ADVA Optical Networking Reports Tenth Consecutive Quarter of Growth in Q2 2006


    Q2 2006 Revenues Up 26 Percent on Q2 2005 and Up 11 Percent on 
        Q1 2006 to Reach a New All-Time High of EUR 41.2 Million

       IFRS Q2 2006 Pro Forma Operating Income of EUR 3.5 million
                           (8% of Revenues)

             Forecasted Full Year 2006 Revenues to Reach
  Between EUR 189 Million and EUR 205 Million, Including Movaz for
                               H2 2006

MARTINSRIED and MUNICH, Germany, and MAHWAH, N.J., Aug. 7, 2006 (PRIMEZONE) -- ADVA Optical Networking today announced Q2 2006 financial results for the quarter ended June 30, 2006, and prepared in accordance with International Financial Reporting Standards (IFRS). ADVA today also published key financials as per U.S. Generally Accepted Accounting Principles (U.S. GAAP), the accounting framework applied in financial statements published prior to the release of the annual report 2005.


In Q2 2006 revenues totaled EUR 41.2 million, up 26% compared to EUR 32.7 million in Q2 2005 and up 11% compared to EUR 37.1 million in Q1 2006, respectively. IFRS pro forma operating income, excluding stock-based compensation and amortization and impairment of goodwill and acquisition-related intangible assets, was at EUR 3.5 million in Q2 2006 after EUR 3.8 million in Q2 2005, driven by higher revenues and significantly expanded selling & marketing and research & development expenses. IFRS pro forma quarterly net profit was at EUR 2.2 million in Q2 2006 after EUR 3.0 million in Q2 2005, with diluted pro forma net earnings per share of EUR 0.06 in Q2 2006 after EUR 0.08 in Q2 2005.

Q2 2006 IFRS actual net profit amounted to EUR 1.4 million after EUR 2.5 million in Q2 2005. Diluted net earnings per share were EUR 0.04 in Q2 2006 and EUR 0.07 in Q2 2005.


Based on the same revenue figures quoted under IFRS, ADVA's U.S. GAAP actual net profit for Q2 2006 was EUR 0.9 million, or EUR 0.5 million less than the figure reported under IFRS. This difference is largely attributable to the capitalization under IFRS of part of the company's development costs and a lower valuation of inventories under U.S. GAAP. Further details on key U.S. GAAP financial numbers are provided in the Six-Month Report 2006, available in the investor relations section of the corporate web site,


In conjunction with the release of its Q2 2006 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 on August 8, 2006. 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


Currently ADVA expects its market for optical WDM and Ethernet access solutions for metro networks to grow by 20% to 25% in 2006, based on the expectation of ongoing strong demand for metro infrastructure deployments and enterprise solutions. Given the consolidation of Movaz from July 1, 2006, onwards, for ADVA, this will result in full year 2006 revenues between EUR 189 million and EUR 205 million or between 44% and 56% above 2005 levels. For Q3 2006, ADVA projects revenues to range between EUR 51 million and EUR 57 million, and for Q4 2006 between EUR 60 million and EUR 70 million. Further, ADVA projects its full year 2006 IFRS pro forma operating margin between 7% and 8% of revenues. For Q3 2006, this margin is expected to range at nonrecurring levels between 0% and 2% of revenues, driven by considerable ADVA-Movaz integration activity, which is a major catalyst for the realization of future synergies, and Movaz's current gross margins ranging substantially below ADVA's. Due to the first results of its integration efforts, ADVA is confident to see rapid improvements in gross margins and operating expenses and projects its Q4 2006 IFRS pro forma operating margin to range between 6% and 10% of revenues. ADVA will release its financial results for the quarter ending September 30, 2006, on November 9, 2006.


ADVA AG Optical Networking, Martinsried/Munich and Meiningen, Germany ADVA Optical Networking Inc., Mahwah, New Jersey, USA ADVA Optical Networking Corp., Tokyo, Japan


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