ADVA Optical Networking Reports Q1 2009 Financial Results with Revenues Again Exceeding Guidance
Q1 2009 revenues at EUR 56.9 million; Q1 2009 IFRS pro forma operating income of EUR -0.1 million (-0.1% of revenues); Q2 2009 revenues expected to range between EUR 51 million and EUR 56 million with IFRS pro forma operating income between -3% and +2% of revenues
Norcross, Georgia, USA and Martinsried/Munich, Germany (Vocus/PRWEB ) May 5, 2009 -- ADVA Optical Networking announced Q1 2009 financial results for the quarter ended March 31, 2009, and prepared in accordance with International Financial Reporting Standards (IFRS).
Q1 2009 IFRS FINANCIAL RESULTS
Revenues in Q1 2009 at EUR 56.9 million were higher than guidance of between EUR 50 million and EUR 55 million, and up 5% vs. Q1 2008 at EUR 54.0 million and marginally better than the EUR 56.8 million reported in Q4 2008. IFRS pro forma operating income, excluding stock-based compensation and amortization & impairment of goodwill & acquisition-related intangible assets, amounted to EUR -0.1 million or -0.1% of revenues in Q1 2009, in line with guidance of between -4% and +1% of revenues. This compares to EUR -2.0 million or -3.8% of revenues in Q1 2008 and EUR 0.1 million or 0.1% of revenues in Q4 2008. Year-on-year, the pro forma operating income improvement is largely due to higher revenues and gross margins. The improvement is tempered by lower net capitalization of development expenses and by higher selling and marketing expenses.
The IFRS operating loss in Q1 2009 was EUR 1.0 million, after EUR 3.8 million in Q1 2008. The key drivers for this improvement are the above-mentioned increase of pro forma operating income as well as reduced amortization of intangible assets of EUR 0.6 million after EUR 1.2 million in Q1 2008.
The IFRS net loss in Q1 2009 was EUR 0.5 million, after EUR 4.4 million in Q1 2008. Beyond the factors impacting the operating loss, Q1 2009 net foreign currency exchange gains of EUR 0.5 million after losses of EUR 1.3 million in Q1 2008 contributed to the lower net loss. Basic and diluted IFRS net earnings per share were EUR -0.01 each in Q1 2009 after EUR -0.10 each in Q1 2008.
"We are very pleased with our Q1 2009 revenues of EUR 56.9 million, which exceed guidance and are up for the third consecutive quarter. This development is also in contrast to the trend of most of our competitors in the current economic crisis. Further, we managed to improve our pro forma gross margin from 39.1% in Q1 2008 to 43.1% in Q1 2009, mainly resulting from more favorable component procurement terms as well as from variations in regional revenue distribution and in product and customer mix. These factors translate into an impressive 16.1% increase of pro forma gross profit from EUR 21.2 million to EUR 24.6 million year-on-year. At EUR -0.1 million or -0.1% of revenues, pro forma operating income in Q1 2009 was within guidance of between -4% and +1% of revenues. The depreciation of the GBP vs. the EUR since Q3 2008 prevented us from achieving a higher pro forma operating income margin. Further working capital improvements again resulted in all-time-high cash and cash equivalents of EUR 47.8 million at the end of Q1 2009, up EUR 1.2 million vs. the end of the previous quarter," commented Jaswir Singh, chief financial officer of ADVA Optical Networking.
CONFERENCE CALL AND WEBCAST
In conjunction with the release of its Q1 2009 IFRS financial results on May 5, 2009, ADVA Optical Networking will host a conference call for analysts and investors at 3:00 p.m. CEDT/9:00 a.m. EDT. Participating in the call will be ADVA Optical Networking's chief executive officer, Brian Protiva, and chief financial officer, Jaswir Singh. Interested parties may dial in at +49 69 40359 611 or +1 866 306 3455, and listen live via webcast on ADVA Optical Networking's website, located on the 'financial results' page in the investor relations section of ADVA Optical Networking's website at www.advaoptical.com.
Q2 2009 OUTLOOK
In light of the ongoing economic crisis, ADVA Optical Networking expects Q2 2009 revenues to range between EUR 51 million and EUR 56 million, and we anticipate pro forma operating income of between -3% and +2% of revenues in Q2 2009. Further, ADVA Optical Networking notes that it will continue to perform detailed quarterly reviews of the expected business development in respect to all intangible assets, including capitalized research and development expenses. These reviews may result in non-cash impairment charges in Q2 2009 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 June 10, 2009, in Meiningen, Germany, and will publish its Q2 2009 financial results on July 30, 2009.
"Despite a slowdown of capital spending in the telecommunications industry over the last quarters, ADVA Optical Networking was able to maintain revenue stability and outperform most of its peers and the market as a whole. This is due to our strong positioning with carriers in the EMEA region, our relatively low exposure to enterprise customers, and the increasing success of our direct touch approach with customers served via indirect distribution channels. Nevertheless, we continue to apply strict cost discipline and are prepared for further cost-cutting initiatives should the economic environment deteriorate further. In addition, our strong focus on cost-effective innovation, short development and delivery times, commitment to quality and a broad and growing customer base have put us in a strong position to continue winning market share. We have become a far better-managed company over the last two years and today are more efficient than ever," stated Brian Protiva, chief executive officer of ADVA Optical Networking.
ABOUT ADVA OPTICAL NETWORKING
ADVA Optical Networking (FSE: ADV) is a global provider of telecommunications equipment. With innovative Optical+Ethernet transport solutions, we build the foundation for high-speed, next-generation networks. Our FSP product family adds scalability and intelligence to our customers' networks while removing complexity and cost. With a flexible and fast-moving organization, we forge close partnerships with our customers to meet growing demand for data, storage, voice and video services. Thanks to reliable performance for more than 15 years, we have become a trusted partner for more than 200 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 AG Optical Networking, Martinsried/Munich and Meiningen, Germany
ADVA Optical Networking North America, Inc., Norcross, Georgia, USA
ADVA Optical Networking (Shenzhen) Ltd., Shenzhen, China
www.advaoptical.com
FOR PRESS:
Christine Keck
t +1 201 258 8293 (U.S.)
t +44 1904 699 358 (Europe)
t +86 755 8621 7400 (Asia)
public-relations(at)advaoptical.com
FOR INVESTORS:
Wolfgang Guessgen
t +1 201 258 8302 (U.S.)
t +49 89 89 0665 940 (Europe)
t +86 755 8621 7400 (Asia)
investor-relations(at)advaoptical.com
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