CIENA Reports Third Quarter Revenue of $128.8 Million, Net Income of $0.01 per Diluted Share, Exclusive of Merger Costs.LINTHICUM, Md.--(BUSINESS WIRE)--Aug. 19, 1999-- 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 $128.8 million for its third fiscal quarter ended July July: see month. 31, 1999, a sequential One after the other in some consecutive order such as by name or number. increase of 15.5% over the previous quarter's revenue of $111.5 million. For the same period a year ago, the Company reported revenue of $129.1 million. Net income for the third quarter, exclusive of merger-related costs of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $10.8 million associated with the acquisition of Omnia Omnia is the Latin plural of "all" and may refer to:
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 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 previous quarter of $0.5 million, 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 ($0.00), earnings per share, exclusive of merger-related costs associated with the Company's acquisition of Lightera Networks.(a) Pro forma net income for the same period a year ago totaled $13.8 million, or $0.10 per diluted share, once again, exclusive of merger-related and other one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. costs.(a) First Call consensus expectations for the third quarter 1999 were for a loss of $0.01 per diluted share. "Robust demand from a growing worldwide customer base helped drive CIENA's sequential revenue growth this 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 chief executive officer. "We're we're Contraction of we are. we're we are pleased to have met our goal of continued gross margin improvement, in part, due to the benefits of product cost-cutting efforts launched last year." For the nine months ended July 31, 1999, CIENA reported revenue of $340.7 million, compared with $416.9 million for the first nine months of 1998. For the first nine months of 1999, pro forma net income totaled $0.1 million, or breakeven ($0.00), earnings per diluted share, exclusive of merger-related costs. This compares to pro forma net income of $82.2 million, or $0.66 per diluted share, for the same period in 1998, again exclusive of merger-related and other one-time costs.(a) CIENA continued to broaden its customer base, recognizing revenue during the third quarter from a total of 18 optical transport customers, including recently announced customers Alltel ALLTEL Corporation (NYSE: AT) is an American telecommunications company with headquarters in Little Rock, Arkansas. Alltel provides wireless services to residential and business customers in 35 states. , Intermedia Intermedia - A hypertext system developed by a research group at IRIS (Brown University). , and RCN RCN n abbr (= Royal Canadian Navy) → kanadische Marine . This compares with just 10 revenue-generating customers in the same period a year ago and 14 in the previous quarter. CIENA has now delivered transport systems commercially to a total of 22 customers. Service-related revenues accounted for approximately 12.4% of the quarter's total revenue, with the Company recognizing service revenue from its base of more than 50 engineering, furnishing and installation customers. On July 1, 1999, CIENA added the third dimension to its LightWorks(TM) architecture with the completion of its acquisition of Omnia Communications, Inc. "CIENA is positioned to become a key strategic supplier for both new and incumbent carriers See ILEC. faced with growing traffic demands and escalating network operations stress," said Nettles. "Upon commercial availability of MultiWave EdgeDirector(TM) and MultiWave CoreDirector(TM), we believe CIENA, with its LightWorks architecture, will be unique in its ability to offer carriers the choice of either a comprehensive next-generation intelligent optical architecture - including transport, switching and service delivery - or the best-of-breed The best product of its type. Organizations often purchase software from different vendors in order to obtain the best-of-breed for each application area; for example, a human resources package from one vendor and an accounting package from another. solution in each of these three critical networking areas." Regarding CIENA's business outlook, Nettles said: "There appears to be a healthy market demand for optical transport equipment and we believe CIENA will win its fair share of that market. During the fourth quarter, we will ramp manufacturing for several significant new feature sets to our optical transport products. There are execution risks inherent in this effort, but we expect to deliver continued revenue growth and modest earnings improvement." Nettles concluded, "Once we successfully deliver MultiWave EdgeDirector and MultiWave CoreDirector commercially, we believe sales of these new products will contribute to help drive future revenue and earnings growth." NOTE TO 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 the appearance of healthy market demand for optical transport equipment and the expectation that CIENA will win its fair share of that market, expectations of continued revenue growth and modest earnings improvement, successful commercial delivery of MultiWave EdgeDirector(TM) and MultiWave CoreDirector(TM), as well as sales from MultiWave EdgeDirector and MultiWave CoreDirector contributing to help drive future revenue and earnings growth, 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 by such forward-looking statements, due to risks and uncertainties associated with the Company's business. The forward-looking statements should be considered in the context of these and other risk factors disclosed in the Company's report on Form 10-Q Form 10-Q See 10-Q. , as filed with the Securities and Exchange Commission on August 19, 1999. ABOUT CIENA CIENA Corporation's market-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. systems form the core for the new era of telecommunications networks A telecommunications network is a of telecommunications links and nodes arranged so that messages may be passed from one part of the network to another over multiple links and through various nodes. worldwide. CIENA's LightWorks(TM) architecture 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. (a) Past financial results have been restated to reflect 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: operating results of Lightera Networks, Inc. and Omnia Communications, Inc., acquired by CIENA in pooling transactions on March 31, 1999 and July 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 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).
