View:
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) December 14, 2006
-----------------------
Ciena Corporation
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware
- --------------------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation)
0-21969 23-2725311
- --------------------------------------------------------------------------------
(Commission File Number) (IRS Employer Identification No.)
1201 Winterson Road, Linthicum, MD 21090
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(410) 865-8500
- --------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02 - RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On December 14, 2006, Ciena Corporation issued a press release announcing
its financial results for its fourth fiscal quarter and fiscal year ended
October 31, 2006. The text of the press release is furnished as Exhibit 99.1 to
this Report. The information in this Report shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or
otherwise subject to the liabilities of that section, and shall not be
incorporated by reference into any registration statement pursuant to the
Securities Act of 1933, as amended.
ITEM 9.01 - FINANCIAL STATEMENTS AND EXHIBITS
(c) The following exhibit is being filed herewith:
Exhibit Number Description of Document
-------------- -----------------------
Exhibit 99.1 Text of Press Release dated December 14, 2006,
issued by Ciena Corporation, reporting its results
of operations for its fourth fiscal quarter and
fiscal year ended October 31, 2006.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Ciena Corporation
Date: December 14, 2006 By: /s/ Russell B. Stevenson, Jr.
--------------------------------------
Russell B. Stevenson, Jr.
Senior Vice President, General Counsel
and Secretary
EXHIBIT 99.1
Ciena Reports Unaudited Fiscal Fourth Quarter and Year-End Results
Quarterly revenue of $160.0 million represents 35.3%
year-over-year growth; Company achieves profitability for fiscal
fourth quarter and fiscal 2006
LINTHICUM, Md.--(BUSINESS WIRE)--December 14, 2006--Ciena(R) Corporation
(NASDAQ:CIEN), the network specialist, today announced unaudited
results for its fiscal fourth quarter and fiscal year ending October
31, 2006.
Ciena's unaudited fiscal fourth quarter revenue was $160.0
million, representing a 4.9% sequential increase from fiscal third
quarter revenue of $152.5 million and an increase of 35.3% over
revenue of $118.2 million for the same period a year ago. For the
fiscal year ending October 31, 2006, Ciena's unaudited revenue was
$564.1 million, representing an increase of 32.0 % over revenue of
$427.3 million for the same year-ago period.
Ciena's unaudited fiscal fourth quarter net income was $13.1
million, or a net income of $0.14 per diluted share. This compares to
a net loss of $252.9 million, or a net loss of $3.06 per share, in the
same period a year ago. Net loss for the fiscal fourth quarter 2005
reflects an aggregate charge of $222.3 million associated with
impairment of goodwill and long-lived assets. For the fiscal year
ending October 31, 2006, Ciena's net income was $0.6 million, or a net
income of $0.01 per diluted share. This compares to a net loss of
$435.7 million, or a net loss of $5.30 per share, in the same
twelve-month period a year ago.
"Ciena's return to profitability in fiscal 2006 can be attributed
to the focused, persistent execution of our strategy. Continuing to
invest in innovation has enabled us to leverage our network specialist
position, thereby driving strong revenue growth," said Ciena CEO and
President, Gary Smith. "As a result, our fiscal fourth quarter results
represent our eleventh sequential quarterly increase in revenue, at a
pace exceeding that of the overall market. Customers are embracing the
value of our FlexSelect(TM) Architecture, a unique formula for
facilitating network transition, and we are beginning to reap the
benefits of bringing that vision to market."
Non-GAAP Presentation of Results
In evaluating the operating performance of its business, Ciena's
management excludes certain charges or credits that are required by
Generally Accepted Accounting Principles (GAAP). These items, which
are identified in the table that follows (in thousands, except per
share data), 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
the Company's control.
