CIENA Reports Fourth Quarter Revenue of $287.6 Million, Pro Forma Net Income of $0.14 per Diluted Share.Business Editors LINTHICUM, Md.--(BUSINESS WIRE)--Dec. 7, 2000 Customer Relationship with Dynegy Dynegy Inc. (NYSE: DYN), headquartered in Houston, Texas, provides wholesale power, capacity and ancillary services to utilities, cooperatives, municipalities and other energy companies in 15 states in three key U.S. Announced; Next Generation 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. Taking Hold as Two Leading Service Providers, Genuity See BBN. and Broadwing Broadwing can mean:-
Intelligent Optical Core Switch 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) ) today reported revenue of $287.6 million for its fourth fiscal quarter ended October October: see month. 31, 2000. The results represent sequential One after the other in some consecutive order such as by name or number. revenue growth of more than 23 percent over the Company's fiscal third quarter revenue of $233.3 million, and an increase of more than 100 percent as compared to the same period a year ago when the Company reported revenue of $141.4 million. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net income for the fourth quarter, exclusive of provision for doubtful accounts and payroll tax Payroll Tax Tax an employer withholds and/or pays on behalf of their employees based on the wage or salary of the employee. In most countries, including the U.S., both state and federal authorities collect some form of payroll tax. on stock option exercises, was $41.3 million, or $0.14, earnings per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. This represents an increase of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 46 percent compared with net income for the previous quarter of $28.2 million, or $0.09, earnings per diluted share. For the same period in fiscal 1999, the Company reported net income of $4.7 million, or $0.02, earnings per diluted share.(1) Consensus of First Call estimates for fourth quarter fiscal 2000 as of the close of business on Wednesday Wednesday: see week. , December December: see month. 6, 2000 was $0.12 earnings per diluted share. "CIENA's robust growth in the fourth quarter and over the last fiscal year is the result of strong customer focus and consistent execution across the company," said CIENA Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Patrick Nettles net·tle n. 1. Any of numerous plants of the genus Urtica, having toothed leaves, unisexual apetalous flowers, and stinging hairs that cause skin irritation on contact. 2. Any of various hairy, stinging, or prickly plants. . "We believe CIENA stands to be one of the primary beneficiaries as service providers begin to shift spending away from legacy solutions toward next generation, intelligent optical networking solutions." For the twelve months ended October 31, 2000, CIENA reported revenue of $858.8 million, an increase of approximately 78 percent over revenue of $482.1 million for fiscal year 1999. For the fiscal year 2000, exclusive of provision for doubtful accounts, settlement of accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. contract obligation and costs associated with payroll taxes on stock options, CIENA's pro forma net income totaled $98.4 million, or $0.33, earnings per diluted share. This compares with pro forma net income of $4.8 million, or $0.02, earnings per diluted share, exclusive merger-related costs and provision for doubtful accounts for fiscal year 1999.(1) "CIENA is poised to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. a dramatic market shift that appears to be underway," said Gary Smith Gary Smith may refer to:
The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . "We believe that service providers worldwide are realizing the capital savings and operational benefits associated with moving away from closed, legacy, TDM-based solutions to open, next-generation intelligent optical networking." Smith continued, "CIENA believes it is uniquely positioned to take advantage of this shift: Unlike legacy equipment vendors, CIENA is unencumbered Unencumbered Property that is not subject to any creditor claims or liens. Notes: For example, if a house is owned free and clear (meaning the owner owes no mortgage to anyone), it is unencumbered. by legacy products or revenue streams and unlike newer market entrants, CIENA has the experience and the scale to support carrier-class, global intelligent optical networking deployments." CIENA continues to diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. its customer base, adding four new customers in the fourth quarter, one of which, Interoute Interoute is a telecom operator providing network services in the European Union and neighbouring nations with transatlantic capacity linked to North American hubs. The company operates in 19 countries, having significant operations in most countries. , has been named publicly. The Company's total optical networking equipment customer base now totals 42, of which, 27 contributed to CIENA's revenues during the most recent quarter. Dynegy Becomes Customer CIENA also announced today that it has signed a three-year agreement to supply its MultiWave CoreStream(TM) intelligent optical transport systems to Dynegy Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). Communications for deployment in its
pan-European fiber-optic See fiber optics. network. Dynegy has placed initial orders for
