Document
false0000949158 0000949158 2019-08-02 2019-08-02


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 2, 2019

 
CRAY INC.
(Exact name of registrant as specified in its charter)

 
Washington
 
0-26820
 
93-0962605
(State or other Jurisdiction
of Incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
901 Fifth Avenue, Suite 1000
 
98164
Seattle
WA
 
 
(Address of Principal Executive Offices)
 
(Zip Code)
Registrant’s telephone number, including area code: (206) 701-2000
None
(Former name or former address if changed since last report.)  

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 par value
CRAY
Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act





Item 2.02    Results of Operations and Financial Condition

On August 2, 2019, Cray Inc. announced its financial results for its second quarter ended June 30, 2019. A copy of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01    Financial Statements and Exhibits
 
(d) Exhibits.
99.1

 

 
The information in Item 2.02 of this Form 8-K and Exhibit 99.1 attached hereto is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
  

 






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: August 2, 2019
 
Cray Inc.
 
 
By:
 
/s/ MICHAEL C. PIRAINO
 
 
Michael C. Piraino
Senior Vice President Administration, General Counsel and Corporate Secretary





Exhibit


Exhibit 99.1
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=13039718&doc=8
Cray Media:
Investors:
Diana Brodskiy
Paul Hiemstra
415/306-6199
206/701-2044
pr@cray.com
ir@cray.com


CRAY INC. REPORTS SECOND QUARTER 2019 FINANCIAL RESULTS
        
Seattle, WA - August 2, 2019 - Global supercomputer leader Cray Inc. (Nasdaq: CRAY) today announced financial results for its second quarter ended June 30, 2019.

All figures in this release are based on U.S. GAAP unless otherwise noted. A reconciliation of GAAP to non-GAAP measures is included in the financial tables in this press release.

Revenue for the second quarter of 2019 was $69 million, compared to $120 million in the second quarter of 2018. Net loss for the second quarter of 2019 was $43 million, or $1.03 per diluted share, compared to net loss of $11 million, or $0.27 per diluted share in the second quarter of 2018. Non-GAAP net loss was $31 million, or $0.75 per diluted share for the second quarter of 2019, compared to non-GAAP net loss of $8 million, or $0.20 per diluted share in the second quarter of 2018.

Overall gross profit margin on a GAAP and non-GAAP basis for the second quarter of 2019 was 35% and 36%, respectively, compared to 31% and 32%, on a GAAP and non-GAAP basis in the second quarter of 2018, respectively.

Operating expenses for the second quarter of 2019 were $68 million, compared to $50 million in the second quarter of 2018. Non-GAAP operating expenses for the second quarter of 2019 were $57 million, compared to $47 million in the second quarter of 2018, with the increase primarily driven by higher R&D costs. Non-GAAP adjustments for the second quarter of 2019 include $7.6 million in costs related to our pending merger with Hewlett Packard Enterprise Company (“HPE”).

As of June 30, 2019, cash and restricted cash totaled $165 million. Working capital at the end of the second quarter of 2019 was $223 million, compared to $263 million at the end of the first quarter of 2019.

No Quarterly Conference Call
As previously announced on May 17, 2019, Cray entered into an agreement and plan of merger with HPE to acquire all the issued and outstanding common shares of Cray for $35 per share in cash. Due to the pending merger, Cray will not hold an earnings conference call.

Use of Non-GAAP Financial Measures
This press release contains “non-GAAP financial measures” under the rules of the U.S. Securities and Exchange Commission (“SEC”). A reconciliation of U.S. generally accepted accounting principles, or GAAP, to non-GAAP results is included in the financial tables included in this press release. Management believes that the non-GAAP financial measures that we have set forth provide additional insight for analysts and investors and facilitate an evaluation of Cray’s financial and operational performance that is consistent with the manner in which management evaluates Cray’s financial performance. However, these

1



non-GAAP financial measures have limitations as an analytical tool as they exclude the financial impact of transactions necessary or advisable for the conduct of Cray’s business, such as the granting of equity compensation awards, and are not intended to be an alternative to financial measures prepared in accordance with GAAP. Hence, to compensate for these limitations, management does not review these non-GAAP financial metrics in isolation from its GAAP results, nor should investors. Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles. This non-GAAP information supplements and is not intended to represent a measure of performance in accordance with or disclosures required by GAAP. These measures are adjusted as described in the reconciliation of GAAP to non-GAAP numbers at the end of this release, but these adjustments should not be construed as an inference that all of these adjustments or costs are unusual, infrequent, or non-recurring. Non-GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, financial measures determined in accordance with GAAP. Investors are advised to carefully review and consider this non-GAAP information as well as the GAAP financial results that are disclosed in Cray’s SEC filings.

