Ciena - CIENA Announces First Post-IPO Quarterly Results

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CIENA Announces First Post-IPO Quarterly Results

Savage, MD — 02/20/1997

Ciena Corporation [NASDAQ: CIEN], which completed its initial public offering on February 7, 1997, today announced results of operations for its first fiscal quarter ended January 31, 1997.

Revenues for the quarter were $53.9 million, and gross profit was $33.1 million. Operating expenses were $11.9 million, resulting in income from operations of $21.2 million. Net income was $13 million, or, on a pro forma basis, $0.13 per share. For the comparable quarter ended January 31, 1996, the Company had no revenue, operating expenses of $3.5 million, and a net loss of $3.3 million, or, on a pro forma basis, a net loss of $0.03 per share.

At quarter end, the Company’s receivables reflected 36 days sales outstanding. For the quarter, inventory turned, on an annualized basis, 5.7 times.

The Company also indicated that its facilities expansion plans were proceeding generally on schedule. Total employees reached 301 by the end of the quarter, an increase of 76 from October 31, 1996.

The Company indicated that revenues from sales of its MultiWaveTM 1600 system in the first quarter were derived almost entirely from its two major customers, Sprint and WorldCom, with the majority of those revenues derived from Sprint. "Our highest priority is to solidify and enhance our existing customer relationships, so we’re pleased with the growth in sales to Sprint and with initiation of sales to WorldCom," said Patrick Nettles, President and CEO of Ciena.

Mr. Nettles also stated "We’re pleased to have announced last week the formal introduction of an optical add/drop multiplexer to the MultiWaveTM 1600 system. We believe the route flexibility the OADM offers will enhance the overall value of our system solution to our customers."

Ciena Corporation is a leading supplier of dense wavelength division multiplexing ("DWDM") systems to long distance fiberoptic telecommunications carriers. Ciena’s DWDM systems alleviate capacity constraints and enable flexible provisioning of additional bandwidth on high-traffic routes in carriers’ networks. The Company’s headquarters are located in Savage, Maryland. Additional information on the Company can be found on its World Wide Web site: http//www.Ciena.com.

NOTE: Forward-looking statements in this release, including statements regarding enhancement of the system solution by the optical add/drop multiplexer, as well as plans regarding the expansion of the Company’s facilities, 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 by such forward-looking statements, due to risks and uncertainties associated with the Company’s dependence on its major customers, the recent introduction of its products, and the overall management of its expansion. The forward-looking statements should be considered in the context of these and other risk factors disclosed in the Company’s report on Form 8-K, as filed with the Securities and Exchange Commission on February 19, 1997.

		Quarter Ended January 31, 1997

Revenue			$53,933
Cost of goods sold			20,832
	Gross profit		33,101

Operating expenses
	Research and development		3,050
	Selling and marketing		2,598
	General and administrative		6,295
	Total operating Expenses		11,943

Income from operations			21,158

Other income, net			290

Income before income taxes			21,448

Provision for income taxes			8,365

Net income			$13,083

Pro forma net income per common and common
	equivalent share (1)		$0.13

Pro forma weighted average common and common
	equivalent shares outstanding (1)		99,425

(1) Pro forma net income per common and common equivalent share is computed using the
	pro forma weighed average number of common and common equivalent shares outstanding.
	Pro forma weighted average common and common equivalent shares include Common
	Stock, stock options and warrants using the treasury stock method and the conversion
	of all outstanding shares of Mandatorily Redeemable Preferred Stock.

Ciena CORPORATION

BALANCE SHEETS

(in thousands, except per share data)

					Pro forma
				January 31,	January 31,
				1997	1997(1)
				(Unaudited)	(Unaudited)
			ASSETS
Current assets:
	Cash and cash equivalents			$31,940	$154,432
	Accounts receivable (net of allowance of $ -)			26,131	26,131
	Inventories, net			16,145	16,145
	Other current assets			5,305	5,305
		Total current assets		79,521	202,013
Equipment, furniture and fixtures, net				19,362	19,362
Other assets				728	728
	Total assets			$99,611	$222,103

LIABILITIES, MANDATORILY REDEEMABLE PREFERRED STOCK AND
			STOCKHOLDERS' EQUITY

Current liabilities:
	Accounts payable			$9,915	$9,915
	Accrued liabilities			13,341	13,341
	Income taxes payable			10,795	10,795
	Deferred revenue			3,152	3,152
	Other current liabilities			1,069	1,069
		Total current liabilities		38,272	38,272
	Long-term obligations, net of current maturities			2,852	2,852
		Total liabilities		41,124	41,124
Commitments and contingencies				-	-
Mandatorily redeemable preferred stock				40,404	-
Stockholders' equity:
	Preferred stock - par value $.01; 20,000,000 shares
	authorized; zero shares issued and outstanding;
	zero outstanding pro forma			-	-
	Common stock - par value $.01; 180,000,000 shares
	authorized; 13,512,935 shares issued
	and outstanding; 94,078,675 outstanding
	pro forma			135	941
	Additional paid-in capital			372	162,462
	Notes receivable from stockholders			(66)	(66)
	Retained earnings			17,642	17,642
		Total stockholders' equity		18,083	180,979
	Total liabilities, mandatorily redeemable preferred
	stock and stockholders' equity			$99,611	$222,103

(1) Reflects the net proceeds from the Company's initial public offering, conversion of the Convertible Preferred Stock,
and the exercise of certain warrants converted into Common Stock upon the closing of the initial public offering.

About Ciena

Ciena specializes in network transition. We provide the flexible platforms, intelligent software and professional services to build converged networks for enhanced services and applications. With a growing global presence, Ciena leverages its heritage of practical innovation to deliver maximum performance and economic value in communications networks worldwide. For more information, visit www.ciena.com.

Press Contacts:
Nicole Anderson
Ciena Corporation
(877) 857 -7377
pr@ciena.com

Investor Contacts:
Marie Downing
Ciena Corporation
(888) 243-6223
ir@ciena.com