Price Graph
Price
Yield
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|
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Delaware
(State or other jurisdiction of
incorporation or organization)
|
23-2725311
(I.R.S. Employer Identification No.)
|
|
7035 Ridge Road, Hanover, MD
(Address of Principal Executive Offices)
|
21076
(Zip Code)
|
|
Large accelerated filer
þ
|
Accelerated filer
o
|
Non-accelerated filer
o
(do not check if smaller reporting company)
|
Smaller reporting company
o
|
|
Class
|
|
Outstanding at September 4, 2015
|
|
common stock, $0.01 par value
|
|
134,754,004
|
|
|
PAGE
NUMBER
|
|
|
|
|
|
|
|
|
Quarter Ended July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
||||||||
|
Revenue:
|
|
|
|
|
|
|
|
||||||||
|
Products
|
$
|
495,889
|
|
|
$
|
493,919
|
|
|
$
|
1,389,651
|
|
|
$
|
1,428,114
|
|
|
Services
|
107,673
|
|
|
109,013
|
|
|
307,675
|
|
|
325,582
|
|
||||
|
Total revenue
|
603,562
|
|
|
602,932
|
|
|
1,697,326
|
|
|
1,753,696
|
|
||||
|
Cost of goods sold:
|
|
|
|
|
|
|
|
||||||||
|
Products
|
275,003
|
|
|
273,837
|
|
|
777,851
|
|
|
797,283
|
|
||||
|
Services
|
64,586
|
|
|
59,226
|
|
|
191,960
|
|
|
183,838
|
|
||||
|
Total cost of goods sold
|
339,589
|
|
|
333,063
|
|
|
969,811
|
|
|
981,121
|
|
||||
|
Gross profit
|
263,973
|
|
|
269,869
|
|
|
727,515
|
|
|
772,575
|
|
||||
|
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
|
Research and development
|
97,685
|
|
|
100,379
|
|
|
302,674
|
|
|
306,342
|
|
||||
|
Selling and marketing
|
81,919
|
|
|
81,650
|
|
|
243,929
|
|
|
240,833
|
|
||||
|
General and administrative
|
36,285
|
|
|
29,743
|
|
|
98,264
|
|
|
89,598
|
|
||||
|
Acquisition and integration costs
|
—
|
|
|
2,435
|
|
|
—
|
|
|
3,455
|
|
||||
|
Amortization of intangible assets
|
11,019
|
|
|
11,019
|
|
|
34,951
|
|
|
33,057
|
|
||||
|
Restructuring costs
|
63
|
|
|
192
|
|
|
178
|
|
|
8,260
|
|
||||
|
Total operating expenses
|
226,971
|
|
|
225,418
|
|
|
679,996
|
|
|
681,545
|
|
||||
|
Income from operations
|
37,002
|
|
|
44,451
|
|
|
47,519
|
|
|
91,030
|
|
||||
|
Interest and other income (loss), net
|
(6,328
|
)
|
|
(5,491
|
)
|
|
(14,231
|
)
|
|
(19,273
|
)
|
||||
|
Interest expense
|
(11,508
|
)
|
|
(11,883
|
)
|
|
(33,556
|
)
|
|
(38,491
|
)
|
||||
|
Income (loss) before income taxes
|
19,166
|
|
|
27,077
|
|
|
(268
|
)
|
|
33,266
|
|
||||
|
Provision for income taxes
|
3,006
|
|
|
3,452
|
|
|
9,666
|
|
|
7,767
|
|
||||
|
Net income (loss)
|
$
|
16,160
|
|
|
$
|
23,625
|
|
|
$
|
(9,934
|
)
|
|
$
|
25,499
|
|
|
Basic net income (loss) per common share
|
$
|
0.15
|
|
|
$
|
0.20
|
|
|
$
|
(0.09
|
)
|
|
$
|
0.23
|
|
|
Diluted net income (loss) per potential common share
|
$
|
0.15
|
|
|
$
|
0.19
|
|
|
$
|
(0.09
|
)
|
|
$
|
0.22
|
|
|
Weighted average basic common shares outstanding
|
106,236
|
|
|
118,413
|
|
|
105,404
|
|
|
113,189
|
|
||||
|
Weighted average dilutive potential common shares outstanding
|
120,809
|
|
|
133,233
|
|
|
105,404
|
|
|
114,549
|
|
||||
|
|
Quarter Ended July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
||||||||
|
Net income (loss)
|
$
|
16,160
|
|
|
$
|
23,625
|
|
|
$
|
(9,934
|
)
|
|
$
|
25,499
|
|
|
Change in unrealized gain on available-for-sale securities, net of tax
|
(43
|
)
|
|
(13
|
)
|
|
(12
|
)
|
|
(37
|
)
|
||||
|
Change in unrealized loss on foreign currency forward contracts, net of tax
|
383
|
|
|
(154
|
)
|
|
34
|
|
|
(1,626
|
)
|
||||
|
Change in unrealized loss on forward starting interest rate swap, net of tax
|
—
|
|
|
(667
|
)
|
|
—
|
|
|
(2,885
|
)
|
||||
|
Change in cumulative translation adjustment
|
(122
|
)
|
|
(3,508
|
)
|
|
(4,287
|
)
|
|
(6,919
|
)
|
||||
|
Other comprehensive income (loss)
|
218
|
|
|
(4,342
|
)
|
|
(4,265
|
)
|
|
(11,467
|
)
|
||||
|
Total comprehensive income (loss)
|
$
|
16,378
|
|
|
$
|
19,283
|
|
|
$
|
(14,199
|
)
|
|
$
|
14,032
|
|
|
|
October 31,
2014 |
|
July 31,
2015 |
||||
|
ASSETS
|
|
|
|
||||
|
Current assets:
|
|
|
|
||||
|
Cash and cash equivalents
|
$
|
586,720
|
|
|
$
|
697,091
|
|
|
Short-term investments
|
140,205
|
|
|
160,067
|
|
||
|
Accounts receivable, net
|
518,981
|
|
|
530,261
|
|
||
|
Inventories
|
254,660
|
|
|
194,017
|
|
||
|
Prepaid expenses and other
|
192,624
|
|
|
185,140
|
|
||
|
Total current assets
|
1,693,190
|
|
|
1,766,576
|
|
||
|
Long-term investments
|
50,057
|
|
|
70,161
|
|
||
|
Equipment, building, furniture and fixtures, net
|
126,632
|
|
|
159,592
|
|
||
|
Other intangible assets, net
|
128,677
|
|
|
89,019
|
|
||
|
Other long-term assets
|
74,076
|
|
|
78,347
|
|
||
|
Total assets
|
$
|
2,072,632
|
|
|
$
|
2,163,695
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
|
||||
|
Current liabilities:
|
|
|
|
||||
|
Accounts payable
|
$
|
209,777
|
|
|
$
|
201,774
|
|
|
Accrued liabilities
|
276,608
|
|
|
272,691
|
|
||
|
Deferred revenue
|
104,688
|
|
|
114,902
|
|
||
|
Current portion of long-term debt
|
190,063
|
|
|
2,500
|
|
||
|
Total current liabilities
|
781,136
|
|
|
591,867
|
|
||
|
Long-term deferred revenue
|
40,930
|
|
|
53,731
|
|
||
|
Other long-term obligations
|
45,390
|
|
|
63,482
|
|
||
|
Long-term debt, net
|
1,274,791
|
|
|
1,276,761
|
|
||
|
Total liabilities
|
$
|
2,142,247
|
|
|
$
|
1,985,841
|
|
|
Commitments and contingencies (Note 20)
|
|
|
|
||||
|
Stockholders’ equity (deficit):
|
|
|
|
||||
|
Preferred stock – par value $0.01; 20,000,000 shares authorized; zero shares issued and outstanding
|
—
|
|
|
—
|
|
||
|
Common stock – par value $0.01; 290,000,000 shares authorized; 106,979,960 and 118,725,874 shares issued and outstanding
|
1,070
|
|
|
1,187
|
|
||
|
Additional paid-in capital
|
5,954,440
|
|
|
6,187,759
|
|
||
|
Accumulated other comprehensive loss
|
(14,668
|
)
|
|
(26,135
|
)
|
||
|
Accumulated deficit
|
(6,010,457
|
)
|
|
(5,984,957
|
)
|
||
|
Total stockholders’ equity (deficit)
|
(69,615
|
)
|
|
177,854
|
|
||
|
Total liabilities and stockholders’ equity (deficit)
|
$
|
2,072,632
|
|
|
$
|
2,163,695
|
|
|
|
Nine Months Ended July 31,
|
||||||
|
|
2014
|
|
2015
|
||||
|
Cash flows provided by operating activities:
|
|
|
|
||||
|
Net income (loss)
|
$
|
(9,934
|
)
|
|
$
|
25,499
|
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
|
Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements
|
41,463
|
|
|
41,601
|
|
||
|
Share-based compensation costs
|
34,204
|
|
|
32,402
|
|
||
|
Amortization of intangible assets
|
43,931
|
|
|
39,659
|
|
||
|
Provision for inventory excess and obsolescence
|
22,026
|
|
|
18,010
|
|
||
|
Provision for warranty
|
18,720
|
|
|
12,549
|
|
||
|
Other
|
21,254
|
|
|
(1,220
|
)
|
||
|
Changes in assets and liabilities:
|
|
|
|
||||
|
Accounts receivable
|
(55,688
|
)
|
|
(12,053
|
)
|
||
|
Inventories
|
(66,015
|
)
|
|
42,633
|
|
||
|
Prepaid expenses and other
|
(26,698
|
)
|
|
(5,345
|
)
|
||
|
Accounts payable, accruals and other obligations
|
(34,794
|
)
|
|
(39,266
|
)
|
||
|
Deferred revenue
|
27,498
|
|
|
23,015
|
|
||
|
Net cash provided by operating activities
|
15,967
|
|
|
177,484
|
|
||
|
Cash flows used in investing activities:
|
|
|
|
||||
|
Payments for equipment, furniture, fixtures and intellectual property
|
(35,974
|
)
|
|
(39,729
|
)
|
||
|
Restricted cash
|
2,059
|
|
|
(42
|
)
|
||
|
Purchase of available for sale securities
|
(195,259
|
)
|
|
(180,203
|
)
|
||
|
Proceeds from maturities of available for sale securities
|
150,000
|
|
|
140,000
|
|
||
|
Settlement of foreign currency forward contracts, net
|
(10,796
|
)
|
|
16,289
|
|
||
|
Purchase of cost method investment
|
—
|
|
|
(2,000
|
)
|
||
|
Net cash used in investing activities
|
(89,970
|
)
|
|
(65,685
|
)
|
||
|
Cash flows provided by financing activities:
|
|
|
|
||||
|
Proceeds from issuance of term loan, net
|
248,750
|
|
|
—
|
|
||
|
Payment of long term debt
|
—
|
|
|
(8,901
|
)
|
||
|
Payment for debt and equity issuance costs
|
(3,263
|
)
|
|
(420
|
)
|
||
|
Payment of capital lease obligations
|
(2,275
|
)
|
|
(6,441
|
)
|
||
|
Proceeds from issuance of common stock
|
17,518
|
|
|
19,622
|
|
||
|
Net cash provided by financing activities
|
260,730
|
|
|
3,860
|
|
||
|
Effect of exchange rate changes on cash and cash equivalents
|
(330
|
)
|
|
(5,288
|
)
|
||
|
Net increase in cash and cash equivalents
|
186,397
|
|
|
110,371
|
|
||
|
Cash and cash equivalents at beginning of period
|
346,487
|
|
|
586,720
|
|
||
|
Cash and cash equivalents at end of period
|
$
|
532,884
|
|
|
$
|
697,091
|
|
|
Supplemental disclosure of cash flow information
|
|
|
|
||||
|
Cash paid during the period for interest
|
$
|
23,425
|
|
|
$
|
31,566
|
|
|
Cash paid during the period for income taxes, net
|
$
|
9,051
|
|
|
$
|
8,526
|
|
|
Non-cash investing activities
|
|
|
|
||||
|
Purchase of equipment in accounts payable
|
$
|
4,334
|
|
|
$
|
16,717
|
|
|
Debt issuance costs in accrued liabilities
|
$
|
655
|
|
|
$
|
—
|
|
|
Equipment acquired under capital lease
|
$
|
—
|
|
|
$
|
464
|
|
|
Building subject to capital lease
|
$
|
—
|
|
|
$
|
14,939
|
|
|
Construction in progress subject to build-to-suit lease
|
$
|
—
|
|
|
$
|
8,770
|
|
|
Non-cash financing activities
|
|
|
|
||||
|
Conversion of 4.0% convertible senior notes, due March 15, 2015 into 8,898,387 shares of common stock
|
$
|
—
|
|
|
$
|
180,645
|
|
|
(1)
|
INTERIM FINANCIAL STATEMENTS
|
|
(2)
|
SIGNIFICANT ACCOUNTING POLICIES
|
|
•
|
Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities;
|
|
•
|
Level 2 inputs are quoted prices for identical or similar assets or liabilities in less active markets or model-derived valuations in which significant inputs are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and
|
|
•
|
Level 3 inputs are unobservable inputs based on Ciena's assumptions used to measure assets and liabilities at fair value.