CIENA's MultiWave CoreStream systems.As disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). in CIENA's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , filed today with the Securities and Exchange Commission, Dynegy has proposed to purchase the assets of iaxis Limited, a former CIENA customer currently in administration proceedings in the U.K., from iaxis' U.K. administrator. Upon completion of the purchase, CIENA expects to provide Dynegy with in excess of $50 million in CoreStream systems in the first year. Intelligent Optical Switching During the quarter, CIENA recognized additional revenues from sales of MultiWave CoreDirector(TM), its next-generation intelligent optical core switch and expects to meet its previously stated goal of shipping more than $50 million of CoreDirector systems in the calendar year to service providers like Genuity and Broadwing, both of which recently announced initial deployments of this intelligent optical switching system. By the end of its fiscal first quarter, CIENA expects to have made commercial shipments to 10 CoreDirector customers. CoreDirector is believed to be the only next-generation optical switching system currently available that is designed to enable carriers to replace legacy cross-connects and SONET gear - saving valuable capital cost and space in over-crowded central offices - while offering a smooth transition from static, cumbersome cum·ber·some adj. 1. Difficult to handle because of weight or bulk. See Synonyms at heavy. 2. Troublesome or onerous. cum legacy networks to simpler, more agile, intelligent optical networks. CoreDirector's scalability How much a system can be expanded. See scalable. scalability - How well a solution to some problem will work when the size of the problem increases. For example, a central server of some kind with ten clients may perform adequately but with a thousand clients it , flexibility, and advanced networking capabilities are designed to enable carriers to dramatically reduce the cost of deploying, operating and scaling optical service networks while enabling point-and-click point-and-click adj. Computer Science Allowing the activation of commands by moving the cursor over certain areas or icons and clicking a pointing device: a webpage with point-and-click access to other sites. provisioning of customizable 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). optical services. Long-Distance long-dis·tance adj. 1. Covering a long distance: a long-distance runner; operating under long-distance supervision. 2. Optical Transport CIENA continues to extend its technological and market leadership in long-distance optical transport solutions utilizing dense wavelength division multiplexing See WDM. , targeting delivery of more optical channels over further distances. During the quarter CIENA announced advances in internally produced in-fiber Bragg grating See fiber Bragg grating. and filter technologies which CIENA believes will make it possible for service providers to more than double the capacity of their optical networks without the addition of costly optical amplifiers A device that boosts light signals in an optical fiber network. Unlike regenerators, which have to convert light to electricity in order to amplify it and then convert it back again to light, the optical amplifier amplifies the light signal itself. . In addition, CIENA has received orders for the ultra ultra Member of the extreme right (ultraroyalist) wing of the royalist movement in the French Bourbon Restoration (1815–30). The ultras included large landowners, clericalists, and the former émigré nobility. long-haul long haul n. 1. A long distance: It is a long haul from New York to Los Angeles. 2. A long period of time: Over the long haul the candidates performed well. feature set for its CoreStream platform and expects to begin commercial shipments of this new feature during its fiscal first quarter. Metropolitan Optical Transport During the quarter, CIENA saw robust growth from its line of metropolitan optical networking products, with revenue from its MultiWave Metro(TM) product family approaching 10 percent of total revenue for the quarter. CIENA recognized revenue from two new MultiWave Metro customers during the fourth quarter. Business Outlook Commenting on CIENA's business outlook Nettles said: "With products addressing three separate potential markets: long-distance optical transport, metropolitan optical transport and intelligent optical switching, we believe that CIENA has a significant opportunity. Provided we continue to execute, we expect our business will continue to grow faster than the overall market. As a result, we are raising our revenue guidance and believe we will be able to achieve fiscal year 2001 revenue growth of between 75 and 85 percent over fiscal year 2000. Going forward, our challenge will be remaining focused on execution while identifying and acting rapidly on new opportunities to expand our customer base and network presence." Live Web Broadcast of Q4 and Fiscal Year Results Discussion In conjunction with this announcement, as previously announced, CIENA will host a discussion of its fourth fiscal quarter and fiscal year's results with investors and financial analysts on Thursday Thursday: see week. , December 7, 2000 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 Investor relations The process by which the corporation communicates with its investors. page of CIENA's website at: www.CIENA.com/investors. ABOUT CIENA CIENA Corporation's market-leading intelligent optical networking 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 belief that CIENA stands to be one of the primary beneficiaries as service providers begin to shift spending away from legacy solutions