Ciena Reports Fiscal Fourth Quarter 2012 and Year-End Financial Results

 

Annual revenue grew 5%; cash balance increased by $100M for the year

HANOVER, Md. — 12/13/2012

Ciena® Corporation (NASDAQ: CIEN), the network specialist, today announced unaudited financial results for its fiscal fourth quarter and year ended October 31, 2012.

For the fiscal fourth quarter 2012, Ciena reported revenue of $465.5 million as compared to $455.5 million for the fiscal fourth quarter 2011. For fiscal year 2012, Ciena reported revenue of $1.8 billion, as compared to $1.7 billion for fiscal year 2011.

On the basis of generally accepted accounting principles (GAAP), Ciena's net loss for the fiscal fourth quarter 2012 was $(38.8) million, or $(0.39) per common share, which compares to a GAAP net loss of $(22.3) million, or $(0.23) per common share, for the fiscal fourth quarter 2011. For fiscal year 2012, Ciena had a GAAP net loss of $(144.0) million, or $(1.45) per common share, which compares to a GAAP net loss of $(195.5) million or $(2.04) per common share for fiscal year 2011.

Ciena's adjusted (non-GAAP) net loss for the fiscal fourth quarter 2012 was $(6.7) million, or $(0.07) per common share, which compares to an adjusted (non-GAAP) net income of $3.3 million, or $0.03 per common share, for the fiscal fourth quarter 2011. For fiscal year 2012, Ciena's adjusted (non-GAAP) net loss was $(23.5) million, or $(0.24) per common share, as compared to $(24.2) million, or $(0.25) per common share for fiscal year 2011.

"With five percent annual revenue growth and fourth quarter financial performance in line with our expectations, we continued to significantly outpace the market and take share in 2012 despite the challenging environment. That momentum resulted in record order flow and year-end backlog," said Gary Smith, president and CEO of Ciena. "Customers require more network convergence with greater programmability to deliver more services, and we believe our portfolio is leading the transformation to next-generation intelligent networks."

Fiscal Fourth Quarter 2012 Performance Summary

The tables below (in millions, except percentage data) provide comparisons of certain quarterly results to prior periods, including sequential quarterly and year over year changes. A reconciliation between the GAAP and adjusted (non-GAAP) measures contained in this release is included in Appendices A and B.

GAAP Results

 

 

 

Q4

 

Q3

 

Q4

 

Period Change

 

 

 

FY 2012

 

FY 2012

 

FY 2011

 

Q-T-Q*

 

Y-T-Y*

 

Revenue

 

$

465.5

 

 

$

474.1

 

 

$

455.5

 

 

(1.8

)%

 

2.2

%

 

Gross margin

 

41.3

%

 

38.2

%

 

41.7

%

 

3.1

%

 

(0.4

)%

 

Operating expense

 

$

214.1

 

 

$

196.6

 

 

$

206.2

 

 

8.9

%

 

3.8

%

 

Operating margin

 

(4.7

)%

 

(3.2

)%

 

(3.6

)%

 

(1.5

)%

 

(1.1

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Results

 

 

 

Q4

 

Q3

 

Q4

 

Period Change

 

 

FY 2012

 

FY 2012

 

FY 2011

 

Q-T-Q*

 

Y-T-Y*

Revenue

 

$

465.5

 

 

$

474.1

 

 

$

455.5

 

 

(1.8

)%

 

2.2

%

Adj. gross margin

 

42.7

%

 

39.6

%

 

43.2

%

 

3.1

%

 

(0.5

)%

Adj. operating expense

 

$

191.8

 

 

$

175.6

 

 

$

180.8

 

 

9.2

%

 

6.1

%

Adj. operating margin

 

1.4

%

 

2.5

%

 

3.5

%

 

(1.1

)%

 

(2.1

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue by Segment

 

 

Q4 FY 2012

 

Q3 FY 2012

 

Q4 FY 2011

 

 

Revenue

 

%

 

Revenue

 

%

 

Revenue

 

%

Packet-Optical Transport

 

$

289.4

 

 

62.2

 

 

$

298.5

 

 

63.0

 

 

$

296.2

 

 

65.1

Packet-Optical Switching

 

20.5

 

 

4.4

 

 

37.8

 

 

8.0

 

 

41.2

 

