Ciena Reports Fiscal Second Quarter 2013 Financial Results

Ciena Reports Fiscal Second Quarter 2013 Financial Results

Achieves record quarterly revenue by surpassing $500M milestone

HANOVER, Md.--(BUSINESS WIRE)-- Ciena® Corporation (NAS: CIEN) , the network specialist, today announced unaudited financial results for its fiscal second quarter ended April 30, 2013.


For the fiscal second quarter 2013, Ciena reported revenue of $507.7 million.

On the basis of generally accepted accounting principles (GAAP), Ciena's net loss for the fiscal second quarter 2013 was $(27.1) million, or $(0.27) per common share, which compares to a GAAP net loss of $(27.8) million, or $(0.28) per common share, for the fiscal second quarter 2012.

Ciena's adjusted (non-GAAP) net income for the fiscal second quarter 2013 was $2.2 million, or $0.02 per common share, which compares to an adjusted (non-GAAP) net income of $3.7 million, or $0.04 per common share, for the fiscal second quarter 2012.

"We have designed Ciena to take advantage of the fundamental shift in network architecture driven by changing end-user demands, and our strong quarterly and first half of 2013 performance are a direct result of that strategy. Our unique ability to provide customers convergence, automation, openness and software intelligence positions us to lead the industry in this shift," said Gary B. Smith, president and CEO of Ciena. "These dynamics are creating new opportunities that we believe will enable us to continue making progress toward our long-term financial goals."

Fiscal Second Quarter 2013 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 Appendix A.

 
 GAAP Results
Q2 Q1 Q2 Period Change
FY 2013FY 2013FY 2012Q-T-Q* Y-T-Y*
Revenue$507.7$453.1$477.612.1%6.3%
Gross margin41.3%43.2%38.3%(1.9)%3.0%
Operating expense$220.1$201.4$194.49.3%13.2%
Operating margin(2.1)%(1.2)%(2.4)%(0.9)%0.3%
 
 Non-GAAP Results
Q2 Q1 Q2 Period Change
FY 2013FY 2013FY 2012Q-T-Q* Y-T-Y*
Revenue$507.7$453.1$477.612.1%6.3%
Adj. gross margin42.5%44.6%39.6%(2.1)%2.9%
Adj. operating expense$197.4$176.6$172.911.8%14.2%
Adj. operating margin3.7%5.6%3.4%(1.9)%0.3%
 
 Revenue by Segment
Q2 FY 2013 Q1 FY 2013 Q2 FY 2012
Revenue %Revenue %Revenue %
Converged Packet Optical$291.457.4$240.053.0$264.655.4
Packet Networking57.111.245.810.129.96.3
Optical Transport57.411.357.612.784.417.7
Software and Services101.8 20.1 109.7 24.2 98.7 20.6
Total$507.7 100.0 $453.1 100.0 $477.6 100.0
 
* Denotes % change, or in the case of margin, absolute change
 

Additional Performance Metrics for Fiscal Second Quarter 2013

  • Non-U.S. customers contributed 43% of total revenue
  • Two customers accounted for greater than 10% of revenue and represented 31.3% of total revenue
  • Cash and investments totaled $456.5 million
  • Cash flow from operations totaled $44.9 million
  • Free cash flow totaled $35.6 million
  • Average days' sales outstanding (DSOs) were 75
  • Accounts receivable balance was $421.0 million
  • Inventories totaled $248.1 million, including:
    • Raw materials: $49.9 million
    • Work in process: $9.7 million
    • Finished goods: $145.1 million
    • Deferred cost of sales: $84.2 million
    • Reserve for excess and obsolescence: $(40.8) million
  • Product inventory turns were 3.9
  • Headcount totaled 4,546

Business Outlook for Fiscal Third 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 fiscal third quarter 2013 financial performance to include:

  • Revenue in the range of $515 to $545 million
  • Adjusted (non-GAAP) gross margin in the low 40s percent range
  • Adjusted (non-GAAP) operating expense in the mid $190s million range

Live Web Broadcast of Unaudited Fiscal Second Quarter 2013 Results

Ciena will host a discussion of its unaudited fiscal second quarter 2013 results with investors and financial analysts today, Thursday, June 6, 2013 at 8:30 a.m. (Eastern). The live broadcast of the discussion will be available via Ciena's homepage at http://www.ciena.com/. To accompany its live broadcast, Ciena has posted to the Investor Relations page of its website at: www.ciena.com/investors a presentation for investors that includes certain highlighted information relating to this quarter and certain historical results of operation. An archived transcript 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.

