MAHWAH, N.J. and MUNICH, Germany, Nov. 8, 2006 (PRIMEZONE) --
Q3 2006 revenues up 58% on Q3 2005
to reach a new all-time high of EUR 53.1 million
IFRS Q3 2006 pro forma operating income of EUR 0.9 million
(2% of revenues)
Forecasted Q4 2006 revenues to reach
between EUR 62 million and EUR 67 million with
pro forma operating margin between 6% and 9%
ADVA Optical Networking today announced Q3 2006 financial results for the quarter ended September 30, 2006, and prepared in accordance with International Financial Reporting Standards (IFRS). ADVA Optical Networking today also published key financials as per U.S. Generally Accepted Accounting Principles (U.S. GAAP), the accounting framework applied in financial statements published prior to the release of the annual report 2005.
Q3 2006 IFRS FINANCIAL RESULTS
Including the operations of recently acquired Movaz Networks since July 12, 2006, in Q3 2006 revenues totaled EUR 53.1 million, up 58% when compared to EUR 33.7 million in Q3 2005 and up 29% when compared to EUR 41.2 million in Q2 2006, respectively. IFRS pro forma operating income, excluding stock-based compensation and amortization and impairment of goodwill and acquisition-related intangible assets, was at EUR 0.9 million in Q3 2006 after EUR 5.6 million in Q3 2005, primarily driven by initially lower gross margin Movaz operations, variations in product and customer mix as well as expanded research & development expenses. IFRS pro forma quarterly net profit was at EUR 0.4 million in Q3 2006 after EUR 4.0 million in Q3 2005, with diluted pro forma net earnings per share of EUR 0.01 in Q3 2006 after EUR 0.11 in Q3 2005.
In Q3 2006, ADVA Optical Networking experienced an IFRS actual net loss of EUR 4.3 million due to the factors mentioned above as well as initially high amortization of intangible assets of EUR 4.0 million largely related to the Movaz acquisition. This compared to an IFRS actual net profit of EUR 3.6 million in Q3 2005. Diluted net earnings per share were EUR -0.10 in Q3 2006 and EUR 0.10 in Q3 2005.
INFORMATION ON Q3 2006 U.S. GAAP RESULTS
Based on the same revenue figures quoted under IFRS, ADVA Optical Networking's U.S. GAAP actual net loss for Q3 2006 was EUR 7.7 million, or EUR 3.4 million higher than the figure reported under IFRS. This difference is largely attributable to the capitalization under IFRS of part of the company's development costs, higher amortization of intangible assets related to the Movaz acquisition and a lower valuation of inventories under U.S. GAAP. Further details on key U.S. GAAP financial numbers are provided in the Nine-Month Report 2006, available in the investor relations section of the corporate web site, www.advaoptical.com.
CONFERENCE CALL AND WEBCAST
In conjunction with the release of its Q3 2006 financial results, ADVA Optical Networking's chief executive officer, Brian L. Protiva, and chief financial officer, Andreas G. Rutsch, will host a conference call for analysts and investors at 3:00 p.m. CET/ 9:00 a.m. EST today, November 9, 2006. Investors may listen live via webcast on ADVA Optical Networking's website, located on the 'earnings webcasts' page under 'financial results' in the investor relations section of ADVA Optical Networking's website at www.advaoptical.com.
Q4 AND FULL-YEAR 2006 OUTLOOK
Currently ADVA Optical Networking expects its market for optical WDM and Ethernet access solutions for metro networks to grow by 20% to 25% per year in both 2006 and 2007, based on the expectation of ongoing strong demand for metro infrastructure deployments and enterprise solutions. Given the consolidation of Movaz from July 12, 2006, onwards, ADVA Optical Networking expects to achieve full year 2006 revenues between EUR 193 million and EUR 198 million and revenues ranging between EUR 62 million and EUR 67 million in Q4 2006. Further, ADVA Optical Networking projects its full year 2006 IFRS pro forma operating margin between 7% and 8% of revenues, which translates in a Q4 2006 IFRS pro forma operating margin between 6% and 9% of revenues, up significantly from Q3 2006 and driven by higher revenues and improvements in gross margins. Additionally, in Q4 2006 there will be no further significant one-off Movaz integration expenses. ADVA Optical Networking will release its Q4 and full year 2006 financial results on March 13, 2007.