CIENA Reports Fourth Quarter Revenue of $367.8 Million, Adjusted Net Income of $0.05 per Diluted Share.Business Editors/Hi-Tech Writers LINTHICUM, Md.--(BUSINESS WIRE)--Dec. 13, 2001 Fiscal 2001 Revenue Increases 87% Over Fiscal 2000, Adjusted Net Income for Fiscal 2001 Increases 94% Over Fiscal 2000 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 $367.8 million for its fourth fiscal quarter ended October October: see month. 31, 2001. These results represent an increase of more than 27 percent as compared to the same period a year ago when the Company reported revenue of $287.6 million. Adjusted net income 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 for the fourth quarter, after excluding a goodwill impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge, 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, deferred stock compensation charges, payroll taxes 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 and amortization of intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. and goodwill was $17.1 million, or $0.05, earnings per diluted share. Reported, or GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , net loss for the period was $1,802.3 million, or a loss of $5.51 per diluted share.(1) For the twelve months ended October 31, 2001, CIENA reported revenue of $1,603.2 million, an increase of 87 percent over revenue of $858.8 million for fiscal year 2000. For the fiscal year 2001, exclusive of a goodwill impairment charge, restructuring costs, deferred stock compensation charges, in-process research and development, 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 obligations, payroll taxes on stock option exercises and amortization of intangibles and goodwill, CIENA's adjusted net income totaled $195.3 million, or $0.60, earnings per diluted share, an increase of 94 percent compared to fiscal year 2000 adjusted net income of $100.8 million, or $0.34, earnings per diluted share. Reported, or GAAP, net loss for fiscal year 2001 was $1,794.1 million, or a loss of $5.75 per diluted share.(1) "Given the difficult telecom environment, we are very pleased with CIENA's performance in 2001," said Gary Smith Gary Smith may refer to:
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 five new customers in its fiscal fourth quarter, including AFN AFN Assembly of First Nations AFN American Forces Network AFN Ancestral File Number (FamilySearch genealogy records) AFN Alesco Financial Inc (stock symbol) AFN Alaska Federation of Natives and eAccess, as well as a previously unannounced MultiWave Metro The code name for Microsoft's XPS document format. See XML Paper Specification. (TM) customer, Teleglobe. Business Outlook "The telecom industry is facing a dynamic and challenging market environment, the uncertainty of which has only been accentuated by the larger, overall economic slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. ," said CIENA's Smith. "We believe that the combination of CIENA's market-leading position, our compelling value proposition to carriers, our diverse and growing customer base, and our strong financial position enables us to make operating decisions differently than many of our competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. - we can play to win, not just to survive." "CIENA intends to use the current market uncertainty to our advantage by pursuing a strategy of sustained investment in our business," said Smith. "Where others in the industry have elected e·lect v. e·lect·ed, e·lect·ing, e·lects v.tr. 1. To select by vote for an office or for membership. 2. To pick out; select: elect an art course. to cut dramatically in attempts to preserve cash and merely survive the market downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. , we can continue to invest in strategic areas such as research and development and sales. We believe through sustained investment, particularly in these critical areas, we can extend our technology leadership and expand our market presence, firmly establishing ourselves as a winner when the market recovers." "Short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. , given the uncertainty in the market and the resulting unpredictability of quarterly revenues, our sustained investment strategy means that we will incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. ," concluded Smith. "CIENA has consistently operated with an eye toward the future. We remain committed to running our business profitably 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. and we will constantly reassess reassess Verb to reconsider the value or importance of reassessment n Verb 1. reassess - revise or renew one's assessment reevaluate the market to ensure our business strategies are aligned with dynamically changing market conditions." Live Web Broadcast of Q4 and Fiscal Year 2001 Results In conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with this announcement, CIENA will host a discussion of its fiscal fourth quarter and fiscal year 2001 results with investors and financial analysts on Thursday Thursday: see week. , December December: see month. 