CIENA Reports First Quarter 2004 Results.Business Editors/High-Tech Writers LINTHICUM, Md.--(BUSINESS WIRE)--Feb. 19, 2004 CIENA Corporation Ciena Corporation NASDAQ: CIEN develops and markets communications network platforms and software, and offers professional services. The Company's broadband access, data and optical networking platforms, software tools, and global network services support worldwide telecom (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) ) Separately Today: Expands Solution Portfolio to Include Broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). Service Delivery Solutions with Acquisitions of Catena ca·te·na n. pl. ca·te·nae or ca·te·nas A closely linked series, especially of excerpted writings or commentaries. [Latin cat Networks and Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the Photonics CIENA(R) Corporation (NASDAQ: CIEN), a leading global provider of innovative networking solutions, today reported its first fiscal quarter results for the period ending January January: see month. 31, 2004. Consistent with the Company's preliminary results announcement, revenue for the quarter totaled $66.4 million. On a generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) basis, CIENA's reported net loss for the quarter was $76.7 million, or a net loss of $0.16 per share. First Quarter 2004 Highlights -- Announced Tier One customer wins with CIENA's selection to provide next-generation optical solutions for the Defense Information Systems Agency (DISA 1. (body) DISA - Defense Information Systems Agency. 2. (standard) DISA - Data Interchange Standards Association. ) Global Information Grid The globally interconnected, end-to-end set of information capabilities, associated processes and personnel for collecting,processing, storing, disseminating and managing information on demand to warfighters, policy makers, and support personnel. Bandwidth Expansion Bandwidth expansion is a technique for widening the bandwidth or the resonances in an LPC filter. This is done by moving all the poles towards the origin by a constant factor  . (GIG-BE GIG-BE Global Information Grid-Bandwidth ExpansionGIG-BE Global Information Grid Bandwidth Expansion ) project and a multi-year contract with SingTel SingTel Singapore Telecommunication for ONLINE Edge deployment. -- Recognized revenue from 100 customers including 14 new revenue-generating customers in the quarter. -- Ended the quarter with cash and short- and long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. investments valued at $1.52 billion. -- Meaningfully reduced long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. with the redemption of approximately $49 million remaining outstanding 5% convertible notes. 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 table below, 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 Ended
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January 31, 2004
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Item (in thousands)
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Deferred stock compensation $2,844
Amortization of intangible assets 3,396
Restructuring costs 3,393
Gain on equity investments, net (454)
Loss on extinguishment of debt 8,216
Income tax benefit on adjusted net
loss 21,035
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Total Adjustments $38,430
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GAAP Net Loss $(76,708)
Adjusted for items above 38,430
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$(38,278)
Non GAAP Net Loss
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Please see Appendix A for additional information about this table.
These adjustments are not in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP, and making these adjustments may not permit meaningful comparisons to other companies. As of the quarter ended January 31, 2004, CIENA's weighted average shares outstanding were approximately 472,935,000. Adjusting CIENA's quarterly GAAP results as noted would reduce the Company's net loss in its first fiscal quarter to $0.08 per share. Strategy and Vision Separately today, CIENA announced its intent to acquire two companies, Catena Networks, Inc. and Internet Photonics, Inc. Catena is a leader in the emerging broadband access See broadband and wireless broadband. market. Internet Photonics is a leading provider of optical Ethernet Ethernet Telecommunications networking protocol introduced by Xerox Corp. in 1979. It was developed as an inexpensive way of sending information quickly between office machines connected together in a single room or building, but it rapidly became a standard computer transport and switching solutions. Please see the news releases titled "CIENA Announces Execution of Agreement to Acquire Catena Networks; Adds Industry-Leading Broadband Access to Its Growing Solutions Portfolio," and "CIENA Announces Intent to Acquire Internet Photonics; Expands Broadband Service See broadband and broadband service provider. Offerings with Carrier-Grade Ethernet Solutions," respectively, on CIENA's website at www.CIENA.com for further details on these announcements. "The acquisitions of Catena and Internet Photonics are part of CIENA's ongoing efforts to fuel long-term revenue growth and sustained profitability by expanding our addressable Reachable. When something is addressable, it can be identified and manipulated independently of its surroundings. For example, screen pixels and RAM memory are addressable. Each of the screen's picture elements can be individually turned on and off, and each of the memory's bytes can be market; capitalizing on new growth opportunities in adjacent and complementary markets," said Gary Smith Gary Smith may refer to:
"More strategically, these acquisitions are part of CIENA's vision to offer our customers a comprehensive set of solutions that enable them to realize a true, all-service network," said Smith. "The near-term near-term adj. Of, for, or involving a short period of time in the near future. opportunity for carriers and enterprises is optimizing delivery of any broadband service anywhere as opposed to any one specific service in any isolated portion of the network. That's why CIENA is integrating the best optical, data and access solutions to enable delivery of a wider range of broadband services." Business Outlook "Exclusive of any potential impact from the acquisitions announced today, we continue to expect that revenue in our second fiscal quarter will be up by as much as 20% from our fiscal first quarter revenue, though as always, these expectations include some risk," said Smith. "In addition, we remain committed to our previously stated goal of reducing our ongoing operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , exclusive of the effects of the acquisitions announced today. "We firmly believe the steps we've we've Contraction of we have. we've have taken to evolve CIENA's vision and solution set to encompass new technologies and new areas of network growth and investment, position us for sustainable revenue and earnings growth long term," Smith said. Live Web Broadcast of Q1 Results and Acquisitions Discussion CIENA will host a discussion of this morning's announcements with investors and financial analysts today, Thursday Thursday: see week. , February February: see month. 19, 2004 at 8:30 a.m. (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 Investor relations The process by which the corporation communicates with its investors. page of CIENA's website at: www.CIENA.com/investors. 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 acquisitions of Catena and Internet Photonics are part of CIENA's ongoing efforts to fuel long-term revenue growth and sustained profitability by expanding our addressable market; capitalizing on new growth opportunities in adjacent and complementary markets; in the simplest of terms, these acquisitions enhance the scope of the solutions we can offer our customers and further extend CIENA's network reach and presence; more strategically, these acquisitions are part of CIENA's vision to offer our customers a comprehensive set of solutions that enable them to realize a true, all-service network; the near-term opportunity for carriers and enterprises is optimizing delivery of any broadband service anywhere as opposed to any one specific service in any isolated portion of the network; CIENA is integrating the best optical, data and access solutions to enable delivery of a wider range of broadband services; exclusive of any potential impact from the acquisitions announced today, we continue to expect that revenue in our second fiscal quarter will be up by as much as 20% from our fiscal first quarter revenue, though as always, these expectations include some risk; we remain committed to our previously stated goal of reducing our ongoing operating expenses, exclusive of the effects of the acquisitions announced today; we firmly believe the steps we've taken to evolve CIENA's vision and solution set to encompass new technologies and new areas of network growth and investment, position us for sustainable revenue and earnings growth long term, and the proposed CIENA/Catena and CIENA/Internet Photonics transactions, 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 today, February 19, 2004. The following factors, among others, could cause actual results to differ materially from those described herein: inability to obtain, or meet conditions imposed for governmental and other approvals for CIENA's acquisition of Catena or Internet Photonics, including approval by the stockholders of Catena and Internet Photonics respectively; the risk that the CIENA and Catena or CIENA and Internet Photonics businesses will not be integrated successfully; the costs related to the mergers; and other economic, business, competitive and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. regulatory factors affecting CIENA's, Catena's and Internet Photonics' businesses generally. Forward-looking statements include statements regarding the Company's expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. 