About Cray Inc.
Cray Inc. (Nasdaq:CRAY) combines computation and creativity so visionaries can keep asking questions that challenge the limits of possibility. Drawing on more than 45 years of experience, Cray develops the world’s most advanced supercomputers, pushing the boundaries of performance, efficiency and scalability. Cray continues to innovate today at the convergence of data and discovery, offering a comprehensive portfolio of supercomputers, high-performance storage, data analytics and artificial intelligence solutions. Go to www.cray.com for more information.

###

CRAY and the stylized CRAY mark are registered trademarks of Cray Inc. in the United States and other countries. 

2



CRAY INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands, except per share data)
 

 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
 
2019
 
2018
 
2019
 
2018
Revenue:
 
 
 
 
 
 
 
 
Product
 
$
29,924

 
$
83,379

 
$
64,082

 
$
127,833

Service
 
38,775

 
36,824

 
76,163

 
71,964

Total revenue
 
68,699

 
120,203

 
140,245

 
199,797

Cost of revenue:
 
 
 
 
 
 
 
 
Cost of product revenue
 
23,424

 
65,274

 
49,526

 
99,319

Cost of service revenue
 
21,328

 
17,122

 
40,748

 
35,719

Total cost of revenue
 
44,752

 
82,396

 
90,274

 
135,038

Gross profit
 
23,947

 
37,807

 
49,971

 
64,759

Operating expenses:
 
 
 
 
 
 
 
 
Research and development, net
 
37,171

 
29,382

 
72,957

 
59,274

Sales and marketing
 
14,919

 
15,218

 
29,194

 
30,883

General and administrative
 
15,890

 
5,624

 
21,832

 
11,403

Restructuring
 

 

 

 
476

Total operating expenses
 
67,980

 
50,224

 
123,983

 
102,036

Loss from operations
 
(44,033
)
 
(12,417
)
 
(74,012
)
 
(37,277
)
 
 
 
 
 
 
 
 
 
Other income (expense), net
 
272

 
430

 
25

 
48

Interest income, net
 
1,223

 
667

 
2,148

 
1,380

Loss before income taxes
 
(42,538
)
 
(11,320
)
 
(71,839
)
 
(35,849
)
Income tax benefit (expense)
 
(22
)
 
370

 
(141
)
 
(109
)
Net loss
 
$
(42,560
)
 
$
(10,950
)
 
$
(71,980
)
 
$
(35,958
)
 
 
 
 
 
 
 
 
 
Basic net loss per common share
 
$
(1.03
)
 
$
(0.27
)
 
$
(1.75
)
 
$
(0.89
)
Diluted net loss per common share
 
$
(1.03
)
 
$
(0.27
)
 
$
(1.75
)
 
$
(0.89
)
 
 
 
 
 
 
 
 
 
Basic weighted average shares outstanding
 
41,191

 
40,616

 
41,069

 
40,527

Diluted weighted average shares outstanding
 
41,191

 
40,616

 
41,069

 
40,527




3



CRAY INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands, except share data)
 
June 30,
2019
 
December 31,
2018
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
147,533

 
$
228,434

Restricted cash
3,772

 
1,300

Accounts and other receivables, net
76,501

 
87,819

Inventory
88,035

 
80,360

Prepaid expenses and other current assets
25,053

 
22,331

Total current assets
340,894

 
420,244

 
 
 
 
Long-term restricted cash
13,847

 
16,030

Property and equipment, net
38,290

 
35,737

Operating lease right-of-use assets
32,656

 

Goodwill
14,182

 
14,182

Intangible assets other than goodwill, net
2,602

 
3,178

Other non-current assets
17,200

 
27,761

TOTAL ASSETS
$
459,671

 
$
517,132

 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
30,098

 
$
32,847

Accrued payroll and related expenses
20,462

 
23,703

Other accrued liabilities
13,206

 
10,805

Customer contract liabilities
54,353

 
61,983

Total current liabilities
118,119

 
129,338

 
 
 
 
Long-term customer contract liabilities
23,077

 
32,021

Long-term operating lease liabilities
39,845

 

Other non-current liabilities
2,384

 
12,394

TOTAL LIABILITIES
183,425

 
173,753

 
 
 
 
Shareholders’ equity:
 
 
 
Preferred stock — Authorized and undesignated, 5,000,000 shares; no shares issued or outstanding

 

