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.
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.
SIX-MONTH IFRS CONSOLIDATED INCOME STATEMENT
| (in thousands of EUR, except earnings per share) | Q2 2012 | Q2 2011 | 6M 2012 | 6M 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.
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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
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