DJ HUGIN AD-HOC/ADVA AG Optical Networking: ADVA OPTICAL NETWORKING REPORTS AUDITED 2008 IFRS FINANCIAL RESULTS WITH Q4 REVENUES EXCEEDING GUIDANCE
ADVA AG Optical Networking / Annual accounts / Ad hoc: ADVA OPTICAL NETWORKING REPORTS AUDITED 2008 IFRS FINANCIAL RESULTS WITH Q4 REVENUES EXCEEDING GUIDANCE Ad hoc announcement according to §15 WpHG processed and transmitted by Hugin. The issuer is solely responsible for the content of this announcement. =--------------------------------------------------------------------- =------------- Q4 2008 revenues at EUR 56.8 million, IFRS pro forma operating income of EUR 0.1 million(0.1% of revenues) FY 2008 revenues at EUR 217.7 million, IFRS pro forma operating income, excluding restructuring charges, of EUR 1.5 million (0.7% of revenues) Q1 2009 revenues expected to range between EUR 50 million and EUR 55 million with IFRS pro forma operating income between -4% and +1% of revenues Norcross, Georgia, USA and Martinsried/Munich, Germany. March 10, 2009. ADVA Optical Networking announces Q4 and audited full-year 2008 financial results for the period ended December 31, 2008, and prepared in accordance with International Financial Reporting Standards (IFRS). Q4 2008 IFRS FINANCIAL RESULTS Revenues in Q4 2008 totaled EUR 56.8 million after EUR 53.8 million in Q4 2007 and EUR 54.1 million in Q3 2008, above guidance of between EUR 50 million and EUR 55 million. IFRS pro forma operating income, excluding stock-based compensation and amortization & impairment of goodwill & acquisition-related intangible assets, amounted to EUR 0.1 million in Q4 2008 or 0.1% of revenues, in line with guidance of between -3% and +2% of revenues. This compares to a Q4 2007 IFRS pro forma operating loss of EUR 12.1 million or 22.5% of revenues, and to a Q3 2008 IFRS pro forma operating income of EUR 1.3 million or 2.4% of revenues. The year-over-year recovery of pro forma operating income to the largest extent is due to Q4 2007 one-off non-cash charges related to the write-down of outdated inventory items and to the impairment of capitalized research and development expenses. The IFRS operating loss in Q4 2008 was EUR 0.5 million, after an operating loss of EUR 23.2 million in Q4 2007. Key drivers for this development are the above-mentioned non-cash charges, as well as extraordinary high amortization of intangible assets from acquisitions of EUR 10.4 million in Q4 2007, related to one-off impairments of goodwill, purchased technology and in-process R&D projects. This compares to Q4 2008 amortization of intangible assets from acquisitions of EUR 0.7 million. The IFRS net loss in Q4 2008 amounted to EUR 2.2 million, after a net loss of EUR 27.7 million in Q4 2007. This reduction of net loss was largely driven by the factors impacting the development of the operating result described above. Basic and diluted IFRS net earnings per share were EUR -0.05 each in Q4 2008 after EUR -0.60 each in Q4 2007. FULL-YEAR 2008 IFRS FINANCIAL RESULTS Revenues came in at EUR 217.7 million in 2008, down from EUR 251.5 million in 2007. This development was mainly due to lower channel partner business, specifically with one major distribution channel in the U.S. since H2 2007. IFRS pro forma operating income at EUR -0.7 million in 2008 was slightly negative, after a positive EUR 1.8 million in 2007. Significantly higher revenues in 2007 were mostly set off by the one-off charges described in the Q4 2007 analysis. Excluding one-off restructuring charges of EUR 2.3 million incurred in H1 2008, 2008 IFRS pro forma operating income would have been positive at EUR 1.5 million. The IFRS operating loss in 2008 was EUR 7.0 million, after an operating loss of EUR 18.7 million in 2007. The major driver for the operating loss reduction is the extraordinary high amortization of intangible assets from acquisitions in Q4 2007, as described in the Q4 2007 analysis. Also, ADVA Optical Networking reported an IFRS net loss in 2008 amounting to EUR 8.9 million, after a net loss of EUR 29.5 