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ADVA Optical Networking Reports Audited 2012 IFRS Financial Results In Line with Expectations Q4 2012 revenues at EUR 80.3 million, IFRS pro forma operating income of EUR 4.8 million (6.0% of revenues)


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© Marketwire 2013
2013-02-28 01:02:24 - FY 2012 revenues at EUR 330.1 million, IFRS pro forma operating income of EUR 21.8 million (6.6% of revenues)Q1 2013 revenues expected to range between EUR 72 million and EUR 77 million with IFRS pro forma operating income between -2% and +2% of revenues

MARTINSRIED, GERMANY and MUNICH, GERMANY -- (Marketwire) -- 02/27/13 -- ADVA Optical
Networking
announced Q4 and audited full-year 2012 financial results for the period
ended
December 31, 2012, and prepared in accordance with International
Financial
Reporting Standards (IFRS).



Q4 2012 IFRS FINANCIAL RESULTS



Revenues totaled EUR 80.3 million in Q4 2012 and were in the upper
half of
guidance of between EUR 77 million and EUR 82 million. Revenues are down
3.8%
vs. Q4 2011 at EUR 83.4 million and down 2.4% vs. Q3 2012 at EUR 82.3
million.
IFRS pro forma operating income, excluding stock-based compensation
and
amortization & impairment of goodwill & acquisition-related intangible
assets,
amounted to EUR 4.8 million in Q4 2012 or 6.0% of revenues, at the upper
end of
guidance of between 2% and 6% of revenues. This compares to Q4 2011
IFRS pro
forma operating income of EUR 7.4 million or 8.9% of revenues, and to Q3
2012
IFRS pro forma operating income of EUR 5.6 million or 6.8% of revenues.
These
developments are largely due to lower revenues and increased
selling and
marketing expenses.



The IFRS operating income in Q4 2012 was EUR 4.3 million, down from
EUR 6.7
million in Q4 2011. This is due to the above-mentioned reasons for
lower pro
forma operating income.



The IFRS net income in Q4 2012 amounted to EUR 4.1 million after EUR 8.7
million
in Q4 2011. Beyond the reduced operating income, net foreign currency
exchange
losses of EUR 0.1 million in Q4 2012 after gains of EUR 1.9 million in Q4
2011
contributed to this decrease. Basic and diluted IFRS net earnings per share
were
EUR 0.09 and EUR 0.08, respectively, down from EUR 0.18 each in Q4 2011.





FULL-YEAR 2012 IFRS FINANCIAL RESULTS



Driven by increased Ethernet access business, revenues rose to a record
high of
EUR 330.1 million in 2012, 6.2% above the EUR 310.9 million reported in
2011.
IFRS pro forma operating income increased from EUR 17.3 million or
5.6% of
revenues in 2011 to EUR 21.8 million or 6.6% of revenues in 2012.
This
improvement is largely due to revenue and gross margin growth.



2012 IFRS operating income at EUR 18.8 million also increased significantly
from
EUR 13.2 million in 2011. The main reason for this positive development
is the
above-mentioned increase in pro forma operating income and a
reduction in
amortization of intangible assets from acquisitions from EUR 2.5
million in
2011 to EUR 1.6 million in 2012.



Finally, IFRS net income amounted to EUR 16.7 million in 2012, slightly
down vs.
EUR 16.9 million in 2011. The positive operating income development was
mostly
compensated by income tax expenses of EUR 1.8 million after income tax
benefits
of EUR 2.9 million in 2011. Furthermore, net foreign currency exchange
gains of
EUR 0.8 million in 2012 were lower than the EUR 2.3 million recorded in
2011.
Basic and diluted IFRS net earnings per share were EUR 0.35 and EUR
0.34 in
2012, slightly down from EUR 0.36 and EUR 0.35, respectively, in 2011.



"We are very pleased with our Q4 2012 results which were achieved in a
very
volatile macro-economic environment. At EUR 80.3 million, our Q4 2012
revenues
are in the upper half of guidance. Our pro forma gross margin strengthened
from
39.3% in Q3 2012 and 40.0% in Q4 2011, to 41.8% in Q4 2012.
Prior to
amortization of capitalized development expenses, pro forma gross
margin
increased from 44.5% in Q3 2012 and 43.9% in Q4 2011, to 46.7% in Q4
2012. We
achieved pro forma operating income of 6.0% of revenues in Q4 2012, at the
upper
end of guidance, demonstrating our focus on managing operational
costs. In
addition, cash and cash equivalents were at another record high of EUR
70.6
million at the end of Q4 2012, slightly up from EUR 70.3 million at the
end of
the previous quarter. Throughout the year, ADVA Optical Networking
maintained
financial strength, with an equity ratio in excess of 50% and record
high net
liquidity at the end of every quarter. At year-end 2012, net liquidity was
at an
all-time high of EUR 41.6 million, up from EUR 41.3 million at the
end of
Q3 2012. For the full year 2012, through a combination of revenue
growth,
increased gross margins, and enhanced operational excellence, we were
able to
further grow profitability. Pro forma operating income grew by 26%,
from
EUR 17.3 million or 5.6% of revenues in 2011 to EUR 21.8 million or
6.6% of
revenues in 2012," commented Jaswir Singh, chief financial officer &
chief
operating officer of ADVA Optical Networking.