Common stock and additional paid-in capital, par value $.01 per share — Authorized, 75,000,000 shares; issued and outstanding 41,337,879 and 40,893,807 shares, respectively
654,948

 
647,045

Accumulated other comprehensive income
1,534

 
3,208

Accumulated deficit
(380,236
)
 
(306,874
)
TOTAL SHAREHOLDERS’ EQUITY
276,246

 
343,379

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
459,671

 
$
517,132


 


4



CRAY INC. AND SUBSIDIARIES
Reconciliation of Selected U.S. GAAP Measures to non-GAAP Measures
(Unaudited; in millions, except EPS)

 
 
Three Months Ended June 30, 2019
 
 
Net Loss
 
Diluted EPS
 
Operating Loss
 
Gross Profit
 
Operating Expenses
GAAP
 
$
(42.6
)
 
$
(1.03
)
 
$
(44.0
)
 
$
23.9

 
$
68.0

 
 
 
 
 
 
 
 
 
 
 
Share-based compensation
(1)
4.1

 
 
 
4.1

 
0.3

 
3.8

Amortization of acquired and other intangibles
(2)
0.2

 
 
 
0.2

 
0.2

 

Transaction costs related to the pending merger with HPE
(3)
7.6

 
 
 
7.6

 
 
 
7.6

Income tax on reconciling items
(4)
(2.6
)
 
 
 
 
 
 
 
 
Other items impacting tax provision
(5)
2.3

 
 
 
 
 
 
 
 
Total reconciling items
 
11.6

 
0.28

 
11.9

 
0.5

 
11.4

 
 
 
 
 
 
 
 
 
 
 
Non-GAAP
 
$
(31.0
)
 
$
(0.75
)
 
$
(32.1
)
 
$
24.4

 
$
56.6

 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30, 2018
 
 
Net Loss
 
Diluted EPS
 
Operating Loss
 
Gross Profit
 
Operating Expenses
GAAP
 
$
(11.0
)
 
$
(0.27
)
 
$
(12.4
)
 
$
37.8

 
$
50.2

 
 
 
 
 
 
 
 
 
 
 
Share-based compensation
(1)
3.2

 
 
 
3.2

 
0.2

 
3.0

Amortization of acquired and other intangibles
(2)
0.3

 
 
 
0.3

 
0.2

 
0.1

Income tax on reconciling items
(4)
(0.7
)
 
 
 
 
 
 
 
 
Other items impacting tax provision
(5)
0.1

 
 
 
 
 
 
 
 
Total reconciling items
 
2.9

 
0.07

 
3.5

 
0.4

 
3.1

 
 
 
 
 
 
 
 
 
 
 
Non-GAAP
 
$
(8.1
)
 
$
(0.20
)
 
$
(8.9
)
 
$
38.2

 
$
47.1

 
 
 
 
 
 
 
 
 
 
 
Notes
 
 
 
 
 
 
 
 
 
 
(1) Adjustments to exclude non-cash expenses related to share-based compensation
(2) Adjustments to exclude amortization of acquired intangible and other intangible assets
(3) Adjustments to exclude non-recurring transaction costs related to the pending merger with HPE
(4) Adjustments associated with the estimated tax impact on non-GAAP reconciling items at our marginal U.S. tax rate of approximately 21%
(5) As part of an alternative non-GAAP income measure, we have adjusted GAAP taxes as reported including the impact to the GAAP tax provision of the non-GAAP reconciling items (adjusted for note (3) above). And when applicable, we also adjust for changes related to the utilization or increase of our net operating loss carryforwards and for changes in our valuation allowance held against deferred tax assets.

5



CRAY INC. AND SUBSIDIARIES
Reconciliation of Selected U.S. GAAP Measures to non-GAAP Measures
(Unaudited; in millions, except EPS)

 
 
Six Months Ended June 30, 2019
 
 
Net Loss
 
Diluted EPS
 
Operating Loss
 
Gross Profit
 
Operating Expenses
GAAP
 
$
(72.0
)
 
$
(1.75
)
 
$
(74.0
)
 
$
50.0

 
$
124.0

 
 
 
 
 
 
 
 
 
 
 
Share-based compensation
(1)
7.7

 
 
 
7.7

 
0.5

 
7.2

Amortization of acquired and other intangibles
(2)
0.5

 
 
 
0.5

 
0.4

 
0.1

Transaction costs related to the pending merger with HPE
(3)
7.6

 
 
 
7.6

 
 
 
7.6

Income tax on reconciling items
(5)
(3.4
)
 
 
 
 
 
 
 
 
Other items impacting tax provision
(6)
3.0

 
 
 
 
 
 