million in 2007. Beyond the development of the operating loss, the reduction in net loss was impacted by a high income tax charge of EUR 8.2 million in 2007, mainly driven by changes in deferred tax assets and liabilities related to a German tax audit and the impairment of intangible assets. This compares to an income tax benefit of EUR 0.3 million in 2008. Basic and diluted IFRS net earnings per share were EUR -0.19 each in 2008, after EUR -0.64 each in 2007. CONFERENCE CALL AND WEBCAST In conjunction with the release of its full-year 2008 audited IFRS financial results on March 10, 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, Jaswir Singh. Interested parties may dial in at +49 69 4035 9611 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. CHANGE TO MANAGEMENT BOARD ADVA Optical Networking will cut the number of members of its Management Board from six to five, reducing the complexity of the organization. Until the end of Q1 2009, the current Chief Operations Officer (COO) Jürgen Hansjosten will hand over his COO responsibilities to Jaswir Singh, who has been serving as Chief Financial Officer (CFO) since Q4 2007. Jaswir Singh now assumes joint CFO and COO responsibility. Q1 2009 OUTLOOK In light of the ongoing economic crisis, ADVA Optical Networking expects Q1 2009 revenues to range between EUR 50 million and EUR 55 million. We anticipate pro forma operating income of between -4% and +1% of revenues in Q1 2009. 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 Q1 2009 and beyond. The pro forma operating income guidance provided above excludes any such potential impairment charges. ADVA Optical Networking will publish its Q1 2009 financial results on May 5, 2009. IFRS CONSOLIDATED INCOME STATEMENT (in thousands of EUR, Q4 Q4 FY FY except earnings per share) 2008 2007 2008 2007 Revenues 56,849 53,812 217,672 251,486 Pro forma cost of goods sold -32,746 -36,024 -125,802 -151,050 Pro forma gross profit 24,103 17,788 91,870 100,436 Pro forma selling and marketing expenses -9,157 -9,537 -34,087 -33,624 Pro forma general and administrative expenses -6,746 -7,095 -26,298 -26,061 Pro forma research and development expenses -10,010 -10,765 -40,682 -41,372 Income from capitalization of development expenses, net of amortization for capitalized development projects 1,501 -2,089 9,004 2,315 Restructuring expenses 0 0 -2,251 0 Other operating income (expenses), net 388 -429 1,736 86 Pro forma operating income 79 -12,127 -708 1,780 Amortization of intangible assets from acquisitions -747 -10,438 -4,574 -17,308 Stock compensation expenses 121 -658 -1,761 -3,186 Operating income (loss) -547 -23,223 -7,043 -18,714 Interest income (expense), net -262 -192 -1,005 -853 Other income (expense), net -171 143 -1,103 -1,734 Income (loss) before tax -980 -23,272 -9,151 -21,301 Income tax benefit (expense), net -1,198 -4,435 275 -8,154 Net income (loss) -2,178 -27,707 -8,876 -29,455 Earnings per share in EUR basic -0.05 -0.60 -0.19 -0.64 diluted -0.05 -0.60 -0.19 -0.64 # # # 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
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DJ HUGIN AD-HOC/ADVA AG Optical Networking: ADVA -2-
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) email@example.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) firstname.lastname@example.org =-- End of Message --- ADVA AG Optical Networking Campus Martinsried, Fraunhoferstr. 9a Martinsried/Munich Germany WKN: 510300; ISIN: DE0005103006 ; Index: CDAX, Prime All Share, TECH All Share, TecDAX; Listed: Prime Standard in Frankfurter Wertpapierbörse, Regulierter Markt in Bayerische Börse München, Regulierter Markt in Börse Berlin, Regulierter Markt in Börse Düsseldorf, Regulierter Markt in Börse Stuttgart, Regulierter Markt in Frankfurter Wertpapierbörse, Regulierter Markt in Hanseatische Wertpapierbörse zu Hamburg, Regulierter Markt in Niedersächsische Börse zu Hannover; www.advaoptical.com Copyright © Hugin AS 2009. All rights reserved.
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