Corvis Corporation Reports Financial Results for the First Quarter
COLUMBIA, Md., April 25 /PRNewswire-FirstCall/ -- Corvis Corporation (Nasdaq: CORV - news), a leading provider of intelligent optical networking solutions, today reported financial results for its first quarter ended March 30, 2002. Revenues for the first quarter of $8.7 million were generated by sales and services under the company's contracts with Broadwing Communications, Inc., Williams Communications and Telefonica of Spain.
``Despite some modest improvement in the overall economy, the near-term environment and visibility remains difficult for our sector,'' said Dr. David Huber, president and CEO. ``However, we are pleased with the continued high level of interest in our advanced optical networking product suite from the major global telecommunications service providers.''
Pro forma net loss for the current quarter was $41.3 million, or $0.11 loss per share, excluding restructuring and other charges, intangible assets amortization expense and equity-based expense compared with a pro forma net loss of $23.0 million, or $0.07 loss per share for the first quarter of 2001. Reported net loss was $71.0 million, or $0.20 loss per share, for the current quarter as compared with a reported net loss of $100.8 million, or $0.29 loss per share for the first quarter of 2001.
``Corvis continued to make the necessary strategic decisions in the first fiscal quarter to adjust our business to current market realities, '' said Lynn Anderson, senior vice president, chief financial officer and treasurer. ``Our focus on financial discipline combined with selective investments in research and development will allow us to maintain our leadership position in delivering next-generation optical networking solutions.''
First Quarter Restructuring and Other Charges
In the first quarter, Corvis recorded restructuring and other charges totaling $6.9 million.
These charges were comprised of the following:
-- a $4.3 million charge associated with a write-down of excess and
obsolete materials, excess purchase commitments, and the
discontinuance of certain product lines
-- a $2.6 million charge related to recent workforce reductions,
consolidation of excess facilities, and the write-down of idle
equipment
First Quarter Highlights
-- On January 29, 2002, Corvis announced that it has signed a definitive
merger agreement to acquire Dorsal Networks, a privately held provider
of next-generation transoceanic and regional undersea optical network
solutions. The transaction will be voted on by Corvis' shareholders
at its annual meeting on May 10, 2002 in Baltimore, MD.
-- On March 20, 2002, Corvis introduced its second generation all-optical
switch, the Corvis OS. With 80 percent reductions in footprint and
power consumption over the first generation Corvis all-optical switch,
as well as substantial capital cost reductions, the second generation
Corvis OS products have been designed to allow carriers to migrate
their network topologies from a collection of point-to-point links, to
linear and ring networks, to an all-optical mesh network, while they
are in service, without any network interruptions.
Recent Events
-- On April 24, 2002, Corvis announced that Broadwing Communications will
begin lab tests on the Corvis Optical Convergence Switch (OCS). The
Corvis OCS is an integral part of the growing Corvis portfolio of
optical networking solutions that enable carriers to expand revenue
sources by offering advanced, flexible, next-generation wavelength
services to their customers.
-- On April 24, 2002, Corvis announced that it has amended its existing
contract with Qwest Communications. This contract is for Corvis' ON
transport and switching product suite and amends the companies'
previously announced contract.
-- On April 25, 2002, Corvis announced that France Telecom has upgraded
one if its network links using Corvis' next-generation repeaterless
festoon product. This 4 x 2.5 Gbps link, which now connects the
French mainland to the island of Corsica, will provide France Telecom
with 4 times more capacity than their current network technology,
resulting in a lower cost per bit of information. The deployment of
this link is part of a multi-year agreement with France Telecom signed
in June 2001 and was previously announced as Corvis' unnamed global
carrier. We expect revenue recognition from this contract in the
second fiscal quarter 2002.
-- On April 25, 2002, Institutional Shareholder Services (ISS) released a
report recommending approval of Corvis' proposed merger with Dorsal
Networks. The ISS recommendation to its clients follows a thorough
analysis of the merger and its potential impact on institutional
shareholder value. ISS analyzes proxy issues and provides vote
recommendations for more than 8,500 U.S. shareholder meetings each
year.
Webcast Information
In conjunction with this announcement, Corvis will host a conference call discussing its first quarter financial results, customer updates and other important information today at 5:30 p.m. EDT. The live broadcast of the conference will be available via Corvis' website, www.corvis.com. An archived audio of the conference call will also be available for replay purposes through the Corvis website.