Quarter ended Oct. 31, Year ended Oct. 31,
----------------------- -----------------------
Item 2005 2006 2005 2006
----------- ----------- ----------- -----------
Stock-based
compensation-product $ - $ 204 $ - $ 1,075
Stock-based
compensation-services - 206 - 810
Stock-based
compensation-research
and development 356 938 4,404 5,057
Stock-based
compensation-sales
and marketing 147 706 4,404 3,415
Stock-based
compensation-general
and administrative 128 963 633 3,385
Amortization of
intangible assets 8,514 6,296 38,782 25,181
Restructuring costs 2,773 (366) 18,018 15,671
Goodwill impairment 176,600 - 176,600 -
Long-lived asset
impairment 45,728 6 45,862 -
Provision for
(recovery of)
doubtful accounts,
net (2) (41) 2,602 (3,031)
Gain on lease
settlement - - - (11,648)
Contingent legal and
consulting fees upon
litigation settlement - - - 5,705
(Gain) loss on equity
investments, net 500 - 9,486 (215)
Gain on extinguishment
of debt - - (3,882) (7,052)
Income tax adjustment 6,477 (7,443) 49,435 (12,734)
----------- ----------- ----------- -----------
Total adjustments $ 241,221 $ 1,469 $ 346,344 $ 25,619
=========== =========== =========== ===========
GAAP net income (loss) $ (252,870) $ 13,081 $ (435,699) $ 595
Adjustment for the
items above 241,221 1,469 346,344 25,619
----------- ----------- ----------- -----------
Adjusted (non-GAAP)
net income (loss) $ (11,649) $ 14,550 $ (89,355) $ 26,214
=========== =========== =========== ===========
Numerator for Adjusted
(non-GAAP) diluted
EPS calculation
Adjusted (non-GAAP)
net income (loss) $ (11,649) $ 14,550 $ (89,355) $ 26,214
Add: Interest expense
associated with
convertible notes
(excluding anti-
dilutive expense)
adjusted for tax
effect - 122 - 272
----------- ----------- ----------- -----------
Adjusted (non-GAAP)
net income (loss)
used to calculate
Adjusted (non-GAAP)
diluted EPS $ (11,649) $ 14,672 $ (89,355) $ 26,486
=========== =========== =========== ===========
Denominator for
Adjusted (non-GAAP)
diluted EPS
calculation
Basic weighted average
shares issued and
outstanding 82,689 84,657 82,170 83,840
Add: Weighted average
shares issuable under
stock options,
warrants and
restricted stock
units - 899 - 1,171
Add: Weighted average
shares associated
with convertible
notes on an "if
converted" basis - 7,590 - -
-----------------------------------------------
-----------------------------------------------
Quarter ended Oct. 31, Year ended Oct. 31,
----------------------- -----------------------
Item 2005 2006 2005 2006
----------- ----------- ----------- -----------
Diluted weighted
average shares issued
and outstanding 82,689 93,146 82,170 85,011
Add: Weighted average
shares associated
with convertible
notes on an "if
converted" basis (1) - - - 4,203
----------- ----------- ----------- -----------
Adjusted (non-GAAP)
diluted weighted
average shares issued
and outstanding 82,689 93,146 82,170 89,214
=========== =========== =========== ===========
Adjusted (non-GAAP)
basic EPS $ (0.14) $ 0.17 $ (1.09) $ 0.31
Adjusted (non-GAAP)
diluted EPS $ (0.14) $ 0.16 $ (1.09) $ 0.30
Please see Appendix A for additional information about this table.
(1) These shares, underlying Ciena's 0.25% convertible senior notes,
are excluded from the calculation of GAAP net income per diluted
share for the fiscal year ended October 31, 2006 because of their
anti-dilutive effect.
Adjusting Ciena's unaudited fiscal fourth quarter 2006 GAAP net
income of $13.1 million for the items noted above would increase the
Company's adjusted (non-GAAP) net income in the quarter to $14.6
million, or an adjusted (non-GAAP) net income of $0.16 per adjusted
diluted share. This compares with an adjusted (non-GAAP) net loss of
$11.6 million, or an adjusted (non-GAAP) net loss of $0.14 per share,
in the same year-ago period.
