Ubiquiti Inc. 10-K

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock Information As of August 19, 2020, the number of record holders of our common stock was 7. Because most of our shares are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial stockholders represented by these record holders. Stock Performance Graph 28 Table of Contents The following graph compares the cumulative total stockholder return for our common stock from June 30, 2015 to June 30, 2020, with the comparable cumulative return of the NASDAQ Composite Index, the NASDAQ Computer Index, the NYSE Composite Index and the S&P Computer & Retail Index. The graph assumes that $100 was invested on June 30, 2015 in our common stock, the NASDAQ Composite Index, the NASDAQ Computer Index, the NYSE Composite Index and the S&P Computer & Retail Index and assumes reinvestment of any dividends. Our common stock commenced trading on the NYSE on August 20, 2019 under the ticker symbol “UI”. The stock price performance on the following graph is not necessarily indicative of future stock price performance. This performance graph shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference into any of our filings 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. COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* Among Ubiquiti Inc., the NASDAQ Composite Index, the NASDAQ Computer Index, the NYSE Composite Index and the S&P Computer & Electronics Retail Index *100 invested on 6/30/15 in stock or index, including reinvestments of dividends. Issuer Purchases of Equity Securities The following table provides information with respect to the Company’s Share Repurchase programs and the activity under the available share repurchase programs during fiscal year ended June 30, 2020 (in millions, except share and per share amounts): 29 Table of Contents Date of Approved and Publicly Announced Program Amount of Publicly Announced Program Total Number of Shares Purchased as Part of Publicly Announced Programs Average Price Paid per Share Total Aggregate Amount Paid Period of Purchases Estimated Remaining Balance Available for Share Repurchases under the Programs Expiration date of Program May 8, 2020 $500 million — $— $— — $ 500.0 3/31/2022 November 8, 2019 $200 million 1,211,771 $133.78 $162.1 February 7, 2020 - April 21, 2020 $ 37.9 12/31/2021 August 9, 2019 $500 million 4,337,320 $115.28 $500.0 August 12, 2019 - October 28, 2019 $ — 12/31/2020 November 9, 2018 $200 million 293,709 $121.86 $35.8 July 8,2019 - August 12, 2019 $ — 12/31/2019 Common stock repurchase activity under the share repurchase program during the fourth quarter ended June 30, 2020 was as follows (in millions, except share and per share amounts): Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Programs Estimated Remaining Balance Available for Share Repurchases April 1, 2020 - April 30, 2020 99,165 $ 138.25 99,165 $ 37.9 May 1, 2020 - May 31, 2020 — $ — — $ 537.9 June 1, 2020 - June 30, 2020 — $ — — $ 537.9 Total 99,165 $ 138.25 99,165 $ 537.9 Dividends The following tables provides information with respect to the Company’s cash dividends declared and frequency of payments during fiscal year ended June 30, 2020 and 2019: Year Ended June 30, 2020 Q1 Q2 Q3 Q4 Dividends declared date August 8, 2019 November 6, 2019 February 4, 2020 May 5, 2020 Dividends payment date August 19, 2019 November 25, 2019 February 25, 2020 May 26, 2020 Cash dividend paid per common stock $ 0.30 $ 0.30 $ 0.30 $ 0.30 Year Ended June 30, 2019 Q1 Q2 Q3 Q4 Dividends declared date August 8, 2018 November 9, 2018 February 8, 2019 May 10, 2019 Dividends payment date September 10, 2018 November 26, 2018 February 25, 2019 May 28, 2019 Cash dividend paid per common stock $ 0.25 $ 0.25 $ 0.25 $ 0.25 On August 21, 2020, the Company announced that its Board of Directors declared a cash dividend of $0.40 per share payable on September 8, 2020 to shareholders of record at the close of business on August 31, 2020. The Company intends to pay regular quarterly cash dividends of at least $0.40 per share during each remaining quarter of fiscal 2021, however any future dividends will be subject to the approval of the Company’s Board of Directors. In determining whether to approve future dividends, the Company’s Board of Directors will take into account such matters as our financial position and results of operations, available cash and cash flow, capital requirements, growth opportunities, applicable corporate legal requirements, and other factors deemed relevant. Securities Authorized for Issuance under Equity Compensation Plans Information regarding the securities authorized for issuance under our equity compensation plans can be found under Item 12 of this Annual Report on Form 10-K. Unregistered Securities Sold During fiscal 2020 We did not sell any unregistered securities during fiscal 2020. 