 

9.0

Carrier-Ethernet Solutions

 

47.9

 

 

10.3

 

 

31.3

 

 

6.6

 

 

28.8

 

 

6.3

Software and Services

 

107.7

 

 

23.1

 

 

106.5

 

 

22.4

 

 

89.3

 

 

19.6

Total

 

$

465.5

 

 

100.0

 

 

$

474.1

 

 

100.0

 

 

$

455.5

 

 

100.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Denotes % change, or in the case of margin, absolute change

 Additional Performance Metrics for Fiscal Fourth Quarter 2012

Non-U.S. customers contributed 46% of total revenue

One 10%-plus customer represented a total of 11% of revenue

Cash and investments totaled $692.5 million

Cash flow from operations totaled $10.6 million

Average days' sales outstanding (DSOs) were 72

Accounts receivable balance was $345.5 million

Inventories totaled $260.1 million, including:

Raw materials: $39.7 million

Work in process: $10.7 million

Finished goods: $178.2 million

Deferred cost of sales: $71.5 million

Reserve for excess and obsolescence: $(40.0) million

Product inventory turns were 3.3

Headcount totaled 4,481

Business Outlook for Fiscal First Quarter 2013

Statements relating to business outlook are forward-looking in nature and actual results may differ materially. These statements should be read in the context of the Notes to Investors below.

Ciena expects financial performance for fiscal first quarter 2013, a quarter in which we typically experience seasonal reductions in order volume and customer deployment activity, to include:

Revenue in the range of $435 to $460 million

Adjusted (non-GAAP) gross margin percentage in the low 40s range

Adjusted (non-GAAP) operating expense in the high $180s million range

Live Web Broadcast of Unaudited Fiscal Fourth Quarter 2012 Results

Ciena will host a discussion of its unaudited fiscal fourth quarter 2012 and year-end results with investors and financial analysts today, Thursday, December 13, 2012 at 8:30 a.m. (Eastern). The live broadcast of the discussion will be available via Ciena's homepage at http://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.

CIENA CORPORATION

CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 

 

 

 

 

 

 

Quarter Ended
October 31,

 

Year Ended
October 31,

 

 

2011

 

2012

 

2011

 

2012

Revenue:

 

 

 

 

 

 

 

 

Products

 

$

368,049

 

 

$

363,174

 

 

$

1,406,532

 

 

$

1,454,991

 

Services

 

87,406

 

 

102,357

 

 

335,438

 

 

378,932

 

Total revenue

 

455,455

 

 

465,531

 

 

1,741,970

 

 

1,833,923

 

Cost of goods sold:

 

 

 

 

 

 

 

 

Products

 

210,686

 

 

211,443

 

 

825,969

 

 

868,805

 

Services

 

54,859

 

 

61,882

 

 

206,855

 

 

240,894

 

Total cost of goods sold

 

265,545

 

 

273,325

 

 

1,032,824

 

 

1,109,699

 

Gross profit

 

189,910

 

 

192,206

 

 

709,146

 

 

724,224

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

91,232

 

 

95,801

 

 

379,862

 

 

364,179

 

Selling and marketing

 

71,235

 

 

74,013

 

 

251,990

 

 

266,338

 

General and administrative

 

27,276

 

 

29,772

 

 

126,242

 

 

114,122

 

Acquisition and integration costs

 

2,340

 

 

20

 

 

42,088

 

 

(120

)

Amortization of intangible assets

 

13,534

 

 

12,545

 

 

69,665

 

 

51,697

 

Restructuring costs

 

591

 

 

1,990

 

 

5,781

 

 

7,854

 

Change in fair value of contingent consideration

 

 

 

 

 

(3,289

)

 

 

Total operating expenses

 

206,208

 

 

214,141

 

 

872,339

 

 

804,070

 

Loss from operations

 

(16,298

)

 

(21,935

)

 

(163,193

)

 

(79,846

)

Interest and other income (loss), net

 

(1,312

)

 

(3,468

)

 

6,022

 

 

(15,200

)

Interest expense

 

(9,500

)

 

(10,840

)

 

(37,926

)

 

(39,653

)

Gain on cost method investments

 

7,249

 

 

 

 

7,249

 

 

 

Loss before income taxes

 

(19,861

)

 

(36,243

)

