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Ciena Reports Fiscal First Quarter 2014 Financial Results

Ciena ® Corporation (NYSE: CIEN), the network specialist, today announced unaudited financial results for its fiscal first quarter ended January 31, 2014.

For the fiscal first quarter 2014, Ciena reported revenue of $533.7 million as compared to $453.1 million for the fiscal first quarter 2013.

On the basis of generally accepted accounting principles (GAAP), Ciena’s net loss for the fiscal first quarter 2014 was $(15.9) million, or $(0.15) per common share, which compares to a GAAP net loss of $(47.3) million, or $(0.47) per common share, for the fiscal first quarter 2013.

Ciena’s adjusted (non-GAAP) net income for the fiscal first quarter 2014 was $13.7 million, or $0.13 per diluted common share, which compares to an adjusted (non-GAAP) net income of $12.3 million, or $0.12 per diluted common share, for the fiscal first quarter 2013.

“Solid execution in our fiscal first quarter, including 18% year-on-year revenue growth and 6% adjusted operating margin, demonstrates our continued momentum, reinforces our market leadership, and positions us well for the long-term opportunity ahead,” said Gary B. Smith, president and CEO, Ciena. “We continue to benefit from the strategic decisions we’ve made to expand our role and reach in the market, driving more consistent performance and progress toward achieving our long-term operating targets.”

Fiscal First Quarter 2014 Performance Summary

The tables below (in millions, except percentage data) provide comparisons of certain quarterly results to prior periods, including sequential quarter 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
Q1   Q4   Q1   Period Change
FY 2014 FY 2013 FY 2013 Q-T-Q*   Y-T-Y*
Revenue $ 533.7 $ 583.4 $ 453.1 (8.5 )% 17.8 %
Gross margin 42.3 % 39.7 % 43.2 % 2.6 % (0.9 )%
Operating expense $ 222.5 $ 232.1 $ 201.4 (4.1 )% 10.5 %
Operating margin 0.6 % (0.1 )% (1.2 )% 0.7 % 1.8 %
 
 
Non-GAAP Results
Q1   Q4   Q1   Period Change
FY 2014 FY 2013 FY 2013 Q-T-Q*   Y-T-Y*
Revenue $ 533.7 $ 583.4 $ 453.1 (8.5 )% 17.8 %
Adj. gross margin 43.4 % 40.8 % 44.6 % 2.6 % (1.2 )%
Adj. operating expense $ 199.8 $ 210.5 $ 176.6 (5.1 )% 13.1 %
Adj. operating margin 5.9 % 4.7 % 5.6 % 1.2 % 0.3 %
 
 
Revenue by Segment
Q1 FY 2014   Q4 FY 2013   Q1 FY 2013
Revenue   % Revenue   % Revenue   %
Converged Packet Optical $ 333.4 62.5 $ 350.9 60.1 $ 240.0 53.0
Packet Networking 51.7 9.7 61.2 10.5 45.8 10.1
Optical Transport 40.1 7.5 52.6 9.0 57.6 12.7
Software and Services 108.5   20.3   118.7   20.3   109.7   24.2
Total $ 533.7   100.0   $ 583.4   100.0   $ 453.1   100.0
 
 

* Denotes % change, or in the case of margin, absolute change

 

Additional Performance Metrics for Fiscal First Quarter 2014

  • Non-U.S. customers contributed 41% of total revenue
  • One customer accounted for greater than 10% of revenue and represented 18.8% of total revenue
  • Cash and investments totaled $440.1 million
  • Cash flow used in operations totaled $(37.2) million
  • Free cash flow totaled $(52.9) million
  • Average days’ sales outstanding (DSOs) were 88
  • Accounts receivable balance was $518.9 million
  • Inventories totaled $284.1 million, including:
    • Raw materials: $56.7 million
    • Work in process: $7.3 million
    • Finished goods: $178.0 million
    • Deferred cost of sales: $84.5 million
    • Reserve for excess and obsolescence: $(42.4) million
  • Product inventory turns were 3.5
  • Headcount totaled 4,865

Business Outlook for Fiscal Second Quarter 2014

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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