Avanex Provides Preliminary Financial Results for the Third Quarter And Announces Cost-Containment Plan

Apr 11, 2001, 01:00 ET from Avanex Corporation

    FREMONT, Calif., April 11 /PRNewswire/ --
     Avanex Corporation (Nasdaq: AVNX), pioneer of photonic processors that
 accelerate the deployment of the next-generation optical networks, today
 announced a revised outlook for its fiscal third quarter ended March 30, 2001.
     The Company announced that it expects sales in the third quarter of fiscal
 year 2001 to be approximately $30 million and pro forma basic and diluted loss
 per share to be 3 cents, excluding a pre-tax provision for excess inventory,
 expected to be $22 million.  These anticipated results are lower than the
 financial guidance given on Feb. 27, 2001.
     Walter Alessandrini, Chairman and CEO of the Company, noted, "The slowdown
 in domestic telecommunications spending has negatively impacted our business
 more than we expected, especially during this past month as orders that we
 expected from our larger domestic customers for legacy products simply did not
 materialize.  This adversely impacted the results we were able to achieve in
 this past quarter."
     "Despite this," Alessandrini added, "we continue to see strong interest
 for our newest products such as PowerExchanger(TM) and PowerExpress(TM) from
 these same customers, continue to add new customers to our sales base and
 continue to see larger opportunities in international markets for our
 next-generation products."
     Paul Engle, President and Chief Operating Officer of Avanex, said that in
 response to these factors, "Avanex is focusing its efforts accordingly and
 implementing a cost reduction plan throughout the Company.  Accordingly, we
 expect to take a charge in the fourth quarter of this year for the headcount
 reductions and other restructuring costs."
     The cost-containment plan includes a reduction in employee headcount of
 approximately 350, primarily in manufacturing and administrative activities at
 the Company's Fremont facility.  Avanex expects to achieve additional cost
 savings through a cutback in discretionary expenses, including general
 administration.  In addition, the Company said that as a result of its
 outsourcing initiatives, it now would sub-lease its unoccupied buildings in
 Fremont.
     "Our strategy has been to take sufficient actions now that allow us, going
 forward, to weather the storm until the fiber optics industry improves.
 Avanex's leading-edge technology continues to impress both customers and
 industry analysts, and we believe that we are well positioned for growth when
 the economy improves," concluded Alessandrini.
 
     Conference Call
     Avanex will discuss its Q3 results, restructuring actions, anticipated Q4
 restructuring costs as well as the Company's business conditions and outlook
 on a conference call scheduled for April 24 at 4:30 p.m. EDT.  The number for
 the conference call is 888-316-9406.  The password is "Photonics."  A replay
 of the conference call will be available through May 1 at 800-435-3142.
 
     About Avanex
     Avanex designs, manufactures and markets photonic processors for the
 communications industry.  Avanex's photonic processors offer communications
 service providers and optical systems manufacturers greater levels of
 performance and miniaturization, reduced complexity and increased cost-
 effectiveness as compared to current alternatives.
     Avanex was incorporated in 1997 and is headquartered in Fremont, Calif.
 In addition to a development and manufacturing facility in Fremont, the
 Company also maintains The Photonics Center(TM) in Richardson, Texas and a
 development facility in Hudson, Mass.
     To learn more about Avanex, visit its web site at:  www.avanex.com.
 
     Forward-looking Statements
 This press release contains forward-looking statements including forward-
 looking statements regarding revenues and earnings the Company expects to
 report for the third quarter of fiscal year 2001, the amount of the provision
 for excess inventory the Company expects to report for the third quarter of
 fiscal year 2001, a charge for restructuring costs in the fourth quarter of
 2001, demand for the Company's products, including the Company's newest
 products and next-generation products, and the Company's ability to achieve
 anticipated cost reductions.  Actual results could differ materially from
 those projected in the forward-looking statements.  Factors that could cause
 actual results to differ include any accounting adjustments made during the
 close of the Company's quarter, general economic conditions, the pace of
 spending in the telecommunications industry and in particular the optical
 networks industry, the Company's inability to sufficiently anticipate market
 needs and develop products and product enhancements that achieve market
 acceptance, unforeseen expenses the Company may incur in future quarters or
 the inability to identify expenses which can be eliminated.  In addition,
 please refer to the risk factors contained in the Company's SEC filings
 including its most recently 10-Q filed with the SEC on February 15, 2001.
     Avanex undertakes no obligation to publicly release the result of any
 revisions to these forward-looking statements, which may be made to reflect
 events or circumstances after the date hereof or to reflect the occurrence of
 unanticipated events.
 
 

SOURCE Avanex Corporation
    FREMONT, Calif., April 11 /PRNewswire/ --
     Avanex Corporation (Nasdaq: AVNX), pioneer of photonic processors that
 accelerate the deployment of the next-generation optical networks, today
 announced a revised outlook for its fiscal third quarter ended March 30, 2001.
     The Company announced that it expects sales in the third quarter of fiscal
 year 2001 to be approximately $30 million and pro forma basic and diluted loss
 per share to be 3 cents, excluding a pre-tax provision for excess inventory,
 expected to be $22 million.  These anticipated results are lower than the
 financial guidance given on Feb. 27, 2001.
     Walter Alessandrini, Chairman and CEO of the Company, noted, "The slowdown
 in domestic telecommunications spending has negatively impacted our business
 more than we expected, especially during this past month as orders that we
 expected from our larger domestic customers for legacy products simply did not
 materialize.  This adversely impacted the results we were able to achieve in
 this past quarter."
     "Despite this," Alessandrini added, "we continue to see strong interest
 for our newest products such as PowerExchanger(TM) and PowerExpress(TM) from
 these same customers, continue to add new customers to our sales base and
 continue to see larger opportunities in international markets for our
 next-generation products."
     Paul Engle, President and Chief Operating Officer of Avanex, said that in
 response to these factors, "Avanex is focusing its efforts accordingly and
 implementing a cost reduction plan throughout the Company.  Accordingly, we
 expect to take a charge in the fourth quarter of this year for the headcount
 reductions and other restructuring costs."
     The cost-containment plan includes a reduction in employee headcount of
 approximately 350, primarily in manufacturing and administrative activities at
 the Company's Fremont facility.  Avanex expects to achieve additional cost
 savings through a cutback in discretionary expenses, including general
 administration.  In addition, the Company said that as a result of its
 outsourcing initiatives, it now would sub-lease its unoccupied buildings in
 Fremont.
     "Our strategy has been to take sufficient actions now that allow us, going
 forward, to weather the storm until the fiber optics industry improves.
 Avanex's leading-edge technology continues to impress both customers and
 industry analysts, and we believe that we are well positioned for growth when
 the economy improves," concluded Alessandrini.
 
     Conference Call
     Avanex will discuss its Q3 results, restructuring actions, anticipated Q4
 restructuring costs as well as the Company's business conditions and outlook
 on a conference call scheduled for April 24 at 4:30 p.m. EDT.  The number for
 the conference call is 888-316-9406.  The password is "Photonics."  A replay
 of the conference call will be available through May 1 at 800-435-3142.
 
     About Avanex
     Avanex designs, manufactures and markets photonic processors for the
 communications industry.  Avanex's photonic processors offer communications
 service providers and optical systems manufacturers greater levels of
 performance and miniaturization, reduced complexity and increased cost-
 effectiveness as compared to current alternatives.
     Avanex was incorporated in 1997 and is headquartered in Fremont, Calif.
 In addition to a development and manufacturing facility in Fremont, the
 Company also maintains The Photonics Center(TM) in Richardson, Texas and a
 development facility in Hudson, Mass.
     To learn more about Avanex, visit its web site at:  www.avanex.com.
 
     Forward-looking Statements
 This press release contains forward-looking statements including forward-
 looking statements regarding revenues and earnings the Company expects to
 report for the third quarter of fiscal year 2001, the amount of the provision
 for excess inventory the Company expects to report for the third quarter of
 fiscal year 2001, a charge for restructuring costs in the fourth quarter of
 2001, demand for the Company's products, including the Company's newest
 products and next-generation products, and the Company's ability to achieve
 anticipated cost reductions.  Actual results could differ materially from
 those projected in the forward-looking statements.  Factors that could cause
 actual results to differ include any accounting adjustments made during the
 close of the Company's quarter, general economic conditions, the pace of
 spending in the telecommunications industry and in particular the optical
 networks industry, the Company's inability to sufficiently anticipate market
 needs and develop products and product enhancements that achieve market
 acceptance, unforeseen expenses the Company may incur in future quarters or
 the inability to identify expenses which can be eliminated.  In addition,
 please refer to the risk factors contained in the Company's SEC filings
 including its most recently 10-Q filed with the SEC on February 15, 2001.
     Avanex undertakes no obligation to publicly release the result of any
 revisions to these forward-looking statements, which may be made to reflect
 events or circumstances after the date hereof or to reflect the occurrence of
 unanticipated events.
 
 SOURCE  Avanex Corporation