 
 
Total reconciling items
 
15.4

 
0.37

 
15.8

 
0.9

 
14.9

 
 
 
 
 
 
 
 
 
 
 
Non-GAAP
 
$
(56.6
)
 
$
(1.38
)
 
$
(58.2
)
 
$
50.9

 
$
109.1

 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2018
 
 
Net Loss
 
Diluted EPS
 
Operating Loss
 
Gross Profit
 
Operating Expenses
GAAP
 
$
(36.0
)
 
$
(0.89
)
 
$
(37.3
)
 
$
64.8

 
$
102.0

 
 
 
 
 
 
 
 
 
 
 
Share-based compensation
(1)
6.1

 
 
 
6.1

 
0.4

 
5.7

Amortization of acquired and other intangibles
(2)
0.5

 
 
 
0.5

 
0.4

 
0.1

Restructuring
(4)
0.5

 
 
 
0.5

 
 
 
0.5

Income tax on reconciling items
(5)
(1.5
)
 
 
 
 
 
 
 
 
Other items impacting tax provision
(6)
0.8

 
 
 
 
 
 
 
 
Total reconciling items
 
6.4

 
0.16

 
7.1

 
0.8

 
6.3

 
 
 
 
 
 
 
 
 
 
 
Non-GAAP
 
$
(29.6
)
 
$
(0.73
)
 
$
(30.2
)
 
$
65.6

 
$
95.7

 
 
 
 
 
 
 
 
 
 
 
Notes
 
 
 
 
 
 
 
 
 
 
(1) Adjustments to exclude non-cash expenses related to share-based compensation
(2) Adjustments to exclude amortization of acquired intangible and other intangible assets
(3) Adjustments to exclude non-recurring transaction costs related to the pending merger with HPE
(4) Adjustments to exclude restructuring costs
(5) Adjustments associated with the estimated tax impact on non-GAAP reconciling items at our marginal U.S. tax rate of approximately 21%
(6) As part of an alternative non-GAAP income measure, we have adjusted GAAP taxes as reported including the impact to the GAAP tax provision of the non-GAAP reconciling items (adjusted for note (4) above). And when applicable, we also adjust for changes related to the utilization or increase of our net operating loss carryforwards and for changes in our valuation allowance held against deferred tax assets.

6



CRAY INC. AND SUBSIDIARIES
Reconciliation of Selected U.S. GAAP Measures to non-GAAP Measures
(Unaudited; in millions, except percentages)

 
 
Three Months Ended June 30, 2019
 
 
Product
 
Service
 
Total
 
 
Gross Profit
 
Gross Margin
 
Gross Profit
 
Gross Margin
 
Gross Profit
 
Gross Margin
GAAP
 
$
6.5

 
22
%
 
$
17.4

 
45
%
 
$
23.9

 
35
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-based compensation
(1)
0.2

 
 
 
0.1

 
 
 
0.3

 
 
Amortization of acquired and other intangibles
(2)
0.2

 
 
 

 
 
 
0.2

 
 
Total reconciling items
 
0.4

 
1
%
 
0.1

 
%
 
0.5

 
1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP
 
$
6.9

 
23
%
 
$
17.5

 
45
%
 
$
24.4

 
36
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30, 2018
 
 
Product
 
Service
 
Total
 
 
Gross Profit
 
Gross Margin
 
Gross Profit
 
Gross Margin
 
Gross Profit
 
Gross Margin
GAAP
 
$
18.1

 
22
%
 
$
19.7

 
54
%
 
$
37.8

 
31
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-based compensation
(1)
0.1

 
 
 
0.1

 
 
 
0.2

 
 
Amortization of acquired and other intangibles
(2)
0.2

 
 
 

 
 
 
0.2

 
 
Total reconciling items
 
0.3

 
%
 
0.1

 
%
 
0.4

 
1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP
 
$
18.4

 
22
%
 
$
19.8

 
54
%
 
$
38.2

 
32
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes
 
 
 
 
 
 
 
 
 
 
 
 
(1) Adjustments to exclude non-cash expenses related to share-based compensation
(2) Adjustments to exclude amortization of acquired intangible and other intangible assets


7



CRAY INC. AND SUBSIDIARIES
Reconciliation of Selected U.S. GAAP Measures to non-GAAP Measures
(Unaudited; in millions, except percentages)

 
 
Six Months Ended June 30, 2019
 
 
Product
 
Service
 
Total
 
 
Gross Profit
 
Gross Margin
 
Gross Profit
 
Gross Margin
 
Gross Profit
 
Gross Margin
GAAP
 
$
14.6

 
23
%
 
$
35.4

 
46
%
 
$
50.0

 
36
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-based compensation
(1)
0.3