|
|
(3)
|
RESTRUCTURING COSTS
|
|
|
Workforce
reduction
|
|
Consolidation
of excess
facilities
|
|
Total
|
||||||
|
Balance at October 31, 2014
|
$
|
181
|
|
|
$
|
1,134
|
|
|
$
|
1,315
|
|
|
Additional liability recorded
|
8,260
|
|
(a)
|
—
|
|
|
8,260
|
|
|||
|
Cash payments
|
(7,748
|
)
|
|
(370
|
)
|
|
(8,118
|
)
|
|||
|
Balance at July 31, 2015
|
$
|
693
|
|
|
$
|
764
|
|
|
$
|
1,457
|
|
|
Current restructuring liabilities
|
$
|
693
|
|
|
$
|
396
|
|
|
$
|
1,089
|
|
|
Non-current restructuring liabilities
|
$
|
—
|
|
|
$
|
368
|
|
|
$
|
368
|
|
|
|
Workforce
reduction
|
|
Consolidation
of excess
facilities
|
|
Total
|
||||||
|
Balance at October 31, 2013
|
$
|
80
|
|
|
$
|
1,936
|
|
|
$
|
2,016
|
|
|
Additional liability recorded
|
169
|
|
|
9
|
|
|
178
|
|
|||
|
Cash payments
|
(208
|
)
|
|
(269
|
)
|
|
(477
|
)
|
|||
|
Balance at July 31, 2014
|
$
|
41
|
|
|
$
|
1,676
|
|
|
$
|
1,717
|
|
|
Current restructuring liabilities
|
$
|
41
|
|
|
$
|
612
|
|
|
$
|
653
|
|
|
Non-current restructuring liabilities
|
$
|
—
|
|
|
$
|
1,064
|
|
|
$
|
1,064
|
|
|
|
Quarter Ended July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
||||||||
|
Interest income
|
$
|
88
|
|
|
$
|
323
|
|
|
$
|
235
|
|
|
$
|
788
|
|
|
Change in fair value of embedded derivative
|
(190
|
)
|
|
—
|
|
|
(2,740
|
)
|
|
—
|
|
||||
|
Gain (loss) on non-hedge designated foreign currency forward contracts
|
(1,484
|
)
|
|
4,924
|
|
|
(11,677
|
)
|
|
14,925
|
|
||||
|
Foreign currency exchange gain (loss)
|
(4,341
|
)
|
|
(10,424
|
)
|
|
993
|
|
|
(32,910
|
)
|
||||
|
Other
|
(401
|
)
|
|
(314
|
)
|
|
(1,042
|
)
|
|
(2,076
|
)
|
||||
|
Interest and other income (loss), net
|
$
|
(6,328
|
)
|
|
$
|
(5,491
|
)
|
|
$
|
(14,231
|
)
|
|
$
|
(19,273
|
)
|
|
(5)
|
SHORT-TERM AND LONG-TERM INVESTMENTS
|
|
|
July 31, 2015
|
||||||||||||||
|
|
Amortized Cost
|
|
Gross Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated Fair
Value
|
||||||||
|
U.S. government obligations:
|
|
|
|
|
|
|
|
||||||||
|
Included in short-term investments
|
$
|
105,041
|
|
|
$
|
44
|
|
|
—
|
|
|
$
|
105,085
|
|
|
|
Included in long-term investments
|
70,149
|
|
|
12
|
|
|
—
|
|
|
70,161
|
|
||||
|
|
$
|
175,190
|
|
|
$
|
56
|
|
|
$
|
—
|
|
|
$
|
175,246
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Commercial paper:
|
|
|
|
|
|
|
|
||||||||
|
Included in short-term investments
|
54,982
|
|
|
—
|
|
|
—
|
|
|
54,982
|
|
||||
|
|
$
|
54,982
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
54,982
|
|
|
|
October 31, 2014
|
||||||||||||||
|
|
Amortized Cost
|
|
Gross Unrealized
Gains
|
|
Gross Unrealized
Losses
|
|
Estimated Fair
Value
|
||||||||
|
U.S. government obligations:
|
|
|
|
|
|
|
|
||||||||
|
Included in short-term investments
|
$
|
110,182
|
|
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
110,211
|
|
|
Included in long-term investments
|
50,016
|
|
|
41
|
|
|
—
|
|
|
50,057
|
|
||||
|
|
$
|
160,198
|
|
|
$
|
70
|
|
|
$
|
—
|
|
|
$
|
160,268
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Commercial paper:
|
|
|
|
|
|
|
|
||||||||
|
Included in short-term investments
|
29,994
|
|
|
—
|
|
|
—
|
|
|
29,994
|
|
||||
|
|
$
|
29,994
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
29,994
|
|
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||
|
Less than one year
|
$
|
160,023
|
|
|
$
|
160,067
|
|
|
Due in 1-2 years
|
70,149
|
|
|
70,161
|
|
||
|
|
$
|
230,172
|
|
|
$
|
230,228
|
|
|
(6)
|
FAIR VALUE MEASUREMENTS
|
|
|
July 31, 2015
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
Assets:
|
|
|
|
|
|
|
|
||||||||
|
Money market funds
|
$
|
538,895
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
538,895
|
|
|
U.S. government obligations
|
—
|
|
|
175,246
|
|
|
—
|
|
|
175,246
|
|
||||
|
Commercial paper
|
—
|
|
|
99,980
|
|
|
—
|
|
|
99,980
|
|
||||
|
Foreign currency forward contracts
|
—
|
|
|
5,837
|
|
|
—
|
|
|
5,837
|
|
||||
|
Total assets measured at fair value
|
$
|
538,895
|
|
|
$
|
281,063
|
|
|
$
|
—
|
|
|
$
|
819,958
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
|
Foreign currency forward contracts
|
$
|
—
|
|
|
$
|
1,941
|
|
|
$
|
—
|
|
|
$
|
1,941
|
|
|
Forward starting interest rate swap
|
—
|
|
|
4,968
|
|
|
—
|
|
|
4,968
|
|
||||
|
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
6,909
|
|
|
$
|
—
|
|
|
$
|
6,909
|
|
|
|
October 31, 2014
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
Assets:
|
|
|
|
|
|
|
|
||||||||
|
Money market funds
|
$
|
440,013
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
440,013
|
|
|
U.S. government obligations
|
—
|
|
|
160,268
|
|
|
—
|
|
|
160,268
|
|
||||
|
Commercial paper
|
—
|
|
|
89,989
|
|
|
—
|
|
|
89,989
|
|
||||
|
Foreign currency forward contracts
|
—
|
|
|
1,561
|
|
|
—
|
|
|
1,561
|
|
||||
|
Total assets measured at fair value
|
$
|
440,013
|
|
|
$
|
251,818
|
|
|
$
|
—
|
|
|
$
|
691,831
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
|
Foreign currency forward contracts
|
$
|
—
|
|
|
$
|
200
|
|
|
$
|
—
|
|
|
$
|
200
|
|
|
Forward starting interest rate swap
|
—
|
|
|
2,083
|
|
|
—
|
|
|
2,083
|
|
||||
|
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
2,283
|
|
|
$
|
—
|
|
|
$
|
2,283
|
|
|
|
July 31, 2015
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
Assets:
|
|
|
|
|
|
|
|
||||||||
|
Cash equivalents
|
$
|
538,895
|
|
|
$
|
44,998
|
|
|
$
|
—
|
|
|
$
|
583,893
|
|
|
Short-term investments
|
—
|
|
|
160,067
|
|
|
—
|
|
|
160,067
|
|
||||
|
Prepaid expenses and other
|
—
|
|
|
5,837
|
|
|
—
|
|
|
5,837
|
|
||||
|
Long-term investments
|
—
|
|
|
70,161
|
|
|
—
|
|
|
70,161
|
|
||||
|
Total assets measured at fair value
|
$
|
538,895
|
|
|
$
|
281,063
|
|
|
$
|
—
|
|
|
$
|
819,958
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
|
Accrued liabilities
|
$
|
—
|
|
|
$
|
1,941
|
|
|
$
|
—
|
|
|
$
|
1,941
|
|
|
Other long-term obligations
|
—
|
|
|
4,968
|
|
|
—
|
|
|
4,968
|
|
||||
|
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
6,909
|
|
|
$
|
—
|
|
|
$
|
6,909
|
|
|
|
October 31, 2014
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
Assets:
|
|
|
|
|
|
|
|
||||||||
|
Cash equivalents
|
$
|
440,013
|
|
|
$
|
59,995
|
|
|
$
|
—
|
|
|
$
|
500,008
|
|
|
Short-term investments
|
—
|
|
|
140,205
|
|
|
—
|
|
|
140,205
|
|
||||
|
Prepaid expenses and other
|
—
|
|
|
1,561
|
|
|
—
|
|
|
1,561
|
|
||||
|
Long-term investments
|
—
|
|
|
50,057
|
|
|
—
|
|
|
50,057
|
|
||||
|
Total assets measured at fair value
|
$
|
440,013
|
|
|
$
|
251,818
|
|
|
$
|
—
|
|
|
$
|
691,831
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
|
Accrued liabilities
|
$
|
—
|
|
|
$
|
200
|
|
|
$
|
—
|
|
|
$
|
200
|
|
|
Other long-term obligations
|
—
|
|
|
2,083
|
|
|
—
|
|
|
2,083
|
|
||||
|
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
2,283
|
|
|
$
|
—
|
|
|
$
|
2,283
|
|
|
(7)
|
ACCOUNTS RECEIVABLE
|
|
(8)
|
INVENTORIES
|
|
|
October 31,
2014 |
|
July 31,
2015 |
||||
|
Raw materials
|
$
|
64,853
|
|
|
$
|
54,112
|
|
|
Work-in-process
|
8,371
|
|
|
8,924
|
|
||
|
Finished goods
|
165,799
|
|
|
119,635
|
|
||
|
Deferred cost of goods sold
|
75,763
|
|
|
59,606
|
|
||
|
|
314,786
|
|
|
242,277
|
|
||
|
Provision for excess and obsolescence
|
(60,126
|
)
|
|
(48,260
|
)
|
||
|
|
$
|
254,660
|
|
|
$
|
194,017
|
|
|
(9)
|
PREPAID EXPENSES AND OTHER
|
|
|
October 31,
2014 |
|
July 31,
2015 |
||||
|
Prepaid VAT and other taxes
|
$
|
86,464
|
|
|
$
|
86,113
|
|
|
Product demonstration equipment, net
|
42,385
|
|
|
42,469
|
|
||
|
Deferred deployment expense
|
27,991
|
|
|
24,238
|
|
||
|
Prepaid expenses
|
23,539
|
|
|
23,095
|
|
||
|
Other non-trade receivables
|
10,683
|
|
|
3,388
|
|
||
|
Derivative assets
|
1,562
|
|
|
5,837
|
|
||
|
|
$
|
192,624
|
|
|
$
|
185,140
|
|
|
(10)
|
EQUIPMENT, BUILDING, FURNITURE AND FIXTURES
|
|
|
October 31,
2014 |
|
July 31,
2015 |
||||
|
Equipment, furniture and fixtures
|
$
|
383,059
|
|
|
$
|
382,850
|
|
|
Building subject to capital lease
|
—
|
|
|
13,939
|
|
||
|
Construction in progress subject to build-to-suit lease
|
—
|
|
|
8,770
|
|
||
|
Leasehold improvements
|
46,354
|
|
|
47,020
|
|
||
|
|
429,413
|
|
|
452,579
|
|
||
|
Accumulated depreciation and amortization
|
(302,781
|
)
|
|
(292,987
|
)
|
||
|
|
$
|
126,632
|
|
|
$
|
159,592
|
|
|
(11)
|
OTHER INTANGIBLE ASSETS
|
|
|
October 31, 2014
|
|
July 31, 2015
|
||||||||||||||||||||
|
|
Gross
Intangible
|
|
Accumulated
Amortization
|
|
Net
Intangible
|
|
Gross
Intangible
|
|
Accumulated
Amortization
|
|
Net
Intangible
|
||||||||||||
|
Developed technology
|
$
|
417,833
|
|
|
$
|
(351,929
|
)
|
|
$
|
65,904
|
|
|
$
|
417,833
|
|
|
$
|
(372,178
|
)
|
|
$
|
45,655
|
|
|
Patents and licenses
|
46,538
|
|
|
(45,908
|
)
|
|
630
|
|
|
46,538
|
|
|
(46,031
|
)
|
|
507
|
|
||||||
|
Customer relationships, covenants not to compete, outstanding purchase orders and contracts
|
323,573
|
|
|
(261,430
|
)
|
|
62,143
|
|
|
323,573
|
|
|
(280,716
|
)
|
|
42,857
|
|
||||||
|
Total other intangible assets
|
$
|
787,944
|
|
|
$
|
(659,267
|
)
|
|
$
|
128,677
|
|
|
$
|
787,944
|
|
|
$
|
(698,925
|
)
|
|
$
|
89,019
|
|
|
Period ended October 31,
|
|
||
|
2015 (remaining three months)
|
$
|
13,220
|
|
|
2016
|
52,879
|
|
|
|
2017
|
22,783
|
|
|
|
2018
|
137
|
|
|
|
|
$
|
89,019
|
|
|
(12)
|
OTHER BALANCE SHEET DETAILS
|
|
|
October 31,
2014 |
|
July 31,
2015 |
||||
|
Maintenance spares, net
|
$
|
54,101
|
|
|
$
|
58,959
|
|
|
Deferred debt issuance costs, net
|
15,160
|
|
|
11,889
|
|
||
|
Other
|
4,815
|
|
|
7,499
|
|
||
|
|
$
|
74,076
|
|
|
$
|
78,347
|
|
|
|
October 31,
2014 |
|
July 31,
2015 |
||||
|
Compensation, payroll related tax and benefits
|
82,207
|
|
|
79,794
|
|
||
|
Warranty
|
55,997
|
|
|
53,834
|
|
||
|
Vacation
|
35,126
|
|
|
31,990
|
|
||
|
Capital lease obligations
|
7,788
|
|
|
6,319
|
|
||
|
Interest payable
|
6,409
|
|
|
5,817
|
|
||
|
Other
|
89,081
|
|
|
94,937
|
|
||
|
|
$
|
276,608
|
|
|
$
|
272,691
|
|
|
Nine months ended
|
Beginning
|
|
|
|
|
|
Ending
|
||||||
|
July 31,
|
Balance
|
|
Provisions
|
|
Settlements
|
|
Balance
|
||||||
|
2014
|
$
|
56,303
|
|
|
18,720
|
|
|
(17,581
|
)
|
|
$
|
57,442
|
|
|
2015
|
$
|
55,997