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. CIENA, its directors, executive officers and certain other members of management and employees may be soliciting proxies from Catena stockholders and Internet Photonics stockholders. Catena Networks, Inc., its directors, executive officers and certain other members of management and employees may be soliciting proxies from Catena stockholders. Internet Photonics, Inc., its directors, executive officers and certain other members of management and employees may be soliciting proxies from Internet Photonics stockholders. INVESTORS ARE URGED TO READ THE PROXY STATEMENTS-PROSPECTUSES RELATING TO relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc THE FOREGOING TRANSACTIONS THAT CIENA EXPECTS TO FILE WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. THE PROXY STATEMENTS-PROSPECTUSES AND OTHER DOCUMENTS FILED WITH THE SEC BY CIENA MAY BE OBTAINED, WHEN THEY BECOME AVAILABLE, FOR FREE AT THE SEC'S WEB SITE, WWW.SEC.GOV. THE PROXY STATEMENTS-PROSPECTUSES AND THESE OTHER DOCUMENTS MAY ALSO BE OBTAINED FOR FREE FROM CIENA, OR WITH RESPECT TO THE TRANSACTION THAT INVOLVES IT, FROM EITHER CATENA NETWORKS OR INTERNET PHOTONICS. REQUESTS TO CIENA MAY BE DIRECTED TO CIENA, 1201 WINTERSON RD., LINTHICUM, MD, 21090-2205, ATTENTION: INVESTOR RELATIONS. REQUESTS TO CATENA MAY BE DIRECTED TO: CATENA NETWORKS, INC., 307 LEGGET DRIVE, KANATA, ON, K2K K2K KEK to Kamioka (Long Baseline Neutrino Oscillation Experiment) K2K Kabul to Kandahar (Canadian Afghanistan operations) K2K Key to Knowledge 3C8, ATTENTION: KEVIN FORBES, VP OF FINANCE. REQUESTS TO INTERNET PHOTONICS MAY BE DIRECTED TO: INTERNET PHOTONICS, INC., 1030 BROAD STREET, SHREWSBURY, NJ 07702, ATTENTION: STEVE WASZAK, CHIEF FINANCIAL OFFICER.
CIENA CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Quarter ended January 31,
-------------------------
2003 2004
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Revenues:
Products $61,221 $54,674
Services 9,253 11,740
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Total revenue $70,474 $66,414
Costs:
Products 42,234 33,517
Services 14,632 11,301
Provision (benefit) for excess and obsolete
inventory costs (2,657) 1,043
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Total cost of goods sold 54,209 45,861
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Gross profit 16,265 20,553
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Operating expenses:
Research and development 53,734 47,177
Selling and marketing 26,605 25,468
General and administrative 14,706 7,091
Deferred stock compensation costs:
Research and development 3,798 2,205
Sales and marketing 759 518
General and administrative 374 121
Amortization of intangible assets 3,554 3,396
Restructuring costs - 3,393
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Total operating expenses 103,530 89,369
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Loss from operations (87,265) (68,816)
Interest and other income (expense), net 13,301 7,678
Interest expense (12,203) (7,384)
Gain (loss) on equity investments, net (10) 454
Loss on extinguishment of debt (20,606) (8,216)
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Loss before income taxes (106,783) (76,284)
Provision for income taxes 359 424
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Net loss $(107,142) $(76,708)
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Basic and diluted net loss per common share
and dilutive potential common share $ (0.25) $ (0.16)
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Weighted average basic common and dilutive
potential common shares outstanding 432,572 472,935
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CIENA CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
October 31, January 31,
2003 2004
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $309,665 $296,315
Short-term investments 796,809 757,318
Accounts receivable, net 43,600 45,876
Inventories, net 44,995 49,242
Prepaid expenses and other 34,334 31,767
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Total current assets 1,229,403 1,180,518
Long-term investments 519,744 465,638
Equipment, furniture and fixtures, net 114,930 107,590
Goodwill 336,039 335,918
Other intangible assets, net 108,408 104,045
Other long-term assets 69,641 70,614
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Total assets $2,378,165 $2,264,323
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $44,402 $40,459
