Corvis Corporation Reports Financial Results for the Third Quarter
Thursday October 24, 4:08 pm ET
Announces Share Repurchase Program
Adds Two New Members to Board of Directors
Continues to Streamline Business to Meet Current Market Conditions
COLUMBIA, Md., Oct. 24 /PRNewswire-FirstCall/ -- Corvis Corporation (Nasdaq: CORV - News), a leading provider of intelligent optical networking solutions, today reported revenues of $1.4 million for its fiscal third quarter ended September 28, 2002. The company also announced that its Board of Directors has approved a share repurchase program of its common stock.
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"In these difficult times for the telecommunications sector, Corvis continues to make progress," said Dr. David Huber, chairman and CEO. "We remain engaged with top-tier domestic and international service providers for both our terrestrial and subsea optical networking solutions. We also continue to strategically manage the business to set the stage for profitability when the market recovers."
Reported net loss was $127.4 million, or $0.31 loss per share, for the current quarter as compared with a reported net loss of $80.6 million, or $0.23 loss per share, for the third quarter of 2001. Revenues for the third quarter were generated under the company's contracts with Broadwing Communications and France Telecom.
Pro forma net loss for the current quarter was $48.4 million, or $0.12 loss per share, excluding goodwill and intangible assets amortization expense, equity-based expense, and restructuring and other charges compared with a pro forma net loss of $40.3 million, or $0.11 loss per share, for the third quarter of 2001.
Share Repurchase Program
Corvis' Board of Directors has authorized a share repurchase program under which the company can acquire up to $25 million of its common stock in the open market. At yesterday's closing stock price, this would represent approximately 10 percent of the company's outstanding common stock. The purchases will be executed at times and prices considered appropriate by the company during the next two years. The share repurchase program may be implemented at such future date as Corvis may determine and may be suspended at any time and from time-to-time without prior notice. The repurchase program will be funded using the existing cash balances and the repurchased shares may be used for corporate purposes in compliance with applicable law. As of the end of the fiscal third quarter, Corvis had 412.3 million shares outstanding.
"We are initiating a share repurchase program because we believe in the long-term value of Corvis," Dr. Huber continued. "Given our solid cash balance, the current share price, and the strength of our product portfolio, we believe a share repurchase program represents an attractive opportunity to enhance cash value per share."
New Members Named to Board of Directors
Corvis announced it has added two experienced executives to its Board of Directors. These appointments bring the Corvis Board to five members, four of whom are independent, outside directors. The two new members, Dr. Freeman A. Hrabowski, III, and Donald R. Walker, join directors Joseph R. Hardiman, David S. Oros and Corvis CEO Dr. David R. Huber on the Corvis Board.
Dr. Hrabowski, President of the University of Maryland, Baltimore County, leads an institution with more than 11,000 students, 425 faculty and an annual budget of $280 million. Dr. Hrabowski's research and publications focus on science and math education, with a special emphasis on issues involving minority participation.
Mr. Walker is a technology and security expert with almost 40 years of leadership experience in the military, government and business. He is a retired Air Force Brigadier General, former CEO and President of computer security firm Veritect, and CIO of USAA, a $9 billion insurance company.
Streamlining Business to Meet Current Market Conditions
During the quarter, Corvis continued to realign its business to adjust for the current market conditions. Specifically, the company announced a strategic outsourcing agreement with Celestica, a world leader in electronics manufacturing services (EMS). The company said its partnership with Celestica will help Corvis streamline its manufacturing capabilities, improve overall manufacturing flexibility and reduce costs. It also will allow the company to focus its resources on technology development activities and critical integration and testing activities as it works with the leading service providers to provide end-to-end global networking solutions.
The company also continued to make progress on reorganizing its French subsidiaries during the quarter. The company said that as a result of this reorganization, it expects to reduce its workforce by approximately 164 employees. The reorganization provides for the continuation of activities on a reduced basis with a focus primarily on research and development and sales support for products in Corvis' ON and XF product lines.
"Outsourcing and expense reduction will help Corvis maintain its solid cash position, focus its resources on developing leadership products and provide the flexibility we need to focus on our long-term business plan," said Lynn Anderson, senior vice president, CFO and treasurer. "Although we have reduced our operating expenses year over year, we have not reduced our focus on exceeding the expectations of our current and potential customers."
During the quarter, Corvis recorded restructuring and other charges totaling $55.6 million. These charges were comprised of a $24.3 million charge associated with a write-down of inventory and a $31.3 million charge related to workforce reductions, consolidation of excess facilities, and the write- down of idle equipment and other impaired assets.
Outlook
The company indicated that it expects revenue for its fourth fiscal quarter ending December 28, 2002, to increase sequentially from the third quarter. The company expects to end fiscal 2002 with approximately $500 million in cash, cash equivalents and short-term investments, which is subject to change depending on the timing of purchases made under the share repurchase program.
Other Recent Events
On October 1, 2002, the company announced that it would transfer the listing of its common stock to the Nasdaq SmallCap Market from the Nasdaq National Market. The Company's common stock was transferred to the Nasdaq SmallCap Market at the opening of business on October 14, 2002, and continues to trade under the symbol "CORV." The Nasdaq SmallCap Market is fully automated, and provides real-time trade reporting and a marketplace for more than 800 companies. With the introduction of the Nasdaq SuperMontage(SM) trading system this year, securities listed on both the Nasdaq National Market and Nasdaq SmallCap Market share a unified and more transparent order entry system.
On October 7, 2002, the company announced that it had established a subsidiary, Corvis Government Solutions, Inc. (CGSI), to provide optical networking solutions and services to the Federal marketplace. The company also announced that CGSI had formed a Technical Advisory Board, comprised of defense and intelligence experts from the public and private sectors, and has made an initial sale to the U.S. Government for its next-generation optical networking products.
Webcast Information
In conjunction with this announcement, Corvis will host a conference call of its third quarter financial results 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 to transoceanic systems, Corvis Corporation delivers innovative optical network solutions that drive carrier profitability faster than any other vendor. Headquartered in Columbia, MD, Corvis provides carriers with scalable optical networking solutions and services that dramatically reduce the overall expenses associated with building and operating networks. Carriers deploying Corvis' optical network solutions can provision new wavelength-based services and tailor dynamic service-level agreements for rapid revenue generation. For more information about Corvis, please visit its Web site 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 Contacts:
Investor Relations Public Relations
Andrew G. Backman Kathryn Courbe
(443) 259-4600 (301) 310-3030
Fax: (301) 310-3134 Fax: (310) 310-3991
investorinformation@corvis.com pr@corvis.com |