|
|
|
12,549
|
|
|
(14,712
|
)
|
|
$
|
53,834
|
|
|
|
October 31,
2014 |
|
July 31,
2015 |
||||
|
Products
|
$
|
50,457
|
|
|
$
|
56,355
|
|
|
Services
|
95,161
|
|
|
112,278
|
|
||
|
|
145,618
|
|
|
168,633
|
|
||
|
Less current portion
|
(104,688
|
)
|
|
(114,902
|
)
|
||
|
Long-term deferred revenue
|
$
|
40,930
|
|
|
$
|
53,731
|
|
|
|
October 31, 2014
|
|
July 31,
2015 |
||||
|
Income tax liability
|
$
|
14,342
|
|
|
$
|
13,810
|
|
|
Deferred tenant allowance
|
10,839
|
|
|
10,057
|
|
||
|
Straight-line rent
|
5,174
|
|
|
5,801
|
|
||
|
Capital lease obligations
|
4,589
|
|
|
13,977
|
|
||
|
Construction liability
|
—
|
|
|
8,770
|
|
||
|
Forward starting interest rate swap
|
2,083
|
|
|
4,968
|
|
||
|
Other
|
8,363
|
|
|
6,099
|
|
||
|
|
$
|
45,390
|
|
|
$
|
63,482
|
|
|
Period ended October 31,
|
|
||
|
2015 (remaining three months)
|
$
|
1,934
|
|
|
2016
|
6,055
|
|
|
|
2017
|
1,628
|
|
|
|
2018
|
1,290
|
|
|
|
2019
|
1,290
|
|
|
|
Thereafter
|
19,808
|
|
|
|
Net minimum capital lease payments
|
32,005
|
|
|
|
Less: Amount representing interest
|
(11,709
|
)
|
|
|
Present value of minimum lease payments
|
20,296
|
|
|
|
Less: Current portion of present value of minimum lease payments
|
(6,319
|
)
|
|
|
Long-term portion of present value of minimum lease payments
|
$
|
13,977
|
|
|
(13)
|
DERIVATIVE INSTRUMENTS
|
|
|
Unrealized
|
|
Unrealized
|
|
Unrealized
|
|
Cumulative
|
|
|
||||||||||
|
|
Gain/(Loss) on
|
|
Gain/(Loss) on
|
|
Gain/(Loss) on Forward
|
|
Foreign Currency
|
|
|
||||||||||
|
|
Marketable Securities
|
|
Foreign Currency Contracts
|
|
Starting Interest Rate Swap
|
|
Translation Adjustment
|
|
Total
|
||||||||||
|
Balance at October 31, 2014
|
$
|
71
|
|
|
$
|
(173
|
)
|
|
$
|
(2,083
|
)
|
|
$
|
(12,483
|
)
|
|
$
|
(14,668
|
)
|
|
Other comprehensive income (loss) before reclassifications
|
(37
|
)
|
|
(5,451
|
)
|
|
(2,885
|
)
|
|
(6,919
|
)
|
|
(15,292
|
)
|
|||||
|
Amounts reclassified from AOCI
|
—
|
|
|
3,825
|
|
|
—
|
|
|
—
|
|
|
3,825
|
|
|||||
|
Balance at July 31, 2015
|
$
|
34
|
|
|
$
|
(1,799
|
)
|
|
$
|
(4,968
|
)
|
|
$
|
(19,402
|
)
|
|
$
|
(26,135
|
)
|
|
|
Unrealized
|
|
Unrealized
|
|
Cumulative
|
|
|
||||||||
|
|
Gain/(Loss)
on
|
|
Gain/(Loss)
on
|
|
Foreign Currency
|
|
|
||||||||
|
|
Marketable Securities
|
|
Derivative Instruments
|
|
Translation Adjustment
|
|
Total
|
||||||||
|
Balance at October 31, 2013
|
$
|
30
|
|
|
$
|
(261
|
)
|
|
$
|
(7,543
|
)
|
|
$
|
(7,774
|
)
|
|
Other comprehensive income (loss) before reclassifications
|
(12
|
)
|
|
(862
|
)
|
|
(4,287
|
)
|
|
(5,161
|
)
|
||||
|
Amounts reclassified from AOCI
|
—
|
|
|
896
|
|
|
—
|
|
|
896
|
|
||||
|
Balance at July 31, 2014
|
$
|
18
|
|
|
$
|
(227
|
)
|
|
$
|
(11,830
|
)
|
|
$
|
(12,039
|
)
|
|
(15)
|
SHORT-TERM AND LONG-TERM DEBT
|
|
|
|
Principal Balance
|
|
Unamortized Discount
|
|
Net Carrying Amount
|
||||||
|
Term Loan Payable due July 15, 2019
|
|
$
|
247,500
|
|
|
$
|
1,149
|
|
|
$
|
246,351
|
|
|
|
|
July 31, 2015
|
||||||
|
|
|
Carrying Value
|
|
Fair Value
(2)
|
||||
|
Term Loan Payable due July 15, 2019
(1)
|
|
$
|
246,351
|
|
|
$
|
248,428
|
|
|
(1)
|
Includes unamortized bond discount.
|
|
(2)
|
The Term Loan is categorized as Level 2 in the fair value hierarchy. Ciena estimated the fair value of its Term Loan using a market approach based upon observable inputs, such as current market transactions involving comparable securities.
|
|
|
Liability Component
|
|
Equity Component
|
||||||||||||
|
|
Principal Balance
|
|
Unamortized Discount
|
|
Net Carrying Amount
|
|
Net Carrying Amount
|
||||||||
|
4.0% Convertible Senior Notes due December 15, 2020
|
$
|
196,679
|
|
|
$
|
13,769
|
|
|
$
|
182,910
|
|
|
$
|
43,131
|
|
|
|
|
July 31, 2015
|
||||||
|
|
|
Carrying Value
|
|
Fair Value
(1)
|
||||
|
0.875% Convertible Senior Notes due June 15, 2017
|
|
500,000
|
|
|
507,813
|
|
||
|
3.75% Convertible Senior Notes due October 15, 2018
|
|
350,000
|
|
|
498,750
|
|
||
|
4.0% Convertible Senior Notes due December 15, 2020
(2)
|
|
182,910
|
|
|
274,116
|
|
||
|
|
|
$
|
1,032,910
|
|
|
$
|
1,280,679
|
|
|
(1)
|
The convertible notes are categorized as Level 2 in the fair value hierarchy. Ciena estimated the fair value of its outstanding convertible notes using a market approach based upon observable inputs, such as current market transactions involving comparable securities.
|
|
(2)
|
Includes unamortized discount and accretion of principal.
|
|
(16)
|
ABL CREDIT FACILITY
|
|
(17)
|
EARNINGS (LOSS) PER SHARE CALCULATION
|
|
|
Quarter Ended July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||
|
Numerator
|
2014
|
|
2015
|
|
2014
|
|
2015
|
||||||||
|
Net income (loss)
|
$
|
16,160
|
|
|
$
|
23,625
|
|
|
$
|
(9,934
|
)
|
|
$
|
25,499
|
|
|
Add: Interest expense associated with 0.875% convertible senior notes due 2017
|
1,384
|
|
|
1,384
|
|
|
$
|
—
|
|
|
—
|
|
|||
|
Net income (loss) used to calculate Diluted EPS
|
$
|
17,544
|
|
|
$
|
25,009
|
|
|
$
|
(9,934
|
)
|
|
$
|
25,499
|
|
|
|
Quarter Ended July 31,
|
|
Nine Months Ended July 31,
|
||||||||
|
Denominator
|
2014
|
|
2015
|
|
2014
|
|
2015
|
||||
|
Basic weighted average shares outstanding
|
106,236
|
|
|
118,413
|
|
|
105,404
|
|
|
113,189
|
|
|
Add: Shares underlying outstanding stock options, employee stock purchase plan and restricted stock units
|
1,465
|
|
|
1,712
|
|
|
—
|
|
|
1,360
|
|
|
Add: Shares underlying 0.875% convertible senior notes due 2017
|
13,108
|
|
|
13,108
|
|
|
—
|
|
|
—
|
|
|
Dilutive weighted average shares outstanding
|
120,809
|
|
|
133,233
|
|
|
105,404
|
|
|
114,549
|
|
|
|
Quarter Ended July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||
|
EPS
|
2014
|
|
2015
|
|
2014
|
|
2015
|
||||||||
|
Basic EPS
|
$
|
0.15
|
|
|
$
|
0.20
|
|
|
$
|
(0.09
|
)
|
|
$
|
0.23
|
|
|
Diluted EPS
|
$
|
0.15
|
|
|
$
|
0.19
|
|
|
$
|
(0.09
|
)
|
|
$
|
0.22
|
|
|
|
Quarter Ended July 31,
|
|
Nine Months Ended July 31,
|
||||||||
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
||||
|
Shares underlying stock options and restricted stock units
|
1,123
|
|
|
755
|
|
|
3,205
|
|
|
1,534
|
|
|
4.0% Convertible Senior Notes due March 15, 2015
|
9,198
|
|
|
—
|
|
|
9,198
|
|
|
4,515
|
|
|
0.875% Convertible Senior Notes due June 15, 2017
|
—
|
|
|
—
|
|
|
13,108
|
|
|
13,108
|
|
|
3.75% Convertible Senior Notes due October 15, 2018
|
17,356
|
|
|
17,356
|
|
|
17,356
|
|
|
17,356
|
|
|
4.0% Convertible Senior Notes due December 15, 2020
|
9,198
|
|
|
9,198
|
|
|
9,198
|
|
|
9,198
|
|
|
Total shares excluded due to anti-dilutive effect
|
36,875
|
|
|
27,309
|
|
|
52,065
|
|
|
45,711
|
|
|
(18)
|
SHARE-BASED COMPENSATION EXPENSE
|
|
|
Shares Underlying
Options
Outstanding
|
|
Weighted
Average
Exercise Price
|
|||
|
Balance at October 31, 2014
|
1,288
|
|
|
$
|
25.43
|
|
|
Exercised
|
(255
|
)
|
|
15.27
|
|
|
|
Canceled
|
(104
|
)
|
|
25.66
|
|
|
|
Balance at July 31, 2015
|
929
|
|
|
$
|
28.19
|
|
|
|
|
|
|
|
|
Options Outstanding and Vested at
|
||||||||||||||||
|
|
|
|
|
|
|
July 31, 2015
|
||||||||||||||||
|
|
|
|
|
|
|
Number
|
|
Weighted
Average
Remaining
|
|
Weighted
|
|
|
||||||||||
|
Range of
|
|
of
|
|
Contractual
|
|
Average
|
|
Aggregate
|
||||||||||||||
|
Exercise
|
|
Underlying
|
|
Life
|
|
Exercise
|
|
Intrinsic
|
||||||||||||||
|
Price
|
|
Shares
|
|
(Years)
|
|
Price
|
|
Value
|
||||||||||||||
|
$
|
0.94
|
|
|
—
|
|
|
$
|
16.31
|
|
|
93
|
|
|
2.99
|
|
$
|
6.96
|
|
|
$
|
1,713
|
|
|
$
|
16.52
|
|
|
—
|
|
|
$
|
17.29
|
|
|
47
|
|
|
0.62
|
|
16.61
|
|
|
419
|
|
||
|
$
|
17.43
|
|
|
—
|
|
|
$
|
24.50
|
|
|
81
|
|
|
1.15
|
|
19.07
|
|
|
520
|
|
||
|
$
|
24.69
|
|
|
—
|
|
|
$
|
28.28
|
|
|
267
|
|
|
1.63
|
|
27.38
|
|
|
15
|
|
||
|
$
|
28.61
|
|
|
—
|
|
|
$
|
32.55
|
|
|
97
|
|
|
2.07
|
|
29.99
|
|
|
—
|
|
||
|
$
|
33.00
|
|
|
—
|
|
|
$
|
37.10
|
|
|
244
|
|
|
2.31
|
|
35.25
|
|
|
—
|
|
||
|
$
|
37.31
|
|
|
—
|
|
|
$
|
47.32
|
|
|
100
|
|
|
1.96
|
|
44.07
|
|
|
—
|
|
||
|
$
|
0.94
|
|
|
—
|
|
|
$
|
47.32
|
|
|
929
|
|
|
1.93
|
|
$
|
28.19
|
|
|
$
|
2,667
|
|
|
|
Restricted
Stock Units
Outstanding
|
|
Weighted
Average Grant
Date Fair Value
Per Share
|
|
Aggregate
Fair Value
|
|||||
|
Balance at October 31, 2014
|
4,012
|
|
|
$
|
18.02
|
|
|
$
|
67,241
|
|
|
Granted
|
2,509
|
|
|
|
|
|
||||
|
Vested
|
(1,572
|
)
|
|
|
|
|
||||
|
Canceled or forfeited
|
(219
|
)
|
|
|
|
|
||||
|
Balance at July 31, 2015
|
4,730
|
|
|
$
|
18.88
|
|
|
$
|
120,374
|
|
|
|
Quarter Ended July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
||||||||
|
Product costs
|
$
|
737
|
|
|
$
|
671
|
|
|
$
|
1,984
|
|
|
$
|
1,811
|
|
|
Service costs
|
572
|
|
|
490
|
|
|
1,720
|
|
|
1,583
|
|
||||
|
Share-based compensation expense included in cost of sales
|
1,309
|
|
|
1,161
|
|
|
3,704
|
|
|
3,394
|
|
||||
|
Research and development
|
2,368
|
|
|
2,114
|
|
|
7,722
|
|
|
6,815
|
|
||||
|
Sales and marketing
|
3,890
|
|
|
3,571
|
|
|
12,199
|
|
|
11,071
|
|
||||
|
General and administrative
|
3,376
|
|
|
3,516
|
|
|
10,543
|
|
|
11,158
|
|
||||
|
Share-based compensation expense included in operating expense
|
9,634
|
|
|
9,201
|
|
|
30,464
|
|
|
29,044
|
|
||||
|
Share-based compensation expense capitalized in inventory, net
|
(182
|
)
|
|
(96
|
)
|
|
36
|
|
|
(36
|
)
|
||||
|
Total share-based compensation
|
$
|
10,761
|
|
|
$
|
10,266
|
|
|
$
|
34,204
|
|
|
$
|
32,402
|
|
|
(19)
|
SEGMENTS AND ENTITY WIDE DISCLOSURES
|
|
•
|
Converged Packet Optical —
includes the 6500 Packet-Optical Platform and the 5430 Reconfigurable Switching System, which feature Ciena's WaveLogic coherent optical processors. Products also include Ciena's family of CoreDirector® Multiservice Optical Switches and the OTN configuration for the 5410 Reconfigurable Switching System. This segment also includes sales of operating system software and enhanced software features embedded in each of these products. Revenue from this segment is included in product revenue on the Condensed Consolidated Statement of Operations. In May 2015, Ciena launched its new Waveserver™ product. Revenue from sales of Waveserver are included in our Converged Packet Optical segment.
