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

Before you go, we thought you'd like these...
Before you go close icon

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.--(BUSINESS WIRE)-- Ciena® Corporation (NAS: 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 2012FY 2012FY 2011Q-T-Q* Y-T-Y*
Revenue$465.5$474.1$455.5(1.8)%2.2%
Gross margin41.3%38.2%41.7%3.1%(0.4)%
Operating expense$214.1$196.6$206.28.9%3.8%
Operating margin(4.7)%(3.2)%(3.6)%(1.5)%(1.1)%
 
 
Non-GAAP Results 
Q4 Q3 Q4 Period Change
FY 2012FY 2012FY 2011Q-T-Q* Y-T-Y*
Revenue$465.5$474.1$455.5(1.8)%2.2%
Adj. gross margin42.7%39.6%43.2%3.1%(0.5)%
Adj. operating expense$191.8$175.6$180.89.2%6.1%
Adj. operating margin1.4%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$289.462.2$298.563.0$296.265.1
Packet-Optical Switching20.54.437.88.041.29.0
Carrier-Ethernet Solutions47.910.331.36.628.86.3
Software and Services107.7 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.

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.

  
CIENA CORPORATION
CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
 
Quarter Ended October 31,Year Ended October 31,
2011 20122011 2012
Revenue:
Products$368,049$363,174$1,406,532$1,454,991
Services87,406 102,357 335,438 378,932 
Total revenue455,455 465,531 1,741,970 1,833,923 
Cost of goods sold:
Products210,686211,443825,969868,805
Services54,859 61,882 206,855 240,894 
Total cost of goods sold265,545 273,325 1,032,824 1,109,699 
Gross profit189,910 192,206 709,146 724,224 
Operating expenses:
Research and development91,23295,801379,862364,179
Selling and marketing71,23574,013251,990266,338
General and administrative27,27629,772126,242114,122
Acquisition and integration costs2,3402042,088(120)
Amortization of intangible assets13,53412,54569,66551,697
Restructuring costs5911,9905,7817,854
Change in fair value of contingent consideration  (3,289) 
Total operating expenses206,208 214,141 872,339 804,070 
Loss from operations(16,298)(21,935)(163,193)(79,846)
Interest and other income (loss), net(1,312)(3,468)6,022(15,200)
Interest expense(9,500)(10,840)(37,926)(39,653)
Gain on cost method investments7,249  7,249  
Loss before income taxes(19,861)(36,243)(187,848)(134,699)
Provision for income taxes2,468 2,528 7,673 9,322 
Net loss$(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 outstanding97,197 100,506 95,854 99,341 
Weighted average dilutive potential common shares outstanding97,197 100,506 95,854 99,341 
Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners

Gift Finder Promo
More to Explore
Fri, Dec 02
Set Your Location
City, State, or Zip
 
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 investments50,057
Accounts receivable, net417,509345,496
Inventories230,076260,098
Prepaid expenses and other143,357 117,595 
Total current assets1,332,8381,415,690
Long-term investments50,264
Equipment, furniture and fixtures, net122,558123,580
Other intangible assets, net331,635257,137
Other long-term assets114,123 84,736 
Total assets$1,951,418 $1,881,143 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: