I was a shareholder of Cien when they had one customer.
About the only thing CIEN and LUMM have in common is the fact they're both publicly traded.
A few facts from Ciena's S-1 dated 12/12/96:
1) Products in production and positive cash-flow before IPO:
CIENA's MultiWave 1600 system was introduced into field trials in the long distance network of Sprint Corporation ("Sprint") in May 1996 and LDDS WorldCom ("WorldCom") in August 1996. The MultiWave 1600 system began carrying live traffic in the Sprint network in October 1996. The Company has a three-year non-exclusive supply agreement with Sprint which expires in December 1998, a supply agreement with WorldCom which, subject to certain conditions, is exclusive through December 1997 and an agreement to supply Teleway Japan Corporation ("Teleway") with the Company's MultiWave 1600 system. Through October 31, 1996, the Company recorded $54.8 million in revenue, all of which was derived from sales of the MultiWave 1600 system to Sprint. The Company is actively seeking additional customers among other long distance carriers in the worldwide telecommunications market.
2) Pre-IPO financials, including positive EPS:
Financials(in thousands, except per share data)
INCEPTION (NOVEMBER 2, 1992)
YEAR ENDED OCTOBER 31,THROUGH OCTOBER 31, 1993 1994 1995 1996
------------------ ------- ------- ----------
STATEMENT OF OPERATIONS DATA:
Revenue................................... $ -- $ -- $ -- $ 54,838
Gross profit.............................. -- -- -- 32,994
Operating expenses
Research and development............. -- 1,287 6,361 8,922
Selling and marketing................ -- 295 481 3,780
General and administrative........... 123 787 896 3,905
Income (loss) from operations............. (123) (2,369) (7,738) 16,387
Net income (loss)......................... $ (123) $(2,407) $(7,629) $ 14,718
====== ======= ======= ==========
Pro forma net income per common and common share)..................... $ .15
3) Personnel at time of IPO:
Total personnel has grown from 49 on October 31, 1995 to 225 on October 31, 1996, with 125 of the 176 new employees devoted to manufacturing.
. . .
4) Patent position:
As of December 4, 1996, the Company had received seven United States patents, had received notice of allowance of two more, and had 16 pending patent applications. The issued patents relate to (i) an optical monitoring channel for WDM systems capable of surviving failure of an optical amplifier, (ii) an in-fiber Bragg grating system for optical cable television systems that allows the network operator to remove and insert different optical frequencies and switch video signals on demand, (iii) a WDM optical communication system with remodulators to carry multiple optical signals of different wavelengths simultaneously, (iv) a WDM system that can be expanded with additional optical signals, (v) an optical system which uses optical amplifiers with flattened gain curves, (vi) a method for removing and inserting optical carriers in a WDM system and (vii) an optical system with tunable in-fiber gratings. Allowed patent applications relate to other aspects of in-fiber Bragg gratings technology and other aspects of WDM system design. In addition, the Company holds a non-exclusive license from General Instrument Corporation of Delaware for a portfolio of 32 United States and foreign patents relating to optical communications, primarily for video-on-demand applications.
. . . .
5) Underwriters:
Goldman, Sachs & Co. .........................................................
Alex. Brown & Sons Incorporated ...............................................
Wessels, Arnold & Henderson, L.L.C. ..........................................
William K. Woodruff & Company.................................................
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6) Financial growth during first year as public company:
IPO announcement Feb. 7, 1997:
ciena.com
First quarter results as a public company:
ciena.com
Revenues for the quarter were $53.9 million, and gross profit was $33.1 million. Operating expenses were $11.9 million, resulting in income from operations of $21.2 million. Net income was $13 million, or, on a pro forma basis, $0.13 per share. For the comparable quarter ended January 31, 1996, the Company had no revenue, operating expenses of $3.5 million, and a net loss of $3.3 million, or, on a pro forma basis, a net loss of $0.03 per share.
Second quarter as public company:
ciena.com
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 forma basis, $0.26 per share.
Third quarter as a public company:
ciena.com
CIENA Corporation (NASDAQ: CIEN) today reported revenue of $112.2 million for its third fiscal quarter ended August 2, 1997. This compares with $16.9 million for the third fiscal quarter in 1996 and $86.7 million for the quarter ended April 30, 1997. Based on current information, the Company expects that earnings per share for the third quarter of 1997 will be in the range of $0.31 to $0.33 per share, compared to $0.10 per share for the third quarter of 1996.
Fourth quarter as a public company:
ciena.com
CIENA Corporation (NASDAQ: CIEN), today reported revenue of $121.0 million for its fourth fiscal quarter ended October 31, 1997. This compares with $37.9 million reported for the fourth fiscal quarter of 1996 and $112.2 million for the previous quarter ended August 2, 1997. Net income for the quarter increased to $37.3 million, or $0.35 per share, compared with net income of $10.7 million, or $0.11 per share, for the same period in 1996 and $34.9 million, or $0.33 per share, for the fiscal third quarter.
For the 12 months ended October 31, 1997, CIENA reported revenue of $373.8 million, an increase of 582% over the $54.8 million reported for the year ended October 31, 1996. Net income for fiscal year 1997 was $112.9 million, or $1.09 per share, compared to $14.7 million, or $0.15 per share, in fiscal year 1996.
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If anything, the fact that Ciena had only one primary customer was a good reason not to invest in them. However, they were shipping product, had revenues and earnings, and were followed by several top-level analysts --- facts that mitigated the risk of their slender customer list. Even so, after the AT&T debacle, their reliance on a primary customer nearly destroyed them.
I welcome a comparison of LUMM on the above six points.
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