|
|
•
|
Packet Networking —
includes Ciena's 3000 family of service delivery switches and service aggregation switches and the 5000 family of service aggregation switches. This segment also includes Ciena’s 8700 Packetwave Platform and Ciena's Ethernet packet configuration for the 5410 Service Aggregation Switch. This segment also includes sales of operating system software and enhanced software features embedded in each of these products. Revenue from this segment is included in product revenue on the Condensed Consolidated Statement of Operations.
|
|
•
|
Optical Transport —
includes the 4200 Advanced Services Platform, Corestream® Agility Optical Transport System, 5100/5200 Advanced Services Platform, Common Photonic Layer (CPL) and 6100 Multiservice Optical Platform. This segment includes sales from SONET/SDH, transport and data networking products, as well as certain enterprise-oriented transport solutions that support storage and LAN extension, interconnection of data centers, and virtual private networks. This segment also includes operating system software and enhanced software features embedded in each of these products. Revenue from this segment is included in product revenue on the Condensed Consolidated Statement of Operations.
|
|
•
|
Software and Services —
includes Ciena's Agility software portfolio, which includes a SDN multilayer WAN controller, NFV platform, and network level software applications for enabling on-demand, high-bandwidth WAN services delivered in an open network ecosystem. This segment also includes the OneControl Unified Management System, ON-Center® Network & Service Management Suite, Ethernet Services Manager and Optical Suite Release. This segment includes a broad range of services for consulting and network design, installation and deployment, maintenance support and training activities. Except for revenue from the software portion of this segment, which is included in product revenue, revenue from this segment is included in services revenue on the Condensed Consolidated Statement of Operations.
|
|
|
Quarter Ended July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
||||||||
|
Revenue:
|
|
|
|
|
|
|
|
||||||||
|
Converged Packet Optical
|
$
|
382,031
|
|
|
$
|
407,970
|
|
|
$
|
1,072,272
|
|
|
$
|
1,177,441
|
|
|
Packet Networking
|
69,464
|
|
|
57,209
|
|
|
187,699
|
|
|
165,480
|
|
||||
|
Optical Transport
|
31,016
|
|
|
17,482
|
|
|
100,729
|
|
|
56,275
|
|
||||
|
Software and Services
|
121,051
|
|
|
120,271
|
|
|
336,626
|
|
|
354,500
|
|
||||
|
Consolidated revenue
|
$
|
603,562
|
|
|
$
|
602,932
|
|
|
$
|
1,697,326
|
|
|
$
|
1,753,696
|
|
|
|
Quarter Ended July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
||||||||
|
Segment profit:
|
|
|
|
|
|
|
|
||||||||
|
Converged Packet Optical
|
$
|
104,020
|
|
|
$
|
118,223
|
|
|
$
|
279,299
|
|
|
$
|
322,652
|
|
|
Packet Networking
|
14,566
|
|
|
7,628
|
|
|
23,147
|
|
|
18,910
|
|
||||
|
Optical Transport
|
8,900
|
|
|
2,813
|
|
|
29,259
|
|
|
13,428
|
|
||||
|
Software and Services
|
38,802
|
|
|
40,826
|
|
|
93,136
|
|
|
111,243
|
|
||||
|
Total segment profit
|
166,288
|
|
|
169,490
|
|
|
424,841
|
|
|
466,233
|
|
||||
|
Less: Non-performance operating expenses
|
|
|
|
|
|
|
|
||||||||
|
Selling and marketing
|
81,919
|
|
|
81,650
|
|
|
243,929
|
|
|
240,833
|
|
||||
|
General and administrative
|
36,285
|
|
|
29,743
|
|
|
98,264
|
|
|
89,598
|
|
||||
|
Acquisition and integration costs
|
—
|
|
|
2,435
|
|
|
—
|
|
|
3,455
|
|
||||
|
Amortization of intangible assets
|
11,019
|
|
|
11,019
|
|
|
34,951
|
|
|
33,057
|
|
||||
|
Restructuring costs
|
63
|
|
|
192
|
|
|
178
|
|
|
8,260
|
|
||||
|
Add: Other non-performance financial items
|
|
|
|
|
|
|
|
||||||||
|
Interest expense and other income (loss), net
|
(17,836
|
)
|
|
(17,374
|
)
|
|
(47,787
|
)
|
|
(57,764
|
)
|
||||
|
Less: Provision for income taxes
|
3,006
|
|
|
3,452
|
|
|
9,666
|
|
|
7,767
|
|
||||
|
Consolidated net income (loss)
|
$
|
16,160
|
|
|
$
|
23,625
|
|
|
$
|
(9,934
|
)
|
|
$
|
25,499
|
|
|
|
Quarter Ended July 31,
|
|
Nine Months Ended July 31,
|
||||||||||||
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
||||||||
|
North America
|
$
|
403,250
|
|
|
$
|
389,593
|
|
|
$
|
1,136,867
|
|
|
$
|
1,118,309
|
|
|
EMEA
|
99,909
|
|
|
93,168
|
|
|
283,743
|
|
|
306,368
|
|
||||
|
CALA
|
67,248
|
|
|
65,152
|
|
|
160,162
|
|
|
155,785
|
|
||||
|
APAC
|
33,155
|
|
|
55,019
|
|
|
116,554
|
|
|
173,234
|
|
||||
|
Total
|
$
|
603,562
|
|
|
$
|
602,932
|
|
|
$
|
1,697,326
|
|
|
$
|
1,753,696
|
|
|
|
October 31,
2014 |
|
July 31,
2015 |
||||
|
United States
|
$
|
73,420
|
|
|
$
|
79,560
|
|
|
Canada
|
42,015
|
|
|
69,045
|
|
||
|
Other International
|
11,197
|
|
|
10,987
|
|
||
|
Total
|
$
|
126,632
|
|
|
$
|
159,592
|
|
|
(20)
|
COMMITMENTS AND CONTINGENCIES
|
|
•
|
Luvishis v. Cyan, Inc., et al., C.A. No. 11027-CB, filed May 15, 2015
|
|
•
|
Poll v. Cyan, Inc., et al., C.A. No. 11028-CB, filed May 15, 2015
|
|
•
|
Canzano v. Floyd, et al., C.A. No. 11052-CB, filed May 20, 2015
|
|
•
|
Kassis v. Cyan, Inc., et al., C.A. No. 11069-CB, filed May 27, 2015
|
|
•
|
Fenske v. Cyan, Inc., et al., C.A. No. 11090-CB, filed June 3, 2015
|
|
(21)
|
SUBSEQUENT EVENTS
|
|
•
|
Product revenue for the
third
quarter of fiscal
2015
decreased
by
$18.0 million
, reflecting a decrease of $24.9 million in Converged Packet Optical, partially offset by increases of $3.9 million in Packet Networking, $2.0 million in software and $1.0 million in Optical Transport.
|
|
•
|
Service revenue for the
third
quarter of fiscal
2015
decreased
by
$0.7 million
.
|
|
•
|
North America revenue for the
third
quarter of fiscal
2015
was
$389.6 million
,
a decrease
from
$397.2 million
in the
second
quarter of fiscal
2015
. This primarily reflects decreases of $7.1 million in Converged Packet Optical and $5.4 million in Packet Networking, partially offset by increases of $3.3 million in Software and Services and $1.6 million in Optical Transport.
|
|
•
|
Europe, Middle East and Africa ("EMEA") revenue for the
third
quarter of fiscal
2015
was
$93.2 million
,
a decrease
from
$102.2 million
in the
second
quarter of fiscal
2015
. This primarily reflects decreases of $15.8 million in Converged Packet Optical, partially offset by increases of $4.9 million in Software and Services and $1.4 million in Packet Networking.
|
|
•
|
Caribbean and Latin America ("CALA") revenue for the
third
quarter of fiscal
2015
was
$65.1 million
,
an increase
from
$47.9 million
in the
second
quarter of fiscal
2015
. This primarily reflects increases of $17.2 million in Converged Packet Optical and $1.2 million in Software and Services, partially offset by a $1.1 million decrease in Optical Transport.
|
|
•
|
Asia Pacific ("APAC") revenue for the
third
quarter of fiscal
2015
was
$55.0 million
,
a decrease
from
$74.3 million
in the
second
quarter of fiscal
2015
. This primarily reflects decreases of $19.2 million in Converged Packet Optical and $8.1 million in Software and Services, partially offset by a $7.9 million increase in Packet Networking.
|
|
•
|
For the
third
quarter of fiscal
2015
, AT&T accounted for
20.2%
of total revenue. This compares to
18.9%
of total revenue in the
second
quarter of fiscal
2015
.
|
|
•
|
Converged Packet Optical —
includes the 6500 Packet-Optical Platform and the 5430 Reconfigurable Switching System, which feature Ciena's WaveLogic coherent optical processors. Products also include Ciena's family of CoreDirector® Multiservice Optical Switches and the OTN configuration for the 5410 Reconfigurable Switching System. This segment also includes sales of operating system software and enhanced software features embedded in each of these products. Revenue from this segment is included in product revenue on the Condensed Consolidated Statement of Operations. In May 2015, we launched our new Waveserver™ product. Revenue from sales of Waveserver are included in our Converged Packet Optical segment.
|
|
•
|
Packet Networking —
includes Ciena's 3000 family of service delivery switches and service aggregation switches and the 5000 family of service aggregation switches. This segment also includes Ciena’s 8700 Packetwave Platform and Ciena's Ethernet packet configuration for the 5410 Service Aggregation Switch. This segment also includes sales of operating system software and enhanced software features embedded in each of these products. Revenue from this segment is included in product revenue on the Condensed Consolidated Statement of Operations.
|
|
•
|
Optical Transport —
includes the 4200 Advanced Services Platform, Corestream® Agility Optical Transport System, 5100/5200 Advanced Services Platform, Common Photonic Layer (CPL) and 6100 Multiservice Optical Platform. This segment includes sales from SONET/SDH, transport and data networking products, as well as certain enterprise-oriented transport solutions that support storage and LAN extension, interconnection of data centers, and virtual private networks. This segment also includes operating system software and enhanced software features embedded in each of these products. Revenue from this segment is included in product revenue on the Condensed Consolidated Statement of Operations.