13, 2001 at 8:30 AM (Eastern). The live broadcast of the discussion will be available via CIENA's homepage See home page. 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 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 that the telecom industry is facing a dynamic and challenging market environment, the uncertainty of which has only been accentuated by the larger, overall economic slowdown, that we believe the combination of CIENA's market-leading position, our compelling value proposition to carriers, our diverse and growing customer base, and our strong financial position enables us to make operating decisions differently than many of our competitors, that we can play to win, not just to survive, that CIENA intends to use the current market uncertainty to our advantage by pursuing a strategy of sustained investment in our business, that where others in the industry have elected to cut dramatically in attempts to preserve cash and merely survive the market downturn, we can continue to invest in strategic areas such as research and development and sales, that we believe through sustained investment, particularly in these critical areas, we can extend our technology leadership and expand our market presence, firmly establishing ourselves as a winner when the market recovers, that short-term, given the uncertainty in the market and the resulting unpredictability of quarterly revenues, our sustained investment strategy means that we will incur operating losses, that CIENA has consistently operated with an eye toward the future, that we remain committed to running our business profitably long-term and we will constantly reassess the market to ensure our business strategies are aligned with dynamically changing market conditions, 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 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 the Company's Report on 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 with the Securities and Exchange Commission on December 13, 2001. 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) CIENA provides adjusted net income and as adjusted net income per share data to assist investors in their analysis of our operating results. 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, or an alternative for, 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) and may be different from the presentation of financial information provided by other companies. Adjusted net income and earnings per share as well as GAAP net income and earnings per share are presented in the 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 that accompany To go along with; to go with or to attend as a companion or associate. A motor vehicle statute may require beginning drivers or drivers under a certain age to be accompanied by a licensed adult driver whenever operating an automobile. this press release. (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 Statements of Operations, Adjusted 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
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Quarter Ended Year Ended
------------------------ ------------------------
Oct. 31, Oct. 31, Oct. 31, Oct. 31,
2000 2001 2000 2001
----------- ----------- ----------- -----------
Revenue $ 287,590 $ 367,774 $ 858,750 $ 1,603,229
Cost of goods
sold 158,013 221,554 477,393 904,549
----------- ----------- ----------- -----------
Gross profit 129,577 146,220 381,357 698,680
----------- ----------- ----------- -----------
Operating
expenses
Research and
development
(exclusive of
$0, $9,362,
$0, $17,825
deferred
stock
compensation
costs) 35,756 73,195 125,434 235,831
Sales and
marketing
(exclusive of
$0, $917, $0,
$8,336
deferred
stock
compensation
costs) 28,094 38,909 90,922 146,949
General and
administrative
(exclusive of
$10, $6,122,
$40, $15,206
deferred stock
compensation
costs) 10,854 15,143 33,960 57,865
Settlement of
accrued
contract
obligation - - (8,538) -
Deferred stock
compensation
costs 10 16,401 40 41,367
Amortization of
goodwill 800 75,873 3,197 177,786
Amortization of
intangible
assets 109 1,922 438 4,413
In-process
research and
development - - - 45,900
Restructuring
costs - 15,439 - 15,439
Goodwill
impairment - 1,719,426 - 1,719,426
Provision for
doubtful
accounts 19,222 - 28,010 (6,579)
----------- ----------- ----------- -----------
Total
operating
expenses 94,845 1,956,308 273,463 2,438,397
----------- ----------- ----------- -----------
Income (loss)
from
operations 34,732 (1,810,088) 107,894 (1,739,717)
Interest and
other income,
net 3,517 18,756 13,020 63,579
Interest
expense (81) (12,098) (340) (30,591)
----------- ----------- ----------- -----------
Income (loss)
before income
taxes 38,168 (1,803,430) 120,574 (1,706,729)
Provision
(benefit) for
income tax 12,405 (1,148) 39,187 87,333
----------- ----------- ----------- -----------
Net income
(loss) $ 25,763 $(1,802,282) $ 81,387 $(1,794,062)
