ADVA AG Optical Networking
FRANKFURT : ADV

April 23, 2012 18:45 ET

ADVA AG Optical Networking: Ad hoc: ADVA Optical Networking Reports Q1 2012 Financial Results With Profitability Above Guidance

MARTINSRIED, GERMANY and MUNICH, GERMANY--(Marketwire - Apr 23, 2012) - ADVA AG Optical Networking / / Ad hoc: ADVA OPTICAL NETWORKING REPORTS Q1 2012 FINANCIAL RESULTS WITH PROFITABILITY ABOVE GUIDANCE. Processed and transmitted by Thomson Reuters ONE. The issuer is solely responsible for the content of this announcement.

Q1 2012 revenues at EUR 81.7 million

Q1 2012 IFRS pro forma operating income of EUR 4.5 million (5.5% of revenues)

Q2 2012 revenues expected to range between EUR 81 million and EUR 86 million with IFRS pro forma operating income between 3% and 7% of revenues

Martinsried/Munich, Germany. April 24, 2012. ADVA Optical Networking announced Q1 2012 financial results for the quarter ended on March 31, 2012, and prepared in accordance with International Financial Reporting Standards (IFRS).

Q1 2012 IFRS FINANCIAL RESULTS

Revenues totaled EUR 81.7 million in Q1 2012 and came in within guidance of between EUR 79 million and EUR 83 million. This is up 16.1% vs. Q1 2011 at EUR 70.4 million and is down slightly vs. EUR 83.4 million in Q4 2011. IFRS pro forma operating income, excluding stock-based compensation and amortization & impairment of goodwill & acquisition-related intangible assets, amounted to EUR 4.5 million or 5.5% of revenues, above guidance of between 2% and 5% of revenues. This compares to EUR 0.9 million or 1.3% of revenues in Q1 2011 and EUR 7.4 million or 8.9% of revenues in Q4 2011. The year-on-year increase in pro forma operating income is largely related to higher revenues and stronger gross margins, while the quarter-on-quarter decline in pro forma operating income is mostly due to lower revenues and reduced income from the capitalization of development expenses.

IFRS operating income rose to EUR 3.5 million in Q1 2012, after a loss of EUR 0.3 million in Q1 2011. The key driver for this improvement is the above- mentioned increase in pro forma operating income.

In Q1 2012, IFRS net income amounted to EUR 4.0 million, up significantly from a loss of EUR 2.3 million in Q1 2011. Beyond the improvement of the operating income, ADVA Optical Networking reported income tax benefits of EUR 1.8 million in Q1 2012 after income tax expenses of EUR 0.1 million in Q1 2011. The Q1 2012 income tax benefit is due to the recognition of deferred tax benefits on tax losses in ADVA Optical Networking's U.S. entity. Further, reduced net foreign currency exchange losses of EUR 0.8 million in Q1 2012 after EUR 1.6 million in Q1 2011 supported the increase in net income. Basic and diluted IFRS net earnings per share were positive EUR 0.09 and EUR 0.08, after negative EUR 0.05 each in Q1 2011.

CONFERENCE CALL

In conjunction with the release of its Q1 2012 financial results on April 24, 2012, 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 201744 210 or +1 877 423 0830, pin code 914 308#, and download the corresponding presentation from ADVA Optical Networking's website, www.advaoptical.com, located in the "About Us / Investor Relations" section on the "Financial Results" page under "Conference Calls".

Q2 2012 OUTLOOK

ADVA Optical Networking has the potential to continue growing revenues while aggressively driving innovation and cost efficiencies into its product platforms. While the fragile global economy still demands a cautious sentiment, the company expects Q2 2012 revenues of between EUR 81 million and EUR 86 million. Further, ADVA Optical Networking anticipates Q2 2012 pro forma operating income to range between 3% and 7% of revenues. ADVA Optical Networking notes that it will continue to perform 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 Q2 2012 and beyond. The pro forma operating income guidance provided above excludes any such potential impairment charges. ADVA Optical Networking will hold its annual shareholders' meeting on May 24, 2012, in Meiningen, Germany, and will publish its Q2 2012 financial results on July 19, 2012.

THREE-MONTH IFRS CONSOLIDATED INCOME STATEMENT

  (in thousands of EUR, except earnings per share)        Q1 2012   Q1 2011



  Revenues                                                 81,655    70,351

  Pro forma cost of goods sold(*)                         -49,388   -44,891
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  Pro forma gross profit(*)                                32,267    25,460

  Pro forma selling and marketing expenses                -10,791   -10,033

  Pro forma general and administrative expenses            -6,781    -6,086

  Pro forma research and development expenses             -16,776   -14,359

  Income from capitalization of development expenses(*)     6,053     5,211

  Other operating income and expenses, net                    513       714
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  Pro forma operating income                                4,485       907

  Amortization of intangible assets from acquisitions        -653      -632

  Stock compensation expenses                                -318      -582
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  Operating income (loss)                                   3,514      -307

  Interest income and expenses, net                          -418      -342

  Other financial gains and losses, net                      -842    -1,609
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  Income (loss) before tax                                  2,254    -2,258

  Income tax benefit (expense), net                         1,790       -56
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  Net income (loss)                                         4,044    -2,314



  Earnings per share in EUR

     Basic                                                   0.09     -0.05

     Diluted                                                 0.08     -0.05

(*) Research and development expenses include income from capitalization of development expenses. From 2012, amortization for capitalized development projects is presented as cost of goods sold. Prior period information has been adjusted accordingly, by reclassification of amortization from research and development expenses to cost of goods sold. The effect on cost of goods sold amounted to EUR 3,320 thousand and EUR 3,523 thousand in Q1 2012 and Q1 2011, respectively.

# # #

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.

Published By:

ADVA AG Optical Networking, Martinsried/Munich and Meiningen, Germany www.advaoptical.com

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Source: ADVA AG Optical Networking via Thomson Reuters ONE [HUG#1605216]

Contact Information

  • For Press:
    Gareth Spence
    t +44 1904 699 358
    public-relations(at)advaoptical.com

    For Investors:
    Wolfgang Guessgen
    t +49 89 89 0665 940
    investor-relations(at)advaoptical.com