|
|
•
|
Software and Services —
includes Ciena's Agility software portfolio, which includes a SDN multilayer WAN controller, NFV platform, and network level software applications for enabling on-demand, high-bandwidth WAN
|
|
|
Quarter Ended July 31,
|
|
Increase
|
|
|
|||||||||||||
|
|
2014
|
|
%*
|
|
2015
|
|
%*
|
|
(decrease)
|
|
%**
|
|||||||
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Converged Packet Optical
|
$
|
382,031
|
|
|
63.3
|
|
$
|
407,970
|
|
|
67.7
|
|
$
|
25,939
|
|
|
6.8
|
|
|
Packet Networking
|
69,464
|
|
|
11.5
|
|
57,209
|
|
|
9.5
|
|
(12,255
|
)
|
|
(17.6
|
)
|
|||
|
Optical Transport
|
31,016
|
|
|
5.1
|
|
17,482
|
|
|
2.9
|
|
(13,534
|
)
|
|
(43.6
|
)
|
|||
|
Software and Services
|
121,051
|
|
|
20.1
|
|
120,271
|
|
|
19.9
|
|
(780
|
)
|
|
(0.6
|
)
|
|||
|
Consolidated revenue
|
$
|
603,562
|
|
|
100.0
|
|
$
|
602,932
|
|
|
100.0
|
|
$
|
(630
|
)
|
|
(0.1
|
)
|
|
•
|
Converged Packet Optical
revenue
increased
, primarily reflecting a $28.7 million increase in sales of our 6500 Packet-Optical Platform, largely driven by network operator demand for high-capacity, optical transport for coherent 40G and 100G network infrastructure. Segment revenue also reflects an increase of $8.6 million in sales of the OTN configuration for the 5410 Reconfigurable Switching System. These increases were partially offset by a $11.9 million decrease in sales of our 5430 Reconfigurable Switching System. The strong performance of this segment, particularly as compared to the steady declines we have experienced, and expect to continue to experience, in Optical Transport segment revenue, reflects the preference of network operators to adopt next-generation architectures that enable the convergence of high-capacity, coherent optical transport with integrated OTN switching and control plane functionality.
|
|
•
|
Packet Networking
revenue
decreased
, reflecting a $14.6 million decrease in sales of our 3000 and 5000 families of service delivery and aggregation switches. This decrease was partially offset by increases of $1.5 million in sales of our 5410 Service Aggregation Switch and $1.0 million in sales of our 8700 Packetwave Platform, which became available for sale in the fourth quarter of fiscal 2014.
|
|
•
|
Optical Transport
revenue
decreased
, reflecting decreases of $5.0 million in sales of our 4200 Advanced Services Platform, $5.3 million in sales of our other stand-alone transport products and $3.2 million in sales of our 5100/5200 Advanced Services Platform. Revenue for our Optical Transport segment, which currently consists principally of stand-alone WDM and SONET/SDH-based transport platforms, has experienced meaningful declines in annual revenue in recent years. We expect this trend to continue, reflecting network operators' transition toward next-generation converged network architectures as described above.
|
|
•
|
Software and Services
revenue
decreased
, reflecting decreases of $2.2 million in network transformation consulting, $2.1 million in software revenue and $1.8 million in installation and deployment services. These decreases were offset by an increase of $5.3 million in maintenance and support services.
|
|
|
Quarter Ended July 31,
|
|
Increase
|
|
|
|||||||||||||
|
|
2014
|
|
%*
|
|
2015
|
|
%*
|
|
(decrease)
|
|
%**
|
|||||||
|
North America
|
$
|
403,250
|
|
|
66.8
|
|
389,593
|
|
|
64.6
|
|
$
|
(13,657
|
)
|
|
(3.4
|
)
|
|
|
EMEA
|
99,909
|
|
|
16.6
|
|
93,168
|
|
|
15.5
|
|
(6,741
|
)
|
|
(6.7
|
)
|
|||
|
CALA
|
67,248
|
|
|
11.1
|
|
65,152
|
|
|
10.8
|
|
(2,096
|
)
|
|
(3.1
|
)
|
|||
|
APAC
|
33,155
|
|
|
5.5
|
|
55,019
|
|
|
9.1
|
|
21,864
|
|
|
65.9
|
|
|||
|
Total
|
$
|
603,562
|
|
|
100.0
|
|
$
|
602,932
|
|
|
100.0
|
|
$
|
(630
|
)
|
|
(0.1
|
)
|
|
•
|
North America revenue
reflects a decrease of $23.3 million in Packet Networking sales of our 3000 and 5000 families of service delivery and aggregation switches. In addition sales of Optical Transport products decreased by $10.4 million and sales of Software and Services decreased by $4.5 million. These decreases were partially offset by an increase of $24.5 million in Converged Packet Optical sales. Converged Packet Optical sales reflect increases of $15.8 million in sales of our 6500 Packet-Optical Platform, $5.7 million in sales of our OTN configuration for the 5410 Reconfigurable Switching System, $1.6 million in sales of our CoreDirector® Multiservice Optical Switches and $1.3 million in sales of our 5430 Reconfigurable Switching System. Sales of our 6500 Packet-Optical Platform reflect increased sales to AT&T and government customers, partially offset by reduced sales to certain large communication service provider customers.
|
|
•
|
EMEA revenue
reflects decreases of $6.6 million in Converged Packet Optical sales and $3.6 million in Optical Transport sales, partially offset by an increase of $2.9 million in Packet Networking sales. Converged Packet Optical sales reflect decreases of $3.2 million in sales of our 6500 Packet-Optical Platform and $2.8 million in sales of our OTN configuration for the 5410 Reconfigurable Switching System.
|
|
•
|
CALA revenue
primarily
reflects a decrease of $1.6 million in Converged Packet Optical sales.
|
|
•
|
APAC revenue
reflects increases of $9.6 million in Converged Packet Optical sales, $8.3 million in Packet Networking sales and $3.5 million in Software and Services sales. Converged Packet Optical sales reflect increases of $8.6 million in sales of our 6500 Packet-Optical Platform and $1.6 million in sales of our 5410 Reconfigurable Switching System. Sales of our 6500 Packet-Optical Platform reflect increased sales to communication service providers and sales through our strategic partnership with Ericsson. Packet Networking sales reflect an increase in sales of our 3000 and 5000 families of service delivery and aggregation switches to certain communication service providers.
|
|
|
Quarter Ended July 31,
|
|
Increase
|
|
|
|||||||||||||
|
|
2014
|
|
%*
|
|
2015
|
|
%*
|
|
(decrease)
|
|
%**
|
|||||||
|
Total revenue
|
$
|
603,562
|
|
|
100.0
|
|
$
|
602,932
|
|
|
100.0
|
|
$
|
(630
|
)
|
|
(0.1
|
)
|
|
Total cost of goods sold
|
339,589
|
|
|
56.3
|
|
333,063
|
|
|
55.2
|
|
(6,526
|
)
|
|
(1.9
|
)
|
|||
|
Gross profit
|
$
|
263,973
|
|
|
43.7
|
|
$
|
269,869
|
|
|
44.8
|
|
$
|
5,896
|
|
|
2.2
|
|
|
|
Quarter Ended July 31,
|
|
Increase
|
|
|
|||||||||||||
|
|
2014
|
|
%*
|
|
2015
|
|
%*
|
|
(decrease)
|
|
%**
|
|||||||
|
Product revenue
|
$
|
495,889
|
|
|
100.0
|
|
$
|
493,919
|
|
|
100.0
|
|
$
|
(1,970
|
)
|
|
(0.4
|
)
|
|
Product cost of goods sold
|
275,003
|
|
|
55.5
|
|
273,837
|
|
|
55.4
|
|
(1,166
|
)
|
|
(0.4
|
)
|
|||
|
Product gross profit
|
$
|
220,886
|
|
|
44.5
|
|
$
|
220,082
|
|
|
44.6
|
|
$
|
(804
|
)
|
|
(0.4
|
)
|
|
|
Quarter Ended July 31,
|
|
Increase
|
|
|
|||||||||||||
|
|
2014
|
|
%*
|
|
2015
|
|
%*
|
|
(decrease)
|
|
%**
|
|||||||
|
Service revenue
|
$
|
107,673
|
|
|
100.0
|
|
$
|
109,013
|
|
|
100.0
|
|
$
|
1,340
|
|
|
1.2
|
|
|
Service cost of goods sold
|
64,586
|
|
|
60.0
|
|
59,226
|
|
|
54.3
|
|
(5,360
|
)
|
|
(8.3
|
)
|
|||
|
Service gross profit
|
$
|
43,087
|
|
|
40.0
|
|
$
|
49,787
|
|
|
45.7
|
|
$
|
6,700
|
|
|
15.5
|
|
|
•
|
Gross profit as a percentage of revenue
increased
as a result of the factors described below.
|
|
•
|
Gross profit on products as a percentage of product revenue
remained relatively unchanged as a result of our relative success in driving product cost reductions and realizing improved manufacturing efficiencies as compared to the market-based price erosion we encountered during the period.
|
|
•
|
Gross profit on services as a percentage of services revenue
increased
, primarily due to increased sales of higher margin software subscription services and reductions in repair costs to support maintenance contracts.
|
|
|
Quarter Ended July 31,
|
|
Increase
|
|
|
|||||||||||||
|
|
2014
|
|
%*
|
|
2015
|
|
%*
|
|
(decrease)
|
|
%**
|
|||||||
|
Research and development
|
$
|
97,685
|
|
|
16.2
|
|
$
|
100,379
|
|
|
16.6
|
|
$
|
2,694
|
|
|
2.8
|
|
|
Selling and marketing
|
81,919
|
|
|
13.6
|
|
81,650
|
|
|
13.5
|
|
(269
|
)
|
|
(0.3
|
)
|
|||
|
General and administrative
|
36,285
|
|
|
6.0
|
|
29,743
|
|
|
4.9
|
|
(6,542
|
)
|
|
(18.0
|
)
|
|||
|
Acquisition and integration costs
|
—
|
|
|
—
|
|
2,435
|
|
|
0.4
|
|
2,435
|
|
|
100.0
|
|
|||
|
Amortization of intangible assets
|
11,019
|
|
|
1.8
|
|
11,019
|
|
|
1.8
|
|
—
|
|
|
—
|
|
|||
|
Restructuring costs
|
63
|
|
|
—
|
|
192
|
|
|
—
|
|
129
|
|
|
204.8
|
|
|||
|
Total operating expenses
|
$
|
226,971
|
|
|
37.6
|
|
$
|
225,418
|
|
|
37.4
|
|
$
|
(1,553
|
)
|
|
(0.7
|
)
|
|
•
|
Research and development expense
benefited
from
$8.1 million
as a result of foreign exchange rates, net of hedging, primarily due to a stronger U.S. dollar in relation to the Canadian Dollar. Including the effect of foreign exchange rates, research and development expenses increased by
$2.7 million
. This increase reflects increases of $2.7 million in facilities and information technology costs, $1.8 million in prototype costs and a $1.3 million reduction in reimbursements from our strategic jobs investment fund grant from the province of Ontario due to the maximum funding limit being met in the second quarter of fiscal 2015, partially offset by decreases of $1.8 million in employee and compensation costs and $1.0 million in professional services.
|
|
•
|
Selling and marketing expense
benefited from
$5.0 million
as a result of foreign exchange rates, primarily due to a stronger U.S. dollar in relation to the Euro and the Canadian Dollar. Including the effect of foreign exchange rates, selling and marketing expense
decreased
by
$0.3 million
, primarily reflecting a decrease of $1.5 million in trade show and related costs, offset by an increase of $1.0 million in customer demonstration equipment.
|
|
•
|
General and administrative expense
benefited from
$1.3 million
as a result of foreign exchange rates, primarily due to a stronger U.S. dollar in relation to the Euro and the Canadian Dollar. Including the effect of foreign exchange rates, general and administrative expense
decreased
by
$6.5 million
, primarily due to a decrease in legal fees.
|
|
•
|
Acquisition and integration costs
primarily reflect legal and accounting costs associated with the acquisition of Cyan.
|
|
•
|
Amortization of intangible assets
remained unchanged.
|
|
•
|
Restructuring costs
remained relatively unchanged. As we look to manage operating expense and drive further efficiency and leverage from our operations, we will continue to assess allocation of headcount, facilities and other resources to ensure that they are optimized toward key growth opportunities.
