ADVA Optical Networking Reports Q1 2013 Financial Results In Line with Guidance
ADVA Optical Networking SE /
ADVA Optical Networking Reports Q1 2013 Financial Results In Line with Guidance
. Processed and transmitted by Thomson Reuters ONE.
The issuer is solely responsible for the content of this announcement.
Q1Â 2013 revenues at EURÂ 77.0 million
Q1Â 2013 IFRS pro forma operating income of
EURÂ 0.8 million (1.0% of revenues)
Q2Â 2013 revenues expected to range
between EURÂ 73 million and EURÂ 78 million with
IFRS pro forma operating income between -2% and +2% of revenues
Martinsried/Munich, Germany. April 25, 2013. ADVA Optical Networking announced
Q1 2013 financial results for the quarter ended on March 31, 2013, and prepared
in accordance with International Financial Reporting Standards (IFRS).
Q1 2013 IFRS FINANCIAL RESULTS
Revenues totaled EURÂ 77.0 million in Q1Â 2013 and were at the upper end of
guidance of between EURÂ 72 million and EURÂ 77 million. This is down 5.7% vs.
Q1Â 2012 at EURÂ 81.7 million and down 4.0% vs. EURÂ 80.3 million in Q4Â 2012. IFRS
pro forma operating income, excluding stock-based compensation and amortization
& impairment of goodwill & acquisition-related intangible assets, amounted to
EURÂ 0.8 million or 1.0% of revenues, and were in the upper half of guidance of
between -2% and +2% of revenues. This compares to EURÂ 4.5 million or 5.5% of
revenues in Q1Â 2012 and EURÂ 4.8 million or 6.0% of revenues in Q4Â 2012. These
developments are largely due to lower revenues and gross margins.
IFRS operating income amounted to EURÂ 0.4 million in Q1Â 2013, after EURÂ 3.5
million in Q1Â 2012. The key driver for this unfavorable 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 EURÂ 0.2 million in Q1Â 2013 after EURÂ 0.7 million in Q1Â 2012.
In Q1Â 2013, IFRS net income amounted to EURÂ 0.8 million, down significantly from
EURÂ 4.0 million in Q1Â 2012. This reduction was largely driven by the development
of the operating result described above. In both periods, net income was higher
than operating income, driven by tax benefits amounting to EURÂ 1.3 in Q1Â 2013
after EURÂ 1.8 million in Q1Â 2012. The Q1Â 2013 tax benefit is mainly due to
release of tax provisions related to open tax audit appeals that partially have
been resolved in Q1Â 2013, while the Q1Â 2012 tax benefit was mainly due to
deferred tax benefits on tax losses in ADVA Optical Networking's U.S. entity.
Basic and diluted IFRS net earnings per share were EURÂ 0.02 each in Q1Â 2013
after EURÂ 0.09 and EURÂ 0.08 in Q1Â 2012.
"While the temporary decline of our business related to short-term market
weakness driven by adverse macro-economic conditions and temporary shifts in
carrier investment priorities clearly is a disappointment, we are still pleased
to report our Q1Â 2013 revenues of EURÂ 77.0 million at the upper end of guidance.
Our pro forma gross margin decreased from 41.8% in Q4Â 2012 to 38.6% in Q1Â 2013,
due to quarterly variations in product and customer mix. In Q1Â 2013, our pro
forma operating margin came in at 1.0% in the upper half of guidance,
demonstrating our focus on managing operational costs in this challenging
environment. Also, operating cash flow at EURÂ 1.7 million in Q1Â 2013 remained
positive, and our quarter-end cash & cash equivalents and net liquidity of
EURÂ 65.3 million and EURÂ 36.3 million, respectively, demonstrate ongoing
financial strength," commented Jaswir Singh, chief financial officer & chief
operating officer of ADVA Optical Networking.
CONFERENCE CALL
In conjunction with the release of its Q1 2013 financial results on April 25,
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 +49Â 69Â 201744Â 210 or +1Â 877Â 423Â 0830, pin code 122Â 165#, 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".
Q2Â 2013 OUTLOOK
Based on short-term market weakness driven by adverse macro-economic conditions
and temporary shifts in carrier investment priorities, ADVA Optical Networking
expects Q2Â 2013 revenues of between EURÂ 73 million and EURÂ 78 million. Further,
ADVA Optical Networking anticipates Q2Â 2013 pro forma operating income to range
between -2% and +2% of revenues. The Company will keep on 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 Q2Â 2013 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 June 4, 2013,
in Meiningen, Germany, and will publish its Q2Â 2013 financial results on
July 18, 2013.
"Due to uncertain macro-economic conditions, carriers have been restricting
investment in their networks for some time. Also, there have been temporary
shifts in carrier investment priorities towards the ramp of LTE technology,
delaying access and core infrastructure spending. However, in order to eliminate
network outages, and under pressure to transform their business models, carriers
will need to drive network efficiency to support increased volume and diversity
of LTE traffic types while keeping tight control of costs. This will require a
fundamental re-think in the way that network capacity and networking
intelligence are architected and provisioned. Operators need a roadmap for
incorporating the cost-saving and revenue generating potential of software-
defined networking (SDN) into the backhaul network. Over time SDN will become a
critical enabler of leveraging greater intelligence into the backhaul network,
as increasingly intense usage of real-time multimedia voice and video services
creates new challenges with respect to congestion control. With our innovative
Optical+Ethernet solutions portfolio including state-of-the art Ethernet access
synchronization and monitoring features, 100G transmission technology for both
metro and regional networks, as well as a strong innovation pipeline, ADVA
Optical Networking is positioned to benefit from these market trends," stated
Brian Protiva, chief executive officer of ADVA Optical Networking.
THREE-MONTH IFRS CONSOLIDATED INCOME STATEMENT
(in thousands of EUR, except earnings per share) Q1Â 2013 Q1Â 2012
Revenues 77,034 81,655
Pro forma cost of goods sold -47,265 -49,388
-------------------------------------------------------------------------
Pro forma gross profit 29,769 32,267
Pro forma selling and marketing expenses -11,685 -10,791
Pro forma general and administrative expenses -6,673 -6,781
Pro forma research and development expenses -16,842 -16,776
Income from capitalization of development expenses 5,580 6,053
Other operating income and expenses, net 656 513
-------------------------------------------------------------------------
Pro forma operating income 805 4,485
Amortization of intangible assets from acquisitions -171 -653
Stock compensation expenses -252 -318
-------------------------------------------------------------------------
Operating income 382 3,514
Interest income and expenses, net -152 -418
Other financial gains and losses, net -756 -842
-------------------------------------------------------------------------
Income (loss) before tax -526 2,254
Income tax benefit (expense), net 1,286 1,790
-------------------------------------------------------------------------
Net income 760 4,044
Earnings per share in EUR
  basic 0.02 0.09
  diluted 0.02 0.08
# # #
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 more than 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:
Wolfgang Guessgen
t +49 89 89 0665 940
investor-relations(at)advaoptical.com
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: ADVA Optical Networking SE via Thomson Reuters ONE
[HUG#1696075]