CIENA Reports Second Quarter Revenue of $185.7 Million, Net Income of $0.12 per Diluted Share.Business Editors LINTHICUM, Md.--(BUSINESS WIRE)--May 18, 2000 MultiWave CoreDirector(TM), CIENA's Intelligent Optical Core Switch, Now in Seven Trials 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 $185.7 million for its second fiscal quarter ended April 30, 2000. The results represent revenue growth of more than 20 percent over the Company's fiscal first quarter results of $152.2 million, and an increase of more than 66 percent as compared to the same period a year ago when the Company reported revenue of $111.5 million. Net income for the second quarter was $18.4 million, or $0.12 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 compares with net income for the previous quarter of $9.1 million, or $0.06 per diluted share. For the same period in fiscal 1999, the Company reported net income of $0.5 million, exclusive of one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charges, or breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations , or $0.00 per diluted share. Consensus of First Call estimates for second quarter fiscal 2000 EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. was $0.10 per diluted share. "Increased customer demand for rapid delivery of CIENA's industry-leading 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. equipment and our successful execution on deployment for new customers are the primary reasons behind our robust performance in the second quarter," said 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. , CIENA's president 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. . For the six months ended April 30, 2000, CIENA reported revenue of $337.9 million, an increase of approximately 60 percent over revenue of $211.9 million for the first half of 1999. For the first six months of 2000, net income totaled $27.5 million, or $0.18 per diluted share. This compares with a net loss of $1.4 million, exclusive of one-time charges, or a loss of $0.01 per diluted share for the same period in 1999.(1) (1) Past financial results have been restated to reflect the consolidated operating results of Lightera Networks, Inc. and Omnia Omnia is the Latin plural of "all" and may refer to:
transactions on March 31, 1999 and July July: see month. 1, 1999, respectively. Net income and earnings per share amounts in the attached consolidated statement of operations See Income statement. are inclusive of inclusive of prep. Taking into consideration or account; including. the effects of merger-related and other one-time charges. All earnings per share amounts represent diluted earnings per share 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). CIENA also announced that its MultiWave CoreDirector(TM), the industry's first intelligent optical core switch, is now in trials with a total of seven service providers. "Our CoreDirector trials are progressing well and indications from customers are that we've we've Contraction of we have. we've have got considerable first-mover advantage First-mover advantage is the advantage gained by the initial occupant of a market segment. This advantage may stem from the fact that the first entrant can gain control of resources that followers may not be able to match. in this exciting new space," said Nettles. CIENA disclosed that it already has received conditional commitments for CoreDirector purchases from two customers and expects to begin commercial shipments during its fiscal third quarter. During the quarter, CIENA began volume commercial shipments of its 10-gigabit per second feature set for its MultiWave CoreStream(TM) long-distance long-dis·tance adj. 1. Covering a long distance: a long-distance runner; operating under long-distance supervision. 2. optical transport product. CIENA's CoreStream platform is capable of mixed 2.5 and 10 gigabit per second transmission speeds, includes ultra-long haul transmission features and will scale to carry up to two terabits per second of traffic. CIENA continues to expand its customer base, recognizing revenue during the second quarter from a total of 22 optical networking customers, an increase of 69 percent over 13 revenue-generating customers in the same period a year ago. In addition to Qwest (Qwest Communications International Inc., Denver, CO, www.qwest.com) A telecommunications company that offers services to telecom carriers, businesses and homes using an extensive fiber-optic network throughout the U.S. and Mexico. , CIENA's second quarter included revenue from another new customer which has yet to be announced To be announced (TBA) A contract for the purchase or sale of an MBS to be delivered at an agreed-upon future date but does not include a specified pool number and number of pools or precise amount to be delivered. . Commenting on CIENA's business outlook, Nettles said, "Our visibility into orders for the third quarter and the balance of the fiscal year is very good. In addition to substantial interest in CoreDirector, we're we're Contraction of we are. we're we are seeing growing demand for our long-distance transport and metropolitan optical networking equipment. We expect sales of these products to drive strong sequential One after the other in some consecutive order such as by name or number. revenue growth in both our fiscal third and fourth quarters." "Investment in our business is critical 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>. the