CIENA Announces Operational Realignment.Business Editors/Hi-Tech Writers LINTHICUM, Md.--(BUSINESS WIRE)--March 26, 2002 CIENA(R) Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CIEN CIEN Ciena Corporation (stock symbol) ) today announced an immediate workforce reduction of approximately 650 employees, or approximately 22 percent of its total workforce, as the Company strives to better align align (  līn),v to move the teeth into their proper positions to conform to the line of occlusion. its operations and strategic focus with the current industry environment. "The telecom equipment market has changed dramatically in the last year and we have to adjust to those changes if we are to maintain our leadership position in the industry," said Gary Smith Gary Smith may refer to:
CIENA estimates that the actions taken today will generate between $145 to $155 million in annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. cost savings, including approximately $85 to $90 million at the operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. level, prior to restructuring-related charges. CIENA expects that the majority of the cost savings will be in place by its fiscal third quarter, 2002. Affected employees will be paid through May 24, 2002 and will be eligible for additional severance packages A severance package is pay and benefits an employee receives when they leave employment at a company. In addition to the employee's remaining regular pay, it may include some of the following:
n. The process of facilitating a terminated employee's search for a new job by provision of professional services, such as counseling, paid for by the former employer. assistance and training. The Company expects to record a restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of between $125 to $135 million in its second fiscal quarter associated with the workforce reduction, lease terminations, non-cancelable lease costs and the write-down of certain property, equipment and leasehold improvements Leasehold Improvement Improvements on a leased asset that increase the value of the asset. Notes: A leasehold improvement is classified as an asset that must be depreciated over time. . In addition, in its fiscal second quarter, CIENA also expects to record a charge of approximately $200 to $225 million, primarily related to excess inventory associated with its long-haul transport products and purchase commitments with suppliers. "CIENA pioneered the WDM (1) (Wavelength Division Multiplexing) A technology that uses multiple lasers and transmits several wavelengths of light (lambdas) simultaneously over a single optical fiber. revolution and we're leading the optical switching revolution. Our goal is to continue to reshape the telecom industry, creating more powerful, more economically compelling network solutions for our customers," continued Smith. "Consequently, we remain committed to investing in key areas of our business as this is not the time to cut back on the efforts that are likely to propel pro·pel tr.v. pro·pelled, pro·pel·ling, pro·pels To cause to move forward or onward. See Synonyms at push. [Middle English propellen, from Latin CIENA to a stronger leadership position when our carrier customers resume more normal spending patterns. However, as demonstrated by today's actions, we are carefully prioritizing our spending with an emphasis on opportunity and return on investment." "The actions we've taken today will help facilitate CIENA's return to profitability," concluded Smith. "CIENA's grown up in turbulent times and agility has been a key competitive advantage - one that is even more valuable in today's volatile environment. We're currently playing from a market-leading, technology-leading position and that position enables us to play to win, not just survive. We will continue to work to leverage our competitive position to the long-term benefit of our customers, our shareholders and our employees." ABOUT CIENA CIENA Corporation's market-leading intelligent optical networking Communications between computers, telephones and other electronic devices using light. An optical network is far more reliable and has far greater potential transmission capacity than networking in the electrical domain. See optical fiber. systems form the core for the new era of networks and services worldwide. CIENA's LightWorks(TM) 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. NOTE TO CIENA INVESTORS This press release contains certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. based on current expectations, forecasts and assumptions of CIENA (the Company) that involve risks and uncertainties. Forward-looking statements in this release, including, the telecom equipment market has changed dramatically in the last year and we have to adjust to those changes if we are to maintain our leadership position in the industry, CIENA's future success depends on our ability to adapt the way we think and the way we run our business in this dynamic environment, CIENA estimates that the actions taken today will generate between $145 to $155 million in annualized cost savings, including approximately $85 to $90 million at the operating expense level, prior to restructuring-related charges, CIENA expects that the majority of the cost savings will be in place by its fiscal third quarter, 2002, affected employees will be paid through May 24, 2002 and will be eligible for additional severance packages, they also will receive outplacement assistance and training, the Company expects to record a restructuring charge of between $125 to $135 million in its second fiscal quarter associated with the workforce reduction, lease terminations, non-cancelable lease costs and the write-down of certain property, equipment and leasehold improvements, in its fiscal second quarter CIENA also expects to record a charge of approximately $200 to $225 million, primarily related to excess inventory associated with its long-haul transport products and purchase commitments with suppliers, CIENA pioneered the WDM revolution and we're leading the optical switching revolution, our goal is to continue to reshape the telecom industry, creating more powerful, more economically compelling network solutions for our customers, we remain committed to investing in key areas of our business as this is not the time to cut back on the efforts that are likely to propel CIENA to a stronger leadership position when our carrier customers resume more normal spending patterns, however, as demonstrated by today's actions, we are carefully prioritizing our spending with an emphasis on opportunity and return on investment, the actions we've taken today will help facilitate CIENA's return to profitability, CIENA's grown up in turbulent times and agility has been a key competitive advantage - one that is even more valuable in today's volatile environment, we're currently playing from a market-leading, technology-leading position and that position enables us to play to win, not just survive, we will continue to work to leverage our competitive position to the long-term benefit of our customers, our shareholders and our employees, are based on information available to the Company as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . 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 Form 10-Q See 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. |
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