CONFERENCE CALL



In conjunction with the release of its full-year 2012 audited IFRS
financial
results on February 28, 2013, ADVA Optical Networking will host a
conference
call for analysts and investors at 3:00 p.m. CET / 9:00 a.m. EST.
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
997 939#, and download the corresponding presentation from ADVA
Optical
Networking's website, www.advaoptical.com : www.advaoptical.com , located in the "About Us /
Investor
Relations" section on the "Financial Results" page under "Conference
Calls".



Q1 2013 OUTLOOK



In Q1 2013, ADVA Optical Networking expects revenues to range between
EUR 72
million and EUR 77 million, and anticipates pro forma operating
income of
between -2% and +2% of revenues. 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 development expenses. In case of highly adverse business
prospects,
these reviews may result in non-cash impairment charges in Q1 2013 and
beyond.
The pro forma operating income guidance provided above excludes any
such
potential impairment charges. ADVA Optical Networking will publish its Q1
2013
financial results on April 25, 2013.



"Despite the difficult macro-economic environment, we achieved our goal to
grow
profitably. ADVA Optical Networking successfully recognizes and targets
rapidly
changing technology trends and growth markets. We continue to be the
multi-year
global market leader in Ethernet Access Devices with a market share of more
than
20%, and remain a strong competitor in EMEA for metro optical
transport
solutions. Although long-term growth perspectives continue to be
strong, for
2013 we are likely to face significant volatility in our market. Current
carrier
investment plans draw a mixed picture. However, an increasing share
of the
carriers' spending will flow into the migration to LTE projects which
should
translate into incremental business for ADVA Optical Networking.
Beyond
potential full-year revenue growth, our focus on innovation and
strategic
technology partnerships will result in an expanding share of higher-
margin,
software-heavy applications as well as expanded service offerings,
supporting
our long-term profitability commitment," stated Brian Protiva, chief
executive
officer of ADVA Optical Networking.



IFRS CONSOLIDATED INCOME STATEMENT

(in thousands of EUR,                         Q4      Q4        FY       FY
except earnings per share)                  2012    2011      2012     2011


Revenues                                  80,268  83,432   330,069  310,945

Pro forma cost of goods sold(*)          -46,711 -50,099  -196,820 -191,560
---------------------------------------------------------------------------
Pro forma gross profit(*)                 33,557  33,333   133,249  119,385

Pro forma
selling and marketing expenses           -12,995 -11,296   -46,259  -43,411

Pro forma
general and administrative expenses       -6,114  -5,465   -25,725  -24,007

Pro forma
research and development
expenses                                 -15,515 -16,848   -65,055  -60,083

Income from capitalization of
development expenses(*)                    5,064   7,397    23,529   23,648

Other operating income and expenses, net     840     291     2,059    1,751
---------------------------------------------------------------------------
Pro forma operating income                 4,837   7,412    21,798   17,283

Amortization of
intangible assets from acquisitions         -145    -640    -1,620   -2,493
Stock compensation expenses                 -404     -98    -1,344   -1,583
---------------------------------------------------------------------------
Operating income                           4,288   6,674    18,834   13,207

Interest income and expenses, net           -298    -378    -1,163   -1,531

Other financial gains and losses, net       -138   1,937       834    2,328
---------------------------------------------------------------------------
Income before tax                          3,852   8,233    18,505   14,004

Income tax benefit (expense), net            249     451    -1,783    2,935
---------------------------------------------------------------------------
Net income                                 4,101   8,684    16,722   16,939


Earnings per share in EUR

   Basic                                     0.09    0.18      0.35    0.36

   Diluted                                   0.08    0.18      0.34    0.35




(*) Research and development expenses include income from
capitalization of
development expenses. From 2012, amortization for capitalized
development
projects is presented as cost of goods sold. Prior period information has
been
adjusted accordingly, by reclassification of amortization from
research and
development expenses to cost of goods sold. The effect on cost of goods
sold
amounted to EUR 3,917/15,394 thousand and EUR 3,267/14,131
thousand in
Q4/12M 2012 and Q4/12M 2011, respectively.



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 : 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 : www.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#1681859]




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



Press Information:




Contact Person:


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