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

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.

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