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. Q42012 revenues at EUR80.3 million, IFRS pro forma operating income of EUR4.8 million (6.0% of revenues) FY2012 revenues at EUR330.1 million, IFRS pro forma operating income of EUR21.8 million (6.6% of revenues) Q12013 revenues expected to range between EUR72 million and EUR77 million with IFRS pro forma operating income between -2% and +2% of revenues Martinsried/Munich, Germany. February28, 2013. ADVA Optical Networking announced Q4 and audited full-year 2012 financial results for the period ended December31, 2012, and prepared in accordance with International Financial Reporting Standards (IFRS). Q4 2012 IFRS FINANCIAL RESULTS Revenues totaledEUR80.3 million in Q42012 and were in the upper half of guidance of between EUR77 million and EUR82 million. Revenues are down 3.8% vs. Q42011 at EUR83.4 million and down 2.4% vs. Q32012 at EUR82.3 million. IFRS pro forma operating income, excluding stock-based compensation and amortization & impairment of goodwill & acquisition-related intangible assets, amounted to EUR4.8 million in Q42012 or 6.0% of revenues, at the upper end of guidance of between 2% and 6% of revenues. This compares to Q42011 IFRS pro forma operating income of EUR7.4 million or 8.9% of revenues, and to Q32012 IFRS pro forma operating income of EUR5.6 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 Q42012 was EUR4.3 million, down from EUR6.7 million in Q42011. This is due to the above-mentioned reasons for lower pro forma operating income. The IFRS net income in Q42012 amounted to EUR4.1 million after EUR8.7 million in Q42011. Beyond the reduced operating income, net foreign currency exchange losses of EUR0.1 million in Q42012 after gains of EUR1.9 million in Q42011 contributed to this decrease. Basic and diluted IFRS net earnings per share were EUR0.09 and EUR0.08, respectively, down from EUR0.18 each in Q42011. FULL-YEAR 2012 IFRS FINANCIAL RESULTS Driven by increased Ethernet access business, revenues rose to a record high of EUR330.1 million in 2012, 6.2% above the EUR310.9 million reported in 2011. IFRS pro forma operating income increased from EUR17.3 million or 5.6% of revenues in 2011 to EUR21.8 million or 6.6% of revenues in 2012. This improvement is largely due to revenue and gross margin growth. 2012 IFRS operating income at EUR18.8 million also increased significantly from EUR13.2 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 EUR2.5 million in 2011 to EUR1.6 million in 2012. Finally, IFRS net income amounted to EUR16.7 million in 2012, slightly down vs. EUR16.9 million in 2011. The positive operating income development was mostly compensated by income tax expenses of EUR1.8 million after income tax benefits of EUR2.9 million in 2011. Furthermore, net foreign currency exchange gains of EUR0.8 million in2012 were lower than the EUR2.3 million recorded in 2011. Basic and diluted IFRS net earnings per share were EUR0.35 and EUR0.34 in 2012, slightly down from EUR0.36 and EUR0.35, respectively, in 2011. "We are very pleased with our Q42012 results which were achieved in a very volatile macro-economic environment. At EUR80.3 million, our Q42012 revenues are in the upper half of guidance. Our pro forma gross margin strengthened from 39.3% in Q32012 and 40.0% in Q42011, to 41.8% in Q42012. Prior to amortization of capitalized development expenses, pro forma gross margin increased from 44.5% in Q32012 and 43.9% in Q42011, to 46.7% in Q42012. We achieved pro forma operating income of 6.0% of revenues in Q42012, 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 EUR70.6 million at the end of Q42012, slightly up from EUR70.3 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 EUR41.6 million, up from EUR41.3 million at the end of Q32012. 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 EUR17.3 million or 5.6% of revenues in 2011 to EUR21.8 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 February28, 2013, ADVA Optical Networking will host a conference call for analysts and investors at 3:00p.m.CET / 9:00a.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 +4969201744210 or +18774230830, 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". Q12013 OUTLOOK In Q12013, ADVA Optical Networking expects revenues to range between EUR72 million and EUR77 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 Q12013 and beyond. The pro forma operating income guidance provided above excludes any such potential impairment charges. ADVA Optical Networking will publish its Q12013 financial results on April25, 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 EUR3,917/15,394 thousand and EUR3,267/14,131 thousand in Q4/12M2012 and Q4/12M2011, 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 ------------------------------------------------------------------------------ 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 Optical Networking SE via Thomson Reuters ONE HUG#1681859 --- End of Message --- ADVA Optical Networking SE 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;
ADVA Optical Networking SE : ADVA Optical Networking Reports Audited 2012 IFRS Financial Results In Line with Expectations
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