SOURCE: ADVA AG Optical Networking

October 20, 2010 21:27 ET


MARTINSRIED/MUNICH, GERMANY--(Marketwire - October 20, 2010) -

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Q3 2010 revenues at EUR 80.5 million

Q3 2010 IFRS pro forma operating income of EUR 4.4 million (5.5% of revenues)

Q4 2010 revenues expected to range between EUR 76 million and EUR 81 million with IFRS pro forma operating income between 2% and 6% of revenues

Norcross, Georgia, USA and Martinsried/Munich, Germany. October 21, 2010. ADVA Optical Networking announced Q3 2010 financial results for the quarter ended September 30, 2010, and prepared in accordance with International Financial Reporting Standards (IFRS).


Revenues in Q3 2010 at EUR 80.5 million were slightly above guidance of between EUR 75 million and EUR 80 million, up a significant 38.6% vs. Q3 2009 at EUR 58.1 million and up 17.4% vs. EUR 68.6 million reported in Q2 2010. IFRS pro forma operating income, excluding stock-based compensation and amortization & impairment of goodwill & acquisition-related intangible assets, amounted to EUR 4.4 million or 5.5% of revenues in Q3 2010, at the upper end of guidance of between 2% and 6% of revenues. This compares to EUR 2.0 million or 3.4% of revenues in Q3 2009 and EUR 1.9 million or 2.8% of revenues in Q2 2010. Both the year-on-year and the quarter-on-quarter increases of pro forma operating income are largely related to higher revenues.

IFRS operating income rose to EUR 3.3 million in Q3 2010, after EUR 1.0 million in Q3 2009. The key driver for this improvement is the above-mentioned increase of pro forma operating income.

In Q3 2010, IFRS net income amounted to EUR 2.4 million, up from nil in Q3 2009. Beyond the improvement of the operating income, net foreign currency exchange gains of EUR 0.5 million in Q3 2010 after respective losses of EUR 0.9 million in Q3 2009 supported this rise in net income. These effects were subdued by income tax expenses of EUR 1.0 million in Q3 2010 after an income tax benefit of EUR 0.2 million in Q3 2009. Basic and diluted IFRS net earnings per share were EUR 0.05 each, after being at nil each in Q3 2009.

conference call

In conjunction with the release of its Q3 2010 IFRS financial results on October 21, 2010, ADVA Optical Networking will host a conference call for analysts and investors at 3:00 p.m. CEST / 9:00 a.m. EDT. Participating in the call will be ADVA Optical Networking's chief executive officer, Brian Protiva and chief financial officer & chief operating officer, Jaswir Singh. Interested parties may dial in at +49 69 4035 9611 or +1 866 306 3455, and download the corresponding presentation from ADVA Optical Networking's website, located on the "financial results" page under "conference calls" in the investor relations section of ADVA Optical Networking's website


ADVA Optical Networking has the potential to continue to significantly grow revenues while aggressively driving innovation and cost efficiencies into its product platforms. In light of the ongoing macro-economic uncertainty, paired with sound order intake, the company expects Q4 2010 revenues of between EUR 76 million and EUR 81 million. Further, ADVA Optical Networking anticipates Q4 2010 pro forma operating income to range between 2% and 6% of revenues. ADVA Optical Networking notes that it will continue to perform detailed quarterly reviews of the expected business development with respect to all intangible assets, including capitalized research and development expenses. These reviews may result in non-cash impairment charges in Q4 2010 and beyond. The pro forma operating income guidance provided above excludes any such potential impairment charges. ADVA Optical Networking will publish its Q4 and full-year 2010 financial results on February 24, 2011.

(in thousands of EUR,                       Q3      Q3       9M       9M
except earnings per share)                2010    2009     2010     2009

Revenues                                 80,549  58,112  212,322  173,208

Pro forma cost of goods sold            -48,358 -33,815 -124,845 -100,301
Pro forma gross profit                   32,191  24,297   87,477   72,907

Pro forma selling and marketing expenses-10,285  -8,784  -30,643  -27,335

Pro forma
general and administrative expenses      -5,892  -5,524  -17,345  -17,251

Pro forma
research and development expenses       -12,731  -9,401  -36,826  -30,265

Income from capitalization of development
expenses, net of amortization for capitalized
development projects                        945   1,256    3,237    4,223

Other operating income, net                 176     127    3,094      719
Pro forma operating income                4,404   1,971    8,994    2,998

Amortization of intangible assets from
acquisitions                               -657    -603   -1,503   -1,852

Stock compensation expenses                -474    -372   -1,297     -950
Operating income (loss)                   3,273     996    6,194      196

Interest expense, net                      -338    -325     -992     -914

Other income, net                           451    -915    2,302     -299
Income (loss) before tax                  3,386    -244    7,504   -1,017

Income tax benefit (expense), net          -957     244   -2,120      928
Net income (loss)                         2,429       0    5,384      -89

Earnings per share in EUR

   basic                                   0.05    0.00     0.12     0.00

   diluted                                 0.05    0.00     0.11     0.00

# # #

The economic projections and forward-looking statements contained in this document relate to future facts. Such projections and forward-looking statements are subject to risks which cannot be foreseen and which are beyond the control of ADVA Optical Networking. ADVA Optical Networking is therefore not in a position to make any representation as to the accuracy of economic projections and forward-looking statements or their impact on the financial situation of ADVA Optical Networking or the market in the shares of ADVA Optical Networking.

ADVA Optical Networking provides consolidated pro forma financial results in this press release solely as supplemental financial information to help investors and the financial community make meaningful comparisons of ADVA Optical Networking's operating results from one financial period to another. ADVA Optical Networking believes that these pro forma consolidated financial results are helpful because they exclude non-cash charges related to the stock option programs and amortization and impairment of goodwill and acquisition- related intangible assets, which are not reflective of the Company's operating results for the period presented. This pro forma information is not prepared in accordance with IFRS and should not be considered a substitute for historical information presented in accordance with IFRS.

ADVA AG Optical Networking, Martinsried/Munich and Meiningen, Germany
ADVA Optical Networking North America, Inc., Norcross, Georgia, USA
ADVA Optical Networking (Shenzhen) Ltd., Shenzhen, China

Christine Keck
t +1 301 920 0237 (U.S.)
t +44 1904 699 358 (Europe)
t +86 755 8621 7400 (Asia)

Wolfgang Guessgen
t +1 201 940 7212 (U.S.)
t +49 89 89 0665 940 (Europe)
t +86 755 8621 7400 (Asia)


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ADVA AG Optical Networking Campus Martinsried, Fraunhoferstr. 9a Martinsried/Munich Germany

WKN: 510300;ISIN: DE0005103006; Listed: Freiverkehr in Hanseatische Wertpapierbörse zu Hamburg, Freiverkehr in Börse Berlin, Freiverkehr in Börse Düsseldorf, Freiverkehr in Bayerische Börse München, Freiverkehr in Niedersächsische Börse zu Hannover, Prime Standard in Frankfurter Wertpapierbörse, Regulierter Markt in Frankfurter Wertpapierbörse;

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Source: ADVA AG Optical Networking via Thomson Reuters ONE

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