Norcross, GA and Martinsried/Munich, Germany (Vocus) October 30, 2009
ADVA Optical Networking announced Q3 2009 financial results for the quarter ended September 30, 2009, and prepared in accordance with International Financial Reporting Standards (IFRS).
Q3 2009 IFRS FINANCIAL RESULTS
Revenues in Q3 2009 at EUR 58.1 million were higher than guidance of between EUR 52 million and EUR 57 million, up 7.4% vs. Q3 2008 at EUR 54.1 million, and sequentially flattish vs. EUR 58.2 million reported in Q2 2009. IFRS pro forma operating income, excluding stock-based compensation and amortization & impairment of goodwill & acquisition-related intangible assets, amounted to EUR 2.0 million or 3.4% of revenues in Q3 2009, slightly above guidance of between -2% and +3% of revenues. This compares to Q3 2008 IFRS pro forma operating income of EUR 1.3 million or 2.4% of revenues, and to IFRS pro forma operating income of EUR 1.1 million or 1.9% of revenues in Q2 2009. Year-on-year, the pro forma operating income improvement is largely due to higher revenues and lower general & administrative and development expenses.
The IFRS operating income in Q3 2009 was EUR 1.0 million, after an operating loss of EUR 0.1 million in Q3 2008. The key drivers for this improvement are the above-mentioned increase of pro forma operating income as well as reduced stock compensation expense of EUR 0.4 million after EUR 0.8 million in Q3 2008.
The IFRS net income in Q3 2009 was nil, after positive EUR 0.4 million in Q3 2008. Beyond the factors impacting the operating result, Q3 2009 net foreign currency exchange losses of EUR 0.9 million after gains of EUR 0.5 million in Q3 2008 contributed to the decrease in net profit. Basic and diluted IFRS net earnings per share were nil each in Q3 2009 after EUR 0.01 each in Q3 2008.
“Once again, we are very pleased with our Q3 2009 revenues of EUR 58.1 million, which exceed guidance and demonstrate a sound 7.4% year-on-year growth, reflecting the strong long-term growth trend in our market and our ability to execute in challenging times. Our pro forma gross margin increased from 41.3% in Q2 2009 to 41.8% in Q3 2009, related to the typical quarterly variability of our customer and product mix. In line with the strong revenue development, pro forma operating income in Q3 2009 at EUR 2.0 million or 3.4% of revenues is above guidance of between -2% and +3% of revenues. Further, cash and cash equivalents were at EUR 48.0 million at the end of Q3 2009. The cash balance was adversely impacted by the early redemption of a EUR 3.0 million loan originally scheduled to be repaid in December 2009. Excluding this effect, cash and cash equivalents would have reached an all-time high of EUR 51.0 million at quarter-end. This strong development is driven by further working capital improvements and also results in a net liquidity improvement to EUR 19.1 million, up EUR 1.6 million or 9% vs. the end of the previous quarter and up a very strong EUR 13.7 million or 254% vs. the end of Q3 2008. This represents the fifth consecutive quarterly all-time high and demonstrates our commitment to managing our cash flows and balance sheet,” commented Jaswir Singh, chief financial officer and chief operating officer of ADVA Optical Networking.
Conference Call and Webcast
In conjunction with the release of its Q3 2009 IFRS financial results on October 29, 2009, ADVA Optical Networking will host a conference call for analysts and investors at 3:00 p.m. CET/10:00 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 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 at http://www.advaoptical.com.
Q4 2009 Outlook
Looking ahead, amidst the differing opinions of business optimism about a recovery and the caution around a double-dip economic recession, revenue visibility continues to be weak. ADVA Optical Networking expects Q4 2009 revenues to range between EUR 54 million and EUR 59 million, and we anticipate 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 to all intangible assets, including capitalized research and development expenses. These reviews may result in non-cash impairment charges in Q4 2009 and beyond. The pro forma operating income guidance provided above excludes any such potential impairment charges. ADVA Optical Networking will publish its Q4 and full-year 2009 financial results on March 3, 2010.
“In the middle of one of the most turbulent macroeconomic environments in history, ADVA Optical Networking continues to do well by executing on its strategy and meeting and exceeding its guidance over several quarters. We continue to be a strong and trusted partner to both carriers and enterprises. As ADVA Optical Networking capitalizes on new technologies, we remain committed to our customers by ensuring fast delivery of our products and solutions, thereby driving long-term growth and sustainability. We are leveraging our leading innovations to quickly enhance networking performance in the globally expanding enterprise and carrier segments. We do so through the continual development of a rich and diverse talent-pool,” 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 http://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.
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
t +1 201 258 8293 (U.S.)
t +44 1904 699 358 (Europe)
t +86 755 8621 7400 (Asia)
public-relations (at) advaoptical (dot) com
t +1 201 258 8302 (U.S.)
t +49 89 89 0665 940 (Europe)
t +86 755 8621 7400 (Asia)
investor-relations (at) advaoptical (dot) com