange Commission (the "SEC"), which are available at the SEC's website at www.sec.gov. Copies may also be obtained by contacting the Ubiquiti Inc. Investor Relations Department, by email at IR@ui.com or by visiting the Investor Relations section of the Ubiquiti Inc. website, http://ir.ui.com.

Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management's beliefs and assumptions only as of the date made. Except as required by law, Ubiquiti Inc. undertakes no obligation to update information contained herein. You should review our SEC filings carefully and with the understanding that our actual future results may be materially different from what we expect.

Use of Non-GAAP Financial Information

To supplement our condensed consolidated financial results prepared under generally accepted accounting principles, or GAAP, we use non-GAAP measures of net income and earnings per diluted share that are adjusted to exclude certain costs, expenses and gains such as stock-based compensation expense, litigation settlement, impairment of cost-based investment and the tax effects of these non-GAAP adjustments.

Reconciliations of the adjustments to GAAP results for the periods presented are provided above. In addition, an explanation of the ways in which management uses non-GAAP financial information to evaluate its business, the substance behind management's decision to use this non-GAAP financial information, material limitations associated with the use of non-GAAP financial information, the manner in which management compensates for those limitations, and the substantive reasons management believes that this non-GAAP financial information provides useful information to investors is included under the paragraphs below.

Usefulness of Non-GAAP Financial Information to Investors

We believe that the presentation of non-GAAP net income and non-GAAP earnings per diluted share provides important supplemental information regarding non-cash expenses, significant items that we believe are important to understanding our financial, and business trends relating to our financial condition and results of operations. Non-GAAP net income and non-GAAP earnings per diluted share are among the primary indicators used by management as a basis for planning and forecasting future periods and by management and our board of directors to determine whether our operating performance has met specified targets and thresholds. Management uses non-GAAP net income and non-GAAP earnings per diluted share when evaluating operating performance because it believes that the exclusion of the items described below, for which the amounts or timing may vary significantly depending upon the Company's activities and other factors, facilitates comparability of the Company's operating performance from period to period. We have chosen to provide this information to investors so they can analyze our operating results in the same way that management does and use this information in their assessment of our business and the valuation of our Company.

About our Non-GAAP Net Income and Non-GAAP Earnings per Diluted Share

We compute non-GAAP net income and non-GAAP earnings per diluted share by adjusting GAAP net income and GAAP earnings per diluted share to remove the impact of certain adjustments and the tax effect of those adjustments. Items excluded from net income are:

These non-GAAP measures are not in accordance with, or an alternative to, GAAP and may be materially different from other non-GAAP measures, including similarly titled non-GAAP measures used by other companies. The presentation of this additional information should not be considered in isolation from, as a substitute for, or superior to, net income or earnings per diluted share prepared in accordance with GAAP. Non-GAAP financial measures have limitations in that they do not reflect certain items that may have a material impact upon our reported financial results.

For more information on the non-GAAP adjustments, please see the table captioned "Reconciliation of GAAP Net Income to non-GAAP Net Income" included in this press release.

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Ubiquiti Inc.

Investor Relations

ir@ui.com

Ph. 1-646-780-7958

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February 05, 2021 07:11 ET (12:11 GMT)