Adjusting Ciena's unaudited fiscal year 2006 GAAP net income of
$0.6 million for the items noted above would increase the Company's
adjusted (non-GAAP) net income for the year to $26.2 million, or an
adjusted (non-GAAP) net income of $0.30 per adjusted diluted share.
This compares with an adjusted (non-GAAP) net loss of $89.4 million,
or an adjusted (non-GAAP) net loss of $1.09 per share, in the same
year-ago period.
To aid investors' understanding of Ciena's results and the effect
of SFAS 123R-related share-based compensation expenses, the following
table (in thousands, except per share data) summarizes the
presentation of Ciena's financial results covered in this press
release for both the Company's fiscal fourth quarter 2005 and fiscal
fourth quarter 2006.
Periods prior to the Company's fiscal first quarter 2006 have not
been restated to reflect, and do not include, the impact of SFAS 123R.
Prior periods do include share-based compensation expense recognized
in accordance with Accounting Principles Board (APB) Opinion No. 25,
"Accounting for Stock Issued to Employees," as interpreted by
Financial Accounting Standards Board (FASB) Interpretation (FIN) No.
44.
Quarter ended Oct. 31,
--------------------------------------------
2005 2006
--------------------- ----------------------
Net loss Net loss Net Net income
per share income per diluted
share
--------------------- ----------------------
GAAP
- -------------------------
1. GAAP results as
reported $(252,870) $(3.06) $13,081 $0.14
========== ========== ========== ===========
Non-GAAP
- -------------------------
1. GAAP results less SFAS
123R-related share-
based compensation
expense N/A N/A $16,098 $0.17
========== ========== ========== ===========
2. GAAP results less APB
25-related share-
based compensation
expense $(252,239) $(3.05) N/A N/A
========== ========== ========== ===========
3. As-adjusted results
(excludes SFAS 123R
and APB 25-related
share-based
compensation expense
and other items as
defined in previous
table) $(11,649) $(0.14) $14,550 $0.16
========== ========== ========== ===========
Fourth Quarter 2006 Financial Highlights
-- Ciena delivered fiscal fourth quarter sequential revenue
growth of 4.9% and year-over-year revenue growth of 35.3%.
-- Ciena used $15.0 million (including $10.2 million of
semi-annual interest payments on the Company's outstanding
3.75% convertible notes) in cash for operations in the fiscal
fourth quarter.
-- Ciena ended the fiscal fourth quarter 2006 with cash and
short- and long-term investments of $1.2 billion.
-- Ciena reduced operating expenses to $68.9 million in the
fiscal fourth quarter 2006.
Fourth Quarter 2006 Customer and Product Highlights
-- Swisscom and Ciena announced that Swisscom's Carrier Optical
Service (COS) and Ciena's optical Ethernet platforms -- the CN
4200(TM) FlexSelect(TM) Advanced Services Platform and CN
2300(TM) Managed Optical Services Multiplexer-- have been
certified by the Metro Ethernet Forum for carrier Ethernet
Services at the User Network Interface (UNI).
-- Interoute and Ciena expanded existing relationship to upgrade
and extend the operator's Eastern European network,
positioning Interoute as the first service provider to offer
carrier-class 10-Gigabit wavelength and 10-Gigabit Ethernet
services on-demand to enterprise customers in emerging
European Union countries.
-- Internet2 and Ciena announced a partnership to deploy Ciena's
CoreDirector(R) Multiservice Switch in the new Internet2
nationwide advanced research and education network. Ciena also
became an Internet2 Corporate Partner, the highest level
partnership offered, to further advance the exploration and
development of next-generation optical switching technology.
-- Ciena was selected by University of Tennessee at Knoxville for
an optical control plane research collaboration to automate
configuration and provisioning of lightpaths in support of
grid computing applications.
-- Ciena introduced Data Migration Managed Service (DMMS), a
flexible, short-term solution for enterprise data migration
needs built around Ciena's award winning CN 2000(TM) Storage
Extension Platform and ON-Center(R) Network Management Suite.