30 Table of Contents Item 6. Selected Financial Data The selected consolidated statement of operations and comprehensive income data for the fiscal years ended June 30, 2020, 2019 and 2018 and the consolidated balance sheet data as of June 30, 2020 and 2019 are derived from our audited consolidated financial statements included elsewhere in this report. The selected consolidated statement of operations and comprehensive income data for the fiscal years ended June 30, 2017 and 2016 and the consolidated balance sheet data as of June 30, 2018, 2017 and 2016 are derived from our consolidated financial statements which are not included in this report. Historical results are not necessarily indicative of future results and should be read in conjunction with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements, related notes, and other financial information included in this report. Years Ended June 30, In thousands, except per share data 2020 2019 2018 2017 2016 Consolidated Statements of Operations and Comprehensive Income Data: Revenues (4) $ 1,284,500 $ 1,161,733 $ 1,016,861 $ 865,268 $ 666,395 Cost of revenues (1) 676,328 624,129 573,289 469,560 341,600 Gross profit 608,172 537,604 443,572 395,708 324,795 Operating expenses: Research and development (1) 89,405 82,070 74,324 69,094 57,765 Sales, general and administrative (1) 40,569 43,237 43,121 36,853 33,269 Litigation settlement — 18,000 — — — Business e-mail compromise (“BEC”)- (recovery) — — — — (8,294) Total operating expenses 129,974 143,307 117,445 105,947 82,740 Income from operations 478,198 394,297 326,127 289,761 242,055 Interest expense and other, net (28,002) (12,808) (11,985) (4,737) (2,115) Income before income taxes 450,196 381,489 314,142 285,024 239,940 Provision for income taxes (2) (3) 69,899 58,795 117,852 27,518 26,324 Net Income $ 380,297 $ 322,694 $ 196,290 $ 257,506 $ 213,616 Net income per share of common stock: Basic $ 5.81 $ 4.52 $ 2.54 $ 3.16 $ 2.53 Diluted $ 5.80 $ 4.51 $ 2.51 $ 3.09 $ 2.49 Weighted average shares used in computing net income per share of common stock: Basic 65,427 71,435 77,179 81,478 84,402 Diluted 65,514 71,602 78,331 83,252 85,784 Cash dividends paid per common share $ 1.20 $ 1.00 $ — $ — $ — (1) Includes stock-based compensation as follows Cost of revenues $ 121 $ 347 $ 360 $ 264 $ 448 Research and development 2,022 2,045 1,873 1,861 2,296 Sales, general and administrative 745 498 975 660 975 Total stock-based compensation $ 2,888 $ 2,890 $ 3,208 $ 2,785 $ 3,719 (2) Includes the excess tax benefits resulting from the adoption of ASU 2016-09 Stock Compensation $ — $ — $ (29,091) $ (7,939) $ — (3) Includes Tax Reform $ — $ 2,765 $ 116,572 $ — $ — (4) Effective July 1, 2018, for fiscal year end 2019 and fiscal year end 2020, the Company adopted the new revenue accounting standard (“ASC 606”). As we elected the modified retrospective method of adoption, comparative information from prior periods have not been restated and continues to be reported under the ASC 605, “Revenue Recognition” information. Refer to Note 2, “Significant Accounting Policies” and Note 3, “Revenue” for additional information. 31 Table of Contents June 30, In thousands 2020 2019 2018 2017 2016 Consolidated Balance Sheet Data: Cash and cash equivalents $ 142,617 $ 238,147 $ 666,681 $ 604,198 $ 551,031 Investments – short-term 925 69,866 — — — Investments – long-term 513 31,585 — — — Working capital 322,350 574,625 888,436 853,846 637,721 Total assets 737,451 875,865 1,022,577 972,711 747,108 Debt – short-term 24,067 30,675 24,425 14,743 10,993 Debt – long-term 628,437 464,700 460,352 241,821 191,564 Total stockholders’ equity (295,458) 99,277 315,748 601,764 440,376