Ciena Reports Q2 Results

LINTHICUM, Md. -- Ciena Corporation (NASDAQ: CIEN), the network specialist, today reported its fiscal second quarter 2005 results for the period ending April 30, 2005. Revenue for the second quarter totaled $103.8 million, representing a 9.6% sequential increase, and an increase of 39.0% over the same period a year ago.

On the basis of generally accepted accounting principles (GAAP), Ciena's reported net loss for the fiscal second quarter was $74.8 million, or a net loss of $0.13 per share. This loss compares to a GAAP net loss of $76.2 million, or a net loss of $0.16 per share, in the same period a year ago. For the six-month period ended April 30, 2005, Ciena's reported GAAP net loss was $131.8 million, or a net loss of $0.23 per share. This loss compares to a GAAP net loss of $152.9 million, or a net loss of $0.32 per share, in the same six-month period a year ago.

"Ciena's application-driven, network specialist approach enables us to differentiate ourselves in an often crowded market, and is clearly resonating with our customers," said Gary Smith, Ciena's president and CEO. "With our fifth sequential quarter of solid revenue growth, we are growing faster than the market and beginning to take share on a global basis. In addition to strong revenue growth, we continue to improve other important financial metrics, including delivering gross margin improvement and reducing our use of cash in our fiscal second quarter."

Second Quarter 2005 Highlights

Non-GAAP Presentation of Quarterly Results

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 tables that follow, 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.

Business Outlook

"We expect continued revenue growth, improving gross margin and lower operating expenses will combine to drive meaningful improvement in Ciena's financial performance over the balance of 2005," said Smith. "In addition to our expectations of five percent sequential revenue growth in our fiscal third quarter, we also expect product mix and ongoing cost reduction efforts to drive meaningful gross margin improvement for the second half of our fiscal year."

Ciena Corp.