Q1 2006 revenues up 27% on Q1 2005 to reach a new all-time high of EUR 37.1 million EUR 5.7 million in IFRS pro forma Q1 operating income (15% of revenues) exceeds guidance Forecasted full year 2006 revenues increased and pro forma operating income confirmed
MUNICH and MARTINSRIED, Germany and MAHWAH, N.J., May 9, 2006 (PRIMEZONE) -- ADVA Optical Networking today announced Q1 2006 financial results for the quarter ended March 31, 2006, and prepared in accordance with International Financial Reporting Standards (IFRS). ADVA 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.
Q1 2006 IFRS FINANCIAL RESULTS
In Q1 2006 revenues totaled EUR 37.1 million, compared to EUR 35.8 million in Q4 2005 and EUR 29.1 million in Q1 2005, respectively. IFRS pro forma operating income, excluding stock-based compensation and amortization and impairment of goodwill and acquisition-related intangible assets, was at EUR 5.7 million in Q1 2006, up 23.3% from EUR 4.6 million in Q1 2005, driven by higher revenues and the continued high capitalization of development expenses. IFRS pro forma quarterly net profit was at EUR 3.8 million in Q1 2006 after EUR 3.2 million in Q1 2005, with diluted pro forma net earnings per share of EUR 0.10 in Q1 2006 after EUR 0.09 in Q1 2005. Due to the first-time consolidation of Covaro, the number of shares outstanding increased by 2.0 million in Q1 2006. Therefore the increase in pro forma net profit did not fully translate in a respective increase of pro forma net earnings per share.
Q1 2006 IFRS actual net profit amounted to EUR 3.0 million after EUR 2.7 million in Q1 2005. Diluted net earnings per share in both Q1 2006 and Q1 2005 were EUR 0.08.
INFORMATION ON Q1 2006 U.S. GAAP RESULTS
Based on the same revenue figures quoted under IFRS, ADVA's U.S. GAAPnet profit for Q1 2006 was EUR 1.5 million or EUR 1.5 million less than the figure reported under IFRS. This difference is largely attributable to the capitalization under IFRS of part of the company's development costs and a lower valuation of inventories under U.S. GAAP. Further details on key U.S. GAAP financial numbers are provided in the Three-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 Q1 2006 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 9, 2006. 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 13, 2005, in Meiningen, Germany.
Q2 AND FULL-YEAR 2006 OUTLOOK
ADVA expects revenues of between EUR 39 and EUR 44 million and an IFRS pro forma operating income margin of between 8% and 12% in Q2 2006. As for full-year 2006, we increase our previous guidance of revenue growth to levels of 24% to 32% above 2005 revenues and confirm our previous guidance of IFRS pro forma operating income margins between 10% and 13% of revenues. The company's strategy targets to increase global market share, to build its Optical+Ethernet business, to expand its focus on North America and to drive procurement and development activities in China. ADVA plans continued investments throughout the year in the areas of research & development and sales & marketing, and also anticipates additional capital expenditures, including the expansion of its R&D and production facility in Meiningen. ADVA will release its financial results for the quarter ending June 30, 2005 on(TM) August 8, 2006.
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ADVA AG Optical Networking, Martinsried/Munich and Meiningen, Germany ADVA Optical Networking Inc. Mahwah, New Jersey, USA ADVA Optical Networking Corp., Tokyo, Japan www.advaoptical.com