Ciena reports unaudited Fiscal Q4 2007,year end results

Ciena® Corporation (NASDAQ: CIEN), the network specialist, today announced unaudited results for its fiscal fourth quarter and year ended October 31, 2007. Revenue for the fourth quarter totaled $216.2 million, representing a 5.5% sequential increase from fiscal third quarter revenue of $205.0 million, and an increase of 35.2% over the same period a year ago when the Company reported revenue of $160.0 million. For the fiscal year ended October 31, 2007, Ciena reported revenue of $779.8 million, representing an increase of 38.2% over revenue of $564.1 million for fiscal 2006.

On the basis of generally accepted accounting principles (GAAP), Ciena’s net income for the fiscal fourth quarter 2007 was $30.4 million, or $0.30 per diluted share. This compares to fiscal third quarter GAAP net income of $28.3 million, or $0.29 per diluted share, and with a reported GAAP net income of $13.1 million, or $0.14 per diluted share, for the same period a year ago. For the fiscal year ended October 31, 2007, Ciena’s reported GAAP net income was $82.8 million, or $0.87 per diluted share. This compares to a GAAP net income of $0.6 million, or $0.01 per diluted share, for fiscal year 2006.

“By all accounts, 2007 was a momentous year for Ciena. In addition to achieving 38% annual revenue growth and delivering strong financial performance, we established ourselves as a leader in the emerging converged Ethernet infrastructure space with strong market validation for our FlexSelect Architecture and vision,” said Gary Smith, Ciena president and CEO. “Our strong 2007 performance is the direct result of the individual efforts of every single Ciena employee, and in 2008 everyone at Ciena will continue to focus on driving revenue growth while working toward further operating performance improvement.”

At October 31, 2007, Ciena had a $1.7 billion total cash position, which includes $892.1 million in cash and cash equivalents and $856.1 million in short-term and long-term investments in marketable debt securities. The Company’s fiscal fourth quarter and fiscal 2007 GAAP net income reflect a $13.0 million loss related to investments in commercial paper issued by SIV Portfolio plc (formerly known as Cheyne Finance plc) and Rhinebridge LLC, two structured investment vehicles (SIVs) that entered into receivership and failed to make payment at maturity. At the time of purchase, each investment had a rating of A1+ by Standard and Poor’s and P-1 by Moody’s, their highest ratings respectively. After giving effect to this loss, Ciena’s investment portfolio at October 31, 2007 included an estimated fair value of $33.9 million related to these two SIVs.

Non-GAAP Presentation of Quarterly Results

In evaluating the operating performance of its business, Ciena’s management excludes certain charges and credits that are required by GAAP. These items, which are identified in the table that follows (in thousands, except per share data) and further described in Appendix A, 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. Management believes that the non-GAAP measures below provide useful information and meaningful insight to the operating performance of the business.

Non-GAAP Presentation of Quarterly Results (Cont’d)

Adjusting Ciena’s unaudited fiscal fourth quarter 2007 GAAP net income of $30.4 million for the items noted above would increase the Company’s adjusted (non-GAAP) net income in the quarter to $50.3 million, or $0.48 per diluted share (non-GAAP). This compares with an adjusted (non-GAAP) net income of $22.0 million, or $0.24 per diluted share (non-GAAP), in the same year-ago period.^.

Fourth Quarter 2007 Performance Highlights

• Achieved sequential quarterly revenue growth of 5.5% and year-over-year revenue growth of 35.2%.
• Delivered overall gross margin of 50.5% and product gross margin of 55.0%.
• Delivered GAAP income from operations of 12.5% of revenue and adjusted income from operations of 15.7% of revenue.
• Ended the fiscal fourth quarter 2007 with cash, cash equivalents and short- and long-term investments of $1.7 billion.

Fourth Quarter 2007 Customer and Product Highlights

• VSNL , a leading communications solutions provider and member of the Tata Group, deployed Ciena's CoreDirector® Multiservice Optical Switches to create the first nationwide intelligent optical mesh network in India.
• Ciena’s FlexSelect™ 40G Shelf was honored by the International Engineering Consortium (IEC) with an InfoVision Award for Network Core Innovation and Advances.
• AboveNet, Inc., a leader in fiber optic connectivity solutions, deployed Ciena's CN 4200™ FlexSelect Advanced Services Platform throughout its metro networks to power a variety of private networks transporting Ethernet, IP and other managed services.
• Ciena’s CN 4200 FlexSelect Advanced Services Platform was honored by R&D Magazine as one of the 100 most technologically significant products introduced to the marketplace in the past year.

¹ Note that calculating diluted earnings per share for the fiscal fourth quarters 2006 and 2007 requires adding interest expense of approximately $0.2 million associated with the Company’s 0.25% convertible senior notes in 2006 and $2.0 million associated with the Company’s 0.25% and 0.875% convertible senior notes in 2007, to GAAP and adjusted net income in order to arrive at the numerator for the earnings per share calculation.

New CFO Named

Ciena also announced today that it named James E. Moylan, Jr., 56, to succeed outgoing CFO, Joseph Chinnici. Most recently, Mr. Moylan was Executive Vice President and Chief Financial Officer at Swett & Crawford, a private equity-owned wholesale insurance broker. His diverse public company experience includes CFO roles at PRG – Shultz International and at SCI Systems, Inc. where he played a key role in the company’s merger with Sanmina. Mr. Moylan holds an M.B.A. from Harvard and a B.S. in Industrial Engineering from Georgia Tech Institute of Technology. Mr. Moylan will assume CFO responsibility at Ciena following the filing of the Company’s 2007 Form 10-K.

“I can’t thank Joe enough for his support and contribution to the business over the years. We wish him all the best in his future endeavors,” said Smith. “I am confident that Jim’s business acumen, global perspective and significant experience will be valuable assets to Ciena, and I look forward to working with him through the next phase of Ciena’s growth.”

Business Outlook

“As we look into fiscal 2008, we believe Ciena is poised to benefit not only from capacity-related growth but also from the transition to next-generation, converged Ethernet-based network infrastructures,” said Smith. “We believe that Ciena’s focus on targeted segments of growth markets will enable us to continue to grow faster than our overall market. We expect to deliver up to 5% sequential revenue growth in our fiscal first quarter and 20% annual revenue growth in fiscal 2008.”

Separately today, Ciena also announced that BT has selected the CN 3000™ Ethernet Access Series as one of its preferred Network Termination Equipment (NTE) platforms for its 21st Century Network (21CN). The agreement extends BT’s partnership with Ciena, which already supplies optical Ethernet transport and switching solutions for the 21CN transmission domain, by enabling BT to provide Ethernet access in the last mile to support the roll-out of new 21CN services and applications.

Sourced From: Brodeur India