ADVA AG Optical Networking / / Ad hoc: ADVA OPTICAL NETWORKING REPORTS Q1 2011 FINANCIAL RESULTS IN LINE WITH GUIDANCE . Processed and transmitted by Thomson Reuters ONE. The issuer is solely responsible for the content of this announcement. Q1 2011 Revenues at EUR 70.4 Million Q1 2011 IFRS Pro Forma Operating Income of EUR 0.9 Million (1.3% of Revenues) Q2 2011 Revenues Expected to Range between EUR 72 Million and EUR 77 Million with IFRS Pro Forma Operating Income between 1% and 4% of Revenues Norcross, Georgia, USA and Martinsried/Munich, Germany. April 20, 2011. ADVA Optical Networking announced Q1 2011 financial results for the quarter ended March 31, 2011, and prepared in accordance with International Financial Reporting Standards (IFRS). Q1 2011 IFRS FINANCIAL RESULTS Revenues in Q1 2011 totaled EUR 70.4 million, up 11% year-on-year, after EUR 63.2 million in Q1 2010 and EUR 79.4 million in Q4 2010. This result is in line with guidance of between EUR 70 million and EUR 75 million. IFRS pro forma operating income, excluding stock-based compensation and amortization & impairment of goodwill & acquisition-related intangible assets, amounted to EUR 0.9 million in Q1 2011 or 1.3% of revenues, also in line with guidance of between 0% and 4% of revenues. This compares to Q1 2010 IFRS pro forma operating income of EUR 2.7 million or 4.3% of revenues, and to Q4 2010 IFRS pro forma operating income of EUR 4.3 million or 5.4% of revenues. Year-on-year, the pro forma operating income reduction is largely due to lower gross margins due to changes in product and customer mix, as well as higher development expenses. These effects could not be fully compensated by the year-on-year increase in carrier infrastructure and Ethernet access revenues. There was an IFRS operating loss in Q1 2011, amounting to EUR 0.3 million, after an operating income of EUR 1.9 million in Q1 2010. The key driver for this unfavorable development is the above-mentioned decrease of pro forma operating income. The IFRS net loss amounted to EUR 2.3 million in Q1 2011, after a net income of EUR 2.4 million in Q1 2010. This significant reduction was largely driven by the development of the operating result described above, as well as net foreign currency exchange losses of EUR 1.6 million in Q1 2011 after respective gains of EUR 1.1 million in Q1 2010. Basic and diluted IFRS net earnings per share were EUR -0.05 in Q1 2011 after EUR +0.05 in Q1 2010. CONFERENCE CALL In conjunction with the release of its Q1 2011 financial results on April 20, 2011, 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 248620#, 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 Q2 2011 OUTLOOK In light of the recent events shaping current market conditions and those that cloud the road forward, ADVA Optical Networking remains cautious about revenue development for the year. In Q2 2011, the Company expects revenues to range between EUR 72 million and EUR 77 million, and anticipates pro forma operating income of between 1% and 4% of revenues. Further, ADVA Optical Networking notes that it will continue to perform detailed quarterly reviews of the expected business development in respect of all intangible assets, including capitalized research and development expenses. These reviews may result in non-cash impairment charges in Q2 2011 and beyond. The pro forma operating income guidance provided above excludes any such potential impairment charges. ADVA Optical Networking will host its annual shareholders' meeting on May 16, 2011, in Meiningen, Germany, and will publish its Q2 2011 financial results on July 21, 2011. THREE-MONTH IFRS CONSOLIDATED INCOME STATEMENT (in thousands of EUR, except earnings per share) Q1 2011 Q1 2010 Revenues 70,351 63,162 Pro forma cost of goods sold -41,368 -35,974 ------------------------------------------------------------------------------ Pro forma gross profit 28,983 27,188 Pro forma selling and marketing expenses -10,033 -9,473 Pro forma general and administrative expenses -6,086 -5,532 Pro forma research and development expenses -14,359 -11,860 Income from capitalization of development expenses, net of amortization for capitalized development projects 1,688 1,429 Other operating income, net 714 949 ------------------------------------------------------------------------------ Pro forma operating income 907 2,701 Amortization of intangible assets from acquisitions -632 -411 Stock compensation expenses -582 -380 ------------------------------------------------------------------------------ Operating income (loss) -307 1,910 Interest expense, net -342 -327 Other income, net -1,609 1,134 ------------------------------------------------------------------------------ Income (loss) before tax -2,258 2,717 Income tax benefit (expense), net -56 -347 ------------------------------------------------------------------------------ Net income (loss) -2,314 2,370 Earnings per share in EUR    basic -0.05 0.05    diluted -0.05 0.05 # # # 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 AG Optical Networking, Martinsried/Munich and Meiningen, Germany ADVA Optical Networking North America, Inc., Norcross, Georgia, USA ADVA Optical Networking (Shenzhen) Ltd., Shenzhen, China FOR PRESS: Christine Keck t +1 301 920 0237 (U.S.) t +44 1904 699 358 (Europe) t +86 755 8621 7400 (Asia) public-relations(at) FOR INVESTORS: Wolfgang Guessgen t +1 201 940 7212 (U.S.) t +49 89 89 0665 940 (Europe) t +86 755 8621 7400 (Asia) investor-relations(at) To unsubscribe pleaseclick here --- End of Message --- ADVA AG Optical Networking Campus Martinsried, Fraunhoferstr. 9a Martinsried/Munich Germany WKN: 510300;ISIN: DE0005103006; Listed: Freiverkehr in Hanseatische Wertpapierbörse zu Hamburg, Freiverkehr in Börse Berlin, Freiverkehr in Börse Düsseldorf, Freiverkehr in Bayerische Börse München, Freiverkehr in Niedersächsische Börse zu Hannover, Prime Standard in Frankfurter Wertpapierbörse, Regulierter Markt in Frankfurter Wertpapierbörse; This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. 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