CIENA announces quarterly results.

LINTHICUM, Md.--(BUSINESS WIRE)--May 22, 1997--CIENA Corp. (NASDAQ:CIEN) today announced results of operations for its second fiscal quarter ended April 30, 1997.

Revenues for the quarter were $86.7 million, and gross profit was $54.7 million. Operating expenses were $11.3 million, resulting in income from operations of $43.4 million. Net income was $27.6 million, or on a pro froma basis, 26 cents per share. For the comparable quarter ended April 30, 1996, the company had no revenue, operating expenses of $3 million, and a net loss of $2.7 million, or, on a pro forma basis, a net loss of 3 cents per share.

The company also indicated that its overall facilities expansion plans were proceeding generally on schedule. Total employees reached 443 by the end of the quarter, an increase of 142 from Jan. 31, 1997.

The company indicated that revenues from sales of its MultiWave(TM) 1600 systems in the second quarter were again derived almost entirely from its two major customers, Sprint and WorldCom, with the majority of those revenues derived from Sprint. Patrick Nettles, president and CEO of CIENA, commented: "We're very pleased our manufacturing operation was able to keep pace with larger volume delivery commitments to our customers. On-time delivery is a top priority for our customers and prospective customers, and our ability to ramp up our production capacity has been very important to them. With our Savage facility now being converted entirely to manufacturing, and our second Linthicum facility expected by the end of the third fiscal quarter to provide enhanced system engineering and customer service capabilities, we feel confident we can continue to meet our customer expectations. Going forward, we also expect our manufacturing expansion will give us the ability to pursue pilot production efforts in support of new products without disrupting normal production, which is very important to the company's future development."

"We're obviously delighted with our quarter-to-quarter revenue growth (53.9 million in the first quarter compared to $86.7 million in the second)," Nettles noted. "We're confident that our existing customer base and expanded manufacturing capacity will enable us to continue to grow significantly, though we don't currently expect to grow at the same quarter to quarter percentage rates we've experienced to date. Looking beyond just the next quarter, our emphasis continues to be on the development of new customer relationships, while continuing to build a world-class support and service organization for our existing customers."

The company also announced that Goldman Sachs & Co., acting on behalf of the underwriters for the company's initial public offering, has agreed to release 10% of the approximately 88 million shares which are subject to lock up agreements due to expire Aug. 7, 1997. The release applies on a pro rata basis to the holdings of each locked up stockholder, and will be effective with the opening of trading on Tuesday, May 27, 1997.

In a separate release today, CIENA also announced the second generation version of the MultiWave(TM) 1600 system, called the MultiWave Sentry.

CIENA Corp. is a leading supplier of dense wavelength division multiplexing ("DWDM") systems to long distance fiberoptic telecommunications carriers. CIENA's DWDM systems alleviate capacity constraints and enable flexible provisioning of additional bandwidth on high-traffic routes in carriers' networks. Additional information on the company can be found on its World Wide Web site: http://www.CIENA.com. -0- NOTE: Forward-looking statements in this release, including statements regarding the status of expansion plans, the ability to meet customer expectations, the efforts to build a support and service organization, and the rate of future growth, are based on information available to the company as of the date hereof. 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 independence on its major customers, the recent introduction of its products, and the overall management of its expansion. The forward-looking statements should be considered in the context of these and other risk factors disclosed in the company's report on Form 8-K, as filed with the Securities and Exchange Commission on Feb. 19, 1997, as supplemented by the discussion of risk considerations in the company's Quarterly Report on Form 10-Q, as filed with the Securities and Exchange Commission on May 22, 1997. -0-

                           CIENA CORP.
             CONSOLIDATED STATEMENTS OF OPERATIONS
             (in thousands, except per share data)
                           (unaudited)

                                Quarter Ended  Six Months Ended
                                   April 30        April 30
                                     1997            1997

Revenue                            $ 86,669      $ 140,602
Costs of goods sold                  32,008         52,840
  Gross profit                       54,661         87,762

Operating expenses
  Research and development            4,699          7,749
  Selling and marketing               4,485          7,083
  General and administrative          2,106          8,401
    Total operating expenses         11,290         23,233

Income (loss) from operations        43,371         64,529

Interest and other income             1,968          2,360

Interest expense                        (91)          (193)

Income (loss) before income taxes    45,248         66,696

Provision for income taxes           17,646         26,011

Net income (loss)                    27,602         40,685

Pro forma net income (loss)
  per common and common            $   0.26       $   0.40
  equivalent share

Pro forma weighted average
  common and common equivalent
  shares outstanding                104,457        101,493


                            Ciena Corp.
                   Consolidated Balance Sheets
              (in thousands, except per share data)


                                          April 30,
                                            1997
                                        (unaudited)
                   ASSETS
Current assets:
 Cash and cash equivalents                $180,791
 Accounts receivable, net                   31,187
 Inventories, net                           22,859
 Deferred income taxes                       4,308
 Prepaid expenses and other                  1,108
  Total current assets                     240,253
Equipment, furniture and fixtures, net      36,092
Other assets                                   392
  Total assets                            $276,737

LIABILITIES, MANDATORILY REDEEMABLE
 PREFERRED STOCK AND STOCKHOLDERS'
 EQUITY

Current Liabilities:
 Current installments of capital
  lease obligations                          $ 988
 Accounts payable                           15,150
 Accrued liabilities                        21,268
 Income taxes payable                       10,246
 Deferred revenue                              652
  Total current liabilities                 48,304
 Capital lease obligations,
  less current installments                  1,691
 Deferred income taxes                      17,560
 Deferred rent                                 585
  Total liabilities                         68,140
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; 180,000,000
  shares authorized; 13,191,585 and
  96,241,858 shares issued and
  outstanding                                  962
 Additional paid-in capital                162,502
 Notes receivable from stockholders           (111)
 Retained earnings                          45,244
  Total stockholders' equity               208,597
Total liabilities and stockholders'
 equity                                   $276,737

CONTACT: CIENA Corp., Linthicum

Joseph R. Chinnici, 410/865-8500