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 Ciena's business outlook for the fiscal third quarter of 2013 as well as: "We have designed Ciena to take advantage of the fundamental shift in network architecture driven by changing end-user demands, and our strong quarterly and first half of 2013 performance are a direct result of that strategy."; "Our unique ability to provide customers convergence, automation, openness and software intelligence positions us to lead the industry in this shift."; "These dynamics are creating new opportunities that we believe will enable us to continue making progress toward our long-term financial goals."

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 March 13, 2013. 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, Appendix A to this press release sets forth a complete GAAP to non-GAAP reconciliation of the non-GAAP measures contained in this release.

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. Investors are encouraged to review the Investors section of our website at www.ciena.com/investors, where we routinely post press releases, SEC filings, recent news, financial results, other announcements and, from time to time, exclusively post material information as with the other disclosure channels that we use.

 

CIENA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

 
 Quarter Ended April 30, Six Months Ended April 30,
2012 20132012 2013
Revenue:
Products$384,726$413,217$718,399$766,274
Services92,891 94,495 175,903 194,531 
Total revenue477,617 507,712 894,302 960,805 
Cost of goods sold:
Products234,372239,441432,124435,962
Services60,304 58,758 111,481 119,535 
Total cost of goods sold294,676 298,199 543,605 555,497 
Gross profit182,941 209,513 350,697 405,308 
Operating expenses:
Research and development90,399100,787180,063189,912
Selling and marketing62,51774,475126,928141,063
General and administrative26,67030,88356,33459,091
Amortization of intangible assets12,96712,43926,43824,892
Restructuring costs1,851 1,509 3,573 6,539 
Total operating expenses194,404 220,093 393,336 421,497 
Loss from operations(11,463)(10,580)(42,639)(16,189)
Interest and other income (loss), net(4,387)(2,716)(9,274)(2,853)
Interest expense(9,646)(11,392)(19,216)(22,124)
Loss on extinguishment of debt   (28,630)
Loss before income taxes(25,496)(24,688)(71,129)(69,796)
Provision for income taxes2,284 2,391 4,304 4,607 
Net loss$(27,780)$(27,079)$(75,433)$(74,403)
Basic net loss per common share$(0.28)$(0.27)$(0.77)$(0.73)
Diluted net loss per potential common share$(0.28)$(0.27)$(0.77)$(0.73)
Weighted average basic common shares outstanding98,981 101,913 98,525 101,560 
Weighted average dilutive potential common shares outstanding98,981 101,913 98,525 101,560 
 
 

CIENA CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

 
 October 31, April 30,
20122013
ASSETS
Current assets:
Cash and cash equivalents$642,444$356,498
Short-term investments50,05799,973
Accounts receivable, net345,496421,014
Inventories260,098248,096
Prepaid expenses and other 117,595  138,577 
Total current assets1,415,6901,264,158
Equipment, furniture and fixtures, net123,580117,553
Other intangible assets, net257,137221,476
Other long-term assets 84,736  90,157 
Total assets$1,881,143 $1,693,344 
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable$179,704$198,820
Accrued liabilities209,540222,783
Deferred revenue79,516 Read Full Story

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs 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.

year-in-review-promo

Markets

NASDAQ6,897.3621.560.31%
S&P 5002,667.124.270.16%
DJIA24,622.4637.030.15%
NIKKEI 22522,694.45-63.62-0.28%
HANG SENG29,166.38-55.72-0.19%
DAX13,124.53-1.11-0.01%
USD (per EUR)1.18-0.01-0.45%
USD (per CHF)0.990.000.46%
JPY (per USD)112.61-0.17-0.15%
GBP (per USD)1.340.000.14%
More to Explore