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Ciena Reports Fiscal Third Quarter 2013 Financial Results

Ciena ® Corporation (NASDAQ: CIEN), the network specialist, today announced unaudited financial results for its fiscal third quarter ended July 31, 2013.

For the fiscal third quarter 2013, Ciena reported revenue of $538.4 million.

On the basis of generally accepted accounting principles (GAAP), Ciena's net loss for the fiscal third quarter 2013 was $(1.2) million, or $(0.01) per common share, which compares to a GAAP net loss of $(29.8) million, or $(0.30) per common share, for the fiscal third quarter 2012.

Ciena's adjusted (non-GAAP) net income for the fiscal third quarter 2013 was $26.2 million, or $0.23 per common share, which compares to an adjusted (non-GAAP) net loss of $(4.1) million, or $(0.04) per common share, for the fiscal third quarter 2012.

"Differentiated by our specialist strategy, we have increased our market share, achieved steady growth, and delivered improved and more consistent financial performance over the last several quarters," said Gary Smith, president and CEO. "We believe that by expanding our role in the industry and extending our reach within our markets, we will be positioned to deliver greater profitability that is more sustainable over time."

Fiscal Third 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
Q3   Q2   Q3   Period Change
FY 2013 FY 2013 FY 2012 Q-T-Q*   Y-T-Y*
Revenue $ 538.4 $ 507.7 $ 474.1 6.0 % 13.6 %
Gross margin 42.4 % 41.3 % 38.2 % 1.1 % 4.2 %
Operating expense $ 213.4 $ 220.1 $ 196.6 (3.0 )% 8.5 %
Operating margin 2.8 % (2.1 )% (3.2 )% 4.9 % 6.0 %
 
Non-GAAP Results
Q3 Q2 Q3 Period Change
FY 2013 FY 2013 FY 2012 Q-T-Q* Y-T-Y*
Revenue $ 538.4 $ 507.7 $ 474.1 6.0 % 13.6 %
Adj. gross margin 43.6 % 42.5 % 39.6 % 1.1 % 4.0 %
Adj. operating expense $ 190.4 $ 197.4 $ 175.6 (3.5 )% 8.4 %
Adj. operating margin 8.2 % 3.7 % 2.5 % 4.5 % 5.7 %
 
  Revenue by Segment
Q3 FY 2013   Q2 FY 2013   Q3 FY 2012
Revenue   % Revenue   % Revenue   %
Converged Packet Optical $ 302.0 56.1 $ 294.3 57.9 $ 246.5 52.0
Packet Networking 61.6 11.4 54.2 10.7 30.2 6.4
Optical Transport 66.2 12.3 57.4 11.3 89.8 18.9
Software and Services 108.6   20.2   101.8   20.1   107.6   22.7
Total $ 538.4   100.0   $ 507.7   100.0   $ 474.1   100.0
 
* Denotes % change, or in the case of margin, absolute change
 

Additional Performance Metrics for Fiscal Third Quarter 2013

  • Non-U.S. customers contributed 37% of total revenue
  • Two customers accounted for greater than 10% of revenue and represented 31.8% of total revenue
  • Cash and investments totaled $493.2 million
  • Cash flow from operations totaled $42.0 million
  • Free cash flow totaled $31.6 million
  • Average days' sales outstanding (DSOs) were 72
  • Accounts receivable balance was $430.4 million
  • Inventories totaled $235.5 million, including:
    • Raw materials: $51.5 million
    • Work in process: $7.9 million
    • Finished goods: $147.8 million
    • Deferred cost of sales: $71.0 million
    • Reserve for excess and obsolescence: $(42.7) million
  • Product inventory turns were 4.2
  • Headcount totaled 4,680

Business Outlook for Fiscal Fourth 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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