ADVA OPTICAL NETWORKING HOLDS STEADY COURSE AND DELIVERS STABLE REVENUES AND HIGHER PROFITABILITY IN FOURTH QUARTER AND FULL-YEAR 2002

Martinsried/Munich, Germany; Mahwah/New Jersey, USA. March 19, 2003. ADVA Optical Networking (FSE: ADV), a leading global provider of optical networking solutions, today announced fourth quarter and full-year 2002 audited financial results for the period ended December 31, 2002, and prepared in accordance with U.S. General Accepted Accounting Principles (U.S. GAAP).

FOURTH QUARTER 2002 FINANCIAL RESULTS
Revenues in the fourth quarter 2002 totalled EUR 22.2 million, compared to revenues of EUR 22.0 million in the third quarter 2002, and revenues of EUR 24.2 million in the fourth quarter 2001. Pro forma operating income increased to EUR 2.3 million in the fourth quarter 2002, a sequential increase of 45.0% compared to pro forma operating income of EUR 1.6 million in the third quarter 2002, and significant improvement over a pro forma operating loss of EUR 0.2 million in the fourth quarter 2001. Pro forma net income from continuing operations increased to EUR 5.2 million in the fourth quarter 2002, compared to pro forma net income from continuing operations of EUR 1.2 million in the third quarter 2002 and EUR 2.0 million in the fourth quarter 2001.

Andreas G. Rutsch, Chief Financial Officer of ADVA, remarked, "Reaching pro forma operating profitability was one of our clear objectives for 2002. Despite the difficult market conditions, we fully delivered with pro forma operating profit of EUR 4.2 million in 2002. We achieved this through sound financial management of the business, specifically by higher gross margins, tight control on our cost structure, and carefully-scrutinized investments. This operating profitability, together with inventory turns which increased from 3.4 times in 2001 to 4.9 times in 2002, tremendously improved our operating cash flow from EUR -4.9 million in 2001 to EUR 15.8 million in 2002."

ADVA posted actual net income of EUR 4.0 million in the fourth quarter 2002, compared to an actual net loss of EUR 11.7 million in the fourth quarter 2001. The higher net loss in 2001 particularly resulted from discontinuing operations at the company's site in Cambridge, UK, and recording a one-time non-cash impairment loss from two acquisitions.

Actual basic net earnings per share totalled EUR 0.12 in the fourth quarter 2002 and EUR -0.35 in the fourth quarter 2001. ADVA has included charges for stock option compensation in its actual financial results since the company first issued options in 1999.

FULL-YEAR 2002 FINANCIAL RESULTS
Revenues in 2002 remained at a relatively similar level to 2001, totalling EUR 88.1 million compared to EUR 90.0 million. Pro forma operating income increased to EUR 4.2 million in 2002, a significant improvement over a pro forma operating loss of EUR 5.6 million in 2001. Pro forma net income from continuing operations increased to EUR 6.1 million in 2002, compared to pro forma net loss from continuing operations of EUR 4.1 million in 2001.

"It is an understatement to say that 2002 was an extremely difficult year for communications equipment vendors," stated Brian L. Protiva, Chief Executive Officer of ADVA. "At ADVA, we had already taken the necessary steps to adjust our business to the deteriorating market conditions in the second half of 2001. We started 2002 with clear strategic objectives and focused on executing these during the ensuing twelve months. This enabled us to not only survive a year of continued market weakness during which many competitors faltered, but emerge as an outperforming player and advance to the No. 1 position in the European metro market and No. 2 position worldwide."

ADVA posted an actual net loss of EUR 1.3 million during the full-year 2002, compared to EUR 116.4 million during the full-year 2001. Actual basic net earnings per share totalled EUR -0.04 in 2002 and EUR -3.57 in 2001.

