Ciena Reports Unaudited Fiscal Second Quarter 2010 Results
Includes partial quarter of results from acquired Nortel MEN business
.Companies:CIENA Corp.Topics:Earnings.Press Release Source: Ciena Corporation On Wednesday June 9, 2010, 7:00 am
LINTHICUM, Md.--(BUSINESS WIRE)--Ciena® Corporation (NASDAQ: CIEN - News), the network specialist, today announced unaudited results for its fiscal second quarter ended April 30, 2010.
Revenue for the fiscal second quarter 2010 totaled $253.5 million. Fiscal second quarter results include $53.5 million in revenue from the acquired assets of Nortel*’s Metro Ethernet Networks business (the “MEN business”), reflecting approximately six weeks of operations since the March 19, 2010 acquisition date. In accordance with acquisition accounting rules, Ciena did not recognize certain deferred revenue of the MEN business that would otherwise have been recognized by Nortel had the acquisition not occurred. Revenue from Ciena’s pre-acquisition portfolio was $200.0 million, representing a 14% sequential improvement compared to fiscal first quarter revenue of $175.9 million, and a 39% improvement compared to the same period a year ago when Ciena reported revenue of $144.2 million.
“We’re very pleased with our progress to date in combining the two companies, and continue to be encouraged by positive market reaction to the acquisition and growing levels of customer engagement across the globe,” said Gary Smith, Ciena’s CEO and president. “As a result, we continue to be on track to deliver on the target operating model milestones that we previously communicated.”
On the basis of generally accepted accounting principles (GAAP), Ciena’s net loss for the fiscal second quarter 2010 was $(90.0) million, or $(0.97) per common share, which compares to a GAAP net loss of $(503.2) million, or $(5.53) per common share, for the second fiscal quarter of 2009, which included a non-cash charge of $455.7 million for impairment of goodwill. The fiscal second quarter 2010 included $39.2 million in acquisition and integration-related expenses associated with Ciena’s acquisition of the MEN business.
Ciena’s adjusted (non-GAAP) net loss for the fiscal second quarter 2010 was $(11.7) million, or $(0.13) per common share, which compares to an adjusted (non-GAAP) net loss of $(22.5) million, or $(0.25) per common share for the fiscal second quarter 2009. A reconciliation between the GAAP and adjusted (non-GAAP) measures contained in this release is provided in the table in Appendix A.
Second Quarter 2010 Performance Summary
•$253.5 million in revenue, reflecting approximately $53.5 million from the acquired MEN business.
•Non-U.S. customers contributed 29% of total revenue.
•Two customers each accounted for greater than 10% of revenue, and 42% of total sales in the aggregate.
•GAAP gross margin of 41%.
•Adjusted (non-GAAP) gross margin of 49%, which excludes share-based compensation costs, amortization of intangible assets, charges for product rationalization, and fair value adjustment of acquired inventory.
•GAAP net loss of $(90.0) million or $(0.97) per common share.
•Adjusted (non-GAAP) net loss of $(11.7) million or $(0.13) per common share.
•Ended the quarter with cash, cash equivalents and short-term investments of $614 million, using $78 million in cash for operations during the quarter, which includes the effect of $38 million of cash spent on acquisition and integration-related costs and a $36 million increase in working capital.
•Incurred $39.2 million in acquisition and integration-related expense, and $1.9 million in restructuring costs.
•Completed a private offering of 4.0% Convertible Senior Notes due March 15, 2015, in aggregate principal amount of $375.0 million.
Business Outlook
“We are encouraged by recent signs of recovery in customer spending, although Europe remains a challenge due to volatile macroeconomic conditions,” stated Smith. “While we still have work to do in delivering the full value of the combined company, we believe we are strategically well-positioned, with strong customer relationships and a portfolio of leading solutions that are tightly aligned with the market trend toward high-capacity, scalable next-generation networks.”
Smith continued, “We anticipate that our fiscal third quarter revenue will be in the range of $375 million to $400 million, and we expect that as-adjusted gross margin will be consistent with our near-term expectation of low 40s.”
Ciena’s fiscal third quarter 2010 financial results will represent the first full quarter to include the operations of the MEN business.
Live Web Broadcast of Unaudited Fiscal Second Quarter 2010 Results
Ciena will host a discussion of its unaudited fiscal second quarter 2010 results with investors and financial analysts today, Wednesday, June 9, 2010 at 8:30 a.m. (Eastern). The live broadcast of the discussion will be available via Ciena’s homepage at cts.businesswire.com. An archived version of the discussion will be available shortly following the conclusion of the live broadcast on the Investor Relations page of Ciena’s website at: ciena.com.
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