toward next- generation, optical networking solutions, that CIENA is poised to capitalize on a dramatic market shift that appears to be underway, that service providers worldwide are realizing the capital savings and operational benefits associated with moving away from closed, legacy, TDM-based solutions to open, next-generation intelligent optical networking, that CIENA believes it is uniquely positioned to take advantage of the shift, that upon completion of Dynegy's purchase of iaxis, CIENA expects to provide Dynegy with in excess of $50 million in CoreStream systems in the first year, that CIENA expects to ship more than $50 million of CoreDirector systems in the calendar year to service providers like Genuity and Broadwing, that by the end of its first fiscal quarter, CIENA expects to have made commercial shipments to 10 CoreDirector customers, that CoreDirector is the only next-generation optical switch product currently available that is designed to enable carriers to replace legacy cross-connects and SONET gear - saving valuable capital cost and space in over-crowded central offices - while offering a smooth transition from static, cumbersome legacy networks to simpler, more agile, intelligent optical networks, that CoreDirector is designed to enable carriers to dramatically reduce the cost of deploying, operating and scaling optical service networks while enabling point-and-click provisioning of customizable broadband optical services, that advances in CIENA's internally produced in-fiber Bragg grating and filter technologies will make it possible for service providers to more than double the capacity of their optical networks without the addition of costly optical amplifiers, that CIENA expects to begin commercial shipments of the ultra long-haul feature set of CoreStream during its fiscal first quarter, that with three separate potential markets: long-distance optical transport, metropolitan optical transport and intelligent optical switching, CIENA has a significant opportunity, that CIENA expects its business will continue to grow faster than the overall market and that the Company will be able to achieve fiscal year 2001 revenue growth of between 75 and 85 percent over fiscal year 2000 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 Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. 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-K filed with the Securities and Exchange Commission on December 7, 2000. 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. (1) All earnings per share amounts represent diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of as defined within Statement of Financial Accounting Standards NO. 128 (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 128). (Pro Forma Condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Statements of Operations, Consolidated Statement of Operations See Income statement. and Consolidated Balance Sheets consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. follow)
CIENA CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Excluding provision for doubtful accounts, settlement of accrued
contract obligation, payroll tax on stock option exercises and
merger-related costs
(in thousands, except per share data)
Quarter Ended Year Ended
--------------------- ----------------------
Oct. 31, Oct. 31, Oct. 31, Oct. 31,
1999 2000 1999 2000
--------- --------- --------- ---------
Revenue $ 141,352 $ 287,590 $ 482,085 $ 858,750
Cost of goods sold 83,392 158,013 299,769 477,393
--------- --------- --------- ---------
Gross profit 57,960 129,577 182,316 381,357
--------- --------- --------- ---------
Operating expenses:
Research and
development 29,927 36,027 104,641 127,791
Selling and
marketing 18,064 26,406 61,603 88,690
General and
administrative 6,418 9,417 22,736 31,843
--------- --------- --------- ---------
Total operating
expenses 54,409 71,850 188,980 248,324
--------- --------- --------- ---------
Income (loss)
from operations 3,551 57,727 (6,664) 133,033
Other income
(expense), net 3,568 3,436 13,944 12,680
--------- --------- --------- ---------
Income before
income taxes 7,119 61,163 7,280 145,713
Provision for
income taxes 2,456 19,878 2,512 47,357
--------- --------- --------- ---------
Net income $ 4,663 $ 41,285 $ 4,768 $ 98,356
========= ========= ========= =========
Basic net income
per common share $ 0.02 $ 0.14 $ 0.02 $ 0.35
========= ========= ========= =========
Diluted net
income per common
share and
Dilutive potential
common share $ 0.02 $ 0.14 $ 0.02 $ 0.33
========= ========= ========= =========
Weighted average
basic common
shares
outstanding 267,616 285,177 267,042 281,621
========= ========= ========= =========
Weighted average
basic common and
dilutive potential
Common shares
outstanding 290,604 301,582 289,431 299,662
========= ========= ========= =========
The above pro forma results have been adjusted to exclude the
following items:
Quarter Ended Year Ended
------------------- -------------------
Oct. 31, Oct. 31, Oct. 31, Oct. 31,
1999 2000 1999 2000
-------- -------- -------- --------
Provision for
doubtful accounts $ 250 $ 19,222 $ 250 $ 28,010
Settlement of
accrued contract
obligation -- -- -- (8,538)
Payroll tax on
stock option
exercises -- 3,773 -- 5,667
Merger related costs -- -- 13,021 --
-------- -------- -------- --------
Net effect of
pro forma
adjustments $ 250 $ 22,995 $ 13,271 $ 25,139
======== ======== ======== ========
The net income per share and number of shares used in the per
share calculation for all periods represented reflect the two-for-one
stock split effected September 18, 2000.