 

(187,848

)

 

(134,699

)

Provision for income taxes

 

2,468

 

 

2,528

 

 

7,673

 

 

9,322

 

Net loss

 

$

(22,329

)

 

$

(38,771

)

 

$

(195,521

)

 

$

(144,021

)

Basic net loss per common share

 

$

(0.23

)

 

$

(0.39

)

 

$

(2.04

)

 

$

(1.45

)

Diluted net loss per potential common share

 

$

(0.23

)

 

$

(0.39

)

 

$

(2.04

)

 

$

(1.45

)

Weighted average basic common shares outstanding

 

97,197

 

 

100,506

 

 

95,854

 

 

99,341

 

Weighted average dilutive potential common shares outstanding

 

97,197

 

 

100,506

 

 

95,854

 

 

99,341

 

 

 

 

 

CIENA CORPORATION

CONDENSED UNAUDITED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

 

 

 

 

 

October 31,

 

 

2011

 

2012

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

541,896

 

 

$

642,444

 

Short-term investments

 

 

 

50,057

 

Accounts receivable, net

 

417,509

 

 

345,496

 

Inventories

 

230,076

 

 

260,098

 

Prepaid expenses and other

 

143,357

 

 

117,595

 

Total current assets

 

1,332,838

 

 

1,415,690

 

Long-term investments

 

50,264

 

 

 

Equipment, furniture and fixtures, net

 

122,558

 

 

123,580

 

Other intangible assets, net

 

331,635

 

 

257,137

 

Other long-term assets

 

114,123

 

 

84,736

 

Total assets

 

$

1,951,418

 

 

$

1,881,143

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

157,116

 

 

$

179,704

 

Accrued liabilities

 

197,004

 

 

209,540

 

Deferred revenue

 

99,373

 

 

79,516

 

Convertible notes payable

 

 

 

216,210

 

Total current liabilities

 

453,493

 

 

684,970

 

Long-term deferred revenue

 

24,425

 

 

27,560

 

Other long-term obligations

 

17,263

 

 

31,779

 

Long term convertible notes payable

 

1,442,364

 

 

1,225,806

 

Total liabilities

 

1,937,545

 

 

1,970,115

 

Commitments and contingencies

 

 

 

 

Stockholders' equity (deficit):

 

 

 

 

Preferred stock — par value $0.01; 20,000,000 shares authorized; zero shares issued and outstanding

 

 

 

 

Common stock — par value $0.01; 290,000,000 shares authorized; 97,440,436 and 100,601,792 shares issued and outstanding

 

974

 

 

1,006

 

Additional paid-in capital

 

5,753,236

 

 

5,797,765

 

Accumulated other comprehensive income (loss)

 

31

 

 

(3,354

)

Accumulated deficit

 

(5,740,368

)

 

(5,884,389

)

Total stockholders' equity (deficit)

 

13,873

 

 

(88,972

)

Total liabilities and stockholders' equity (deficit)

 

$

1,951,418

 

 

$

1,881,143

 

 

 

 

 

CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

 

 

 

Year Ended October 31,

 

 

2011

 

2012

Cash flows from operating activities:

 

 

 

 

Net loss

 

$

(195,521

)

 

$

(144,021

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

Gain on cost method investments

 

(7,249

)

 

 

Change in fair value of embedded redemption feature

 

(2,800

)

 

6,600

 

Depreciation of equipment, furniture and fixtures, and amortization of leasehold improvements

 

60,154

 

 

59,099

 

Share-based compensation costs

 

37,930

 

 

32,394

 

Amortization of intangible assets

 

95,927

 

 

74,497

 

Provision for inventory excess and obsolescence

 

17,334

 

 

23,438

 

Provision for warranty

 

18,451

 

 

33,418

 

Other

 

5,541

 

 

7,122

 

Changes in assets and liabilities:

 

 

 

 

Accounts receivable

 

(75,623

)

 

70,366

 

Inventories

 

14,209

 

 

(53,460

)

Prepaid expenses and other

 

(18,302

)

 

1,748

 

Accounts payable, accruals and other obligations

 

(59,285

)

 

12,610

 

Deferred revenue

 

18,749

 

 

(16,722

)

Net cash provided by (used in) operating activities

 

(90,485

)

 

107,089

 

