CIENA Reports First Quarter Revenue of $162.2 Million, Adjusted Net Loss of $0.17 per Diluted Share, GAAP Net Loss of $0.22 per Diluted Share
Linthicum, MD — 02/21/2002Ciena®Corporation (NASDAQ: CIEN) today reported revenue of $162.2 million for its first fiscal quarter ended January 31, 2002.
Adjusted net loss for the first quarter, after excluding restructuring costs, deferred stock compensation charges, payroll taxes on stock option exercises, amortization of intangibles and net losses on equity investments was $56.7 million, or a loss of $0.17, per diluted share. Reported, or GAAP, net loss for the period was $70.6 million, or a loss of $0.22, per diluted share.1 Adjusted net loss for the period was less than the expected range stated in the company's preliminary results announcement of February 5, 2002, because operating expenses were lower than expected.
"In light of the challenging business environment, we have taken proactive steps company-wide to manage expenses and to prioritize our investments in our business," said Gary Smith, Ciena's president and CEO. "The nearly nine percent sequential reduction in our operating expenses is evidence that we are seeing the benefit of those efforts."
Ciena continued to diversify its customer base, adding two new customers in its fiscal first quarter. This brings its total optical networking customer base to more than 60. In addition, during the first quarter Ciena recognized revenue from shipments of CoreDirector™, its intelligent optical core switch, to AT&T. Earlier this month, AT&T announced that it has deployed Ciena's CoreDirector in more than 40 cities nationwide as the optical mesh backbone for AT&T's nationwide intelligent optical network.
"AT&T's deployment of CoreDirector is a significant milestone for this product," said Ciena's Smith. "CoreDirector remains the only field-proven, intelligent optical core switch available today."
Business Outlook
Regarding the company's outlook, Smith said, "There continues to be a high level of uncertainty surrounding service providers' near-term spending. In our ongoing conversations with our customers we continue to receive indications of further deployment delays. We recently received information that leads us to believe that two of our historically most important customers may purchase significantly less from us than they had previously indicated. As a result, we now expect that our fiscal second quarter revenue is likely to be in the neighborhood of $100 million."
Live Web Broadcast of Q1 Fiscal Year 2002 Results
In conjunction with this announcement, Ciena will host a discussion of its fiscal first quarter results with investors and financial analysts on Thursday, February 21, 2002 at 8:30 AM (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.
1 Ciena provides adjusted net income (loss) and as adjusted net income (loss) per share data to assist investors in their analysis of our operating results. These adjustments are not in accordance with, or an alternative for, generally accepted accounting principles (GAAP) and may be different from the presentation of financial information provided by other companies.
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 in light of the challenging business environment, we have taken proactive steps company-wide to manage expenses and to prioritize our investments in our business, the nearly nine percent sequential reduction in our operating expenses is evidence that we are seeing the benefit of those efforts, AT&T's deployment of CoreDirector is a significant milestone for this product, CoreDirector remains the only field-proven, intelligent optical core switch available today, there continues to be a high level of uncertainty surrounding service providers' near-term spending, in our ongoing conversations with our customers we continue to receive indications of further deployment delays, we recently received information that leads us to believe that two of our historically most important customers may purchase significantly less from us than they had previously indicated, as a result, As a result, we now expect that our fiscal second quarter revenue is likely to be in the neighborhood of $100 million, 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 February 21, 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.
(Condensed Consolidated Statements of Operations, Adjusted Consolidated Statement of Operations and Consolidated Balance Sheets follow)
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Ciena CORPORATION | |||
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CONSOLIDATED STATEMENTS OF OPERATIONS | |||
|
(in thousands, except per share data) | |||
|
(unaudited) | |||
|
Quarter Ended | |||
|
January 31, 2001 |
January 31, 2002 | ||
|
Revenue |
$ 351,989 |
$ 162,156 | |
|
Cost of goods sold |
191,837 |
139,687 | |
|
Gross profit |
160,152 |
22,469 | |
|
Operating expenses |
|||
|
Research and development (exclusive of $0, $3,951 |
42,504 |
64,756 | |
|
deferred stock compensation) |
|||
|
Sales and marketing (exclusive of $0, $956 |
29,636 |
37,600 | |
|
deferred stock compensation) |
|||
|
General and administrative (exclusive of $0, $227 |
11,145 |
13,655 | |
|
deferred stock compensation) |
|||
|
Deferred stock compensation costs |
- |
5,134 | |
|
Amortization of goodwill |
898 |
- | |
|
Amortization of intangible assets |
109 |
1,813 | |
|
Restructuring costs |
- |
6,828 | |
|
Total operating expenses |
84,292 |
129,786 | |
|
Income (loss) from operations |
75,860 |
(107,317) | |
|
Interest and other income (expense), net |
4,296 |
16,172 | |
|
Interest expense |
(87) |
(10,505) | |
|
Loss on equity investments, net |
- |
(5,306) | |
|
Income (loss) before income taxes |
80,069 |
(106,956) | |
|
Provision (benefit) for income taxes |
26,823 |
(36,365) | |
|
Net income (loss) |
$ 53,246 |
$ (70,591) | |
|
Basic net income (loss) per common share |
$ 0.19 |
$ (0.22) | |
|
Diluted net income (loss) per common share |
|||
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and dilutive potential common share |
$ 0.18 |
$ (0.22) | |
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Weighted average basic common shares |
|||
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Outstanding |
287,001 |
327,620 | |
|
Weighted average basic common and |
|||
|
dilutive potential common shares |
|||
|
Outstanding |
300,956 |
327,620 | |
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Ciena CORPORATION | |||
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ADJUSTED CONSOLIDATED STATEMENTS OF OPERATIONS | |||
