Martinsried/Munich, Germany; Mahwah/New Jersey, USA. May 10, 2005. ADVA Optical Networking today announced first quarter 2005 financial results for the quarter ended March 31, 2005, and prepared in accordance with U.S. Generally Accepted Accounting Principles (U.S. GAAP). ADVA pre-released revenues and pro forma operating income already on May 2, 2005. ADVA today also published key financials as per International Financial Reporting Standards (IFRS).
FIRST QUARTER 2005 FINANCIAL RESULTS
In Q1 2005, revenues totaled EUR 29.1 million, compared to EUR 27.3 million in Q4 2004 and EUR 23.0 million in Q1 2004, respectively. At EUR 3.0 million, pro forma operating income, excluding stock-based compensation and acquisition-related charges, was up 58% versus Q4 2004 (EUR 1.9 million), and compares to EUR 3.3 million in Q1 2004. The rise in the pro forma operating income compared to Q4 2004 was primarily driven by higher revenues and gross margins. Pro forma quarterly net profit dropped to EUR 2.2 million in Q1 2005, from EUR 3.6 million in Q1 2004, with undiluted net earnings per share down to EUR 0.06 from EUR 0.11, quarter on quarter. This was primarily due to tax expense incurred in Q1 2005 and small non-recurring gains in Q1 2004.
Q1 2005 net profit rose to EUR 2.2 million from EUR 0.2 million in Q1 2004, largely due to a change in non-cash charges related to the stock option programs in Q1 2004 following a sharp increase in the share price at that time. Undiluted net earnings per share in Q1 2005 were EUR 0.07, compared to EUR 0.01 in Q1 2004.
Based on the same revenues figure as quoted under U.S. GAAP, ADVA's IFRS net profit for Q1 2005 was EUR 2.7 million, which exceeds the figure reported under U.S. GAAP by EUR 0.5 million. This difference is largely attributable to higher valuation of inventories, the capitalization under IFRS of part of the company's development costs, and a different valuation method for stock options outstanding. Further details on key IFRS financial numbers are provided in the Three-Month Report 2005, available in the investor relations section of the corporate web site, www.advaoptical.com.
CONFERENCE CALL
In conjunction with the release of Q1 2005 financial results, ADVA'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. CEDT / 9:00 a.m. EDT today, May 10, 2005. Investors may listen live via webcast on ADVA's website, located on the 'earnings webcasts' page under 'financial results' in the investor relations section of ADVA's website at www.advaoptical.com.
ANNUAL SHAREHOLDERS' MEETING
ADVA will host its annual shareholders' meeting on Tuesday, June 14, 2005, in Meiningen, Germany.
SECOND QUARTER 2005 OUTLOOK
ADVA expects revenues of between EUR 30 and EUR 33 million and a pro forma operating income margin of between 10% and 12% in Q2 2005. Since ADVA's target customer growth is happening more clearly than originally expected, full-year revenues expectation is increased to between 18% and 28% above 2004 revenues of EUR 102.1 million. In this context, ADVA is anticipating a pro forma operating income margin of between 9% and 12% for 2005, ranging above original expectations and driven by higher revenues and further global cost reductions. ADVA will release its financial results for the quarter ending June 30, 2005 on August 8, 2005.