|
|
|
Quarter Ended July 31,
|
|
Increase
|
|
|
|||||||||||||||
|
|
2014
|
|
%*
|
|
2015
|
|
%*
|
|
(decrease)
|
|
%**
|
|||||||||
|
Interest and other income (loss), net
|
$
|
(6,328
|
)
|
|
(1.0
|
)
|
|
$
|
(5,491
|
)
|
|
(0.9
|
)
|
|
$
|
837
|
|
|
(13.2
|
)
|
|
Interest expense
|
$
|
11,508
|
|
|
1.9
|
|
|
$
|
11,883
|
|
|
2.0
|
|
|
$
|
375
|
|
|
3.3
|
|
|
Provision for income taxes
|
$
|
3,006
|
|
|
0.5
|
|
|
$
|
3,452
|
|
|
0.6
|
|
|
$
|
446
|
|
|
14.8
|
|
|
•
|
Interest and other income (loss), net
primarily reflects a gain due to the remeasurement of assets and liabilities denominated in a currency other than the relevant functional currency, net of hedging activity
|
|
•
|
Interest expense
increased
,
primarily due to the Term Loan entered into in the third quarter of fiscal 2014 and related interest payments. For additional information about our Term Loan, see Note
15
to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report.
|
|
•
|
Provision for income taxes
increased
, primarily due to foreign tax expense, which is largely a result of higher income from our Indian operations.
|
|
|
Nine Months Ended July 31,
|
|
Increase
|
|
|
|||||||||||||
|
|
2014
|
|
%*
|
|
2015
|
|
%*
|
|
(decrease)
|
|
%**
|
|||||||
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Converged Packet Optical
|
$
|
1,072,272
|
|
|
63.2
|
|
$
|
1,177,441
|
|
|
67.2
|
|
$
|
105,169
|
|
|
9.8
|
|
|
Packet Networking
|
187,699
|
|
|
11.1
|
|
165,480
|
|
|
9.4
|
|
(22,219
|
)
|
|
(11.8
|
)
|
|||
|
Optical Transport
|
100,729
|
|
|
5.9
|
|
56,275
|
|
|
3.2
|
|
(44,454
|
)
|
|
(44.1
|
)
|
|||
|
Software and Services
|
336,626
|
|
|
19.8
|
|
354,500
|
|
|
20.2
|
|
17,874
|
|
|
5.3
|
|
|||
|
Consolidated revenue
|
$
|
1,697,326
|
|
|
100.0
|
|
$
|
1,753,696
|
|
|
100.0
|
|
$
|
56,370
|
|
|
3.3
|
|
|
•
|
Converged Packet Optical
revenue
increased
, reflecting an increase of $117.0 million in sales of our 6500 Packet-Optical Platform, largely driven by service provider demand for high-capacity, optical transport for coherent 40G and 100G network infrastructures. In addition, sales of the OTN configuration for the 5410 Reconfigurable Switching System increased by $14.5 million. These increases were partially offset by decreases of $16.2 million in sales of our
|
|
•
|
Packet Networking
revenue
decreased
, reflecting decreases of $24.6 million in sales of our 3000 and 5000 families of service delivery and aggregation switches and $2.0 million in sales of our legacy broadband products. These decreases were offset by a $3.9 million increase in sales of our 8700 Packetwave Platform, which became available for sale in the fourth quarter of fiscal 2014.
|
|
•
|
Optical Transport
revenue
decreased
, reflecting decreases of $17.0 million in sales of our 4200 Advanced Services Platform, $15.3 million in sales of our 5100/5200 Advanced Services Platform and $12.1 million in sales of our other stand-alone transport products. Revenue for our Optical Transport segment, which currently consists principally of stand-alone WDM and SONET/SDH-based transport platforms, has experienced meaningful declines in annual revenue in recent years, reflecting network operators' transition toward next-generation network architectures as described above.
|
|
•
|
Software and Services
revenue
increased
, reflecting increases of $17.0 million in maintenance and support services and $3.6 million in installation and deployment services, partially offset by a decrease of $2.7 million in network transformation consulting services.
|
|
|
Nine Months Ended July 31,
|
|
Increase
|
|
|
|||||||||||||
|
|
2014
|
|
%*
|
|
2015
|
|
%*
|
|
(decrease)
|
|
%**
|
|||||||
|
North America
|
$
|
1,136,867
|
|
|
67.0
|
|
$
|
1,118,309
|
|
|
63.7
|
|
$
|
(18,558
|
)
|
|
(1.6
|
)
|
|
EMEA
|
283,743
|
|
|
16.7
|
|
306,368
|
|
|
17.5
|
|
22,625
|
|
|
8.0
|
|
|||
|
CALA
|
160,162
|
|
|
9.4
|
|
155,785
|
|
|
8.9
|
|
(4,377
|
)
|
|
(2.7
|
)
|
|||
|
APAC
|
116,554
|
|
|
6.9
|
|
173,234
|
|
|
9.9
|
|
56,680
|
|
|
48.6
|
|
|||
|
Total
|
$
|
1,697,326
|
|
|
100.0
|
|
$
|
1,753,696
|
|
|
100.0
|
|
$
|
56,370
|
|
|
3.3
|
|
|
•
|
North America revenue
includes sales to AT&T for first nine months of fiscal 2014 and fiscal 2015 of
$351.3 million
and
$355.6 million
, respectively. Revenues reflect
decreases
of $32.4 million in Packet Networking sales and $33.1 million in Optical Transport sales. Packet Networking sales reflect decreased sales of our 3000 and 5000 families of service delivery and aggregation switches. Optical Transport sales reflect decreases of $12.4 million of sales of our 4200 Advanced Services Platform, $11.0 million of sales of our 5100/5200 Advanced Services Platform and $9.8 million of sales of our other stand-alone transport products. These decreases were partially offset by increases of $43.5 million in Converged Packet Optical sales and $3.4 million in Software and Services sales. Converged Packet Optical sales reflect increases of $47.4 million of sales of our 6500 Packet-Optical Platform and $7.3 million of sales of our 5410 Reconfigurable Switching System, partially offset by a decrease of $11.3 million of sales of our CoreDirector® Multiservice Optical Switches. Sales of our 6500 Packet-Optical Platform reflect increased sales to AT&T, multiservice operator customers, Web-scale providers and government customers, partially offset by decreased sales to certain large communication service provider customers.
|
|
•
|
EMEA revenue
reflects increases of $34.8 million in sales of Converged Packet Optical and $2.4 million in sales of Packet Networking. These increases were partially offset by decreases of $9.8 million in Optical Transport sales and $4.8 million in Software and Services sales. Converged Packet Optical sales reflect increases of $33.2 million of sales of our 6500 Packet-Optical Platform, $3.8 million of sales of our 5430 Reconfigurable Switching System and $1.2 million of sales of our 5410 Reconfigurable Switching System, partially offset by a decrease of $3.4 million of sales of our CoreDirector® Multiservice Optical Switches. Sales of our 6500 Packet-Optical Platform reflect increased sales to submarine network operators,Web-scale providers, multiservice operator customers, enterprise customers and certain large communication service providers.
|
|
•
|
CALA revenue
reflects an $11.2 million decrease in Converged Packet Optical sales. This decrease was partially offset by increases of $6.2 million in Software and Services sales and $1.1 million in Optical Transport sales. Converged Packet Optical sales reflect a $29.1 million decrease in sales of our 5430 Reconfigurable Switching System. This decrease was partially offset by increases of $15.3 million in sales of our 6500 Packet-Optical Platform and $2.8 million of sales of our 5410 Reconfigurable Switching System. Sales of our 6500 Packet-Optical Platform reflect increased sales to communication service providers.
|
|
•
|
APAC revenue
reflects
increases
of $38.0 million in Converged Packet Optical sales, $13.1 million in Software and Services sales and $8.3 million in Packet Networking sales. These increases were partially offset by a $2.6 million decrease in sales of Optical Transport. Converged Packet Optical sales reflect increases of $21.0 million of sales of our 6500 Packet-Optical Platform and $19.1 million of sales of our 5430 Reconfigurable Switching System. These increases were partially offset by decreases of $1.2 million of sales of our CoreDirector® Multiservice Optical Switches and $1.0 million of sales of our 5410 Reconfigurable Switching System. Sales of our 6500 Packet-Optical Platform reflect increased sales to communication service providers and sales through our strategic relationship with Ericsson. Sales of our 5430 Reconfigurable Switching System reflect increased sales to communication service providers and submarine network operators. Software and Services sales reflect increases of $6.1 million in installation and deployment services, $3.4 million in maintenance and support services, $2.6 million in software sales and $1.0 million in network transformation consulting.
|
|
|
Nine Months Ended July 31,
|
|
Increase
|
|
|
||||||||||||
|
|
2014
|
|
%*
|
|
2015
|
|
%*
|
|
(decrease)
|
|
%**
|
||||||
|
Total revenue
|
$
|
1,697,326
|
|
|
100.0
|
|
$
|
1,753,696
|
|
|
100.0
|
|
$
|
56,370
|
|
|
3.3
|
|
Total cost of goods sold
|
969,811
|
|
|
57.1
|
|
981,121
|
|
|
55.9
|
|
11,310
|
|
|
1.2
|
|||
|
Gross profit
|
$
|
727,515
|
|
|
42.9
|
|
$
|
772,575
|
|
|
44.1
|
|
$
|
45,060
|
|
|
6.2
|
|
|
Nine Months Ended July 31,
|
|
Increase
|
|
|
||||||||||||
|
|
2014
|
|
%*
|
|
2015
|
|
%*
|
|
(decrease)
|
|
%**
|
||||||
|
Product revenue
|
$
|
1,389,651
|
|
|
100.0
|
|
$
|
1,428,114
|
|
|
100.0
|
|
$
|
38,463
|
|
|
2.8
|
|
Product cost of goods sold
|
777,851
|
|
|
56.0
|
|
797,283
|
|
|
55.8
|
|
19,432
|
|
|
2.5
|
|||
|
Product gross profit
|
$
|
611,800
|
|
|
44.0
|
|
$
|
630,831
|
|
|
44.2
|
|
$
|
19,031
|
|
|
3.1
|
|
|
Nine Months Ended July 31,
|
|
Increase
|
|
|
|||||||||||||
|
|
2014
|
|
%*
|
|
2015
|
|
%*
|
|
(decrease)
|
|
%**
|
|||||||
|
Service revenue
|
$
|
307,675
|
|
|
100.0
|
|
$
|
325,582
|
|
|
100.0
|
|
$
|
17,907
|
|
|
5.8
|
|
|
Service cost of goods sold
|
191,960
|
|
|
62.4
|
|
183,838
|
|
|
56.5
|
|
(8,122
|
)
|
|
(4.2
|
)
|
|||
|
Service gross profit
|
$
|
115,715
|
|
|
37.6
|
|
$
|
141,744
|
|
|
43.5
|
|
$
|
26,029
|
|
|
22.5
|
|
|
•
|
Gross profit as a percentage of revenue
increased
as a result of the factors described below.
|
|
•
|
Gross profit on products as a percentage of product revenue
remained relatively unchanged as a result of our relative success in driving product cost reductions and realizing improved manufacturing efficiencies as compared to the market-based price erosion we encountered during the period.
|
|
•
|
Gross profit on services as a percentage of services revenue
increased
primarily due to increased sales of higher margin software subscription services and reduced repair costs to support maintenance service contracts.
|
|
|
Nine Months Ended July 31,
|
|
Increase
|
|
|
|||||||||||||
|
|
2014
|
|
%*
|
|
2015
|
|
%*
|
|
(decrease)
|
|
%**
|
|||||||
|
Research and development
|
$
|
302,674
|
|
|
17.8
|
|
$
|
306,342
|
|
|
17.5
|
|
$
|
3,668
|
|
|
1.2
|
|
|
Selling and marketing
|
243,929
|
|
|
14.4
|
|
240,833
|
|
|
13.7
|
|
(3,096
|
)
|
|
(1.3
|
)
|
|||
|
General and administrative
|
98,264
|
|
|
5.8
|
|
89,598
|
|
|
5.1
|
|
(8,666
|
)
|
|
(8.8
|
)
|
|||
|
Acquisition and integration costs
|
—
|
|
|
—
|
|
3,455
|
|
|
0.2
|
|
3,455
|
|
|
—
|
|
|||
|
Amortization of intangible assets
|
34,951
|
|
|
2.1
|
|
33,057
|
|
|
1.9
|
|
(1,894
|
)
|
|
(5.4
|
)
|
|||
|
Restructuring costs
|
178
|
|
|
—
|
|
8,260
|
|
|
0.5
|
|
8,082
|
|
|
—
|
|
|||
|
Total operating expenses
|
$
|
679,996
|
|
|
40.1
|
|
$
|
681,545
|
|
|
38.9
|
|
$
|
1,549
|
|
|
0.2
|
|
|
•
|
Research and development expense
benefited
$19.0 million
, as a result of foreign exchange rates, net of hedging, primarily due to a stronger U.S. dollar in relation to the Canadian dollar. Including the effect of foreign exchange rates, research and development expenses
increased by
$3.7 million
primarily reflecting increases of $6.2 million in facilities and information systems expense and a $3.0 million reduction in reimbursements from our strategic jobs investment fund grant from the province of Ontario due to the maximum funding limit being met in the second quarter of fiscal 2015. These increases were partially offset by a decrease of $6.0 million in professional services.
|
|
•
|
Selling and marketing expense
benefited
$12.7 million
as a result of foreign exchange rates, primarily due to a stronger U.S. dollar in relation to the Euro and the Canadian Dollar. Including the effect of foreign exchange rates, selling and marketing expenses
decreased by
$3.1 million
, primarily reflecting decreases of $1.6 million in trade show and related costs, $1.5 million in travel and related costs, and $1.1 million in professional services. These decreases were partially offset by an increase of $1.4 million in customer demonstration equipment.