CIENA CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Including provision for doubtful accounts, settlement of accrued
contract obligation, payroll tax on stock option exercises and
merger-related costs
(in thousands, except per share data)
Quarter Ended Year Ended
--------------------- ----------------------
Oct. 31, Oct. 31, Oct. 31, Oct. 31,
1999 2000 1999 2000
--------- --------- --------- ---------
Revenue $ 141,352 $ 287,590 $ 482,085 $ 858,750
Cost of goods sold 83,392 158,013 299,769 477,393
--------- --------- --------- ---------
Gross profit 57,960 129,577 182,316 381,357
--------- --------- --------- ---------
Operating expenses:
Research and
development 29,927 36,027 104,641 127,791
Selling and
marketing 18,064 26,406 61,603 88,690
General and
administrative 6,418 9,417 22,736 31,843
Provision for
doubtful accounts 250 19,222 250 28,010
Settlement of
accrued contract
obligation -- -- -- (8,538)
Payroll tax on
stock option
exercises -- 3,773 -- 5,667
Merger related costs -- -- 13,021 --
--------- --------- --------- ---------
Total operating
expenses 54,659 94,845 202,251 273,463
--------- --------- --------- ---------
Income (loss)
from operations 3,301 34,732 (19,935) 107,894
Other income
(expense), net 3,568 3,436 13,944 12,680
--------- --------- --------- ---------
Income (loss)
before income
taxes 6,869 38,168 (5,991) 120,574
Provision (benefit)
for income taxes 2,370 12,405 (2,067) 39,187
--------- --------- --------- ---------
Net income (loss) $ 4,499 $ 25,763 $ (3,924) $ 81,387
========= ========= ========= =========
Basic net income
(loss) per common
share $ 0.02 $ 0.09 $ (0.01) $ 0.29
========= ========= ========= =========
Diluted net income
(loss) per common
share and dilutive
potential common
share $ 0.02 $ 0.09 $ (0.01) $ 0.27
========= ========= ========= =========
Weighted average
basic common
shares outstanding 267,616 285,177 267,042 281,621
========= ========= ========= =========
Weighted average
basic common and
dilutive potential
common shares
outstanding 290,604 301,582 267,042 299,662
========= ========= ========= =========
The net income (loss) per share and number of shares used in the
per share calculation for all periods represented reflect the
two-for-one stock split effected September 18, 2000.
CIENA CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
October 31,
--------------------------
1999 2000
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 143,440 $ 143,187
Marketable debt securities 118,956 95,131
Accounts receivable
(net of allowance of
$1,703 and $29,581) 144,348 248,950
Inventories, net 79,608 141,279
Deferred income taxes 25,385 143,029
Prepaid expenses and other 21,262 41,438
----------- -----------
Total current assets 532,999 813,014
Equipment, furniture and
fixtures, net 125,252 189,231
Goodwill and other intangible
assets, net 12,635 9,049
Other assets 6,949 15,907
----------- -----------
Total assets $ 677,835 $ 1,027,201
=========== ===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 34,399 $ 70,250
Accrued liabilities 58,486 84,163
Income taxes payable 8,697 7,483
Deferred revenue 2,954 10,731
Other current obligations 992 712
----------- -----------
Total current liabilities 105,528 173,339
Deferred income taxes 36,953 39,145
Other long-term obligations 4,881 4,882
----------- -----------
Total liabilities 147,362 217,366
----------- -----------
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;
360,000,000 and 460,000,000 shares
authorized; 276,374,712 and
286,530,631 shares issued and
outstanding 2,764 2,865
Additional paid-in capital 358,700 557,257
Notes receivable from stockholders (210) (30)
Accumulated other comprehensive
income (40) (903)
Retained earnings 169,259 250,646
----------- -----------
Total stockholders' equity 530,473 809,835
----------- -----------
Total liabilities and stockholders'
equity $ 677,835 $ 1,027,201
=========== ===========
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