ADVA Optical Networking Reports Q1 2015 Financial Results In Line With Guidance

ADVA Optical Networking SE / ADVA Optical Networking Reports Q1 2015 Financial Results In Line With Guidance . Processed and transmitted by NASDAQ OMX Corporate Solutions. The issuer is solely responsible for the content of this announcement. Q1 2015 revenues at EUR 95.6 million Q1 2015 IFRS pro forma operating income of EUR 3.7 million (3...

 

 

Q1 2015 revenues at EUR 95.6 million

 

Q1 2015 IFRS pro forma operating income of

EUR 3.7 million (3.9% of revenues)

 

Q2 2015 revenues expected to range
between EUR 105 million and EUR 110 million with
IFRS pro forma operating income between 3% and 6% of revenues

Martinsried/Munich, Germany. April 23, 2015. ADVA Optical Networking (FSE: ADV) announced Q1 2015 financial results for the quarter ended on March 31, 2015, and prepared in accordance with International Financial Reporting Standards (IFRS).

 

Q1 2015 IFRS FINANCIAL RESULTS

Revenues in Q1 2015 rose to a record high of EUR 95.6 million, up 22.4% vs. EUR 78.1 million in Q1 2014 and up 10.2% vs. EUR 86.7 million in Q4 2014. This result is slightly above guidance of between EUR 90 million and EUR 95 million. IFRS pro forma operating income, excluding stock-based compensation and amortization & impairment of goodwill & acquisition-related intangible assets, amounted to EUR 3.7 million or 3.9% of revenues, at the upper end of guidance of between 0% and 4% of revenues. This compares to EUR 0.4 million or 0.5% of revenues in Q1 2014 and EUR 5.1 million or 5.9% of revenues in Q4 2014. While the year-on-year rise of pro forma operating income is largely due to higher revenues, the quarter-on-quarter reduction of pro forma operating income results from a lower pro forma gross margin, most notably related to variations in product and customer mix, the weakening of the EUR against the USD and lower other operating income.

 

IFRS operating income amounted to EUR 3.3 million in Q1 2015, after EUR 0.1 million in Q1 2014. The key driver for this improvement is the above-mentioned increase of pro forma operating income.

 

The IFRS net income amounted to EUR 4.3 million in Q1 2015, after a net loss of EUR 0.4 million in Q1 2014. Beyond the improvement of the operating income, net foreign currency exchange gains of EUR 2.1 million in Q1 2015 after rounded nil in Q1 2014 drove the rise in net income. These effects were partially compensated by income tax expenses of EUR 0.9 million in Q1 2015 after EUR 0.2 million in Q1 2014. Basic and diluted IFRS net earnings per share were EUR 0.09 each in Q1 2015 after EUR -0.01 each in Q1 2014.

 

"We are very pleased with the development of our Q1 2015 revenues, reaching an all-time high of EUR 95.6 million, slightly exceeding guidance. This is a strong increase of 22.4% vs. Q1 2014 and an increase of 10.2% vs. Q4 2014. It also marks the fifth consecutive quarter with year-on-year growth. The increase in revenue is largely driven by investments in enterprise solutions, reflecting the continued network traffic growth due to the increasing adoption of cloud based services, most notably in the Americas. Our pro forma gross margin decreased slightly from 36.6% in Q4 2014 to 36.2% in Q1 2015, due to variations in product and customer mix and the weakening of the EUR against the USD. However, the impact of the changes in foreign currency exchange rates to our pro forma gross profitability was compensated by net gains from foreign currency hedging recorded below the operating-income line. We achieved a pro forma operating income of 3.9% of revenues in Q1 2015, at the upper end of guidance, demonstrating our continued focus on managing operational costs. Also, our high quarter-end cash & cash equivalents and net liquidity of EUR 73.4 million and EUR 40.5 million, respectively, demonstrate ongoing financial strength," commented Ulrich Dopfer, chief financial officer of ADVA Optical Networking.