|
|
•
|
General and administrative expense
benefited
$3.2 million
as a result of foreign exchange rates, primarily due to a stronger U.S. dollar in relation to the Euro and the Canadian Dollar. Including the effect of foreign exchange rates, general and administrative expense
decreased by
$8.7 million
, primarily reflecting a decrease in legal fees due to certain patent litigation costs incurred during fiscal 2014.
|
|
•
|
Acquisition and integration costs
primarily
reflects legal and accounting costs associated with the acquisition of Cyan.
|
|
•
|
Amortization of intangible assets
decreased
due to certain intangible assets having reached the end of their economic lives.
|
|
•
|
Restructuring costs
primarily reflect certain severance and related expense associated with headcount reductions and initiatives to improve efficiency. During fiscal
2015
, we have incurred approximately
$8.3 million
in restructuring costs, primarily reflecting a global workforce reduction of approximately 125 employees in the first quarter of fiscal 2015 as part of our business optimization strategy to improve our gross margin, constrain operating expense and redesign certain business processes, systems, and resources. As we look to manage operating expense and drive further efficiency and leverage from our operations, we will continue to assess allocation of headcount, facilities and other resources to ensure that they are optimized toward key growth opportunities.
|
|
|
Nine Months Ended July 31,
|
|
Increase
|
|
|
|||||||||||||||
|
|
2014
|
|
%*
|
|
2015
|
|
%*
|
|
(decrease)
|
|
%**
|
|||||||||
|
Interest and other income (loss), net
|
$
|
(14,231
|
)
|
|
(0.8
|
)
|
|
$
|
(19,273
|
)
|
|
(1.1
|
)
|
|
$
|
(5,042
|
)
|
|
35.4
|
|
|
Interest expense
|
$
|
33,556
|
|
|
2.0
|
|
|
$
|
38,491
|
|
|
2.2
|
|
|
$
|
4,935
|
|
|
14.7
|
|
|
Provision for income taxes
|
$
|
9,666
|
|
|
0.6
|
|
|
$
|
7,767
|
|
|
0.4
|
|
|
$
|
(1,899
|
)
|
|
(19.6
|
)
|
|
•
|
Interest and other income (loss), net
reflects a $7.3 million loss due to the remeasurement of assets and liabilities denominated in a currency other than the relevant functional currency, net of hedging activity, partially offset by a $2.7 million non-cash gain related to the change in fair value of the embedded redemption feature associated with our 2015 Notes that matured in the second quarter of fiscal 2015.
|
|
•
|
Interest expense
increased
primarily due to the Term Loan entered into during the third quarter of fiscal 2014 and related interest payments. For additional information about our Term Loan, see Note
15
to our Condensed Consolidated Financial Statements included in Item 1 of Part I of this report.
|
|
•
|
Provision for income taxes
decreased
primarily due to foreign tax expense, which is largely a result of reduced income from our Brazilian operations.
|
|
|
Quarter Ended July 31,
|
|
|
|
||||||||||
|
|
2014
|
|
2015
|
|
Increase (decrease)
|
|
%*
|
|||||||
|
Segment profit:
|
|
|
|
|
|
|
|
|||||||
|
Converged Packet Optical
|
$
|
104,020
|
|
|
$
|
118,223
|
|
|
$
|
14,203
|
|
|
13.7
|
|
|
Packet Networking
|
$
|
14,566
|
|
|
$
|
7,628
|
|
|
$
|
(6,938
|
)
|
|
(47.6
|
)
|
|
Optical Transport
|
$
|
8,900
|
|
|
$
|
2,813
|
|
|
$
|
(6,087
|
)
|
|
(68.4
|
)
|
|
Software and Services
|
$
|
38,802
|
|
|
$
|
40,826
|
|
|
$
|
2,024
|
|
|
5.2
|
|
|
•
|
Converged Packet Optical
segment
profit
increased
, primarily due to increased sales volume and improved gross margin. Increased sales volume is largely driven by service provider demand for convergence of high-capacity, coherent 40G and 100G network infrastructures with integrated OTN switching and control plane functionality.
|
|
•
|
Packet Networking
segment
profit
decreased
primarily due to decreased sales volume in North America as described above.
|
|
•
|
Optical Transport
segment
profit
decreased
primarily due to reduced sales volume and lower gross margin, slightly offset by lower research and development costs. Revenue for our Optical Transport segment, which currently consists principally of stand-alone WDM and SONET/SDH-based transport platforms, has experienced meaningful declines in annual revenue in recent years, reflecting network operators' transition toward next-generation network architectures as described above.
|
|
•
|
Software and Services
segment
profit
increased
primarily due to improved gross margin as described above, partially offset increases in software research and development costs.
|
|
|
Nine Months Ended July 31,
|
|
|
|
|
|||||||||
|
|
2014
|
|
2015
|
|
Increase (decrease)
|
|
%*
|
|||||||
|
Segment profit:
|
|
|
|
|
|
|
|
|||||||
|
Converged Packet Optical
|
$
|
279,299
|
|
|
$
|
322,652
|
|
|
$
|
43,353
|
|
|
15.5
|
|
|
Packet Networking
|
$
|
23,147
|
|
|
$
|
18,910
|
|
|
$
|
(4,237
|
)
|
|
(18.3
|
)
|
|
Optical Transport
|
$
|
29,259
|
|
|
$
|
13,428
|
|
|
$
|
(15,831
|
)
|
|
(54.1
|
)
|
|
Software and Services
|
$
|
93,136
|
|
|
$
|
111,243
|
|
|
$
|
18,107
|
|
|
19.4
|
|
|
•
|
Converged Packet Optical
segment
profit
increased
, primarily due to increased sales volume and improved gross margin, partially offset by increased research and development expense. Increased sales volume is largely driven by service provider demand for convergence of high-capacity, coherent 40G and 100G network infrastructures with integrated OTN switching and control plane functionality.
|
|
•
|
Packet Networking
segment
profit
decreased
, due to lower sales volume and reduced gross margin, partially offset by lower research and development costs.
|
|
•
|
Optical Transport
segment
profit
decreased
, primarily due to reduced sales volume and decreased gross margin. Revenue for our Optical Transport segment, which currently consists principally of stand-alone WDM and SONET/SDH-based transport platforms, has experienced meaningful declines in annual revenue in recent years, reflecting network operators' transition toward next-generation network architectures as described above.
|
|
•
|
Software and Services
segment
profit
increased
, primarily due to increases in sales of installation services, software subscription services, support and consulting services, and increased margin due to lower repair costs to support maintenance service contracts. These increases were partially offset by increased software research and development costs.
|
|
|
October 31,
2014 |
|
July 31,
2015 |
|
Increase
(decrease)
|
||||||
|
Cash and cash equivalents
|
$
|
586,720
|
|
|
$
|
697,091
|
|
|
$
|
110,371
|
|
|
Short-term investments in marketable debt securities
|
140,205
|
|
|
160,067
|
|
|
19,862
|
|
|||
|
Long-term investments in marketable debt securities
|
50,057
|
|
|
70,161
|
|
|
20,104
|
|
|||
|
Total cash and cash equivalents and investments in marketable debt securities
|
$
|
776,982
|
|
|
$
|
927,319
|
|
|
$
|
150,337
|
|
|
•
|
$177.5 million
cash
generated from
operations, consisting of
$168.5 million
provided by
net
income
(adjusted for non-cash charges) and
$9.0 million
provided by
working capital;
|
|
•
|
$39.7 million
used for purchases of equipment, furniture, and fixtures and intellectual property;
|
|
•
|
$16.3 million
provided by settlement of foreign currency forward contracts, net;
|
|
•
|
$6.4 million
used to pay capital lease obligations;
|
|
•
|
$2.0 million
used for the purchase of a cost method investment;
|
|
•
|
$8.9 million
used for repayment of long-term debt;
|
|
•
|
$19.6 million
provided by stock issuances under our employee stock purchase plan and exercise of stock options; and
|
|
•
|
$5.3 million
decrease due to the effect of exchange rate changes on cash and cash equivalents.
|
|
|
Nine months ended
|
||
|
|
July 31, 2015
|
||
|
Net income
|
$
|
25,499
|
|
|
Adjustments for non-cash charges:
|
|
||
|
Depreciation of equipment, building, furniture and fixtures, and amortization of leasehold improvements
|
41,601
|
|
|
|
Share-based compensation costs
|
32,402
|
|
|
|
Amortization of intangible assets
|
39,659
|
|
|
|
Provision for inventory excess and obsolescence
|
18,010
|
|
|
|
Provision for warranty
|
12,549
|
|
|
|
Other
|
(1,220
|
)
|
|
|
Net income (adjusted for non-cash charges)
|
$
|
168,500
|
|
|
|
October 31,
2014 |
|
July 31,
2015 |
|
Increase
(decrease)
|
||||||
|
Accounts receivable, net
|
$
|
518,981
|
|
|
$
|
530,261
|
|
|
$
|
11,280
|
|
|
|
October 31,
2014 |
|
July 31,
2015 |
|
Increase
(decrease)
|
||||||
|
Raw materials
|
$
|
64,853
|
|
|
$
|
54,112
|
|
|
$
|
(10,741
|
)
|
|
Work-in-process
|
8,371
|
|
|
8,924
|
|
|
553
|
|
|||
|
Finished goods
|
165,799
|
|
|
119,635
|
|
|
(46,164
|
)
|
|||
|
Deferred cost of goods sold
|
75,763
|
|
|
59,606
|
|
|
(16,157
|
)
|
|||
|
Gross inventory
|
314,786
|
|
|
242,277
|
|
|
(72,509
|
)
|
|||
|
Provision for inventory excess and obsolescence
|
(60,126
|
)
|
|
(48,260
|
)
|
|
11,866
|
|
|||
|
Inventory
|
$
|
254,660
|
|
|
$
|
194,017
|
|
|
$
|
(60,643
|
)
|
|
|
October 31,
2014 |
|
July 31,
2015 |
|
Increase
(decrease)
|
||||||
|
Accounts payable
|
$
|
209,777
|
|
|
$
|
201,774
|
|
|
$
|
(8,003
|
)
|
|
Accrued liabilities
|
276,608
|
|
|
272,691
|
|
|
(3,917
|
)
|
|||
|
Other long-term obligations
|
45,390
|
|
|
63,482
|
|
|
18,092
|
|
|||
|
Accounts payable, accruals and other obligations
|
$
|
531,775
|
|
|
$
|
537,947
|
|
|
$
|
6,172
|
|
|
|
October 31,
2014 |
|
July 31,
2015 |
|
Increase
(decrease)
|
||||||
|
Products
|
$
|
50,457
|
|
|
$
|
56,355
|
|
|
$
|
5,898
|
|
|
Services
|
95,161
|
|
|
112,278
|
|
|
17,117
|
|
|||
|
Total deferred revenue
|
$
|
145,618
|
|
|
$
|
168,633
|
|
|
$
|
23,015
|
|
|
|
Total
|
|
Less than one year
|
|
One to three years
|
|
Three to five years
|
|
Thereafter
|
||||||||||
|
Principal due at maturity on convertible notes (1)
|
$
|
1,067,127
|
|
|
$
|
—
|
|
|
$
|
500,000
|
|
|
$
|
350,000
|
|
|
$
|
217,127
|
|
|
Principal due on Term Loan
|
247,500
|
|
|
2,500
|
|
|
5,000
|
|
|
240,000
|
|
|
—
|
|
|||||
|
Interest due on convertible notes
|
95,938
|
|
|
25,000
|
|
|
45,625
|
|
|
21,563
|
|
|
3,750
|
|
|||||
|
Interest due on Term Loan (2)
|
37,018
|
|
|
9,404
|
|
|
18,472
|
|
|
9,142
|
|
|
—
|
|
|||||
|
Payments due under Interest Rate Swap (2)
|
9,319
|
|
|
3,144
|
|
|
6,175
|
|
|
—
|
|
|
—
|
|
|||||
|
Operating leases (3)
|
149,235
|
|
|
32,150
|
|
|
48,645
|
|
|
21,991
|
|
|
46,449
|
|
|||||
|
Purchase obligations (4)
|
199,033
|
|
|
199,033
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
Capital leases— equipment
|
6,713
|
|
|
6,241
|
|
|
472
|
|
|
—
|
|
|
—
|
|
|||||
|
Capital leases— buildings (5)
|
127,982
|
|
|
1,720
|
|
|
9,079
|
|
|
14,841
|
|
|
102,342
|
|
|||||
|
Other obligations
|
3,688
|
|
|
3,227
|
|
|
461
|
|
|
—
|
|
|
—
|
|
|||||
|
Total (6)
|
$
|
1,943,553
|
|
|
$
|
282,419
|
|
|
$
|
633,929
|
|
|
$
|
657,537
|
|
|
$
|
369,668
|
|
|
(1)
|
Includes the accretion of the principal amount on the 2020 Notes payable at maturity at a rate of 1.85% per year compounded semi-annually, commencing December 27, 2012.
|
|
(2)
|
Interest on the Term Loan and payments due under the Interest Rate Swap are variable and were calculated using the rate in effect on the balance sheet date.
