Ciena's #'s came out after the close and follows below. When you read
them, remember that their sole existence is based on DWDM products
and also that these results were a result of only 2 customers for
the most part. Now, you will be able to see that Scott's projection from the other day is not so unbelievable.
CIENA Reports Fourth Quarter Revenue of $121.0 Million, Earnings Per Share of $0.35
BusinessWire, Wednesday, December 10, 1997 at 16:42
--Enhances Resources at Atlanta Technology Center with
Agreement to Acquire
Atlanta-based AstraCom, Inc.--
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.
"In 1997, CIENA began to make its presence known in the telecom
marketplace," said Patrick Nettles, CIENA's president and chief
executive officer. "Rarely does a young company have the opportunity
to have such an impact on a major industry segment."
In addition to significant revenue and net income growth, CIENA
closed its first fiscal year as a public company with a total of 841
employees, an increase of 273% over the 225 employed at the end of
fiscal year 1996.
"Successfully building our employee base and ramping
manufacturing capacity to meet rapidly growing market demand for
CIENA's products were only two of the challenges we faced as a result
of our exceptional growth to date," said Joseph Chinnici, CIENA's
senior vice president, finance and chief financial officer. "As
CIENA continues to expand, we will pay close attention to maintaining
the infrastructure and controls required to support the
organization's growth."
While the significant majority of CIENA's revenue during fiscal
1997 resulted from sales to Sprint Corporation and WorldCom, Inc.,
the Company announced several new customers, including Japan Telecom
Co., Ltd., Mercury Communications Limited (a subsidiary of Cable &
Wireless Communications Group) and Digital Teleport, Inc. AT&T also
selected CIENA as one of two dense wavelength division multiplexing
(DWDM) systems suppliers for its network. Shipments to AT&T are
dependent upon successful completion of required AT&T testing
programs and are expected to commence in 1998.
Over the course of the last year, the Company took significant
steps toward its goal of diversifying its product base, announcing
several new products. In the long-distance DWDM market, CIENA
introduced the MultiWave Sentry and the 40-channel MultiWave 4000, the
next generations of its original MultiWave 1600. CIENA entered the
short-distance DWDM market with the introduction of MultiWave
Firefly, a 24-channel, point-to-point system for interoffice
applications, and the announcement of its forthcoming MultiWave
Metro, a ring-based product for metropolitan applications.
"CIENA will remain focused on expanding our customer base in
1998," stated Nettles. "With entrance into the short-distance
market through MultiWave Firefly and MultiWave Metro, we hope to
bring the economies and the flexibility of DWDM technology to a
broader base of customers, addressing the bandwidth constraints faced
by regional Bell operating companies and competitive local exchange
carriers."
CIENA also announced that it had signed a letter of intent to
acquire AstraCom, Inc., an early stage telecommunications company
based in Atlanta, GA. Under the terms of the agreement, CIENA will
acquire all the outstanding shares of AstraCom in exchange for
169,754 shares of CIENA common stock, $2.4 million cash and the
assumption of certain AstraCom stock options. With closing expected
by the end of December 1997, the transaction is valued at
approximately $13.1 million and will be accounted for as a purchase.
The Company believes the purchase price represents approximately
$11.4 million in goodwill and other intangibles, and approximately
$1.7 million in net assets assumed.
AstraCom's 15 employees will join CIENA's Atlanta technology
development center, providing additional resources for continuing
product development efforts for the Company's MultiWave Metro product
and expanding CIENA's product expertise in competitive local exchange
carrier market applications.
"While CIENA so far has concentrated its efforts on lowering the
cost of transport and simplifying the core of service provider
networks, it is likely that continued growth in data traffic will
spawn bottlenecks beyond the network backbone," concluded Nettles.
"Going forward, CIENA will look to expand its network presence and
revenue opportunities through ongoing product development efforts and
when appropriate, via additional acquisitions, as well as strategic
partnerships."
NOTE TO INVESTORS:
Forward-looking statements in this release, including statements
regarding (1) the Company's attention to maintaining the
infrastructure and controls required to support the organization's
continued growth, (2) the Company's efforts to expand its customer
base and product line, (3) dependence on successful completion of
required AT&T testing programs, (4) the expected timing of shipments
to AT&T, (5) the Company's ability to enter the short distance DWDM
market, (6) the expected purchase price and timeframe of the closing
for the Company's acquisition of AstraCom, Inc., (7) the expected
expansion of the Company's product expertise in competitive local
exchange carrier market applications by the acquisition of AstraCom,
(7) the assertion that data traffic will continue to grow, (8) the
likelihood that continued growth in data traffic will spawn
bottlenecks beyond the network backbone and (9) the Company's intent
to expand its network presence and revenue opportunities through
continued product development, acquisitions and strategic
partnerships, are based on information available to the Company as of
the date hereof. The Company's actual results could differ
materially from those stated or implied by such forward-looking
statements, due to risks and uncertainties associated with the
Company's dependence on its major customers and their spending
patterns, the recent introduction of its products, and the overall
management of its expansion. The forward-looking statements should
be considered in the context of these and other risk factors
disclosed in the Company's Annual Report on Form 10-K, as filed with
the Securities and Exchange Commission on December 10, 1997.
About CIENA
CIENA Corporation is a worldwide market leader of open
architecture, dense wavelength division multiplexing (DWDM) systems
for long-distance and local exchange carriers. CIENA's DWDM
solutions include the MultiWaver 1600 long-haul transport system,
WaveWatcher(R) network management software, the MultiWave(R) Optical
Add/Drop Multiplexer, the MultiWave(r) Sentry enhanced long-distance
transport system and the new MultiWave(r) Firefly and MultiWave(r) Metro
short- haul systems. CIENA's DWDM equipment expands the carrying
capacity of fiber optic networks by up to 24 times by dividing the
optical signal into several separate optical channels or wavelengths.