 

CONFERENCE CALL

In conjunction with the release of its Q1 2015 financial results on April 23, 2015, 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, Ulrich Dopfer. Interested parties may dial in at +49 69 22 222 9043 or +1 855 402 7766, pin code 5034 0392#, and download the corresponding presentation from ADVA Optical Networking's website, www.advaoptical.com, located in the "About Us / Investor Relations" section on the "Financial Results" page under "Conference Calls".

 

Q2 2015 OUTLOOK

In Q2 2015, ADVA Optical Networking expects revenues to range between EUR 105 million and EUR 110 million, and anticipates pro forma operating income of between 3% and 6% of revenues. As a matter of caution, 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 development expenses. In case of highly adverse business prospects, these reviews may result in non-cash impairment charges in Q2 2015 and beyond. The pro forma operating income guidance provided above excludes any such potential impairment charges. ADVA Optical Networking will hold its annual shareholders' meeting on May 20, 2015, in Meiningen, Germany, and will publish its Q2 2015 financial results on July 23, 2015.

 

"With record high revenue in Q1 2015 and a strong pipeline of opportunities, ADVA Optical Networking is proving itself to be extraordinarily well positioned as it continues its strong upwards trend. Our investments in innovative connectivity and networking solutions which support the two mega trends cloud and mobility are driving rapid growth for ADVA Optical Networking. Supported by Infonetics Research^[1], ADVA Optical Networking posted extraordinary results in North America, ahead of its US competitors. Our customers are paying more and more attention to secure network connectivity. Thus, we are expanding our ConnectGuard(TM) portfolio to provide encrypted Ethernet connectivity, enabling secure cloud access for both fixed and mobile users. This complements our leadership position of offering secure optical data center interconnection. With our deep and longstanding industry know-how, our focus on the latest technology and a diverse mix of customers, we have been able to grow our business significantly. Data center interconnection and forward-looking cloud computing applications remain key drivers of growth for the use of our 100G and encryption features. These drivers will create further value for shareholders," stated Brian Protiva, chief executive officer of ADVA Optical Networking.

 

THREE-MONTH IFRS CONSOLIDATED INCOME STATEMENT

 

(in thousands of EUR, except earnings per share)	Q1 2015	Q1 2014
Revenues	95,604	78,119
Pro forma cost of goods sold	-60,985	-50,503
Pro forma gross profit	34,619	27,616
Pro forma selling and marketing expenses	-13,368	-11,389
Pro forma general and administrative expenses	-7,271	-6,313
Pro forma research and development expenses	-18,724	-16,695
Income from capitalization of development expenses	7,526	5,063
Other operating income and expenses, net	921	2,109
Pro forma operating income	3,703	391
Amortization of intangible assets from acquisitions	-134	-171
Stock compensation expenses	-234	-135
Operating income	3,335	85
Interest income and expenses, net	-265	-336
Other financial gains and losses, net	2,106	40
Income (loss) before tax	5,176	-211
Income tax benefit (expense), net	-912	-186
Net income (loss)	4,264	-397
Earnings per share in EUR
Basic	0.09	-0.01
Diluted	0.09	-0.01

 

 

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About ADVA Optical Networking

At ADVA Optical Networking we're creating new opportunities for tomorrow's networks, a new vision for a connected world. Our intelligent telecommunications hardware, software and services have been deployed by several hundred service providers and thousands of enterprises. Over the past twenty years, our innovative connectivity solutions have helped to drive our customers' networks forward, helped to drive their businesses to new levels of success. We forge close working relationships with all our customers. As your trusted partner we ensure that we're always ready to exceed your networking expectations. For more information on our products and our team, please visit us at: 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 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 Optical Networking SE, Martinsried/Munich and Meiningen, Germany

www.advaoptical.com

 

For Press:                                                                   

Gareth Spence                                                  

t +44 1904 699 358                                                       

public-relations(at)advaoptical.com         

 

For Investors:

Karin Tovar

t +1 201 940 7212

investor-relations(at)advaoptical.com

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