CIENA and ONI Shareholders Approve Merger
Linthicum, MD and San Jose, CA — 06/18/2002Ciena® Corporation (NASDAQ: CIEN) and ONI Systems Corp. (NASDAQ: ONIS) today announced that shareholders of both companies have approved the proposed merger between them. The companies expect the transaction will become effective on Friday, June 21, 2002. ONI’s stock will trade through the close of trading on Friday, June 21, 2002.
“We believe the combination of Ciena and ONI creates a new Ciena capable of offering one of the broadest next-generation solution sets available and extends our technological and market lead,” said Gary Smith, Ciena’s president and CEO. “We continue to expect that once our carrier customers resume more normal spending patterns, a larger percentage of their expenditures will be directed toward cost-saving next-generation solutions like Ciena’s.”
Ciena and ONI also announced that each company would immediately take steps to eliminate functional redundancies and achieve the operational cost synergies anticipated as a result of their combination. The companies expect to reduce their combined workforce by approximately 225 employees, effective tomorrow, June 19, 2002. Another approximately 110 employees will be leaving within the next three months after assisting with the integration transition. All of the affected employees have been notified. Affected employees will receive severance based on position and length of service, as well as outplacement services. Ciena expects that as a result of these and other cost-cutting measures, it will achieve its target of greater than $55 to $65 million in annualized operating cost synergies.
Ciena’s Smith offered the following comments about the combined company’s fiscal third quarter, which ends July 31, 2002:
“We continue to navigate an uncertain telecomm environment – one in which service provider spending appears to have reached unsustainably low levels. In this environment our business remains volatile and unpredictable, and our fiscal third quarter revenues will depend heavily on the timing of customer orders and acceptance of products for which we already have orders. It is possible, however, that depending on the timing of acceptance and customer orders, Ciena’s third quarter revenues, including revenues derived from ONI, could be down meaningfully from Ciena’s stand-alone second quarter revenues.”
Smith concluded: “Both Ciena’s and ONI’s businesses have been affected dramatically by the unprecedented decline in carrier spending. However, we firmly believe that together we are stronger and better positioned to emerge a winner.”
Ciena expects to report fiscal third quarter results inclusive of ONI on Thursday, August 22, 2002.
Live Web Broadcast of Teleconference Call
In conjunction with this announcement, Ciena will host a discussion with investors and financial analysts today, Tuesday, June 18, 2002 at 5:30 PM (Eastern). The live broadcast of the discussion will be available via Ciena’s homepage at www.Ciena.com. An archived version of the discussion will be available shortly following the conclusion of the live broadcast on the Investor Relations page of Ciena’s website at: www.Ciena.com/investors.
Ciena Corporation’s market-leading intelligent optical networking systems form the core for the new era of networks and services worldwide. Ciena’s LightWorks™ architecture enables next-generation optical services and changes the fundamental economics of service-provider networks by simplifying the network and reducing the cost to operate it. Additional information about Ciena can be found at www.Ciena.com.
This press release contains certain forward-looking statements based on current expectations, forecasts and assumptions of Ciena (the Company) that involve risks and uncertainties. Forward-looking statements in this release, including that the companies expect the transaction will become effective on Friday, June 21, 2002, ONI’s stock will trade through the close of trading on Friday, June 21, 2002, the belief that the combination of Ciena and ONI creates a new Ciena capable of offering one of the broadest next-generation solution sets available and extends our technological and market lead, we continue to expect that once our carrier customers resume more normal spending patterns, a larger percentage of their expenditures will be directed toward cost-saving next-generation solutions like Ciena’s, the companies expect to reduce their combined workforce by approximately 225 employees, effective tomorrow, June 19, 2002, another approximately 110 employees will be leaving within the next three months after assisting with the integration transition, Ciena expects that as a result of these and other cost-cutting measures, it will achieve its target of greater than $55 to $65 million in annualized operating cost synergies, we continue to navigate an uncertain telecomm environment – one in which service provider spending appears to have reached unsustainably low levels, in this environment our business remains volatile and unpredictable, and our fiscal third quarter revenues will depend heavily on the timing of customer orders and acceptance of products for which we already have orders, it is possible, however, that depending on the timing of acceptance and customer orders, Ciena’s third quarter revenues, including revenues derived from ONI, could be down meaningfully from Ciena’s stand-alone second quarter revenues, both Ciena’s and ONI’s businesses have been affected dramatically by the unprecedented decline in carrier spending, we firmly believe that together we are stronger and better positioned to emerge a winner, Ciena expects to report fiscal third quarter results inclusive of ONI on Thursday, August 22, 2002, are based on information available to the Company as of the date hereof. The Company’s actual results could differ materially from those stated or implied in such forward-looking statements, due to risks and uncertainties associated with the Company’s business, which include the risk factors disclosed in the Company’s Report on Form 10-Q filed with the Securities and Exchange Commission on May 23, 2002. Forward-looking statements include statements regarding the Company’s expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “will,” and “would” or similar words. The Company assumes no obligation to update the information included in this press release, whether as a result of new information, future events or otherwise.
Nicole Anderson
Ciena Corporation
(877) 857 -7377
pr@ciena.com
Marie Downing
Ciena Corporation
(888) 243-6223
ir@ciena.com