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Quarter Ended Nine Months Ended
-----------------------------------------------
July 31, July 31, July 31, July 31,
1998 1999 1998 1999
-----------------------------------------------
Revenue $ 129,116 $ 128,826 $ 416,926 $ 340,733
Cost of goods sold 70,431 79,361 193,326 216,377
--------- --------- --------- ---------
Gross profit 58,685 49,465 223,600 124,356
--------- --------- --------- ---------
Operating expenses:
Research and
development 21,965 28,402 51,196 74,714
Selling and
marketing 12,937 16,839 34,019 43,539
General and
administrative 4,186 5,433 12,927 16,318
Purchased research
and development -- -- 9,503 --
Pirelli litigation 20,579 -- 30,579 --
Merger related
costs 2,017 10,768 2,017 13,021
--------- --------- --------- ---------
Total operating
expenses 61,684 61,442 140,241 147,592
--------- --------- --------- ---------
Income (loss)
from operations (2,999) (11,977) 83,359 (23,236)
Interest and
other income, net 2,840 3,692 10,058 10,786
Interest expense (71) (200) (242) (410)
--------- --------- --------- ---------
Income (loss)
before income
taxes (230) (8,485) 93,175 (12,860)
Provision
(benefit) for
income taxes 20 (2,928) 40,337 (4,437)
--------- --------- --------- ---------
Net income (loss) $ (250) $ (5,557) $ 52,838 $ (8,423)
========= ========= ========= =========
Basic net
income (loss)
per common share $ (0.00) $ (0.04) $ 0.47 $ (0.06)
========= ========= ========= =========
Diluted net
income (loss) per
common share and
dilutive potential
common share $ (0.00) $ (0.04) $ 0.43 $ (0.06)
========= ========= ========= =========
Weighted average
basic common
shares outstanding 121,820 133,016 113,602 132,712
========= ========= ========= =========
Weighted average
basic common and dilutive
potential common shares
outstanding 121,820 133,016 124,130 132,712
========= ========= ========= =========
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
October 31, July 31,
1998 1999
----------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 250,714 $ 142,599
Marketable debt securities 15,993 155,657
Accounts receivable, net 85,472 103,156
Inventories, net 70,908 64,638
Deferred income taxes 16,421 19,324
Prepaid income taxes 11,688 --
Prepaid expenses and other 4,728 11,804
--------- ---------
Total current assets 455,924 497,178
Equipment, furniture
and fixtures, net 125,767 128,333
Goodwill and other
intangible assets, net 16,270 13,544
Other assets 4,848 5,842
--------- ---------
Total assets $ 602,809 $ 644,897
========= =========
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Accounts payable $ 27,893 $ 30,467
Accrued liabilities 34,437 48,786
Income taxes payable -- 4,661
Deferred revenue 1,084 3,697
Other current obligations 1,205 1,164
--------- ---------
Total current liabilities 64,619 88,775
Deferred income taxes 34,125 36,766
Other long-term obligations 3,029 3,962
--------- ---------
Total liabilities 101,773 129,503
--------- ---------
Commitments and contingencies -- --
Stockholders' equity:
Preferred stock - par value
$.01; 20,000,000 shares authorized;
zero shares issued and outstanding -- --
Common stock - par value
$.01; 360,000,000 shares
authorized; 134,605,491 and
137,263,120 shares issued
and outstanding 1,346 1,373
Additional paid-in capital 328,821 351,029
Notes receivable from stockholders (586) (280)
Cumulative translation adjustment (107) 133
Retained earnings 171,562 163,139
--------- ---------
Total stockholders' equity 501,036 515,394
--------- ---------
Total liabilities and stockholders'
equity $ 602,809 $ 644,897
========= =========
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