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CIENA to Record Charge in Fiscal Fourth Quarter Against Receivable
No Change To CIENA'S Future Revenue Expectations
LINTHICUM, Md., Sep 5, 2000 (BUSINESS WIRE) -- CIENA Corporation (Nasdaq: CIEN chart, msgs), today announced that it has been informed that an administration order has been issued by a London court against iaxis Limited, one of CIENA's European customers.
An administration order is similar to a filing for reorganization in the U.S. As a result of this order, up to $28.2 million in net accounts receivable currently owed CIENA from this customer may be uncollectible, and CIENA therefore expects to record a one-time charge related to a provision for doubtful accounts in its fourth fiscal quarter ending October 31, 2000.
Iaxis Limited is the optical networking customer that CIENA disclosed as having financial difficulties in CIENA's Form 10-Q, filed with the Securities and Exchange Commission on August 17, 2000. As was disclosed in the Form 10-Q, net outstanding receivables from iaxis represented approximately 13 percent of CIENA's net receivables as of July 31, 2000, or approximately $28.2 million.
CIENA previously had been informed that iaxis was working toward a sale of the company and received information about the administration order yesterday.
CIENA had no projections of future revenues from iaxis, either in the current quarter or in future quarters, and at this time believes that its accounts receivables from its other customers are fully collectible in accordance with their recorded amounts. In addition, this event does not impact CIENA's previously announced expectations for future revenue growth.
The impact of the charge on CIENA's net earnings per diluted share in its fourth fiscal quarter is expected to be up to approximately $0.13, or $0.06 on a post-split basis. CIENA has previously announced a two for one stock split payable on September 18, 2000.
"This situation is the result of issues particular to a single customer and is not indicative of our outlook for the optical networking industry," said Patrick Nettles, CIENA's president and chief executive officer. "While disappointing, this event does not change our outlook for continued robust sales growth across our intelligent optical networking product lines."
CIEN is down 10 at 220. |