 
 
 
0.2

 
 
 
0.5

 
 
Amortization of acquired and other intangibles
(2)
0.4

 
 
 

 
 
 
0.4

 
 
Total reconciling items
 
0.7

 
1
%
 
0.2

 
%
 
0.9

 
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP
 
$
15.3

 
24
%
 
$
35.6

 
46
%
 
$
50.9

 
36
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2018
 
 
Product
 
Service
 
Total
 
 
Gross Profit
 
Gross Margin
 
Gross Profit
 
Gross Margin
 
Gross Profit
 
Gross Margin
GAAP
 
$
28.5

 
22
%
 
$
36.3

 
50
%
 
$
64.8

 
32
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-based compensation
(1)
0.2

 
 
 
0.2

 
 
 
0.4

 
 
Amortization of acquired and other intangibles
(2)
0.4

 
 
 

 
 
 
0.4

 
 
Total reconciling items
 
0.6

 
1
%
 
0.2

 
1
%
 
0.8

 
1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP
 
$
29.1

 
23
%
 
$
36.5

 
51
%
 
$
65.6

 
33
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes
 
 
 
 
 
 
 
 
 
 
 
 
(1) Adjustments to exclude non-cash expenses related to share-based compensation
(2) Adjustments to exclude amortization of acquired intangible and other intangible assets




8



CRAY INC. AND SUBSIDIARIES
Reconciliation of GAAP to non-GAAP Net Loss
(Unaudited; in millions except per share amounts and percentages)

 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
 
 
 
2019
 
2018
 
2019
 
2018
 
 
GAAP Net Loss
 
$
(42.6
)
 
$
(11.0
)
 
$
(72.0
)
 
$
(36.0
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP adjustments impacting gross profit:
 
 
 
 
 
 
 
 
 
 
  Share-based compensation
(1)
0.3

 
0.2

 
0.5

 
0.4

 
 
  Amortization of acquired and other intangibles
(2)
0.2

 
0.2

 
0.4

 
0.4

 
 
Total adjustments impacting gross profit
 
0.5

 
0.4

 
0.9

 
0.8

 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP gross margin percentage
 
36
%
 
32
%
 
36
%
 
33
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP adjustments impacting operating expenses:
 
 
 
 
 
 
 
 
 
 
  Share-based compensation
(1)
3.8

 
3.0

 
7.2

 
5.7

 
 
  Amortization of acquired and other intangibles
(2)

 
0.1

 
0.1

 
0.1

 
 
  Restructuring
(3)

 

 

 
0.5

 
 
  Transaction costs related to the pending merger with HPE
(4)
7.6

 

 
7.6

 

 
 
Total adjustments impacting operating expenses
 
11.4

 
3.1

 
14.9

 
6.3

 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP adjustments impacting tax provision:
 
 
 
 
 
 
 
 
 
 
  Income tax on reconciling items
(5)
(2.6
)
 
(0.7
)
 
(3.4
)
 
(1.5
)
 
 
  Other items impacting tax provision
(6)
2.3

 
0.1

 
3.0

 
0.8

 
 
 
 
(0.3
)
 
(0.6
)
 
(0.4
)
 
(0.7
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP Net Loss
 
$
(31.0
)
 
$
(8.1
)
 
$
(56.6
)
 
$
(29.6
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP Diluted Net Loss per common share
 
$
(0.75
)
 
$
(0.20
)
 
$
(1.38
)
 
$
(0.73
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted weighted average shares
 
41.1

 
40.6

 
41.1

 
40.5

 
 
 
 
 
 
 
 
 
 
 
 
 
Notes
 
 
 
 
 
 
 
 
 
 
(1) Adjustments to exclude non-cash expenses related to share-based compensation
 
 
(2) Adjustments to exclude amortization of acquired intangible and other intangible assets
 
 
(3) Adjustments to exclude restructuring costs
 
 
(4) Adjustments to exclude non-recurring transaction costs related to the pending merger with HPE
(5) Adjustments associated with the estimated tax impact on non-GAAP reconciling items at our marginal U.S. tax rate of approximately 21%
 
 
(6) As part of an alternative non-GAAP income measure, we have adjusted GAAP taxes as reported including the impact to the GAAP tax provision of the non-GAAP reconciling items (adjusted for note (5) above). And when applicable, we also adjust for changes related to the utilization or increase of our net operating loss carryforwards and for changes in our valuation allowance held against deferred tax assets.
 
 

9