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.
Q1 2013 revenues at EUR 77.0 million
Q1 2013 IFRS pro forma operating income of
EUR 0.8 million (1.0% of revenues)
Q2 2013 revenues expected to range
between EUR 73 million and EUR 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 EUR 77.0 million in Q1 2013 and were at the upper end of guidance of between EUR 72 million and EUR 77 million. This is down 5.7% vs. Q1 2012 at EUR 81.7 million and down 4.0% vs. EUR 80.3 million in Q4 2012. IFRS pro forma operating income, excluding stock-based compensation and amortization & impairment of goodwill & acquisition-related intangible assets, amounted to EUR 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 EUR 4.5 million or 5.5% of revenues in Q1 2012 and EUR 4.8 million or 6.0% of revenues in Q4 2012. These developments are largely due to lower revenues and gross margins.
IFRS operating income amounted to EUR 0.4 million in Q1 2013, after EUR 3.5 million in Q1 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 EUR 0.2 million in Q1 2013 after EUR 0.7 million in Q1 2012.
In Q1 2013, IFRS net income amounted to EUR 0.8 million, down significantly from EUR 4.0 million in Q1 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 EUR 1.3 in Q1 2013 after EUR 1.8 million in Q1 2012. The Q1 2013 tax benefit is mainly due to release of tax provisions related to open tax audit appeals that partially have been resolved in Q1 2013, while the Q1 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 EUR 0.02 each in Q1 2013 after EUR 0.09 and EUR 0.08 in Q1 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 Q1 2013 revenues of EUR 77.0 million at the upper end of guidance. Our pro forma gross margin decreased from 41.8% in Q4 2012 to 38.6% in Q1 2013, due to quarterly variations in product and customer mix. In Q1 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 EUR 1.7 million in Q1 2013 remained positive, and our quarter-end cash & cash equivalents and net liquidity of EUR 65.3 million and EUR 36.3 million, respectively, demonstrate ongoing financial strength," commented Jaswir Singh, chief financial officer & chief operating officer of ADVA Optical Networking.
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 +49 69 201744 210 or +1 877 423 0830, pin code 122 165#, 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".
Q2 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 Q2 2013 revenues of between EUR 73 million and EUR 78 million. Further, ADVA Optical Networking anticipates Q2 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 Q2 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 Q2 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)||Q1 2013||Q1 2012|
|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|
|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|
|Earnings per share in EUR|
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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.
ADVA Optical Networking SE, Martinsried/Munich and Meiningen, Germany
t +44 1904 699 358
t +49 89 89 0665 940
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
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ADVA Optical Networking SE
Campus Martinsried, Fraunhoferstr. 9a Martinsried/Munich Germany
WKN: 510300;ISIN: DE0005103006;
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