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

ADVA Optical Networking Reports Audited 2012 IFRS Financial Results In Line 
with Expectations 
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, GERMANY and MUNICH, GERMANY -- (Marketwire) -- 02/27/13
--  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 
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] 
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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