Ciena - Ciena Reports Fourth Quarter and Fiscal Year 2004 Results

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Ciena Reports Fourth Quarter and Fiscal Year 2004 Results

Revenue Increases 8.5% Sequentially, 16.1% Year-over-Year

Linthicum, MD — 12/09/2004

Ciena® Corporation (NASDAQ: CIEN), the network specialist, today reported its fourth quarter and fiscal year 2004 results for the period ending October 31, 2004. Revenue for the fourth quarter totaled $82.0 million, representing an 8.5% sequential increase, and an increase of 16.1% over the same period a year ago. For the year, Ciena’s revenue totaled $298.7 million, representing an increase of 5.5% over 2003 revenue of $283.1 million.

On a generally accepted accounting principles (GAAP) basis, Ciena’s reported net loss for the fiscal fourth quarter was $495.1 million, or a net loss of $0.87 per share. This loss includes a goodwill impairment of $371.7 million and compares to a GAAP net loss of $115.0 million, or a net loss of $0.24 per share, in the same period a year ago. On a GAAP basis, Ciena’s reported net loss for the fiscal year was $789.5 million, or a net loss of $1.51 per share. This compares to a GAAP net loss of $386.5 million, or a net loss of $0.87 per share, in fiscal 2003.

Non-GAAP Presentation

In evaluating the operating performance of its business, Ciena’s management excludes certain charges or credits that are required by GAAP. These items, which are identified in the tables that follow, share one or more of the following characteristics: they are unusual, and Ciena does not expect them to recur in the ordinary course of its business; they do not involve the expenditure of cash; they are unrelated to the ongoing operation of the business in the ordinary course; or their magnitude and timing is largely outside of the Company’s control.

	Quarter	Quarter
	Ended	Ended
	Oct 31,	Oct 31,
	2003	2004
Item	(in thousands)	(in thousands)
Stock compensation costs	$ 3,487	$ 3,184
Amortization of intangible assets	6,416	11,381
In-process research and development	1,300	-
Restructuring costs	8,972	34,982
Goodwill impairment	-	371,712
Long-lived asset impairment	33,528	8,709
Recovery of use tax payments	-	-
Recovery of doubtful accounts, net	-	-
Accelerated amortization of leasehold improvements	-	8,382
Loss (gain) on equity investments, net	4,750	4,500
Loss on extinguishment of debt	-	-
Income tax benefit on adjusted net loss	20,031	18,328
Total Adjustments	$ 78,484	$ 461,178
GAAP Net Loss	$ (115,040)	$ (495,073)
Adjustment for items above	78,484	461,178
Non-GAAP Net Loss	$ (36,556)	$ (33,895)

As of the quarter ended October 31, 2004, Ciena’s weighted average shares outstanding were approximately 569,462,000. Adjusting Ciena’s quarterly GAAP results as noted would reduce the Company’s net loss in its fiscal fourth quarter to $0.06 per share. This compares with an adjusted net loss of $0.08 per share in the same period a year ago.

	Year	Year
	Ended	Ended
	Oct 31,	Oct 31,
	2003	2004
Item	(in thousands)	(in thousands)
Stock compensation costs	$ 16,777	$ 11,883
Amortization of intangible assets	17,870	30,839
In-process research and development	2,800	30,200
Restructuring costs	13,575	57,107
Goodwill impairment	-	371,712
Long-lived asset impairment	47,176	15,926
Recovery of use tax payments	-	(5,388)
Recovery of doubtful accounts, net	-	(2,794)
Accelerated amortization of leasehold improvements	-	22,535
Loss (gain) on equity investments, net	4,760	4,107
Loss on extinguishment of debt	20,606	8,216
Income tax benefit on adjusted net loss	92,850	86,521
Total Adjustments	$ 216,414	$ 630,864
GAAP Net Loss	$ (386,517)	$ (789,464)
Adjustment for items above	216,414	630,864
Non-GAAP Net Loss	$ (170,103)