Cash flows used in investing activities:

 

 

 

 

Payments for equipment, furniture, fixtures and intellectual property

 

(52,367

)

 

(48,098

)

Restricted cash

 

10,751

 

 

35,597

 

Purchase of available for sale securities

 

(49,892

)

 

 

Proceeds from sale of cost method investment

 

6,544

 

 

524

 

Receipt of contingent consideration related to business acquisition

 

16,394

 

 

 

Net cash used in investing activities

 

(68,570

)

 

(11,977

)

Cash flows from financing activities:

 

 

 

 

Repayment of capital lease obligations

 

 

 

(1,895

)

Debt issuance costs

 

 

 

(2,331

)

Proceeds from issuance of common stock

 

13,202

 

 

12,166

 

Net cash provided by financing activities

 

13,202

 

 

7,940

 

Effect of exchange rate changes on cash and cash equivalents

 

(938

)

 

(2,504

)

Net increase (decrease) in cash and cash equivalents

 

(146,791

)

 

100,548

 

Cash and cash equivalents at beginning of period

 

688,687

 

 

541,896

 

Cash and cash equivalents at end of period

 

$

541,896

 

 

$

642,444

 

Supplemental disclosure of cash flow information

 

 

 

 

Cash paid during the period for interest

 

$

32,931

 

 

$

33,511

 

Cash paid during the period for income taxes, net

 

$

3,204

 

 

$

9,603

 

Non-cash investing and financing activities

 

 

 

 

Purchase of equipment in accounts payable

 

$

6,431

 

 

$

5,202

 

Debt issuance costs in accrued liabilities

 

$

 

 

$

319

 

Fixed assets purchased under capital leases

 

$

1,106

 

 

$

6,736

 

 

 

APPENDIX A - Reconciliation of Adjusted (Non- GAAP) Quarterly Measurements

 

 

 

 

 

 

 

 

Quarter Ended

 

 

 

October 31,

 

 

 

2011

 

2012

 

Gross Profit Reconciliation (GAAP/non-GAAP)

 

 

 

 

 

GAAP gross profit

 

$

189,910

 

 

$

192,206

 

 

Share-based compensation-products

 

611

 

 

647

 

 

Share-based compensation-services

 

365

 

 

326

 

 

Amortization of intangible assets

 

5,827

 

 

5,384

 

 

Total adjustments related to gross profit

 

6,803

 

 

6,357

 

 

Adjusted (non-GAAP) gross profit

 

$

196,713

 

 

$

198,563

 

 

Adjusted (non-GAAP) gross profit percentage

 

43.2

%

 

42.7

%

 

 

 

 

 

 

 

Operating Expense Reconciliation (GAAP/non-GAAP)

 

 

 

 

 

GAAP operating expense

 

$

206,208

 

 

$

214,141

 

 

Share-based compensation-research and development

 

2,558

 

 

2,500

 

 

Share-based compensation-sales and marketing

 

3,312

 

 

3,048

 

 

Share-based compensation-general and administrative

 

3,117

 

 

2,205

 

 

Acquisition and integration costs

 

2,340

 

 

20

 

 

Amortization of intangible assets

 

13,534

 

 

12,545

 

 

Restructuring costs

 

591

 

 

1,990

 

 

Total adjustments related to operating expense

 

25,452

 

 

22,308

 

 

Adjusted (non-GAAP) operating expense

 

$

180,756

 

 

$

191,833

 

 

 

 

 

 

 

 

Income (Loss) from Operations Reconciliation (GAAP/non-GAAP)

 

 

 

 

 

GAAP loss from operations

 

$

(16,298

)

 

$

(21,935

)

 

Total adjustments related to gross profit

 

6,803

 

 

6,357

 

 

Total adjustments related to operating expense

 

25,452

 

 

22,308

 

 

Adjusted (non-GAAP) income from operations

 

$

15,957

 

 

6,730

 

 

Adjusted (non-GAAP) operating margin percentage

 

3.5

%

 

1.4

%

 

 

 

 

 

 

 

Net Income (Loss) Reconciliation (GAAP/non-GAAP)

 

 

 

 

 

GAAP net loss

 

$

(22,329

)

 

$

(38,771

)

 

Total adjustments related to gross profit

 

6,803

 

 

6,357

 

 

