Corvis announces USD127m loss, to cut 164 staff
25 October 2002 -- Corvis Corporation yesterday reported revenues of USD1.4m for its Q3 ended 28 September. Reported net loss was USD127.4m, or USD0.31 loss per share.
25 October 2002 -- Corvis Corporation yesterday reported revenues of USD1.4m for its Q3 ended 28 September. Reported net loss was USD127.4m, or USD0.31 loss per share, for the current quarter as compared with a reported net loss of USD80.6m, or USD0.23 loss per share, for Q3 2001. The company also announced a share repurchase program of its common stock.
Revenues for this Q3 were generated under the company's contracts with Broadwing Communications and France Telecom.
Pro forma net loss for the current quarter was USD48.4m, or USD0.12 loss per share, excluding goodwill and intangible assets amortization expense, equity-based expense, and restructuring and other charges compared with a pro forma net loss of USD40.3m, or USD0.11 loss per share, for the Q3 2001.
Corvis' Board of Directors has authorised a share repurchase program under which the company can acquire up to USD25m of its common stock in the open market. At yesterday's closing stock price, this would represent approximately 10% of the company's outstanding common stock.
The purchases will be executed at times and prices considered appropriate by the company during the next two years. The share repurchase program may be implemented at such future date as Corvis may determine and may be suspended at any time and from time-to-time without prior notice. The repurchase program will be funded using the existing cash balances and the repurchased shares may be used for corporate purposes in compliance with applicable law. As of the end of Q3 2002, Corvis had 412.3m shares outstanding.
"We are initiating a share repurchase program because we believe in the long-term value of Corvis," Dr. Huber continued. "Given our solid cash balance, the current share price, and the strength of our product portfolio, we believe a share repurchase program represents an attractive opportunity to enhance cash value per share."
Corvis has added two men to its Board of Directors, taking the total to five, four of whom are independent, outside directors. The two new members, Dr. Freeman A. Hrabowski, III, and Donald R. Walker, join directors Joseph R. Hardiman, David S. Oros and Corvis CEO Dr. David R. Huber on the Corvis Board.
Hrabowski is President of the University of Maryland, Baltimore County. Walker is a technology and security expert with almost 40 years in the military, government and business. He is a retired Air Force Brigadier General, former CEO and President of computer security firm Veritect, and CIO of USAA
During the quarter, Corvis continued to realign its business to adjust for the current market conditions. Specifically, the company announced a strategic outsourcing agreement with Celestica, a world leader in electronics manufacturing services (EMS).
Corvis said its partnership with Celestica will help to streamline its manufacturing capabilities, improve overall manufacturing flexibility and reduce costs.
The company also continued to make progress on reorganizing its French subsidiaries during the quarter. The company said that as a result of this reorganization, it expects to reduce its workforce by approximately 164 employees. The reorganisation provides for the continuation of activities on a reduced basis with a focus primarily on research and development and sales support for products in Corvis' ON and XF product lines.
The company expects revenue for its Q4 ending December 28, 2002, to increase sequentially from the third quarter. Corvis says it expects to end its 2002 financial year with approximately USD500 million in cash, cash equivalents and short-term investments, which is subject to change depending on the timing of purchases made under the share repurchase program.