|
|
(3)
|
Does not include variable insurance, taxes, maintenance and other costs required by the applicable operating lease. These costs are not expected to have a material future impact.
|
|
(4)
|
Purchase obligations relate to purchase order commitments to our contract manufacturers and component suppliers for inventory. In certain instances, we are permitted to cancel, reschedule or adjust these orders. Consequently, only a portion of the amount reported above relates to firm, non-cancelable and unconditional obligations.
|
|
(5)
|
This represents the total minimum lease payments due for all buildings that are subject to capital lease accounting, as well as buildings that are expected to be recorded as capital leases upon the commencement of the lease term. Payment timing is based on the excepted commencement of the lease term. Does not include variable insurance, taxes, maintenance and other costs required by the applicable capital lease. These costs are not expected to have a material future impact.
|
|
(6)
|
As of
July 31, 2015
, we also had approximately
$11.8 million
of other long-term obligations in our Condensed Consolidated Balance Sheet for unrecognized tax positions that are not included in this table because the timing of any cash settlement with the respective tax authority, if any, cannot be reasonably estimated.
|
|
|
Total
|
|
Less than one year
|
|
One to three years
|
|
Three to five years
|
Thereafter
|
||||||||||
|
Standby letters of credit
|
$
|
54,304
|
|
|
$
|
26,162
|
|
|
$
|
14,285
|
|
|
$
|
6,000
|
|
$
|
7,857
|
|
|
•
|
Luvishis v. Cyan, Inc., et al., C.A. No. 11027-CB, filed May 15, 2015
|
|
•
|
Poll v. Cyan, Inc., et al., C.A. No. 11028-CB, filed May 15, 2015
|
|
•
|
Canzano v. Floyd, et al., C.A. No. 11052-CB, filed May 20, 2015
|
|
•
|
Kassis v. Cyan, Inc., et al., C.A. No. 11069-CB, filed May 27, 2015
|
|
•
|
Fenske v. Cyan, Inc., et al., C.A. No. 11090-CB, filed June 3, 2015
|
|
•
|
broader macroeconomic conditions, including weakness and volatility in global markets, that affect our customers;
|
|
•
|
changes in capital spending by large communications service providers;
|
|
•
|
order timing, volume and cancellations;
|
|
•
|
backlog levels;
|
|
•
|
the level of competition and pricing pressure we encounter;
|
|
•
|
the impact of commercial concessions or unfavorable commercial terms required to maintain incumbency or secure new opportunities with key customers;
|
|
•
|
our level of success in achieving cost reductions and efficiencies in our supply chain;
|
|
•
|
the level of start-up costs we incur to support initial deployments, gain new customers or enter new markets;
|
|
•
|
the timing of revenue recognition on sales, particularly relating to large orders;
|
|
•
|
the mix of revenue by product segment, geography and customer in any particular quarter;
|
|
•
|
installation service availability and readiness of customer sites;
|
|
•
|
adverse impact of foreign exchange; and
|
|
•
|
seasonal effects in our business.
|
|
•
|
product functionality, speed, capacity, scalability and performance;
|
|
•
|
price and total cost of ownership of our solutions;
|
|
•
|
incumbency and existing business relationships;
|
|
•
|
ability to offer comprehensive networking solutions, consisting of equipment, software and network consulting services;
|
|
•
|
product development plans and the ability to meet customers' immediate and future network requirements;
|
|
•
|
flexibility and openness of platforms, including ease of integration, interoperability and integrated software programmability and management;
|
|
•
|
manufacturing and lead-time capability; and
|
|
•
|
services and support capabilities.
|
|
•
|
reductions in customer spending and delay, deferral or cancellation of network infrastructure initiatives;
|
|
•
|
increased competition for fewer network projects and sales opportunities;
|
|
•
|
increased pricing pressure that may adversely affect revenue, gross margin and profitability;
|
|
•
|
difficulty forecasting operating results and making decisions about budgeting, planning and future investments;
|
|
•
|
increased overhead and production costs as a percentage of revenue;
|
|
•
|
tightening of credit markets needed to fund capital expenditures by Ciena or our customers;
|
|
•
|
customer financial difficulty, including longer collection cycles and difficulties collecting accounts receivable or write-offs of receivables; and
|
|
•
|
increased risk of charges relating to excess and obsolete inventories and the write-off of other intangible assets.
|
|
•
|
damage to our reputation, declining sales and order cancellations;
|
|
•
|
increased costs to remediate defects or replace products;
|
|
•
|
payment of liquidated damages, contractual or similar penalties, or other claims for performance failures or delays;
|
|
•
|
increased warranty expense or estimates resulting from higher failure rates, additional field service obligations or other rework costs related to defects;
|
|
•
|
increased inventory obsolescence;
|
|
•
|
costs and claims that may not be covered by liability insurance coverage or recoverable from third parties; and
|
|
•
|
delays in recognizing revenue or collecting accounts receivable.
|
|
•
|
the impact of economic conditions in countries outside the United States;
|
|
•
|
effects of adverse changes in currency exchange rates;
|
|
•
|
greater difficulty in collecting accounts receivable and longer collection periods;
|
|
•
|
difficulty and cost of staffing and managing foreign operations;
|
|
•
|
less protection for intellectual property rights in some countries;
|
|
•
|
adverse tax and customs consequences, particularly as related to transfer-pricing issues;
|
|
•
|
social, political and economic instability;
|
|
•
|
compliance with certain testing, homologation or customization of products to conform to local standards;
|
|
•
|
higher incidence of corruption or unethical business practices that could expose us to liability or damage our reputation;
|
|
•
|
trade protection measures, export compliance, domestic preference procurement requirements, qualification to transact business and additional regulatory requirements; and
|
|
•
|
natural disasters, epidemics and acts of war or terrorism.
|
|
•
|
pay substantial damages or royalties;
|
|
•
|
comply with an injunction or other court order that could prevent us from offering certain of our products;
|
|
•
|
seek a license for the use of certain intellectual property, which may not be available on commercially reasonable terms or at all;
|
|
•
|
develop non-infringing technology, which could require significant effort and expense and ultimately may not be successful; and
|
|
•
|
indemnify our customers or other third parties pursuant to contractual obligations to hold them harmless or pay expenses or damages on their behalf.
|
|
•
|
reduced control over delivery schedules and planning;
|
|
•
|
reliance on the quality assurance procedures of third parties;
|
|
•
|
potential uncertainty regarding manufacturing yields and costs;
|
|
•
|
availability of manufacturing capability and capacity, particularly during periods of high demand;
|
|
•
|
risks and uncertainties relating to the locations and geographies of our international contract manufacturing sites;
|
|
•
|
limited warranties provided to us;
|
|
•
|
potential misappropriation of our intellectual property; and
|
|
•
|
potential manufacturing disruptions, including disruptions caused by geopolitical events or environmental factors affecting the locations and geographies of our international contract manufacturing sites.
|
|
•
|
delays in recognizing revenue;
|
|
•
|
liability for injuries to persons, damage to property or other claims relating to the actions or omissions of our service partners;
|
|
•
|
our services revenue and gross margin may be adversely affected; and
|
|
•
|
our relationships with customers could suffer.
|
|
•
|
increasing our vulnerability to adverse economic and industry conditions;
|
|
•
|
limiting our ability to obtain additional financing, particularly in unfavorable capital and credit market conditions;
|
|
•
|
debt service and repayment obligations that may adversely impact our results of operations and reduce the availability of cash resources for other business purposes;
|
|
•
|
limiting our flexibility in planning for, or reacting to, changes in our business and the markets; and
|
|
•
|
placing us at a possible competitive disadvantage to competitors that have better access to capital resources.
|
|
•
|
significant acquisition and integration costs;
|
|
•
|
disruption due to the integration and rationalization of operations, products, technologies and personnel;
|
|
•
|
diversion of management attention;
|
|
•
|
difficulty completing projects of the acquired company and costs related to in-process projects;
|
|
•
|
difficulty managing customer transitions or entering into new markets;
|
|
•
|
loss of key employees;
|
|
•
|
ineffective internal controls over financial reporting;
|
|
•
|
dependence on unfamiliar suppliers or manufacturers;
|
|
•
|
assumption of or exposure to unanticipated liabilities, including intellectual property infringement claims; and
|
|
•
|
adverse tax or accounting effects including amortization expense related to intangible assets and charges associated with impairment of goodwill.
|
|
•
|
combining the companies’ operations and corporate functions;
|
|
•
|
combining our business with Cyan’s business and meeting the capital requirements of the combined company, in a manner that permits us to achieve the cost savings or revenue synergies anticipated to result from the merger, the failure of which would result in the anticipated benefits of the merger not being realized in the time frame currently anticipated or at all;
|
|
•
|
integrating the companies’ technologies and unifying the hardware and software solutions offerings and services available to customers;
|
|
•
|
identifying and eliminating redundant costs and underperforming functions and assets;
|
|
•
|
harmonizing the companies’ operating practices, employee-related policies and compensation programs, internal controls and other policies, procedures and processes;
|
|
•
|
maintaining existing agreements with customers, distributors and vendors and avoiding delays in entering into new agreements with prospective customers, distributors and vendors;
|
|
•
|
addressing possible differences in business backgrounds, corporate cultures and management philosophies;
|
|
•
|
consolidating the companies’ administrative, information technology and business systems infrastructure; and
|
|
•
|
coordinating distribution and marketing efforts.
|
|
•
|
Luvishis v. Cyan, Inc., et al.
, C.A. No. 11027-CB, filed May 15, 2015
|
|
•
|
Poll v. Cyan, Inc., et al.
, C.A. No. 11028-CB, filed May 15, 2015
|
|
•
|
Canzano v. Floyd, et al.
, C.A. No. 11052-CB, filed May 20, 2015
|
|
•
|
Kassis v. Cyan, Inc., et al.
, C.A. No. 11069-CB, filed May 27, 2015
|
|
•
|
Fenske v. Cyan, Inc., et al.
, C.A. No. 11090-CB, filed June 3, 2015
|
|
|
|
|
2.1
|
Agreement and Plan of Merger, dated as of May 3, 2015, among Ciena Corporation, Neptune Acquisition Subsidiary, Inc. and Cyan, Inc. (Incorporated by reference from Exhibit 2.1 to Ciena's Current Report on Form 8-K filed on May 4, 2015)
|
|
2.2
|
Amendment No. 1, dated as of June 2, 2015, to Agreement and Plan of Merger, dated as of May 3, 2015, among Ciena Corporation, Cyan, Inc. and Neptune Acquisition Subsidiary, Inc. (Incorporated by reference from Annex A to Ciena's Registration Statement on Form S-4 (File No. 333-204732) filed on June 4, 2015)
|
|
4.1
|
Indenture, dated as of December 12, 2014, between Ciena (as successor to Cyan, Inc.) and U.S. Bank National Association (Incorporated by reference from Exhibit 4.1 to Cyan, Inc.’s Current Report on Form 8-K filed December 17, 2014)
|
|
4.2
|
First Supplemental Indenture, dated as of April 27, 2015, between Cyan, Inc. and U.S. Bank National Association (Incorporated by reference from Exhibit 4.2 to Cyan Inc.’s Quarterly Report on Form 10-Q filed on May 13, 2015)
|
|
4.3
|
Second Supplemental Indenture, dated as of August 3, 2015, among Ciena, Cyan, Inc. and U.S. Bank National Association (Incorporated by reference herein from Exhibit 4.3 to Ciena's Current Report on Form 8-K filed on August 3, 2015)
|
|
4.4
|
Third Supplemental Indenture, dated as of August 3, 2015, among Ciena, Cyan, Inc. and U.S. Bank National Association (Incorporated herein by reference from Exhibit 4.4 to Ciena's Current Report on Form 8-K filed on August 3, 2015)
|
|
10.1
|
Amendment No. 5 to Asset Backed Loan Credit Agreement dated as of July 2, 2015
|
|
10.2
|
Amendment No. 2 to Term Loan Credit Agreement dated as of July 2, 2015
|
|
10.3
|
Form of Voting Agreement, dated as of May 3, 2015, by and between Ciena Corporation and certain Cyan officers and directors and affiliated stockholders (Incorporated herein by reference from Exhibit 10.1 to Ciena's Registration Statement on Form S-4 (File No. 333-204732) filed on June 4, 2015)
|
|
10.4
|
Cyan, Inc. 2006 Stock Plan (Incorporated herein by reference from Cyan, Inc.’s Registration Statement on Form S-1 (File No. 333-187732) filed on April 4, 2013).
|
|
10.5
|
Cyan, Inc. 2013 Equity Incentive Plan (Incorporated herein by reference from Cyan, Inc.’s Registration Statement on Form S-1 (File No. 333-187732) filed on April 4, 2013).
|
|
31.1
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema Document
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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Ciena Corporation
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Date:
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September 9, 2015
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By:
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/s/ Gary B. Smith
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Gary B. Smith
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President, Chief Executive Officer
and Director
(Duly Authorized Officer)
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Date:
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September 9, 2015
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By:
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/s/ James E. Moylan, Jr.
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James E. Moylan, Jr.
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Senior Vice President, Finance and
Chief Financial Officer
(Principal Financial Officer)
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No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
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| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
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No information found
No Customers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
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