ADVA Optical Networking Reports Q2 2013 Financial Results with Revenues Above Guidance

ADVA Optical Networking SE / ADVA Optical Networking Reports Q2 2013 Financial Results with Revenues Above Guidance . Ad hoc announcement according to § 15 WpHG. Processed and transmitted by Thomson Reuters ONE. The issuer is solely responsible for the content of this announcement. Q2 2013 revenues at EUR 78.4 million Q2 2013 IFRS pro forma operating income of EUR 1.5 million (2...

 

Q2 2013 revenues at EUR 78.4 million

 

Q2 2013 IFRS pro forma operating income of

EUR 1.5 million (2.0% of revenues)

 

Q3 2013 revenues expected to range between EUR 76 million and EUR 81 million

with IFRS pro forma operating income between 1% and 5% of revenues

 

Martinsried/Munich, Germany. July 18, 2013. ADVA Optical Networking announced Q2 2013 financial results for the quarter ended on June 30, 2013, and prepared in accordance with International Financial Reporting Standards (IFRS).

 

Q2 2013 IFRS FINANCIAL RESULTS

Revenues totaled EUR 78.4 million in Q2 2013 and were slightly above guidance of between EUR 73 million and EUR 78 million.  This is down 8.7% vs. Q2 2012 at EUR 85.9 million and up 1.7% vs. EUR 77.0 million in Q1 2013. IFRS pro forma operating income, excluding stock-based compensation and amortization & impairment of goodwill & acquisition-related intangible assets, amounted to EUR 1.5 million or 2.0% of revenues in Q2 2013, at the upper end of guidance of between -2% and +2% of revenues. This compares to EUR 6.8 million or 8.0% of revenues in Q2 2012 and EUR 0.8 million or 1.0% of revenues in Q1 2013. The quarter-on-quarter increase of pro forma operating income is largely due to higher revenues and improved gross margins, while the year-on-year development is largely due to lower revenues from one of our largest customers due to local regulatory challenges.

 

The IFRS operating income amounted to EUR 1.2 million in Q2 2013 after EUR 5.9 million in Q2 2012, and after EUR 0.4 million in Q1 2013. The key driver for the unfavorable year-on-year development is the above-mentioned decrease of pro forma operating income. The decline in part is offset by lower scheduled amortization of intangible assets from acquisitions, which amounted to EUR 0.2 million in Q2 2013 after EUR 0.7 million in Q2 2012. The favorable quarter-on-quarter development is largely due to the increase in pro forma operating income explained above.

 

The IFRS net income amounted to EUR 0.1 million in Q2 2013, down significantly from EUR 5.1 million in Q2 2012. This reduction was largely driven by the development of the operating result described above. Beyond the development of the operating income, net foreign currency exchange losses of EUR 0.2 million, after a gain of EUR 1.9 million in Q2 2012, drove the decrease in net income. In part, this effect was offset by lower tax expenses of EUR 0.6 million in Q2 2013 after EUR 2.4 million in Q2 2012. Basic and diluted IFRS net earnings per share in Q2 2013 were nil after EUR 0.11 and 0.10 respectively in Q2 2012.

 

"We are pleased with our Q2 2013 results which were achieved in a volatile macro-economic environment. At EUR 78.4 million, our Q2 2013 revenues are above guidance and are up 1.7% vs. the previous quarter. Our pro forma gross margin strengthened from 38.6% in Q1 2013 to 39.9% in Q2 2013. This improvement is due to changes in product and customer mix and also demonstrates our focus on managing operational costs. Pro forma operating income at 2.0% of revenues came in at the upper end of guidance, driven mostly by the stronger revenue and gross margin development. In addition, cash and cash equivalents were at a record high of EUR 80.3 million at the end of Q2 2013, up from EUR 65.3 million at the end of the previous quarter. This is in part due to incremental refinancing of a bonded loan. Net liquidity increased to EUR 40.6 million, up EUR 4.3 million or 12% vs. the end of the previous quarter, demonstrating our commitment to manage our working capital and strengthen our balance sheet," commented Jaswir Singh, chief financial officer & chief operating officer of ADVA Optical Networking

 

CONFERENCE CALL

In conjunction with the release of its Q2 2013 financial results on July 18, 2013, 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 867 604#, 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 2013 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 2013 revenues of between EUR 76 million and EUR 81 million. Further, ADVA Optical Networking anticipates Q3 2013 pro forma operating income to range between 1% and 5% of revenues. The Company will continue driving innovation and cost efficiencies in order to strengthen its business model. 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 research and development expenses. In case of highly adverse business prospects, these reviews may result in non-cash impairment charges in Q3 2013 and beyond. The pro forma operating income guidance provided above excludes any such potential impairment charges. ADVA Optical Networking will publish its Q3 2013 financial results on October 24, 2013.

SIX-MONTH IFRS CONSOLIDATED INCOME STATEMENT

 

 

 

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About ADVA Optical Networking

ADVA Optical Networking is a global provider of intelligent telecommunications infrastructure solutions. With software-automated Optical+Ethernet transmission technology, the Company builds the foundation for high-speed, next-generation networks. The Company's FSP product family adds scalability and intelligence to customers' networks while removing complexity and cost. With a flexible and fast-moving organization, ADVA Optical Networking forges close partnerships with its customers to meet the growing demand for data, storage, voice and video services. Thanks to reliable performance for two decades, the Company has become a trusted partner for more than 250 carriers and 10,000 enterprises across the globe. For more information, 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

[1] Infonetics Research Optical Network Hardware, Quarterly Market Share, Size, and Forecasts 1Q13, May 24,2013

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