About Corvis
From point-to-point links to all-optical networks, Corvis Corporation delivers innovative optical network solutions that drive carrier profitability faster than any other vendor. Corvis continues to demonstrate optical leadership with numerous industry firsts, including the first and only commercial all-optical network and integrated all-optical switches, the first to transmit over 6000 km without costly electronic regeneration and first to deploy Raman amplification commercially. Corvis' innovative solutions enable carriers to provision new wavelength-based services rapidly and to tailor dynamic service level agreements for rapid revenue generation. Corvis' future-ready product portfolio solves carrier network challenges with scalable, robust solutions that reduce capital and operating expenditures. With offices across North America and Europe, Corvis operates Research and Development centers of excellence at its global headquarters in Columbia, Maryland, and in Lannion, France. For more information, call Corvis at (443) 259-4000 or visit www.corvis.com.
Corvis and the Corvis logo are trademarks and/or service marks of the Corvis Corporation. All other trademarks are the property of their respective owners.
Note: This announcement contains certain forward-looking statements that are subject to risks and uncertainties. Actual results could differ materially from those currently anticipated as a result of a number of factors, including, but not limited to, the risks and uncertainties discussed under ``Risk Factors'' and ``Management's Discussion and Analysis of Financial Condition and Results of Operations'' in the Company's filings with the Securities and Exchange Commission.
Corvis Contact: Corvis Contact:
Investor Relations Public Relations
Andrew G. Backman Keira N. Shein
(443) 259-4600 (443) 259-4006
Fax: (301) 310-3134 Fax: (443) 259-4798
pr@corvis.com investorinformation@corvis.com
CORVIS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
Quarter Ended
March 30, 2002 March 31, 2001
(Unaudited) (Unaudited)
Revenues $8,717 $84,086
Cost of sales 10,796 52,903
Gross profit (2,079) 31,183
Operating expenses:
Research and development 29,058 40,975
Sales and marketing 11,205 15,412
General and administrative 6,045 10,979
Goodwill and other intangible
assets amortization expense
2,917 52,245
Equity-based expense 19,956 25,633
Restructuring and other charges 2,559 -
Operating loss (73,819) (114,061)
Interest and other income, net 2,783 13,232
Net loss $(71,036) $(100,829)
Weighted average number of common
shares outstanding (in thousands) 360,710 342,359
Basic and diluted net loss per
common share $(0.20) $(0.29)
CORVIS CORPORATION
PRO FORMA
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (a)
(Dollars in thousands, except per share data)
For Discussion Purposes Only
Quarter Ended
March 30, 2002 March 31, 2001
(Unaudited) (Unaudited)
Revenues $8,717 $84,086
Cost of sales 6,488 52,903
Gross profit 2,229 31,183
Operating expenses:
Research and development 29,058 40,975
Sales and marketing 11,205 15,412
General and administrative 6,045 10,979
Operating loss (44,079) (36,183)
Interest and other income, net 2,783 13,232
Pro forma net loss $(41,296) $(22,951)
Weighted average number of common
shares outstanding (in thousands) 360,710 342,359
Pro forma net loss per common share $(0.11) $(0.07)
(a) Pro forma results exclude restructuring and other charges, intangible assets amortization expense, purchased research and development expense and equity-based expense.
For the quarter ended March 30, 2002, restructuring and other charges of $6.9 million were recorded as $4.3 million to Cost of Sales, $2.6 million to Operating Expenses.
CORVIS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
March 30, 2002 December 29, 2001
Assets
Current assets:
Cash and cash equivalents $581,355 $638,872
Short term investments 30,999 21,907
Trade accounts receivable 37,153 33,676
Inventory, net 98,123 96,426
Other current assets 15,717 17,486
Total current assets 763,347 808,367
Restricted cash, non-current 2,409 2,417
Property and equipment, net 127,014 134,393
Goodwill and intangible assets, net 18,302 21,429
Other non-current assets 11,755 12,219
Total assets $922,827 $978,825
Liabilities and stockholders' equity
Total current liabilities $77,509 $81,862
Total liabilities 84,444 89,972
Total stockholders' equity * 838,383 888,853
Total liabilities and stockholders'
equity $922,827 $978,825
$0.01 per share par value; 1,900,000,000 authorized shares; 365,832,172 shares issued and outstanding as of 3/30/02; 362,687,909 shares issued and outstanding shares as of 12/29/01.
Corvis Contact: Corvis Contact:
Investor Relations Public Relations
Andrew G. Backman Keira N. Shein
(443) 259-4600 (443) 259-4006
Fax: (301) 310-3134 Fax: (443) 259-4798
investorinformation@corvis.com pr@corvis.com
SOURCE: Corvis Corporation |