Business Outlook
"We remain encouraged by the continued improvement in the strength
of our addressable market, and are building momentum with customers as
they transition their networks to Ethernet-centric, converged
architectures in support of demand for a broader mix of services,"
said Smith. "We've demonstrated progress in several strategic areas,
and are confident that sustained execution of our strategy will enable
us to become even more globally competitive and continue improving our
overall financial performance in 2007 and beyond."
Smith concluded: "We expect to deliver, on a percentage basis, low
single-digit sequential revenue growth in our fiscal first quarter
2007. And, based on our current order pipeline we see growth improving
during the balance of the year."
Live Web Broadcast of Unaudited Fiscal Fourth Quarter Results
Ciena will host a discussion of its unaudited fiscal fourth
quarter results with investors and financial analysts today, Thursday,
December 14, 2006 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: http://www.ciena.com/investors/investors.htm.
NOTE TO INVESTORS
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 filed with the
Securities and Exchange Commission on August 31, 2006. 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:
we remain encouraged by the continued improvement in strength of our
addressable market, and are building momentum with customers as they
transition their networks to Ethernet-centric, converged architectures
in support of demand for a broader mix of services; we've demonstrated
progress in several strategic areas, and are confident that sustained
execution of our strategy will enable us to become even more globally
competitive and continue improving our overall financial performance
in 2007 and beyond; we expect to deliver, on a percentage basis, low
single-digit sequential revenue growth in our fiscal first quarter
2007; based on our current order pipeline we see growth improving
during the balance of the year. Ciena assumes no obligation to update
the information included in this press release, whether as a result of
new information, future events or otherwise.
(Unaudited Consolidated Balance Sheets, Statement of Operations
and Cash Flows follow)
CIENA CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
ASSETS
Year Ended October 31,
--------------------------
Current assets: 2005 2006
------------ ------------
Cash and cash equivalents $ 358,012 $ 220,164
Short-term investments 579,531 628,393
Accounts receivable, net 72,786 107,172
Inventories, net 49,333 106,085
Prepaid expenses and other 37,867 36,372
------------ ------------
Total current assets 1,097,529 1,098,186
Long-term investments 155,944 351,407
Equipment, furniture and fixtures, net 28,090 29,427
Goodwill 232,015 232,015
Other intangible assets, net 120,324 91,274
Other long-term assets 41,327 37,404
------------ ------------
Total assets $ 1,675,229 $ 1,839,713
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 43,868 $ 39,277
Accrued liabilities 76,491 79,282
Restructuring liabilities 15,492 8,914
Unfavorable lease commitments 9,011 8,512
Income taxes payable 5,785 5,981
Deferred revenue 27,817 19,637
------------ ------------
Total current liabilities 178,464 161,603
Long-term deferred revenue 15,701 21,039
Long-term restructuring liabilities 54,285 26,720
Long-term unfavorable lease commitments 41,364 32,785
Other long-term obligations 1,296 1,678
Convertible notes payable 648,752 842,262
------------ ------------
Total liabilities 939,862 1,086,087
------------ ------------
Commitments and contingencies
Stockholders' equity:
Preferred stock - par value $0.01;
20,000,000 shares authorized; zero
shares issued and outstanding - -
Common stock - par value $0.01;
140,000,000 shares authorized;
82,905,849 and 84,891,656 shares issued
and outstanding 829 849
Additional paid-in capital 5,494,587 5,505,853
Deferred stock compensation (2,286) -
Changes in unrealized gains on
investments, net (4,673) (496)
Translation adjustment (495) (580)
Accumulated deficit (4,752,595) (4,752,000)
------------ ------------
Total stockholders' equity 735,367 753,626
------------ ------------
Total liabilities and stockholders'
equity $ 1,675,229 $ 1,839,713
============ ============
CIENA CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Quarter Ended October 31, Year Ended October 31,