=========== =========== =========== ===========
Basic net income
(loss) per
common share $ 0.09 $ (5.51) $ 0.29 $ (5.75)
=========== =========== =========== ===========
Diluted net
income (loss)
per common
share and
dilutive
potential
common share $ 0.09 $ (5.51) $ 0.27 $ (5.75)
=========== =========== =========== ===========
Weighted average
basic common
shares
outstanding 285,177 326,834 281,621 311,815
=========== =========== =========== ===========
Weighted average
basic common
and dilutive
potential
common shares
outstanding 301,582 326,834 299,662 311,815
=========== =========== =========== ===========
CIENA CORPORATION
ADJUSTED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Quarter Ended Year Ended
------------------------- -------------------------
Oct. 31, Oct. 31, Oct. 31, Oct. 31,
2000 2001 2000 2001
----------- ----------- ----------- -----------
Revenue $ 287,590 $ 367,774 $ 858,750 $ 1,603,229
Cost of goods
sold 158,013 221,554 477,393 904,549
----------- ----------- ----------- -----------
Gross profit 129,577 146,220 381,357 698,680
----------- ----------- ----------- -----------
Operating
expenses (1):
Research and
development 35,118 73,167 124,155 234,927
Sales and
marketing 26,406 38,903 88,691 146,659
General and
administrative 9,407 15,103 31,803 56,459
----------- ----------- ----------- -----------
Total
operating
expenses 70,931 127,173 244,649 438,045
----------- ----------- ----------- -----------
Income from
operations 58,646 19,047 136,708 260,635
Interest and
other income,
net 3,517 18,756 13,020 63,579
Interest
expense (81) (12,098) (340) (30,591)
----------- ----------- ----------- -----------
Income before
income taxes 62,082 25,705 149,388 293,623
Provision for
income tax 20,177 8,611 48,551 98,364
----------- ----------- ----------- -----------
Adjusted net
income $ 41,905 $ 17,094 $ 100,837 $ 195,259
=========== =========== =========== ===========
Basic adjusted
net income per
common share $ 0.15 $ 0.05 $ 0.36 $ 0.63
=========== =========== =========== ===========
Diluted
adjusted net
income per
common share
and dilutive
potential
common share $ 0.14 $ 0.05 $ 0.34 $ 0.60
=========== =========== =========== ===========
Weighted average
basic common
shares
outstanding 285,177 326,834 281,621 311,815
=========== =========== =========== ===========
Weighted average
basic common
and dilutive
potential
common shares
outstanding 301,582 334,717 299,662 324,670
=========== =========== =========== ===========
(1) As adjusted
is exclusive
of the
following
charges:
Payroll tax on
stock options $ 3,773 $ 74 $ 5,667 $ 2,600
Settlement of
accrued contract
obligations -- -- (8,538) --
Deferred stock
compensation
costs 10 16,401 40 41,367
Amortization of
goodwill 800 75,873 3,197 177,786
Amortization of
intangible asset 109 1,922 438 4,413
In-process
research and
development -- -- -- 45,900
Restructure
costs -- 15,439 -- 15,439
Goodwill
impairment -- 1,719,426 -- 1,719,426
Provision for
doubtful
accounts 19,222 -- 28,010 (6,579)
Income tax
effect (7,772) (9,759) (9,364) (11,031)
----------- ----------- ----------- -----------
Net effect on
adjusted net
income $ 16,142 $ 1,819,376 $ 19,450 $ 1,989,321
=========== =========== =========== ===========
CIENA CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
October 31,
-------------------------
2000 2001
----------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 143,187 $ 397,890
Short-term investments 95,131 902,594
Accounts receivable (net of allowance
of $29,581 and $1,491) 248,950 395,063
Inventories, net 141,279 254,968
Deferred income taxes 143,029 186,861
Prepaid expenses and other 41,438 53,713
---------- ----------
Total current assets 813,014 2,191,089
Long-term investments -- 494,657
Equipment, furniture and fixtures, net 189,231 331,490
Goodwill and workforce, net 4,461 178,891
Other intangible assets, net 4,588 47,874
Other assets 15,907 73,300
---------- ----------
Total assets $1,027,201 $3,317,301
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 70,250 $ 68,735
Accrued liabilities 84,163 148,523
Income taxes payable 7,483 6,649
Deferred revenue 10,731 29,480
Other current obligations 712 995
---------- ----------
Total current liabilities 173,339 254,382
Deferred income taxes 39,145 64,072
Other long-term obligations 4,882 5,982
Convertible notes payable -- 863,883
---------- ----------
Total liabilities 217,366 1,188,319
---------- ----------
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;
460,000,000 and 980,000,000 shares
authorized; 286,530,631 and
328,022,264 shares issued and
outstanding . 2,865 3,280
Additional paid-in capital 557,257 3,667,512
Notes receivable from stockholders (30) (3,236)
Accumulated other comprehensive
income (903) 4,842
Retained earnings (deficit) 250,646 (1,543,416)
---------- ----------
Total stockholders' equity 809,835 2,128,982
---------- ----------
Total liabilities and
stockholders' equity $ 1,027,201 $ 3,317,301
========== ==========
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