MAHWAH, New Jersey and MUNICH, Germany, Aug. 8, 2005 (PRIMEZONE) -- ADVA:
-- Q2 2005 revenues up 28% on Q2 2004 and 12% on Q1 2005 to reach a new all-time high of EUR 32.7 million
-- EUR 3.3 million in pro forma Q2 2005 operating income (10.0% of revenues)
-- Full year 2005 revenues forecast increased to range between 23% and 29% above 2004 revenues
ADVA Optical Networking today announced second quarter 2005 financial results for the quarter ended June 30, 2005, and prepared in accordance with U.S. Generally Accepted Accounting Principles (U.S. GAAP). ADVA today also published key financials as per International Financial Reporting Standards (IFRS).
SECOND QUARTER 2005 FINANCIAL RESULTS
In Q2 2005, revenues totaled EUR 32.7 million, compared to EUR 29.1 million in Q1 2005 and EUR 25.6 million in Q2 2004, respectively. At EUR 3.3 million, pro forma operating income, excluding stock-based compensation and acquisition-related charges, was up 7.9% versus Q1 2005 (EUR 3.0 million). The rise in pro forma operating income was primarily driven by higher revenues and gross margins. Pro forma quarterly net profit at EUR 2.6 million was up 19.0% versus Q1 2005, with undiluted net earnings per share up to EUR 0.08 from EUR 0.06, primarily due to lower tax expenses.
Q2 2005 net profit remained flat at EUR 2.2 million in comparison with Q1 2005, and undiluted net earnings per share in Q2 2005 were EUR 0.06, compared to EUR 0.07 in Q1 2005.
SIX MONTH 2005 FINANCIAL RESULTS
Revenues increased 27.2% from EUR 48.6 million in H1 2004 to EUR 61.8 million in H1 2005. Pro forma operating income, excluding stock-based compensation and acquisition-related charges, decreased slightly from EUR 6.8 million in H1 2004 to EUR 6.3 million in H1 2005 as a result of higher investments into the international expansion of ADVA's activities, especially in selling and development efforts. Pro forma net income fell to EUR 4.8 million in H1 2005 (EUR 0.14 pro forma basic net earnings per share), compared to EUR 6.9 million in H1 2004 (EUR 0.21 pro forma basic net earnings per share), driven by our international expansion and higher tax expenses in H1 2005.
Actual net income increased from EUR 3.1 million in H1 2004 to EUR 4.4 million in H1 2005, helped by lower stock-based compensation and acquisition-related expense charges totalling EUR 3.8 million in H1 2004 and EUR 0.5 million in H1 2005. The higher charges in H1 2004 were due to the increase in ADVA's stock price during this period. Actual basic net earnings per share improved from EUR 0.09 in H1 2004 to EUR 0.13 in H1 2005.
INFORMATION ON SECOND QUARTER AND SIX MONTH 2005 IFRS RESULTS
Based on the same revenues figure as quoted under U.S. GAAP, ADVA's IFRS net profit for Q2 2005 was EUR 2.5 million, which exceeds the figure reported under U.S. GAAP by EUR 0.3 million. IFRS net profit for H1 2005 was EUR 5.2 million, exceeding the U.S. GAAP figure by EUR 0.8 million. These differences are largely attributable to higher valuation of inventories, the capitalization under IFRS of part of the company's development costs and a different valuation method for stock options outstanding. Further details on key IFRS financial numbers are provided in the Six-Month Report 2005, available in the investor relations section of the corporate web site, www.advaoptical.com.
CONFERENCE CALL
In conjunction with the release of Q2 2005 financial results, ADVA's Chief Executive Officer, Brian L. Protiva, and Chief Financial Officer, Andreas G. Rutsch, will host a conference call for analysts and investors at 3:00 p.m. CEDT/9:00 a.m. EDT today, August 8, 2005. Investors may listen live via webcast on ADVA's website, located on the 'earnings webcasts' page under 'financial results' in the investor relations section of ADVA's website at www.advaoptical.com.
ADDITIONAL SUPERVISORY BOARD MEMBER
Thomas J. Smach, Chief Financial Officer at Flextronics Corporation, was approved by shareholders as an additional Supervisory Board member at the annual shareholders meeting in June 2005. Thomas Smach has spent more than twenty years in various finance positions and brings extensive industry experience. He will be a valuable additional resource to ADVA to help the company continue to achieve its objectives.
THIRD QUARTER 2005 OUTLOOK
Based on the positive development of revenues so far this year and a stronger than expected growth of its target customers, ADVA is increasing its current full year 2005 guidance of revenues to range between 23% and 29% above 2004 revenues of EUR 102.1 million. For the full year, ADVA's expected pro forma operating income margin is narrowed to range between 9% and 11% of revenues. In Q3 2005, ADVA expects revenues of between EUR 33 and EUR 35 million and a pro forma operating income margin of between 10% and 11%. ADVA will release its financial results for the quarter ending September 30, 2005, on November 3, 2005.
PUBLISHED BY:
ADVA AG Optical Networking, Martinsried/Munich and Meiningen, Germany ADVA Optical Networking Inc., Mahwah/New Jersey, USA ADVA Optical Networking Corp., Tokyo, Japan www.advaoptical.com