------------------------- -------------------------
2005 2006 2005 2006
------------ ------------ ------------ ------------
Revenue:
Products $ 102,909 $ 141,469 $ 374,275 $ 502,427
Services 15,274 18,483 52,982 61,629
------------ ------------ ------------ ------------
Total revenue 118,183 159,952 427,257 564,056
------------ ------------ ------------ ------------
Costs:
Products 59,484 73,955 248,931 263,667
Services 11,535 13,241 42,136 42,608
------------ ------------ ------------ ------------
Total cost of
goods sold 71,019 87,196 291,067 306,275
------------ ------------ ------------ ------------
Gross profit 47,164 72,756 136,190 257,781
------------ ------------ ------------ ------------
Operating
expenses:
Research and
development 32,161 26,561 137,245 111,069
Selling and
marketing 28,325 26,302 115,022 104,434
General and
administrative 7,672 10,117 33,715 47,476
Amortization of
intangible
assets 8,514 6,296 38,782 25,181
Restructuring
costs 2,773 (366) 18,018 15,671
Goodwill
impairment 176,600 - 176,600 -
Long-lived
asset
impairments 45,728 6 45,862 -
Provision for
(recovery of)
doubtful
accounts, net (2) (41) 2,602 (3,031)
Gain on lease
settlement - - - (11,648)
------------ ------------ ------------ ------------
Total
operating
expenses 301,771 68,875 567,846 289,152
------------ ------------ ------------ ------------
Gain (loss) from
operations (254,607) 3,881 (431,656) (31,371)
Interest and other
income (expense),
net 9,236 15,741 31,294 50,245
Interest expense (6,794) (6,149) (28,413) (24,165)
Gain (loss) on
equity
investments, net (500) - (9,486) 215
Gain on
extinguishment of
debt - - 3,882 7,052
------------ ------------ ------------ ------------
Income (loss)
before income
taxes (252,665) 13,473 (434,379) 1,976
Provision for
income taxes 205 392 1,320 1,381
------------ ------------ ------------ ------------
Net income (loss) $ (252,870) $ 13,081 $ (435,699) $ 595
============ ============ ============ ============
Basic net income
(loss) per common
share $ (3.06) $ 0.15 $ (5.30) $ 0.01
============ ============ ============ ============
Diluted net income
(loss) per common
share and
dilutive
potential common
share $ (3.06) $ 0.14 $ (5.30) $ 0.01
============ ============ ============ ============
Weighted average
basic common
shares
outstanding 82,689 84,657 82,170 83,840
============ ============ ============ ============
Weighted average
basic common and
dilutive
potential common
shares
outstanding 82,689 93,146 82,170 85,011
============ ============ ============ ============
CIENA CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Year Ended October 31,
--------------------------
2005 2006
------------ ------------
Cash flows from operating activities:
Net income (loss) $ (435,699) $ 595
Adjustments to reconcile net income
(loss) to net cash used in operating
activities:
Early extinguishment of debt (3,882) (7,052)
Amortization of premium (discount) on
marketable securities 13,636 (823)
Non-cash loss from equity investments 9,486 733
Non-cash impairment of long-lived
assets 45,862 -
Depreciation and amortization of
leasehold improvements 33,377 16,401
Goodwill impairment 176,600 -
Stock-based compensation 9,441 14,042
Amortization of intangible assets 42,651 29,050
Provision for doubtful accounts 2,602 -
Provision for inventory excess and
obsolescence 5,232 9,012
Provision for warranty and other
contractual obligations 9,738 14,522
Other 3,218 2,028
Changes in assets and liabilities:
Accounts receivable (29,510) (34,386)
Inventories (6,951) (65,764)
Prepaid expenses and other 7,420 4,056
Accounts payable and accruals (19,633) (59,161)
Income taxes payable 2,431 196
Deferred revenue and other
obligations 5,942 (2,842)
------------ ------------
Net cash used in operating
activities (128,039) (79,393)
------------ ------------
Cash flows from investing activities:
Additions to equipment, furniture,
fixtures and intellectual property (11,315) (17,760)
Proceeds from sale of equipment,
furniture and fixtures 278 -
Restricted cash 1,986 4,552
Purchase of available for sale
securities (578,846) (1,090,409)
Maturities of available for sale
securities 910,505 851,084
Minority equity investments, net 4,882 948
------------ ------------
Net cash provided by (used in)
investing activities 327,490 (251,585)
------------ ------------
Cash flows from financing activities:
Proceeds from issuance of 0.25%
convertible senior notes payable - 300,000
Repurchase of 3.75% convertible notes
payable (36,913) (98,410)
Debt issuance costs - (7,990)
Purchase of call spread option - (28,457)
Proceeds from issuance of common stock
and warrants 9,558 27,987
Repayment of notes receivable from
stockholders 48 -
------------ ------------
Net cash provided by (used in)
financing activities (27,307) 193,130
------------ ------------
Net (decrease) increase in cash and
cash equivalents 172,144 (137,848)
Cash and cash equivalents at beginning of
period 185,868 358,012
------------ ------------
Cash and cash equivalents at end of period $ 358,012 $ 220,164
============ ============
Supplemental disclosure of cash flow
information
Cash paid during the period for:
Interest $ 25,817 $ 21,685
============ ============
Income taxes $ 977 $ 969
============ ============
Appendix A
The adjustments management makes in analyzing Ciena's fiscal
fourth quarter and fiscal years-ended 2005 and 2006 GAAP results are
as follows:
-- Stock compensation costs - As of November 1, 2005, Ciena
adopted SFAS 123R. In accordance with the modified prospective
application transition method, Ciena's consolidated financial
statements for prior periods have not been restated to
reflect, and do not include, the impact of SFAS 123R. Prior
periods do include share-based compensation expense recognized
in accordance with APB 25 as interpreted by FASB
Interpretation (FIN) No. 44.
-- Amortization of intangible assets - a non-cash expense arising
from acquisitions of intangible assets, principally developed
technology, which Ciena is required to amortize over its
expected useful life and which the Company feels is not
reflective of its ongoing operating costs.
-- Restructuring costs - non-recurring charges incurred as the
result of reducing the size of the Company's operations to
align its resources with the reduced size of the
telecommunications market as well as the result of targeting
new segment opportunities within the overall market, which the
Company feels are not reflective of its ongoing operating
costs.
-- Goodwill impairment - non-cash expense resulting from the
decline in the forecasted market demand for the Company's
products.
-- Long-lived asset impairment - non-recurring charges, incurred
as a result of excess equipment classified as held for sale
which the Company feels are not reflective of its ongoing
operating costs.
-- Provision for (recovery of) doubtful accounts - a
non-recurring charge unrelated to normal operations resulting
from an assessment of doubtful payment due to a customer's
financial condition.
-- Gain on lease settlement - a non-recurring gain unrelated to
normal operations resulting from termination of obligations
under a lease for an unused facility.
-- Contingent legal and consulting fees upon litigation
settlement - included in general and administrative expenses
during our third quarter of fiscal 2006 were $5.7 million in
contingent fees paid to outside counsel and advisors connected
with the settlement of patent litigation with Nortel Networks.
-- Loss (gain) on equity investments, net - a non-recurring gain
or loss related to changes in the value of the Company's
equity investments which the Company feels is not reflective
of its ongoing operating costs.
-- Loss (gain) on extinguishment of debt - a non-recurring gain
or loss related to the early extinguishment of outstanding
debt.
-- Income tax affect on adjusted net income (loss) - the income
tax charge or benefit on the adjusted net income or loss,
which is a necessary adjustment for consistency. The Company
currently has a full valuation allowance for GAAP reporting
purposes and accordingly does not recognize a tax benefit for
losses generated.
About Ciena
Ciena Corporation is the network specialist, focused on expanding
the possibilities for its customers' networks while reducing their
cost of ownership. The Company's systems, software and services target
and cure specific network pain points so that telcos, cable operators,
governments and enterprises can best exploit the new applications that
are driving their businesses forward. For more information, visit
www.ciena.com.
CONTACT: Ciena Corporation
Press Contact:
Nicole Anderson, (410) 694-5786
pr@ciena.com
or
Investor Contact:
Jessica Towns, (888) 243-6223
ir@ciena.com