An optical fiber without DWDM technology carries a single color of
laser light, or a single wavelength, on which travels approximately
32,000 voice or data transmissions. CIENA's DWDM technology divides
the single wavelength into multiple colors, or channels, thereby
multiplying the capacity of the fiber by the number of channels and
enabling service providers to expand bandwidth without the expensive
process of adding more fibers.
Additional information about CIENA can be found on its
World Wide Website: ciena.com.
*T
CIENA CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share data)
(unaudited)
Quarter Ended 12 Months Ended
Oct. 31, Oct. 31,
1997 1996 1997 1996
Revenue $121,036 $ 37,915 $373,827 $ 54,838
Cost of goods sold 43,189 14,498 136,187 21,844
Gross profit 77,847 23,417 237,640 32,994
Operating expenses
R&D 8,314 2,739 23,308 8,922
S&M 7,501 1,459 20,899 3,780
G&A 5,700 1,816 16,731 3,905
Total operating expenses 21,515 6,014 60,938 16,607
Income from operations 56,332 17,403 176,702 16,387
Other income (expense) net 3,636 140 7,256 581
Income before income taxes 59,968 17,543 183,958 16,968
Provision (benefit) for income
taxes 22,657 6,850 71,013 2,250
Net income $ 37,311 $ 10,693 $112,945 $ 14,718
Pro forma net income per common
and common equivalent share
(1)(2) $ 0.35 $ 0.11 $ 1.09 $ 0.15
Pro forma weighted average
common and common equivalent
shares outstanding (1) 106,308 99,111 103,765 99,111
(1) The pro forma net income per common and common equivalent share
are presented on a pro forma basis for all periods stated, except
for the quarter ended Oct. 31, 1997, which is presented on a
historical basis. Pro forma weighted average common and common
equivalent shares outstanding include Common Stock, stock options and
warrants using the treasury stock method and the assumed conversion
of all outstanding shares of Convertible Preferred Stock into Common
Stock.
(2) The sum of the quarterly earnings per share for fiscal 1997 does
not equal the reported annual earnings per share for fiscal 1997 due
to the effect of the Company's stock issuances during the year.
CONSOLIDATED STATEMENTS OF OPERATIONS
Percentage of Revenue Analysis (unaudited)
Quarter Ended 12 Months Ended
Oct. 31, Oct. 31,
1997 1996 1997 1996
Revenue 100% 100% 100% 100%
Cost of goods sold 35.7% 38.2% 36.4% 39.8%
Gross profit 64.3% 61.8% 63.6% 60.2%
Operating expenses
R&D 6.9% 7.2% 6.2% 16.3%
S&M 6.2% 3.8% 5.6% 6.9%
G&A 4.7% 4.8% 4.5% 7.1%
Total operating expenses 17.8% 15.8% 16.3% 30.3%
Income (loss) from operations 46.5% 46.0% 47.3% 29.9%
Other income (expense) net 3.0% 0.3% 1.9% 1.1%
Income (loss) before income taxes 49.5% 46.3% 49.2% 31.0%
Provision (benefit) for income
taxes 18.7% 18.1% 19.0% 4.1%
Net income 30.8% 28.2% 30.2% 26.9%
CIENA Corporation
Consolidated Balance Sheets
(in thousands, except share data)
October 31,
1996 1997
Assets
Current Assets:
Cash and cash equivalents $22,557 $263,085
Accounts receivable(net
of allowance of $- and $200) 16,759 63,227
Inventories, net 13,228 41,109
Deferred income taxes 1,834 9,006
Prepaid expenses and other 634 2,220
Total current assets 55,012 378,647
Equipment, furniture and
fixtures, net 11,863 67,412
Other assets 426 1,169
Total assets $67,301 $447,228
Liabilities, Mandatorily Redeemable Preferred Stock And
Stockholders' Equity
Current liabilities:
Accounts payable $6,278 $20,373
Accrued liabilities 5,242 31,463
Income taxes payable 3,342 -
Deferred revenue 3,265 776
Other current obligations 1,029 985
Total current liabilities 19,156 53,597
Deferred income taxes - 28,167
Other long-term obligations 2,771 1,880
Total liabilities 21,927 83,644
Commitments and contingencies - -
Mandatorily redeemable preferred
stock - par value $.01,
16,250,000 shares authorized:
Series A - 4,500,000 shares
authorized; 3,590,157 and
zero shares issued and
outstanding 3,492 -
Series B - 8,000,000 shares
authorized; 7,354,092 and
zero shares issued and
outstanding 10,962 -
Series C - 3,750,000 shares
authorized; 3,718,899 and
zero shares issued and
outstanding 25,950 -
Stockholders' equity:
Preferred Stock - par value
$.01 - 20,000,000 shares
authorized; zero shares
issued and outstanding - -
Common Stock - par value $.01;
180,000,000 shares authorized;
13,191,585 and 99,287,653
shares issues and outstanding 132 993
Additional paid-in capital 339 245,151
Notes receivable from stockholders (60) (64)
Retained earnings 4,559 117,504
Totals stockholders' equity 4,970 363,584
Total liabilities, mandatorily
redeemable preferred stock
and stockholders' equity $67,301 $447,228
*T
CONTACT: Investor Contact
Suzanne DuLong
CIENA Corporation
888/243-6223
email: ir@CIENA.com
or
Press Contact
Denny Bilter
CIENA Corporation
800/921-1144
KEYWORD: MARYLAND
INDUSTRY KEYWORD: REAL ESTATE RETAIL EARNINGS
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