|
(in thousands, except per share data) | |||
|
(unaudited) | |||
|
Quarter Ended | |||
|
January 31, 2001 |
January 31, 2002 | ||
|
Revenue |
$ 351,989 |
$ 162,156 | |
|
Cost of goods sold |
191,837 |
139,687 | |
|
Gross profit |
160,152 |
22,469 | |
|
Operating expenses (1): |
|||
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Research and development |
41,973 |
64,753 | |
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Sales and marketing |
29,489 |
37,598 | |
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General and administrative |
10,543 |
13,631 | |
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Total operating expenses |
82,005 |
115,982 | |
|
Income from operations |
78,147 |
(93,513) | |
|
Interest and other income, net |
4,296 |
16,172 | |
|
Interest expense |
(87) |
(10,505) | |
|
Income before income taxes |
82,356 |
(87,846) | |
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Provision for income tax |
27,590 |
(31,185) | |
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Adjusted net income |
$ 54,766 |
$ (56,661) | |
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Basic adjusted net income per common share |
$ 0.19 |
$ (0.17) | |
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Diluted adjusted net income per common share |
|||
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and diluted potential common share |
$ 0.18 |
$ (0.17) | |
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Weighted average basic common shares |
|||
|
Outstanding |
287,001 |
327,620 | |
|
Weighted average basic common and |
|||
|
dilutive potential common shares |
|||
|
Outstanding |
300,956 |
327,620 | |
|
(1) As adjusted is exclusive of the following |
|||
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charges: |
|||
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Payroll tax on stock options |
1,280 |
29 | |
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Deferred stock compensation costs |
- |
5,134 | |
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Amortization of goodwill |
898 |
- | |
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Amortization of intangible asset |
109 |
1,813 | |
|
Restructuring costs |
- |
6,828 | |
|
Loss on equity investments, net |
- |
5,306 | |
|
Income tax effect |
(767) |
(5,180) | |
|
Net effect on adjusted net income |
$ 1,520 |
$ 13,930 | |
Ciena CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
|
October 31, |
January 31, |
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|
2001 |
2002 |
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ASSETS |
|||||||||||
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Current assets: |
|||||||||||
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Cash and cash equivalents |
$ 397,890 |
$ 472,533 |
|||||||||
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Short-term investments |
902,594 |
1,051,117 |
|||||||||
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Accounts receivable, net of allowance of ($1,491 and $1,100) |
395,063 |
150,221 |
|||||||||
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Inventories, net |
254,968 |
250,191 |
|||||||||
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Deferred income taxes |
186,861 |
60,234 |
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Prepaid expenses and other |
53,713 |
47,110 |
|||||||||
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Total current assets |
2,191,089 |
2,031,406 |
|||||||||
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Long-term investments |
494,657 |
416,330 |
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Equipment, furniture and fixtures, net |
331,490 |
316,039 |
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Goodwill |
178,891 |
178,891 |
|||||||||
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Other intangible assets, net |
47,874 |
46,061 |
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Deferred income taxes |
- |
160,496 |
|||||||||
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Other assets |
73,300 |
69,555 |
|||||||||
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Total assets |
$ 3,317,301 |
$ 3,218,778 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
|||||||||||
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Accounts payable |
$ 68,735 |
$ 46,962 |
|||||||||
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Accrued liabilities |
148,523 |
125,883 |
|||||||||
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Income taxes payable |
6,649 |
6,399 |
|||||||||
|
Deferred revenue |
29,480 |
21,435 |
|||||||||
|
Other current obligations |
995 |
1,159 |
|||||||||
|
Convertible notes payable |
- |
176,533 |
|||||||||
|
Total current liabilities |
254,382 |
378,371 |
|||||||||
|
Deferred income taxes |
64,072 |
58,318 |
|||||||||
|
Long-term deferred revenue |
- |
17,984 |
|||||||||
|
Other long-term obligations |
5,982 |
5,740 |
|||||||||
|
Convertible notes payable |
863,883 |
690,000 |
|||||||||
|
Total liabilities |
1,188,319 |
1,150,413 |
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Commitments and contingencies |
|||||||||||
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Stockholders' equity: |
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Preferred stock – par value $.01; 20,000,000 shares authorized; | |||||||||||
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zero shares issued and outstanding |
- |
|
- |
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Common stock – par value $.01; 980,000,000 shares authorized; | |||||||||||
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328,022,264 and 328,577,712 shares issued and outstanding |
3,280 |
|
3,286 |
||||||||
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Additional paid-in capital |
3,667,512 |
3,676,192 |
|||||||||
|
Notes receivable from stockholders |
(3,236) |
(2,453) |
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Accumulated other comprehensive income |
4,842 |
5,347 |
|||||||||
|
Accumulated deficit |
(1,543,416) |
(1,614,007) |
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Total stockholders' equity |
2,128,982 |
2,068,365 |
|||||||||
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Total liabilities and stockholders' equity |
$ 3,317,301 |
|
$ 3,218,778 |
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Nicole Anderson
Ciena Corporation
(877) 857 -7377
pr@ciena.com
Marie Downing
Ciena Corporation
(888) 243-6223
ir@ciena.com
