Ciena Corp.'s president and chief executive said yesterday that 2001 was a good year despite the tough telecommunications market, and that the company is positioning itself to be a leader when the industry picks up again.
"Even in the more difficult environment that we're in this year, we're still winning new accounts," Gary B. Smith said at the company's annual meeting at the BWI Marriott.
Ciena, the Linthicum-based maker of fiber-optic equipment, finished 2001 with about 60 customers - about 20 more than it had at the beginning of the year, Smith said.
"What we're heading into, in our belief, is a more consolidated market," Smith said. "And I think you're beginning to see some of that, both in the carrier space with some of the spectacular bankruptcies that you're seeing and also with some of the vendors getting together."
Ciena, he said, is operating from a position of strength. Other vendors who came to market after the Linthicum company "have really been caught in this economic crunch," he said.
But Smith also said it is not business as usual at Ciena. The company has reduced expenses and cut its work force by about 800 since November. And executives want to restore profitability, he said.
Ciena reported a net loss of $70.6 million for its first fiscal quarter, ended Jan. 31 - its third quarterly loss in 12 months.
"We've been profitable, we enjoyed it, we know you enjoyed it too," Smith told about 60 shareholders at the meeting, which was open only to shareholders but could be heard over the Internet.
During a question-and-answer segment, shareholders asked about the financial woes of Ciena customer Qwest Communications International Inc. and about Ciena's $1.1 billion purchase of California-based Cyras Systems Inc.
Without commenting specifically on Qwest, Smith said he believes that the majority of Ciena's customers will come out of the telecommunications downturn doing well.
He also said the product Ciena acquired with Cyras - an optical switch for metropolitan area networks - is on the market and doing very well.
Smith also said, in response to a question about executive bonuses, that members of Ciena's leadership team have accepted pay freezes and waived bonuses for this year. Typically, the company gives performance-related bonuses on a quarter-to-quarter basis, he said.
Smith also noted that Ciena recently announced plans to acquire ONI Systems Corp., which fits its strategy of playing to win rather than to survive.
Ciena said in the last month that it would buy the publicly held California company for $1.2 billion in stock and debt. ONI's strength is in metropolitan networks, while Ciena's two main products handle long-distance transmissions.
That deal, still subject to shareholder and regulatory approval, is expected to close in the second or third quarter of this year.
Shares of Ciena closed at $9.70 yesterday, up 13 cents.