FOURTH QUARTER 2002 HIGHLIGHTS
- ADVA won 3 new carrier end customers in the fourth quarter 2002, including two U.S.-based local exchange carriers. New carrier end customers announced during the fourth quarter 2002, who are deploying metro infrastructure solutions with ADVA's FSP systems, included European incumbent carriers Telecom Italia and CYTA and Japanese carrier Fusion Communications.
- ADVA announced in October 2002 that it had deployed a total of more than 30,000 Wavelength Division Multiplexing (WDM) channel cards in metro area networks - a record milestone unprecedented in the industry which points to ADVA's increasing worldwide market traction, large installed customer base, and leadership position.
- ADVA launched several new features for the FSP 2000 product in December 2002, specifically a universal card with a small form pluggable (SFP) transceiver and an SFP transceiver for the 2:1 Time Division Multiplexing card. These features enable customers to improve delivery times, simplify network planning, reconfigure applications more easily, dramatically reduce spares inventory, and thereby lower total network investment.

PRESS CONFERENCE, CONFERENCE CALL, AND WEBCAST
In conjunction with the release of its full-year 2002 audited financial results, ADVA will host a press conference at 10:00 a.m. CET today, March 19, 2003, at its offices in Martinsried/Munich, Germany.

ADVA will also host a conference call for investors at 3:00 p.m. CET / 9:00 a.m. EST today, March 19, 2003. Participating in the call will be ADVA's Chief Executive Officer, Brian L. Protiva, and Chief Financial Officer, Andreas G. Rutsch. To listen to the Webcast, interested investors are encouraged to log onto the broadcast at least 15 minutes prior to the call, located on the con calls and presentations page in the investor relations section of ADVA's website at www.advaoptical.com. The call will be archived as an audio file and the conference call presentation will also be available in the investor relations section of ADVA's website.

ADVA's complete audited financial statements and annual report for the year 2002 can be found on its website.

FIRST QUARTER 2003 EARNINGS RELEASE DATE
ADVA expects revenues for the first quarter 2003 to be at the lower end of its previously-issued guidance of EUR 20 to 25 million.

Brian L. Protiva, Chief Executive Officer of ADVA, commented further, "We firmly believe that demands for Fast Ethernet, Gigabit Ethernet, storage, and wavelength services will slowly drive growth in the metro area in the latter half of 2003, and more rapidly thereafter. At ADVA, we have a strong vision for these emerging applications in the market and a solid understanding of the role of optics as a transport solution. We furthermore believe that the industry will become increasingly cost-driven over the coming years. Companies like ADVA who truly understand lowest total cost of ownership - how to minimize both CAPEX and OPEX - will be the dominant players in our industry. ADVA's access to leading global incumbent carriers and large enterprise customers provides us with a critical understanding of network requirements and future direction, and enables our product and engineering teams to effectively address discontinuities. It is our innovation and speed in developing and launching new metro solutions which will ensure that ADVA stays at the forefront of our industry."

ADVA will announce financial results for the first quarter 2003 for the period ending March 31, 2003, on Tuesday, May 6, 2003. In conjunction with the release of its first quarter 2003 financial results, ADVA will host a conference call for investors at 3:00 p.m. CET / 9:00 a.m. EST on the same day.

ANNUAL SHAREHOLDERS MEETING
ADVA will hold its annual shareholders meeting on Wednesday, June 11, 2003, in Meiningen, Germany.

ABOUT ADVA OPTICAL NETWORKING
ADVA Optical Networking is a leading global provider of optical networking solutions for rapid and cost-effective provisioning of high-speed data, storage, voice, and video services in the metropolitan area. ADVA's carrier-class portfolio is comprised of the Fiber Service Platform family of products - explicitly designed to ensure the lowest total cost of ownership. ADVA's solutions have been deployed at over 70 carriers and service providers (including PTTs, RBOCs, LECs, and IXCs) and more than 500 enterprises worldwide. ADVA's products are sold through an international network of blue-chip distribution partners in addition to its own direct sales force. Further information about ADVA Optical Networking: 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 AG Optical Networking. ADVA AG 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 AG Optical Networking or the market in the shares of ADVA AG 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, purchased in-process R&D, amortization and impairment of goodwill and intangible assets, as well as loss from discontinued operations of the component, which are not reflective of the company's operating results for the period presented. This pro forma information is not prepared in accordance U.S. GAAP and should not be considered a substitute for historical information presented in accordance with U.S. GAAP.