Corvis Corporation Reports Financial Results for the Second Quarter
Continued Focus on Streamlining Business to Meet Current Market Conditions
COLUMBIA, MD July 25, 2002 -
Corvis Corporation (NASDAQ: CORV), a leading provider of intelligent optical networking solutions, today reported revenues of $3.0 million for its fiscal second quarter ended June 29, 2002, in-line with its previous guidance. Revenues for the second quarter were generated under the company's contracts with France Telecom, Broadwing Communications, Inc., and Williams Communications.
''While current business conditions remain difficult, we will continue to preserve our strong balance sheet and scale our operations accordingly without jeopardizing new product development initiatives or customer support,'' said Dr. David Huber, chairman and CEO.
Corvis continued its cost-cutting strategy over the quarter. During the quarter, the company aligned its U.S. operations with its current business objectives. These actions resulted in the elimination of approximately 70 positions. The company also announced that it is taking steps to reorganize its French subsidiary, Corvis-Algety. The company believes this action could involve the reduction of approximately 170 positions. The Corvis-Algety plan calls for the continuation of activities on a reduced basis with a focus primarily on research and development. Corvis is currently working with French government authorities and workers to ensure complete compliance with all local laws.
''Corvis continues to take decisive steps to streamline expenses and preserve cash for additional financial flexibility,'' said Lynn Anderson, senior vice president and CFO. ''We have successfully reduced our cash burn over the last six quarters and will continue to make the strategic decisions that we believe will set the stage for profitability in the years ahead.''
Reported net loss was $119.1 million, or $0.31 loss per share, for the current quarter as compared with a reported net loss of $821.8 million, or $2.36 loss per share, for the second quarter of 2001.
Pro forma net loss for the current quarter was $54.9 million, or $0.14 loss per share, excluding intangible assets amortization expense, equity-based expense, and restructuring and other charges compared with a pro forma net loss of $32.2 million, or $0.09 loss per share, for the second quarter of 2001.
During the quarter, Corvis recorded restructuring and other charges totaling $8.4 million. These charges were comprised of a $1.7 million charge associated with a write-down of inventory, a $1.8 million charge related to recent workforce reductions, consolidation of excess facilities, and the write-down of idle equipment, net of adjustments to prior estimates, and a $4.9 million charge associated with a write-down of certain strategic equity investments.
Quarterly Highlights
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On April 24, 2002, Corvis announced that Broadwing Communications would 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.
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On April 24, 2002, Corvis announced that it had 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.
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On April 25, 2002, Corvis announced that France Telecom has upgraded one of 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, which was signed in June 2001 and was previously announced as Corvis' unnamed global carrier.
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On May 15, 2002, Corvis announced the completion of the acquisition of Dorsal Networks, a privately-held developer of next-generation transoceanic and regional undersea optical network solutions. The company named James Bannantine as the new President of Corvis Corporation. |
