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ADVA Optical Networking SE : ADVA Optical Networking Reports Audited 2012 IFRS Financial Results In Line with Expectations



ADVA Optical Networking SE : ADVA Optical Networking Reports Audited 2012 IFRS
                 Financial Results In Line with Expectations

ADVA Optical Networking SE / ADVA Optical Networking Reports Audited 2012 IFRS
Financial Results In Line with Expectations . Processed and transmitted by
Thomson Reuters ONE. The issuer is solely responsible for the content of this
announcement.

                    Q4 2012 revenues at EUR 80.3 million,
    IFRS pro forma operating income of EUR 4.8 million (6.0% of revenues)

                    FY 2012 revenues at EUR 330.1 million,
    IFRS pro forma operating income of EUR 21.8 million (6.6% of revenues)

                      Q1 2013 revenues expected to range
                between EUR 72 million and EUR 77 million with
       IFRS pro forma operating income between -2% and +2% of revenues

Martinsried/Munich,  Germany.  February 28,  2013.  ADVA  Optical   Networking 
announced Q4 and audited full-year 2012 financial results for the period ended
December 31, 2012,  and prepared  in accordance  with International  Financial 
Reporting Standards (IFRS).

Q4 2012 IFRS FINANCIAL RESULTS

Revenues totaled EUR 80.3 million  in Q4 2012 and  were in the  upper half  of 
guidance of between EUR 77 million and EUR 82 million. Revenues are down  3.8% 
vs. Q4 2011 at EUR 83.4 million and down 2.4% vs. Q3 2012 at EUR 82.3 million.
IFRS pro  forma  operating  income,  excluding  stock-based  compensation  and 
amortization & impairment of goodwill & acquisition-related intangible assets,
amounted to EUR 4.8 million in Q4 2012 or  6.0% of revenues, at the upper  end 
of guidance of between 2%  and 6% of revenues.  This compares to Q4 2011  IFRS 
pro forma operating  income of  EUR 7.4 million or  8.9% of  revenues, and  to 
Q3 2012 IFRS  pro  forma  operating  income of  EUR 5.6  million  or  6.8%  of 
revenues. These developments are largely  due to lower revenues and  increased 
selling and marketing expenses.

The IFRS operating income  in Q4 2012 was EUR 4.3  million, down from  EUR 6.7 
million in Q4 2011. This is due  to the above-mentioned reasons for lower  pro 
forma operating income.

The IFRS  net income  in Q4 2012  amounted to  EUR 4.1 million  after  EUR 8.7 
million in Q4 2011. Beyond the reduced operating income, net foreign  currency 
exchange losses of EUR 0.1 million in  Q4 2012 after gains of EUR 1.9  million 
in Q4 2011 contributed to this decrease.  Basic and diluted IFRS net  earnings 
per share were EUR 0.09 and EUR 0.08, respectively, down from EUR 0.18 each in
Q4 2011.

FULL-YEAR 2012 IFRS FINANCIAL RESULTS
Driven by increased Ethernet access business,  revenues rose to a record  high 
of EUR 330.1 million  in 2012, 6.2%  above the EUR 310.9  million reported  in 
2011. IFRS pro forma operating income increased from EUR 17.3 million or  5.6% 
of revenues in  2011 to EUR 21.8  million or  6.6% of revenues  in 2012.  This 
improvement is largely due to revenue and gross margin growth.

2012 IFRS operating  income at EUR 18.8  million also increased  significantly 
from EUR 13.2 million in 2011. The  main reason for this positive  development 
is the above-mentioned increase in pro forma operating income and a  reduction 
in amortization of intangible assets from acquisitions from EUR 2.5 million in
2011 to EUR 1.6 million in 2012.

Finally, IFRS net income amounted to  EUR 16.7 million in 2012, slightly  down 
vs. EUR 16.9 million in  2011. The positive  operating income development  was 
mostly compensated by income tax expenses of EUR 1.8 million after income  tax 
benefits of  EUR 2.9  million  in  2011.  Furthermore,  net  foreign  currency 
exchange gains of EUR 0.8 million in 2012 were lower than the EUR 2.3  million 
recorded in 2011. Basic and diluted IFRS net earnings per share were  EUR 0.35 
and EUR 0.34 in 2012, slightly down from EUR 0.36 and EUR 0.35,  respectively, 
in 2011.

"We are very pleased with  our Q4 2012 results which  were achieved in a  very 
volatile macro-economic environment. At EUR 80.3 million, our Q4 2012 revenues
are in the  upper half of  guidance. Our pro  forma gross margin  strengthened 
from 39.3% in  Q3 2012 and 40.0%  in Q4 2011,  to 41.8% in  Q4 2012. Prior  to 
amortization of  capitalized  development  expenses, pro  forma  gross  margin 
increased from 44.5% in Q3 2012 and 43.9% in Q4 2011, to 46.7% in Q4 2012.  We 
achieved pro forma  operating income of  6.0% of revenues  in Q4 2012, at  the 
upper end of guidance, demonstrating our focus on managing operational  costs. 
In addition, cash and cash equivalents were at another record high of EUR 70.6
million at the end of Q4 2012, slightly up from EUR 70.3 million at the end of
the previous quarter. Throughout the year, ADVA Optical Networking  maintained 
financial strength, with an equity ratio in excess of 50% and record high  net 
liquidity at the end of every quarter. At year-end 2012, net liquidity was  at 
an all-time high of EUR 41.6 million, up  from EUR 41.3 million at the end  of 
Q3 2012. For the  full year  2012, through  a combination  of revenue  growth, 
increased gross margins, and enhanced operational excellence, we were able  to 
further grow  profitability. Pro  forma  operating income  grew by  26%,  from 
EUR 17.3 million or 5.6% of  revenues in 2011 to  EUR 21.8 million or 6.6%  of 
revenues in 2012,"  commented Jaswir  Singh, chief financial  officer &  chief 
operating officer of ADVA Optical Networking.

        CONFERENCE CALL

In conjunction with the release of  its full-year 2012 audited IFRS  financial 
results on February 28, 2013, ADVA  Optical Networking will host a  conference 
call  for   analysts  and   investors   at  3:00 p.m. CET   /   9:00 a.m. EST. 
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  997   939#,  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".

Q1 2013 OUTLOOK
In Q1 2013, ADVA Optical Networking  expects revenues to range between  EUR 72 
million and  EUR 77 million,  and anticipates  pro forma  operating income  of 
between -2%  and  +2%  of revenues.  As  a  matter of  caution,  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  development  expenses.  In   case  of  highly  adverse   business 
prospects, these reviews may result in non-cash impairment charges in  Q1 2013 
and beyond. The pro  forma operating income  guidance provided above  excludes 
any such potential  impairment charges. ADVA  Optical Networking will  publish 
its Q1 2013 financial results on April 25, 2013.

"Despite the difficult  macro-economic environment,  we achieved  our goal  to 
grow profitably. ADVA Optical  Networking successfully recognizes and  targets 
rapidly changing technology trends and growth  markets. We continue to be  the 
multi-year global market leader in Ethernet Access Devices with a market share
of more than 20%,  and remain a  strong competitor in  EMEA for metro  optical 
transport solutions.  Although long-term  growth perspectives  continue to  be 
strong, for 2013 we are likely  to face significant volatility in our  market. 
Current carrier investment plans draw a mixed picture. However, an  increasing 
share of the carriers' spending will  flow into the migration to LTE  projects 
which should translate into incremental business for ADVA Optical  Networking. 
Beyond potential  full-year  revenue  growth,  our  focus  on  innovation  and 
strategic technology  partnerships  will  result  in  an  expanding  share  of 
higher-margin,  software-heavy  applications  as  well  as  expanded   service 
offerings, supporting our  long-term profitability  commitment," stated  Brian 
Protiva, chief executive officer of ADVA Optical Networking.

IFRS CONSOLIDATED INCOME STATEMENT

(in thousands of EUR,                            Q4      Q4        FY       FY
except earnings per share)                     2012    2011      2012     2011
Revenues                                     80,268  83,432   330,069  310,945
Pro forma cost of goods sold^*              -46,711 -50,099  -196,820 -191,560
Pro forma gross profit^*                     33,557  33,333   133,249  119,385
Pro forma
selling and marketing expenses              -12,995 -11,296   -46,259  -43,411
Pro forma
general and administrative expenses          -6,114  -5,465   -25,725  -24,007
Pro forma
research and development expenses           -15,515 -16,848   -65,055  -60,083
Income from capitalization of development
expenses^*                                    5,064   7,397    23,529   23,648
Other operating income and expenses, net        840     291     2,059    1,751
Pro forma operating income                    4,837   7,412    21,798   17,283
Amortization of
intangible assets from acquisitions            -145    -640    -1,620   -2,493
Stock compensation expenses                    -404     -98    -1,344   -1,583
Operating income                              4,288   6,674    18,834   13,207
Interest income and expenses, net              -298    -378    -1,163   -1,531
Other financial gains and losses, net          -138   1,937       834    2,328
Income before tax                             3,852   8,233    18,505   14,004
Income tax benefit (expense), net               249     451    -1,783    2,935
Net income                                    4,101   8,684    16,722   16,939
Earnings per share in EUR
   Basic                                       0.09    0.18      0.35     0.36
   Diluted                                     0.08    0.18    0.34     0.35  

^* 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 3,917/15,394  thousand  and  EUR 3,267/14,131  thousand   in 
Q4/12M 2012 and Q4/12M 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  two 
decades, 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 Optical Networking SE, Martinsried/Munich and Meiningen, Germany
www.advaoptical.com

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

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Source: ADVA Optical Networking SE via Thomson Reuters ONE
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ADVA Optical Networking SE
Campus Martinsried, Fraunhoferstr. 9a Martinsried/Munich Germany

WKN: 510300;ISIN: DE0005103006;
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