Ciena files $1.5 billion shelf offering

Company also files to more than double outstanding shares

`A need for cash'

Some view offering as gauge of business' fiber-optic success

January 20, 2001|By Stacey Hirsh | Stacey Hirsh,SUN STAFF

Ciena Corp., the Linthicum maker of fiber-optic equipment, has filed a shelf offering with the Securities and Exchange Commission to allow the company to sell $1.5 billion in debt securities, preferred and common stock, warrants and depositary shares.

Ciena said in a news release that the offering gives it the flexibility to raise money through stock or debt.

Bill Rose, a Ciena spokesman, said the money could be used to pay off debts or for acquisitions. Rose said the money would give the company more capital to continue to grow and that by filing the statement, "We can act quicker when market opportunities arrive."

"We foresaw a need for cash to fund continued growth in the company and many of our competitors are substantially capitalized, some more than we are."

News of the filing was made public Thursday after the stock markets closed. Yesterday, Ciena's stock price continued to rise, closing at $104.81, up $2.38.

In addition, Ciena said yesterday in an SEC filing that it will seek shareholder approval of a plan to more than double the number of common shares it is authorized to issue, from 460 million to 980 million, and that shareholders will vote on the proposal March 14.

The proposal already has been approved by Ciena's board of directors, the company said.

Prospero Roda, an analyst with Global Capital Securities in Baltimore, said Ciena might be looking to round out its product portfolio and could be "building up their war chest in case something comes along they want to acquire."

Shelf filings are typically issued to larger companies, and Ciena's statement serves as an indicator of its status in the market, said Seth Spalding, an analyst who covers Ciena for Epoch Partners in San Francisco.

"It's a sign of them becoming a larger company," he said.

For the quarter that ended Oct. 31, Ciena's earnings reached $41.3 million, or 14 cents per diluted share, compared with $4.7 million, or 2 cents per diluted share, in the corresponding quarter in the previous year. Revenue for the quarter was $287.6 million, up from $141.4 million a year earlier.

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