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ADVA AG Optical Networking: Ad hoc: ADVA Optical Networking Reports Q3 2011 Financial Results Above Guidance

(October 19, 2011)

MARTINSRIED, GERMANY and MUNICH, GERMANY -- (Marketwire) -- 10/19/11 --

ADVA AG Optical Networking / / Ad hoc: ADVA OPTICAL NETWORKING REPORTS Q3 2011 FINANCIAL RESULTS ABOVE GUIDANCE . Processed and transmitted by Thomson Reuters ONE. The issuer is solely responsible for the content of this announcement.

Q3 2011 revenues at EUR 79.3 million

Q3 2011 IFRS pro forma operating income of EUR 5.5 million (6.9% of revenues)

Q4 2011 revenues expected to range between EUR 79 million and EUR 84 million with IFRS pro forma operating income between 6% and 9% of revenues

Norcross, Georgia, USA and Martinsried/Munich, Germany. October 20, 2011. ADVA Optical Networking announced Q3 2011 financial results for the quarter ended September 30, 2011, and prepared in accordance with International Financial Reporting Standards (IFRS).


Revenues totaled EUR 79.3 million in Q3 2011 and came in slightly above guidance of between EUR 73 million and EUR 78 million. This compares to EUR 80.5 million in Q3 2010 and is up 1.9% vs. Q2 2011 at EUR 77.8 million. IFRS pro forma operating income, excluding stock-based compensation and amortization & impairment of goodwill & acquisition-related intangible assets, amounted to EUR 5.5 million or 6.9% of revenues, also above guidance of between 2% and 5% of revenues. This compares to EUR 4.4 million or 5.5% of revenues in Q3 2010 and EUR 3.5 million or 4.5% of revenues in Q2 2011. The increase in pro forma operating income is largely related to higher revenues vs. Q2 2011 and to higher gross margins vs. Q3 2010.

IFRS operating income rose to EUR 4.4 million in Q3 2011, after EUR 3.3 million in Q3 2010. The key driver for this improvement is the above-mentioned increase in pro forma operating income.

In Q3 2011, IFRS net income amounted to EUR 9.7 million, up significantly from EUR 2.4 million in Q3 2010. Beyond the improvement of the operating income, net foreign currency exchange gains of EUR 3.0 million in Q3 2011 after EUR 0.5 million in Q3 2010 drove this development. Further, ADVA Optical Networking reported income tax benefits of EUR 2.7 million in Q3 2011 after income tax expenses of EUR 1.0 million in Q3 2010. The Q3 2011 income tax benefit is due to initial recognition of deferred taxes in ADVA Optical Networking's U.S. entity. Basic and diluted IFRS net earnings per share were EUR 0.21 and EUR 0.20, after EUR 0.05 each in Q3 2010.

conference call

In conjunction with the release of its Q3 2011 financial results on October 20, 2011, 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 405 991#, and download the corresponding presentation from ADVA Optical Networking's website,, located in the "About Us / Investor Relations" section on the "Financial Results" page under "Conference Calls".


ADVA Optical Networking has the potential to continue significantly growing revenues while aggressively driving innovation and cost efficiencies into its product platforms. While the fragile global economy demands a cautious sentiment, the company expects Q4 2011 revenues of between EUR 79 million and EUR 84 million. Further, ADVA Optical Networking anticipates Q4 2011 pro forma operating income to range between 6% and 9% of revenues. 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. These reviews may result in non- cash impairment charges in Q4 2011 and beyond. The pro forma operating income guidance provided above excludes any such potential impairment charges. ADVA Optical Networking will publish its Q4 and full-year 2011 financial results on February 23, 2012.

NINE-MONTH IFRS CONSOLIDATED INCOME STATEMENT (in thousands of EUR, Q3 Q3 9M 9M except earnings per share) 2011 2010 2011 2010 Revenues 79,325 80,549 227,513 212,322 Pro forma cost of goods sold -44,830 -48,358 -130,597 -124,845 --------------------------------------------------------------------------- Pro forma gross profit 34,495 32,191 96,916 87,477 Pro forma selling and marketing expenses -10,983 -10,285 -32,115 -30,643 Pro forma general and administrative expenses -6,273 -5,892 -18,542 -17,345 Pro forma research and development expenses -14,782 -12,731 -43,235 -36,826 Income from capitalization of development expenses, net of amortization for capitalized development projects 2,539 945 5,387 3,237 Other operating income (expense), net 469 176 1,460 3,094 --------------------------------------------------------------------------- Pro forma operating income 5,465 4,404 9,871 8,994 Amortization of intangible assets from acquisitions -614 -657 -1,853 -1,503 Stock compensation expenses -424 -474 -1,485 -1,297 --------------------------------------------------------------------------- Operating income 4,427 3,273 6,533 6,194 Interest income (expense), net -402 -338 -1,153 -992 Other financial gains (losses), net 2,988 451 391 2,302 --------------------------------------------------------------------------- Income before tax 7,013 3,386 5,771 7,504 Income tax benefit (expense), net 2,719 -957 2,484 -2,120 --------------------------------------------------------------------------- Net income 9,732 2,429 8,255 5,384 Earnings per share in EUR basic 0.21 0.05 0.17 0.12 diluted 0.20 0.05 0.17 0.11

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 AG Optical Networking, Martinsried/Munich and Meiningen, Germany
ADVA Optical Networking North America, Inc., Norcross, Georgia, USA
ADVA Optical Networking (Shenzhen) Ltd., Shenzhen, China

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ADVA AG Optical Networking Campus Martinsried, Fraunhoferstr. 9a Martinsried/Munich Germany

WKN: 510300;ISIN: DE0005103006; Listed: Freiverkehr in Hanseatische Wertpapierbörse zu Hamburg, Freiverkehr in Börse Berlin, Freiverkehr in Börse Düsseldorf, Freiverkehr in Bayerische Börse München, Freiverkehr in Niedersächsische Börse zu Hannover, Prime Standard in Frankfurter Wertpapierbörse, Regulierter Markt in Frankfurter Wertpapierbörse;

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Source: ADVA AG Optical Networking via Thomson Reuters ONE


Gareth Spence
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