Total adjustments related to operating expense

 

25,452

 

 

22,308

 

 

Gain on cost method investment

 

(7,249

)

 

 

 

Change in fair value of embedded redemption feature

 

580

 

 

3,440

 

 

Adjusted (non-GAAP) net income (loss)

 

$

3,257

 

 

$

(6,666

)

 

 

 

 

 

 

 

Weighted average basic common shares outstanding

 

97,197

 

 

100,506

 

 

Weighted average dilutive potential common shares outstanding

 

97,857

 

 

100,506

 

 

 

 

 

 

 

 

Net Income (Loss) per Common Share

 

 

 

 

 

GAAP diluted net loss per common share

 

$

(0.23

)

 

$

(0.39

)

 

Adjusted (non-GAAP) diluted net income (loss) per common share

 

$

0.03

 

 

$

(0.07

)

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX B - Reconciliation of Adjusted (Non- GAAP) Annual Measurements

 

 

 

 

 

 

 

Year Ended

 

 

October 31,

 

 

2011

 

2012

Gross Profit Reconciliation (GAAP/non-GAAP)

 

 

 

 

GAAP gross profit

 

$

709,146

 

 

$

724,224

 

Share-based compensation-products

 

2,269

 

 

2,156

 

Share-based compensation-services

 

1,881

 

 

1,462

 

Amortization of intangible assets

 

23,307

 

 

22,032

 

Fair value adjustment of acquired inventory

 

5,735

 

 

 

Total adjustments related to gross profit

 

33,192

 

 

25,650

 

Adjusted (non-GAAP) gross profit

 

$

742,338

 

 

$

749,874

 

Adjusted (non-GAAP) gross profit percentage

 

42.6

%

 

40.9

%

 

 

 

 

 

Operating Expense Reconciliation (GAAP/non-GAAP)

 

 

 

 

GAAP operating expense

 

$

872,339

 

 

$

804,070

 

Share-based compensation-research and development

 

10,149

 

 

8,567

 

Share-based compensation-sales and marketing

 

12,182

 

 

11,558

 

Share-based compensation-general and administrative

 

11,140

 

 

8,691

 

Acquisition and integration costs

 

42,088

 

 

(120

)

Amortization of intangible assets

 

69,665

 

 

51,697

 

Restructuring costs

 

5,781

 

 

7,854

 

Change in fair value of contingent consideration

 

(3,289

)

 

 

Settlement of patent litigation

 

500

 

 

 

Total adjustments related to operating expense

 

148,216

 

 

88,247

 

Adjusted (non-GAAP) operating expense

 

$

724,123

 

 

$

715,823

 

 

 

 

 

 

Loss from Operations Reconciliation (GAAP/non-GAAP)

 

 

 

 

GAAP loss from operations

 

$

(163,193

)

 

$

(79,846

)

Total adjustments related to gross profit

 

33,192

 

 

25,650

 

Total adjustments related to operating expense

 

148,216

 

 

88,247

 

Adjusted (non-GAAP) income from operations

 

$

18,215

 

 

34,051

 

Adjusted (non-GAAP) operating margin percentage

 

1.0

%

 

1.9

%

 

 

 

 

 

Loss Reconciliation (GAAP/non-GAAP)

 

 

 

 

GAAP net loss

 

$

(195,521

)

 

$

(144,021

)

Total adjustments related to gross profit

 

33,192

 

 

25,650

 

Total adjustments related to operating expense

 

148,216

 

 

88,247

 

Gain on cost method investment

 

(7,249

)

 

 

Change in fair value of embedded redemption feature

 

(2,800

)

 

6,600

 

Adjusted (non-GAAP) net loss

 

$

(24,162

)

 

$

(23,524

)

 

 

 

 

 

Weighted average basic common shares outstanding

 

95,854

 

 

99,341

 

Weighted average dilutive potential common shares outstanding

 

95,854

 

 

99,341

 

 

 

 

 

 

Net Loss per Common Share

 

 

 

 

GAAP diluted net loss per common share

 

$

(2.04

)

 

$

(1.45

)

Adjusted (non-GAAP) diluted net income (loss) per common share

 

$

(0.25

)

 

$

(0.24

The adjusted (non-GAAP) measures above and their reconciliation to Ciena's GAAP results for the periods presented reflect adjustments relating to the following items:

Share-based compensation expense - a non-cash expense incurred in accordance with share-based compensation accounting guidance.