Accrued liabilities 98,926 95,004
Restructuring liabilities 14,378 12,018
Unfavorable lease commitments 9,380 9,269
Income taxes payable 4,640 5,095
Deferred revenue 14,473 20,811
----------- -----------
Total current liabilities 186,199 182,656
Long-term deferred revenue 14,547 15,606
Long-term restructuring liabilities 52,164 50,967
Long-term unfavorable lease commitments 61,312 58,833
Other long-term obligations 2,698 2,650
Convertible notes payable 730,428 690,000
----------- -----------
Total liabilities 1,047,348 1,000,712
----------- -----------
Commitments and contingencies
Stockholders' equity:
Preferred stock - par value $0.01;
20,000,000 shares authorized; zero shares
issued and outstanding - -
Common stock - par value $0.01;
980,000,000 shares authorized;
473,214,856 and 474,809,938 shares
issued and outstanding 4,732 4,748
Additional paid-in capital 4,861,182 4,867,544
Deferred stock compensation (9,664) (6,565)
Notes receivable from stockholders (448) (448)
Accumulated other comprehensive income 2,447 2,472
Accumulated deficit (3,527,432) (3,604,140)
----------- -----------
1,330,817 1,263,611
----------- -----------
Total liabilities and stockholders'
equity $2,378,165 $2,264,323
=========== ===========
Appendix A The adjustments management makes in analyzing CIENA's first quarter fiscal 2004 GAAP results are as follows: -- Deferred stock compensation costs - a non-cash expense Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) largely unrelated to normal operations Generally and collectively, the broad functions that a combatant commander undertakes when assigned responsibility for a given geographic or functional area. Except as otherwise qualified in certain unified command plan paragraphs that relate to particular commands, "normal operations" of , and which arises under GAAP accounting from the assumption of unvested stock options issued by any companies we acquire. -- Amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. - a non-cash expense unrelated to normal operations arising from acquisitions of intangible assets, principally developed technology acquired in the Cyras, ONI ONI abbr. Office of Naval Intelligence Noun 1. ONI - the military intelligence agency that provides for the intelligence and counterintelligence and investigative and security requirements of the United States Navy , WaveSmith and Akara acquisitions which CIENA is required to amortize amortize To write off gradually and systematically a given amount of money within a specific number of time periods. For example, an accountant amortizes the cost of a long-term asset by deducting a portion of that cost against income in each period. over its expected useful life. -- Restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs - non-recurring charges, unrelated to normal operations, incurred as the result of reducing the size of the Company's operations to align align (  līn),v to move the teeth into their proper positions to conform to the line of occlusion. its resources with the reduced size of the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. market as well as the result of targeting new segment opportunities within the overall market. -- Gain on equity investments, net - a non-recurring gain unrelated to normal operations. -- Loss on extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt - a non-recurring expense, unrelated to normal operations. -- Income tax benefit on adjusted net loss - the income tax charge or benefit on the adjusted net loss, which is a necessary adjustment for consistency. The Company currently has a full valuation allowance for GAAP reporting purposes and accordingly does not recognize a tax benefit for losses generated. ABOUT CIENA CIENA Corporation delivers innovative network solutions to the world's largest service providers and enterprises, increasing the cost-efficiency of current services while enabling the creation of new carrier-class data services built upon the existing network infrastructure. Additional information about CIENA can be found at www.ciena.com. ABOUT CATENA NETWORKS Catena integrated broadband access solutions enable service providers to profitably deliver voice, data and video services and smoothly migrate to packet-based networks. These solutions include the CNX-5 Broadband DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary System, the CN1000 Broadband Loop Carrier, and the CN1000FX Fiber-to-the-X solution. ABOUT INTERNET PHOTONICS Internet Photonics, Inc. is an innovative growth company delivering the first carrier-grade Intelligent Wavelength Platforms, which allow network operators (service providers and cable MSOs) to sell profitable high-bandwidth data services alongside existing legacy services. For more information, please visit www.internetphotonics.com. |
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