Corvis Corporation Reports Financial Results for the Second Quarter; Continued Focus on Streamlining Business to Meet Current Market Conditions
COLUMBIA, Md., July 25 /PRNewswire-FirstCall/ -- Corvis Corporation (Nasdaq: CORV - News), 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 purchased research and development, 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
-- 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.
-- 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.
-- 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.
-- 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.
Webcast Information
In conjunction with this announcement, Corvis will host a conference call of its second quarter financial results today at 5:30 pm 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 the 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.
Investor Note Regarding Forward Looking Statements
This announcement and the quarterly earnings conference call may contain 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:
Investor Relations & Public Relations
Andrew G. Backman
(443) 259-4600
Fax: (301) 310-3134
investorinformation@corvis.com
CORVIS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
(unaudited)
Quarter Ended Six Months Ended
June 29, June 30, June 29, June 30,
2002 2001 2002 2001
Revenues $3,022 $64,959 $11,739 $149,046
Cost of sales 3,971 139,708 14,767 192,611
Gross profit (949) (74,749) (3,028) (43,565)
Operating expenses:
Research and
development 33,085 41,950 62,143 82,925
Sales and marketing 13,988 15,101 25,193 30,512
General and
administrative 11,131 8,533 17,176 19,512
Goodwill and other
intangible assets
amortization expense 4,258 49,631 7,175 101,876
Equity-based expense 17,022 25,439 36,978 51,072
Purchased research and
development 34,580 - 34,580 -
Restructuring and other
charges 1,792 606,735 4,351 606,735
Operating loss (116,805) (822,138) (190,624) (936,197)
Interest and other
income(expense), net (2,305) 306 478 13,536
Net loss $(119,110) $(821,832) $(190,146) $(922,661)
Weighted average number
of common shares
outstanding
(in thousands) 383,412 347,909 373,302 345,172
Basic and diluted net
loss per common share $(0.31) $(2.36) $(0.51) $(2.67)
CORVIS CORPORATION
PRO FORMA
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (a)
(Dollars in thousands, except per share data)
(unaudited)
For Discussion Purposes Only
Quarter Ended Six Months Ended
June 29, June 30, June 29, June 30,
2002 2001 2002 2001
Revenues $3,022 $64,959 $11,739 $149,046
Cost of sales 2,233 40,542 8,722 93,445
Gross profit 789 24,417 3,017 55,601
Operating expenses:
Research and
development 33,085 41,950 62,143 82,925
Sales and marketing 13,988 15,101 25,193 30,512
General and
administrative 11,131 8,533 17,176 19,512
Pro forma operating loss (57,415) (41,167) (101,495) (77,348)
Interest and other
income, net 2,553 8,988 5,336 22,218
Pro forma net loss $(54,862) $(32,179) $(96,159) $(55,130)
Weighted average number
of common shares
outstanding
(in thousands) 383,412 347,909 373,302 345,172
Pro forma net loss per
common share $(0.14) $(0.09) $(0.26) $(0.16)
(a) Pro forma results exclude restructuring and other charges, goodwill
and other intangible assets amortization expense, equity-based
expense and purchased research and development associated with the
acquisition of Dorsal Networks.
For the three months ended June 29, 2002, restructuring and other
charges of $8.4 million recorded as $1.7 million to Cost of Sales,
$1.8 million to Operating Expenses and $4.9 million to Interest and
Other Income, Net.
For the six months ended June 29, 2002, restructuring and other
charges of $15.3 million recorded as $6.0 million to Cost of Sales,
$4.4 million to Operating Expenses and $4.9 million to Interest and
Other Income, Net.
For the periods ended June 30, 2001, restructuring and other charges
of $ 714.6 million recorded as $99.2 million to Cost of Sales, $606.7
million to Operating Expenses, including $588.3 million for the
write-down of goodwill related to the Algety Telecom acquisition, and
$ 8.7 million to Interest and Other Income, Net.
CORVIS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
June 29, December 29,
2002 2001
Assets
Current assets:
Cash and cash equivalents $541,086 $638,872
Short term investments 43,014 21,907
Trade accounts receivable 15,915 33,676
Inventory, net 91,135 96,426
Other current assets 14,250 17,486
Total current assets 705,400 808,367
Restricted cash, non-current 2,409 2,417
Property and equipment, net 125,739 134,393
Goodwill and intangible assets, net 67,202 21,429
Other non-current assets 6,188 12,219
Total assets $906,938 $978,825
Liabilities and stockholders' equity
Total current liabilities $67,547 $81,862
Total liabilities 73,656 89,972
Total stockholders' equity * 833,282 888,853
Total liabilities and stockholders'
equity $906,938 $978,825
* $0.01 per share par value; 1,900,000,000 authorized shares; 411,166,642
shares issued and outstanding as of 6/29/02; 362,687,909 shares issued
and outstanding shares as of 12/29/01.
Corvis Contact:
Investor Relations & Public Relations
Andrew G. Backman
(443) 259-4600
Fax: (301) 310-3134
investorinformation@corvis.com
SOURCE: Corvis Corporation |