prospects for strong continued growth," said Nettles. "In addition to scaling our optical manufacturing capacity over the next several quarters, we'll we'll Contraction of we will. we'll we will or we shall we'll will ~shall also look to extend our sales, installation and support capabilities worldwide. Provided we do not experience an increase in competitive pricing pressure, we expect earnings per share growth slightly above current consensus expectations for the third and fourth quarters," said Nettles. "Service providers worldwide are acknowledging the capital and operational savings associated with optical networking - but cost savings are only a part of the story. With products like CoreDirector, our recently announced CoreDirector CI(TM), the service enablers in our LightWorks ToolKit An integrated set of software routines or utilities (tools) that are used to develop and maintain applications and databases. There are toolkits for developing almost anything. See tool, developer's toolkit, library, class library and CASE. (TM) and the optical network and service management capabilities provided by ON-Center(TM) , CIENA delivers optical-layer network intelligence, enabling new revenue-generating, market-differentiating optical services," concluded Nettles. ABOUT CIENA CIENA Corporation's market-leading 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 http://www.ciena.com. NOTE TO CIENA INVESTORS 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. in this release, including expectations that the Company will ship MultiWave CoreDirector in its fiscal third quarter, expectations that sales of long-distance transport and metropolitan optical networking equipment will drive strong growth in both the Company's fiscal third and fourth quarters, expectations of earnings per share growth slightly above current consensus expectations for the Company's third and fourth quarters, and expectations for future development of its products, 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 May 18, 2000. (Consolidated Statements of Operations 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 Six Months Ended
---------------------- ---------------------
April 30, April 30, April 30, April 30,
1999 2000 1999 2000
--------- --------- --------- ---------
Revenue $ 111,490 $ 185,679 $ 211,907 $ 337,892
Cost of goods
sold 71,238 104,205 137,016 191,208
--------- --------- --------- ---------
Gross profit 40,252 81,474 74,891 146,684
--------- --------- --------- ---------
Operating
expenses:
Research and
development 24,094 29,965 46,312 59,707
Selling and
marketing 13,092 20,331 26,700 38,453
General and
administrative 5,849 7,176 10,885 14,047
Merger costs 2,253 -- 2,253 --
--------- --------- --------- ---------
Total operating
expenses 45,288 57,472 86,150 112,207
--------- --------- --------- ---------
Income (loss) from
operations (5,036) 24,002 (11,259) 34,477
Interest and other
income (expense),
net 3,698 3,357 7,094 6,403
Interest expense (115) (89) (210) (185)
--------- --------- --------- ---------
Income (loss)
before income
taxes (1,453) 27,270 (4,375) 40,695
Provision (benefit)
for income taxes (468) 8,863 (1,509) 13,226
--------- --------- --------- ---------
Net income (loss) $ (985) $ 18,407 $ (2,866) $ 27,469
========= ========= ========= =========
Basic net income
(loss) per common
share $ (0.01) $ 0.13 $ (0.02) $ 0.20
========= ========= ========= =========
Diluted net income
(loss) per common
share and dilutive
potential common
share $ (0.01) $ 0.12 $ (0.02) $ 0.18
========= ========= ========= =========
Weighted average
basic common shares
outstanding 132,530 140,081 132,041 139,300
========= ========= ========= =========
Weighted average
basic common and
dilutive potential
common shares
outstanding 132,530 149,563 132,041 148,977
========= ========= ========= =========
CIENA CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(unaudited)
October 31, April 30,
1999 2000
----------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 143,440 $ 90,004
Marketable debt securities 118,956 147,137
Accounts receivable, net 144,348 197,771
Inventories, net 79,608 107,566
Deferred income taxes 25,385 26,605
Prepaid income taxes -- 15,735
Prepaid expenses and other 21,262 31,502
--------- ---------
Total current assets 532,999 616,320
Equipment, furniture and fixtures, net 125,252 146,109
Goodwill and other intangible assets, net 12,635 10,817
Other assets 6,949 7,588
--------- ---------
Total assets $ 677,835 $ 780,834
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 34,399 $ 42,629
Accrued liabilities 58,486 78,446
Income taxes payable 8,697 --
Deferred revenue 2,954 1,294
Other current obligations 992 722
--------- ---------
Total current liabilities 105,528 123,091
Deferred income taxes 36,953 36,953
Other long-term obligations 4,881 5,002
--------- ---------
Total liabilities 147,362 165,046
--------- ---------
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 shares
authorized; 138,187,356 and
141,165,194 shares issued
and outstanding 1,382 1,412
Additional paid-in capital 360,082 417,855
Notes receivable from stockholders (210) (31)
Accumulated other comprehensive
income (40) (176)
Retained earnings 169,259 196,728
--------- ---------
Total stockholders' equity 530,473 615,788
--------- ---------
Total liabilities and stockholders'
equity $ 677,835 $ 780,834
========= =========
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