CIENA Corporation Reports Third Quarter Revenue of $112.2 Million, Earnings Per Share of $0.33.

LINTHICUM, Md.--(BUSINESS WIRE)--Aug. 20, 1997--

Company Announces Plans for Atlanta Technology Development Center

CIENA Corporation (NASDAQ: CIEN) today reported final results for its third fiscal quarter ended August 2, 1997. The Company previously announced revenue for the quarter of $112.2 million, compared with $16.9 million for the third fiscal quarter in 1996 and $86.7 million for the quarter ended April 30, 1997.

Net income for the quarter increased to $34.9 million, or $0.33 per share, compared with net income of $10.1 million, or $0.10 per share, for the same period a year ago.

For the nine months ended August 2, 1997, revenue increased to $252.8 million from $16.9 million for the first nine months of 1996. Net income for the period was $75.6 million, or $0.74 per share, compared to $4.0 million, or $0.04 per share, for the same period in 1996.

CIENA also announced plans to open a technology development center in Atlanta, Georgia. The Company expects the location will be fully operational with a starting staff of 10 to 15 engineering professionals by the end of CIENA's fiscal year in October. The Company already has received employment commitments from five engineers whose focus initially will be on software development. The Company also expects to lease additional facilities in the Linthicum, Maryland area which it will use for expansion over the next two or three quarters.

"CIENA made significant progress toward expanding our customer base during the quarter and we are confident that we will be able to broaden that base both domestically and internationally over the coming quarters," said Patrick Nettles, CIENA's president and chief executive officer. "While we reiterate our caution that investors should not be surprised by moderating sequential growth over the next two quarters, we remain very positive about our prospects for fiscal 1998."

"We also are very excited about the opportunities we expect to result from our ongoing product development efforts," continued Nettles. "The new Atlanta facility will provide much needed additional support. It also gives CIENA a broader geographic presence - an important advantage when it comes to supporting customers and recruiting top-notch industry talent."

"As demand for bandwidth accelerates, we believe that more network operators will be turning toward solutions offered by wave division multiplexing," concluded Nettles. "CIENA's industry leading technology and our focus on customer relationships have established the Company's position as a leader in dense wave division multiplexing. Going forward, we intend to move aggressively to leverage and expand that leadership position."

NOTE TO INVESTORS:

Forward-looking statements in this release, including statements regarding (1) the expectation that the Atlanta technology support center will employ 10 to 15 engineering professionals by fiscal year end, (2) the expected lease of additional facilities in the Linthicum area, (3) the Company's confidence that it will be able to broaden its customer base, (4) moderating sequential growth in the fourth quarter of fiscal year 1997 and the first quarter of fiscal 1998, (5) the Company's very positive outlook for its prospects for fiscal 1998, (6) the expectation of exciting opportunities from ongoing product development efforts, and (7) accelerating bandwidth demand, 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 and their spending patterns, 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 ("SEC") on February 19, 1997, as further amended and restated by Amendment No. 1 to the Form 8-K, as filed with SEC on August 6, 1997, and as supplemented by the discussion of risk considerations in the Company's Quarterly Report on Form 10-Q, as filed with the SEC on August 20, 1997.

About CIENA

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. Additional information about CIENA can be found on its World Wide Website: http://www.ciena.com . -0-

                        CIENA CORPORATION
                CONSOLIDATED STATEMENTS OF OPERATIONS
                 (in thousands, except share data)
                          (unaudited)


                                   Quarter Ended     Nine Months Ended
                                  July 31, July 31,  July 31,  July 31,
                                    1996     1997      1996      1997

Revenue                          $ 16,923 $ 112,189 $ 16,923  $ 252,791
Cost of goods sold                  7,346    40,158    7,346     92,998
        Gross profit                9,577    72,031    9,577    159,793

Operating expenses:
        Research and development    1,964    7,245     6,183     14,994
        Selling and marketing       1,130    6,315     2,321     13,398
        General and administrative  1,064    2,630     2,089     11,031
          Total operating expenses  4,158   16,190    10,593     39,423

Income (loss) from operations       5,419   55,841    (1,016)   120,370

Interest and other income (expense),
 net                                  165    1,528       624      3,888

Interest expense                      (90)     (75)     (183)      (268)

Income (loss) before income taxes   5,494   57,294      (575)   123,990

Provision (benefit) for income
 taxes                             (4,600)  22,345    (4,600)    48,356

Net income                       $ 10,094 $ 34,949   $ 4,025   $ 75,634

Net income per common
   and common equivalent share   $   0.10 $   0.33   $  0.04   $   0.74

Weighted average common and
   common equivalent shares
   outstanding                     99,111  105,296    99,111    102,750



                            Ciena Corp.
                   Consolidated Balance Sheets
              (in thousands, except per share data)

                                          Oct. 31,      July 31,
                                            1996          1997
                                         (Audited)    (Unaudited)
                   ASSETS
Current assets:
 Cash and cash equivalents                $ 22,557     $ 244,485
 Accounts receivable, net                   16,759        57,103
 Inventories, net                           13,228        29,103
 Deferred income taxes                       1,834         5,808
 Prepaid expenses and other                    634           994
  Total current assets                      55,012       337,493
Equipment, furniture and fixtures, net      11,863        53,194
Other assets                                   426           373
  Total assets                            $ 67,301     $ 391,060

LIABILITIES, MANDATORILY REDEEMABLE
 PREFERRED STOCK AND STOCKHOLDERS'
 EQUITY

Current Liabilities:
 Current installments of capital
  lease obligations                       $    960     $     987
 Current maturities of notes
  payable                                       69            --
 Accounts payable                            6,278        23,294
 Accrued liabilities                         5,242        29,168
 Income taxes payable                        3,342        19,483
 Deferred revenue                            3,265         2,527
  Total current liabilities                 19,156        75,459
 Capital lease obligations,
  less current installments                  2,186         1,446
 Notes payable, less current
  maturities                                   487            --
 Deferred income taxes                          --        17,560
 Deferred rent                                  98           678
  Total liabilities                         21,927        95,143
Commitments and contingencies                   --            --
Mandatorily redeemable preferred stock -
 par value $.01, 16,250,000 shares
 authorized: 14,663,148 and zero
 issued and outstanding;                    40,404            --
Stockholders' equity:
 Preferred stock - par value $.01; 20,000,000
  shares authorized; zero shares issued and
  outstanding                                   --            --
 Common stock - par value $.01; 180,000,000
  shares authorized; 13,191,585 and
  98,258,550 shares issued and
  outstanding                                  132           983
 Additional paid-in capital                    339       214,785
 Notes receivable from stockholders            (60)          (44)
 Retained earnings                           4,559        80,193
  Total stockholders' equity                 4,970       295,917
Total liabilities mandatorily redeemable
 preferred stock and and stockholders'
 equity                                   $ 67,301     $ 391,060
-0-

CONTACT: Investor Contact:

Suzanne DuLong

CIENA Corporation

[phone]

email: [e-mail]

or

Press Contact:

Denny Bilter

CIENA Corporation

[phone]