Amortization of intangible assets - a non-cash expense arising from the acquisition of intangible assets, principally developed technologies and customer-related intangibles acquired from the MEN Business, that Ciena is required to amortize over its expected useful life.

Fair value adjustment of acquired inventory - an infrequent charge required by acquisition accounting rules resulting from the required revaluation of inventory acquired from the MEN Business to estimated fair value. This revaluation resulted in a net increase in inventory carrying value and an increase in cost of goods sold for the periods indicated.

Acquisition and integration costs - reflects transaction expense, and consulting and third party service fees associated with the acquisition of the Nortel MEN Business and the integration of this business into Ciena's operations.

Restructuring costs - costs incurred as a result of restructuring activities taken to align resources with perceived market opportunities.

Change in fair value of contingent consideration – a non-cash, unrealized gain during the periods identified related to Nortel's intent to exercise its early termination right relating to the Carling, Canada facility lease entered into as part of the acquisition of the MEN Business.

Settlement of patent litigation - included in general and administrative expense during our first quarter of fiscal 2011 is a $0.5 million patent litigation settlement.

Gain on cost method investments – a non-cash gain related to the sale of a privately held technology company in which Ciena held a minority equity investment, which gain Ciena does not believe is reflective of its ongoing operating costs.

Change in fair value of embedded redemption feature - a non-cash unrealized gain or loss reflective of a mark to market fair value adjustment of an embedded derivative related to the redemption feature of Ciena's outstanding 4.0% senior convertible notes.

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 perform and compete. Ciena leverages its deep expertise in packet and optical networking and distributed software automation to deliver solutions in alignment with OPn, its approach for building open next-generation networks. We enable a high-scale, programmable infrastructure that can be controlled and adapted by network-level applications, and provide open interfaces to coordinate computing, storage and network resources in a unified, virtualized environment. 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

Notes to Investors
Forward-looking statements. 
This press release contains certain forward-looking statements that involve risks and uncertainties. These statements are based on current expectations, forecasts, assumptions and other information available to the Company as of the date hereof. 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: "With five percent annual revenue growth and fourth quarter financial performance in line with our expectations, we continued to significantly outpace the market and take share in 2012 despite the challenging environment"; "That momentum resulted in record order flow and year-end backlog"; "Customers require more network convergence with greater programmability to deliver more services, and we believe our portfolio is leading the transformation to next-generation intelligent networks"; "Ciena expects financial performance for fiscal first quarter 2013, a quarter in which we typically experience seasonal reductions in order volume and customer deployment activity, to include revenue in the range of $435 to $460 million, adjusted (non-GAAP) gross margin percentage in the low 40s range, adjusted (non-GAAP) operating expense in the high $180s million range."

Ciena's actual results, performance or events may differ materially from these forward-looking statements made or implied due a number of risks and uncertainties relating to Ciena's business, including: the effect of broader economic and market conditions on our customers and their business; changes in network spending or network strategy by large communication service providers; seasonality and the timing and size of customer orders, including our ability to recognize revenue relating to such sales; the level of competitive pressure we encounter; the product, customer and geographic mix of sales within the period; supply chain disruptions and the level of success relating to efforts to optimize Ciena's operations; changes in foreign currency exchange rates affecting revenue and operating expense; and the other risk factors disclosed in Ciena's Report on Form 10-Q filed with the Securities and Exchange Commission on September 5, 2012. Ciena assumes no obligation to update any forward-looking information included in this press release.

Non-GAAP Presentation of Quarterly Results. This release includes non-GAAP measures of Ciena's gross profit, operating expense, income (loss) from operations, net income (loss) and net income (loss) 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. To the extent not previously disclosed in a prior Ciena financial results press release, Appendixes A and B to this press release sets forth a complete GAAP to non-GAAP reconciliation of the non-GAAP measures contained in this release.

Press Contacts:
Nicole Anderson
Ciena Corporation
(877) 857 -7377
pr@ciena.com

Investor Contacts:
Gregg Lampf
Ciena Corporation
(877) 243 6273
ir@ciena.com

 

For media inquiries, please contact Jamie Moody at 877-857-7377 or email us.

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