Ciena Reports Unaudited Fiscal Third Quarter 2010 Results
Announcement posted by Ciena 09 Sep 2010
Revenue for the fiscal third quarter 2010 totaled $389.7 million. Fiscal third quarter performance includes $221.8 million in revenue from the acquired assets of the Metro Ethernet Networks business of Nortel* (the “MEN Business”), reflecting the first full quarter of those operations since the close of the transaction on March 19, 2010.
“We’re pleased with our progress and believe our financial performance this quarter is evidence of both the strategic value and market acceptance of the combined company. Our focus remains on the execution of our integration plan, and in the third quarter we were able to achieve certain integration milestones sooner than expected,” said Gary Smith, Ciena president and CEO. “We are confident in the strength of our market position and believe we are well-positioned to capitalise on future growth opportunities.”
On the basis of generally accepted accounting principles (GAAP), Ciena’s net loss for the fiscal third quarter 2010 was $(109.9) million, or $(1.18) per common share, which compares to a GAAP net loss of $(26.5) million, or $(0.29) per common share, for the fiscal third quarter of 2009. The fiscal third quarter 2010 included $17.0 million in acquisition and integration-related costs associated with Ciena’s acquisition of the MEN Business.
Ciena’s adjusted (non-GAAP) net loss for the fiscal third quarter 2010 was $(8.0) million, or $(0.09) per common share, which compares to an adjusted (non-GAAP) net loss of $(4.8) million, or $(0.05) per common share for the fiscal third quarter 2009. A reconciliation between the GAAP and adjusted (non-GAAP) measures contained in this release is provided in the table in Appendix A.
Fiscal Third Quarter 2010 Performance Summary
- $389.7 million in revenue, reflecting approximately $221.8 million from the Nortel MEN Business.
- Non-U.S. customers contributed 41% of total revenue.
- Two customers each accounted for greater than 10% of revenue, and 34% of total revenue in the aggregate.
- As-adjusted operating expense of $178 million.
- GAAP gross margin of 37%.
- Adjusted (non-GAAP) gross margin of 45.2% excludes share-based compensation costs, amortisation of intangible assets, and fair value adjustment of acquired inventory.
- GAAP net loss of $(109.9) million or $(1.18) per common share.
- Adjusted (non-GAAP) net loss of $(8.0) million or $(0.09) per common share.
- Ended the quarter with cash, cash equivalents and short-term investments of $470.4 million. We used $130 million in cash for operations during the quarter, which reflects $109 million for changes in working capital and $21 million in net losses (adjusted for non-cash charges), which includes payments of $17 million for acquisition and integration costs.
- Incurred $17.0 million in acquisition and integration-related costs, and $2.2 million in restructuring costs.
Business Outlook
“We see increasing levels of customer activity and continued strength in the fundamental demand drivers of our business; however, we remain cautious in the face of continuing macroeconomic uncertainties,” stated Smith. “We currently expect a sequential increase in our fiscal fourth quarter revenue of up to 5%, and expect as-adjusted gross margin to be in the low 40s range.”
Live Web Broadcast of Unaudited Fiscal Third Quarter 2010 Results
Ciena will host a discussion of its unaudited fiscal third quarter 2010 results with investors and financial analysts today, Wednesday, September 8, 2010 at 8:30 a.m. (Eastern). The live broadcast of the discussion will be available via Ciena’s homepage at www.ciena.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: www.ciena.com/investors.
Note to Investors
Forward-looking statements. This press release contains certain forward-looking statements based on current expectations, forecasts and assumptions that involve risks and uncertainties. These statements are based on information available to the Company as of the date hereof; and Ciena's actual results could differ materially from those stated or implied, due to risks and uncertainties associated with its business, which include the risk factors disclosed in its Report on Form 10-Q, which Ciena filed with the Securities and Exchange Commission on June 10, 2010. Forward-looking statements include statements regarding Ciena's expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or similar words. Forward-looking statements in this release include: based on our direct conversations with customers and supported by trends we are seeing currently in the business, including recently improved order flow, we expect to deliver sequential revenue growth in our fiscal third quarter. Ciena assumes no obligation to update the information included in this press release, whether as a result of new information, future events or otherwise.
Non-GAAP Presentation of Quarterly Results. This release includes non-GAAP measures of Ciena’s gross profit, operating expenses, income from operations, net income and net income per share. In evaluating the operating performance of Ciena’s business, management excludes certain charges and credits that are required by GAAP. These items, share one or more of the following characteristics: they are unusual and Ciena does not expect them to recur in the ordinary course of its business; they do not involve the expenditure of cash; they are unrelated to the ongoing operation of the business in the ordinary course; or their magnitude and timing is largely outside of Ciena’s control. Management believes that the non-GAAP measures below provide management and investors useful information and meaningful insight to the operating performance of the business. The presentation of these non-GAAP financial measures should be considered in addition to Ciena’s GAAP results and these measures are not intended to be a substitute for the financial information prepared and presented in accordance with GAAP. Ciena’s non-GAAP measures and the related adjustments may differ from non-GAAP measures used by other companies and should only be used to evaluate Ciena’s results of operations in conjunction with our corresponding GAAP results. For a complete GAAP to non-GAAP reconciliation of the non-GAAP measures contained in this release, see Appendix A.
About Ciena
Ciena is the network specialist. We collaborate with customers worldwide to unlock the strategic potential of their networks and fundamentally change the way they compete. With focused innovation, Ciena brings together the reliability and capacity of optical networking with the flexibility and economics of Ethernet, unified by a software suite that delivers the industry’s leading network automation. We routinely post recent news, financial results and other important announcements and information about Ciena on our website. For more information, visit www.ciena.com.