Ciena Reports Q1 Results

LINTHICUM, Md. -- CIENA® Corporation (NASDAQ: CIEN - News), a leading global provider of innovative networking solutions, today reported its first fiscal quarter results for the period ending January 31, 2004. Consistent with the Company's preliminary results announcement, revenue for the quarter totaled $66.4 million. On a generally accepted accounting principles (GAAP) basis, CIENA's reported net loss for the quarter was $76.7 million, or a net loss of $0.16 per share.

First Quarter 2004 Highlights

Non-GAAP Presentation

In evaluating the operating performance of its business, CIENA's management excludes certain charges or credits that are required by GAAP. These items, which are identified in the table below, 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. Table 1: Quarter Ended January 31, 2004

These adjustments are not in accordance with GAAP, and making these adjustments may not permit meaningful comparisons to other companies. As of the quarter ended January 31, 2004, CIENA's weighted average shares outstanding were approximately 472,935,000. Adjusting CIENA's quarterly GAAP results as noted would reduce the Company's net loss in its first fiscal quarter to $0.08 per share.

Strategy and Vision

Separately today, CIENA announced its intent to acquire two companies, Catena Networks, Inc. and Internet Photonics, Inc. Catena is a leader in the emerging broadband access market. Internet Photonics is a leading provider of optical Ethernet transport and switching solutions.

"The acquisitions of Catena and Internet Photonics are part of CIENA's ongoing efforts to fuel long-term revenue growth and sustained profitability by expanding our addressable market; capitalizing on new growth opportunities in adjacent and complementary markets," said Gary Smith, CIENA's president and CEO. "In the simplest of terms, these acquisitions enhance the scope of the solutions we can offer our customers and further extend CIENA's network reach and presence.

"More strategically, these acquisitions are part of CIENA's vision to offer our customers a comprehensive set of solutions that enable them to realize a true, all-service network," said Smith. "The near-term opportunity for carriers and enterprises is optimizing delivery of any broadband service anywhere as opposed to any one specific service in any isolated portion of the network. That's why CIENA is integrating the best optical, data and access solutions to enable delivery of a wider range of broadband services."

Business Outlook

"Exclusive of any potential impact from the acquisitions announced today, we continue to expect that revenue in our second fiscal quarter will be up by as much as 20% from our fiscal first quarter revenue, though as always, these expectations include some risk," said Smith. "In addition, we remain committed to our previously stated goal of reducing our ongoing operating expenses, exclusive of the effects of the acquisitions announced today.

"We firmly believe the steps we've taken to evolve CIENA's vision and solution set to encompass new technologies and new areas of network growth and investment, position us for sustainable revenue and earnings growth long term," Smith said.

Ciena Corp.