June 18, 2002--Ciena Corp. (Linthicum, MD) and ONI Systems Corp. (San Jose, CA) today announced that shareholders of both companies have approved the proposed merger between them. The companies expect the transaction will become effective on Friday, June 21, 2002. ONI's stock will trade through the close of trading on Friday, June 21, 2002.
"We believe the combination of Ciena and ONI creates a new Ciena capable of offering one of the broadest next-generation solution sets available," said Gary Smith, Ciena's president and chief executive officer. "We continue to expect that once our carrier customers resume more normal spending patterns, a larger percentage of their expenditures will be directed toward cost-saving next-generation solutions like Ciena's."
Ciena and ONI also announced that each company would immediately take steps to eliminate functional redundancies and achieve the operational cost synergies anticipated as a result of their combination. The companies expect to reduce their combined workforce by approximately 225 employees, effective tomorrow, June 19, 2002. Another approximately 110 employees will be leaving within the next three months after assisting with the integration transition. All of the affected employees have been notified. Affected employees will receive severance based on position and length of service, as well as outplacement services. Ciena expects that as a result of these and other cost-cutting measures, it will achieve its target of greater than $55 to $65 million in annualized operating cost synergies.
Ciena's Smith offered the following comments about the combined company's fiscal third quarter, which ends July 31, 2002:
"We continue to navigate an uncertain telecomm environment - one in which service provider spending appears to have reached unsustainably low levels. In this environment our business remains volatile and unpredictable, and our fiscal third quarter revenues will depend heavily on the timing of customer orders and acceptance of products for which we already have orders. It is possible, however, that depending on the timing of acceptance and customer orders, Ciena's third quarter revenues, including revenues derived from ONI, could be down meaningfully from Ciena's stand-alone second quarter revenues."
Smith concluded, "Both Ciena's and ONI's businesses have been affected dramatically by the unprecedented decline in carrier spending. However, we firmly believe that together we are stronger and better positioned to emerge a winner."
Ciena expects to report fiscal third quarter results inclusive of ONI on Thursday, August 22, 2002. Additional information about Ciena can be found at www.ciena.com.