MARTINSRIED, GERMANY and MUNICH, GERMANY--(Marketwire - Jul 18, 2012) - ADVA AG Optical
Networking / ADVA Optical Networking Reports Q2 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.
Q2 2012 revenues at EUR 85.9 million
Q2 2012 IFRS pro forma operating income of EUR 6.8 million (8.0% of
revenues)
Q3 2012 revenues expected to range between EUR 82 million and EUR 87
million
with IFRS pro forma operating income between 4% and 8% of revenues
Martinsried/Munich, Germany. July 19, 2012. ADVA Optical Networking
announced
Q2 2012 financial results for the quarter ended on June 30, 2012, and
prepared
in accordance with International Financial Reporting Standards (IFRS).
Q2 2012 IFRS FINANCIAL RESULTS
Revenues in Q2 2012 rose to a record high of EUR 85.9 million, up
10.3% vs.
EUR 77.8 million in Q2 2011 and up 5.2% vs. EUR 81.7 million
achieved in
Q1 2012. This result is at the upper end of guidance of between EUR 81
million
and EUR 86 million. IFRS pro forma operating income, excluding stock-
based
compensation and amortization & impairment of goodwill & acquisition-
related
intangible assets, amounted to EUR 6.8 million or 8.0% of revenues in Q2
2012,
above guidance of between 3% and 7% of revenues. This compares to
EUR 3.5
million or 4.5% of revenues in Q2 2011 and EUR 4.5 million or 5.5% of
revenues
in Q1 2012. Both the year-on-year and the quarter-on-quarter increases
of pro
forma operating income are largely due to higher revenues and gross
margins.
The IFRS operating income rose to EUR 5.9 million in Q2 2012, after
EUR 2.4
million in Q2 2011. The key driver for this improvement is the above-
mentioned
increase of pro forma operating income.
The IFRS net income amounted to EUR 5.1 million in Q2 2012, up from
EUR 0.8
million in Q2 2011. Beyond the improvement of the operating income, net
foreign
currency exchange gains of EUR 1.9 million, after a loss of EUR 1.0
million in
Q2 2011, drove the increase in net income. In part, this effect was
offset by
higher tax expenses of EUR 2.4 million in Q2 2012 after EUR 0.2
million in
Q2 2011. Basic and diluted IFRS net earnings per share in Q2 2012 were EUR
0.11
and EUR 0.10 after EUR 0.02 each in Q2 2011.
"We are very pleased with our Q2 2012 revenues of EUR 85.9 million, which
are at
the upper end of guidance and are up 5.2% vs. our previous quarter and
10.3% vs.
Q2 2011. The quarter-on-quarter increase is driven largely by
investments in
carrier infrastructure and enterprise solutions, reflecting the
continued
network traffic growth due to video applications and the increasing
adoption of
cloud computing services, coupled with rising demand for innovative
enterprise
network technology in a broad range of verticals. Year-on-year, the pick-
up is
mostly related to higher demand for Ethernet transport solutions for
mobile
backhaul and enterprise access applications. Our pro forma gross
margin
increased to 40.9% in Q2 2012, up from 39.5% in Q1 2012 and 38.1% in Q2
2011.
Excluding amortization for capitalized development projects, our Q2
2012 pro
forma gross margin amounted to 45.4%, up from 43.6% in Q1 2012 and
43.0% in
Q2 2011. This improvement is due to changes in product and customer
mix and
positive effects of our cost reduction programs. Our pro forma operating
income
was at 8.0% of revenues in Q2 2012 and came in above guidance, driven
mostly by
the strong revenue and gross margin development. Furthermore, cash and
cash
equivalents were at EUR 69.9 million at the end of Q2 2012, up 9% from EUR
64.0
million at the end of the previous quarter and up 26% from EUR 55.4
million at
the end of Q2 2011. Correspondingly, net liquidity increased to EUR
40.8
million, up EUR 6.0 million or 17% vs. the end of the previous quarter
and up
EUR 13.5 million or 49% vs. the end of Q2 2011. With this, cash
and net
liquidity levels at the end of Q2 2012 both reached quarter-end all-time
highs,
demonstrating our commitment to manage our working capital and
strengthen our
balance sheet," commented Jaswir Singh, chief financial officer &
chief
operating officer of ADVA Optical Networking.
CONFERENCE CALL
In conjunction with the release of its Q2 2012 financial results on
July 19,
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 616
608#, 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 at
www.advaoptical.com.
Q3 2012 OUTLOOK
With its sound business model, ADVA Optical Networking remains flexible
and is
able to respond quickly to continuous change in the global market.
Although the
global economic sentiment continues to be very challenging, the Company
expects
Q3 2012 revenues of between EUR 82 million and EUR 87 million. Further,
ADVA
Optical Networking anticipates Q3 2012 pro forma operating income to
range
between 4% and 8% 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 Q3
2012 and
beyond. The pro forma operating income guidance provided above excludes any
such
potential impairment charges. ADVA Optical Networking will publish its Q3
2012
financial results on October 23, 2012.
"While the Optical+Ethernet transport market has developed slowly in 2012,
ADVA
Optical Networking's revenues have grown nicely, distancing ourselves from
many
of our competitors. Continued core network traffic growth as well as
higher
demand for Ethernet transport solutions for mobile backhaul and
enterprise
access applications should drive further profitable growth. These
effects as
well as shifts in product mix, further investments in advanced
innovation and
continued operational efficiencies should also support gross
margin
improvements. Furthermore, we have expanded our customer base quickly due
to the
success of our innovative mobile backhauling FSP 150EG-X platform for
carrier
Ethernet access and due to our 100G transport technology for the metro
market.
Data center interconnections and forward-looking cloud computing
applications
remain key drivers of growth for the use of our 100G, control
plane and
encryption features. These drivers should create further value
for
shareholders," stated Brian Protiva, chief executive officer of ADVA
Optical
Networking.
SIX-MONTH IFRS CONSOLIDATED INCOME STATEMENT
(in thousands of EUR, Q2 Q2 6M 6M
except earnings per share) 2012 2011 2012 2011
Revenues 85,879 77,837 167,534 148,188
Pro forma cost of goods sold(*) -50,779 -48,146 -100,167 -93,037
--------------------------------------------------------------------------
Pro forma gross profit(*) 35,100 29,691 67,367 55,151
Pro forma selling and marketing expenses -11,761 -11,099 -22,552 -21,132
Pro forma
general and administrative expenses -6,707 -6,183 -13,488 -12,269
Pro forma
research and development expenses -16,613 -14,094 -33,389 -28,453
Income from capitalization
of development expenses(*) 6,446 4,907 12,499 10,118
Other operating income and expenses, net 382 277 895 991
--------------------------------------------------------------------------
Pro forma operating income 6,847 3,499 11,332 4,406
Amortization of intangible assets
from acquisitions -662 -607 -1,315 -1,239
Stock compensation expenses -287 -479 -605 -1,061
--------------------------------------------------------------------------
Operating income (loss) 5,898 2,413 9,412 2,106
Interest income and expenses, net -213 -409 -631 -751
Other financial gains and losses, net 1,850 -988 1,008 -2,597
--------------------------------------------------------------------------
Income (loss) before tax 7,535 1,016 9,789 -1,242
Income tax benefit (expense), net -2,436 -179 -646 -235
--------------------------------------------------------------------------
Net income (loss) 5,099 837 9,143 -1,477
Earnings per share in EUR
Basic 0.11 0.02 0.19 -0.03
Diluted 0.10 0.02 0.19 -0.03
(*) 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 3,902/7,222 thousand and EUR 3,747/7,270 thousand in Q2/6M
2012
and Q2/6M 2011, respectively.
# # #
About ADVA Optical Networking
ADVA Optical Networking is a global provider of intelligent
telecommunications
infrastructure solutions. With software-automated Optical+Ethernet
transmission
technology, the Company builds the foundation for high-speed, next-
generation
networks. The Company's FSP product family adds scalability and
intelligence to
customers' networks while removing complexity and cost. With a
flexible and
fast-moving organization, ADVA Optical Networking forges close partnerships
with
its customers to meet the growing demand for data, storage, voice and
video
services. Thanks to reliable performance for more than 15 years, the
Company has
become a trusted partner for more than 250 carriers and 10,000
enterprises
across the globe. For more information, please visit us at
www.advaoptical.com.
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
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: ADVA AG Optical Networking via Thomson Reuters ONE
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