NAPERVILLE, Ill. -- Reflecting the overall industry environment and carriers' current capital spending, Tellabs (Nasdaq: TLAB - news) today announced first-quarter 2002 sales of $371 million. The company reported first-quarter net income of $5 million and earnings per share of 1 cent. Excluding a one-time $5 million charge for in- process research and development related to the January acquisition of Ocular Networks, Tellabs earned 2 cents per share in the quarter. First-quarter operating expenses excluding this charge were $170 million, down 10% sequentially from the fourth quarter of 2001. Tellabs generated approximately $110 million in cash from operations during the first quarter of 2002. To keep pace with the industry environment, Tellabs announced plans to reduce its workforce by about 1,200 people. Tellabs plans to close a manufacturing facility in Ronkonkoma, N.Y., and consolidate several smaller locations. As a result, the company will record charges in the second quarter of approximately $130 million related to restructuring actions and approximately $110 million related to excess inventory and purchase commitments. Through these restructuring actions, Tellabs expects to generate annualized operating expense savings of $120 million for the remaining three quarters of 2002. In effect, Tellabs' operating expenses will be reduced from $785 million to $685 million in 2002. "As we size our business to match customer demand, we're sustaining the crucial capabilities we need to deliver metro optical networking and business services solutions to our customers,'' said Richard C. Notebaert, Tellabs president and chief executive officer. "Making the company smaller is painful, but it's essential to position Tellabs for a future return to growth.'' Tellabs Inc.