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ADVA Optical Networking Reports Audited 2015 IFRS Financial Results in Line With Guidance

  • Revenues of EUR 441.9 million drive 30.3% year-on-year growth
  • Pro forma operating income rises to EUR 30.0 million (6.8% of revenues)
  • Operating income increases 217% on 2014 figures
  • Q1 2016 revenues expected to range between EUR 117 million and EUR 127 million with IFRS pro forma operating income between 1% and 4% of revenues

MUNICH, Germany, Feb. 25, 2016 (GLOBE NEWSWIRE) -- ADVA Optical Networking (FSE: ADV) announced Q4 and audited full-year 2015 financial results for the period ended December 31, 2015, and prepared in accordance with International Financial Reporting Standards (IFRS).

Q4 2015 IFRS FINANCIAL RESULTS
Quarterly revenues climbed to EUR 111.8 million (Q4 2014: EUR 86.7 million). The Q4 2015 figure marks a year-on-year (YoY) growth leap by 28.8%. Today's figures are in the middle of guidance between EUR 107 million and EUR 117 million. The significant increase in revenues was due to several factors: the demand for data center interconnect (DCI) technology, the continued push for 100G in metro and regional networks and the rebound in European carrier and enterprise spend.

Pro forma operating income, excluding stock-based compensation and amortization & impairment of goodwill & acquisition-related intangible assets, in Q4 2015 rose substantially to EUR 9.0 million or 8.1% of revenues, which marks a 75% YoY increase (Q4 2014: EUR 5.1 million) and is at the upper end of the previously announced guidance between 6% und 9% of revenues. The year-on-year rise is largely due to higher revenues, improved gross margins and a disproportional increase in operating expenses.

The operating income climbed significantly to EUR 7.5 million which is a 46% increase YoY (Q4 2014: EUR 5.1 million). Although operating income in Q4 2015 was impacted by higher stock-based compensation expenses, the key drivers for this positive development are the above-mentioned reasons for higher pro forma operating income.

Net profit more than doubled to EUR 8.9 million YoY (Q4 2014: EUR 4.3 million). This was supported by a positive effect from foreign currency exchange rates of EUR 1.5 million and the recognition of tax assets. Basic and diluted IFRS net earnings per share in Q4 2015 increased to EUR 0.18 each from EUR 0.09 each reported in Q4 2014.

The Q4 results place ADVA Optical Networking in a financially strong position with cash and cash equivalents at EUR 93.9 million at the end of December 2015 (2014: EUR 83.9 million) and net liquidity with a record high of EUR 51.2 million. This positive development provides considerable operational flexibility for the company.

FULL-YEAR 2015 IFRS FINANCIAL RESULTS
Driven by increased enterprise network and carrier infrastructure business particularly in the Americas and Asia Pacific, revenues rose to a record high of EUR 441.9 million in 2015, up by 30.3% from EUR 339.2 million in 2014.

Pro forma operating income amounted to EUR 30.0 million in 2015 or 6.8% of revenues, after EUR 9.5 million in 2014 or 2.8% of revenues. This development is largely due to higher revenues, a stable gross margin and disproportional increased operating expenses. Operating income at EUR 26.8 million also improved from EUR 8.4 million in 2014.

Net income amounted to EUR 26.9 million in 2015, after EUR 8.4 million in 2014. Beyond the favorable development of operating income, net foreign currency exchange gains of EUR 2.2 million 2015 (2014: net foreign currency exchange gains of EUR 1.1 million) as well as income tax expense of EUR 1.2 million (2014: income tax benefit of EUR 0.1 million) contributed to this development. The income tax expense in 2015 as well as the income tax benefit in 2014 are impacted by the recognition of deferred tax assets on tax loss carry-forwards. Basic and diluted earnings per share were EUR 0.55 each in 2015, after EUR 0.17 each in 2014.

"The global megatrends cloud and mobility are still the growth engine for our addressable market," comments Brian Protiva, Chief Executive Officer, ADVA Optical Networking. "The demand for cloud and mobile services drives the demand for more bandwidth and ultimately for more transmission technology. Data centers are the new cornerstones of communication networks. We provide network operators with the right technology to build powerful cloud infrastructures and deliver fast and cost-efficient services. With ADVA Ensemble, a new division of ADVA Optical Networking, network operators have unprecedented choice of hardware and software and can extend and assure the cloud beyond the data center closer to the their customers. The cloud will continue to lift us to new heights in 2016."

IFRS CONSOLIDATED INCOME STATEMENT

(in thousands of EUR) Q4
2015
Q4
2014
Change Q3
2015
Change
Revenues 111,752 86,749 +28.8% 122,322 -8.6%
Pro forma gross profit 41,777 31,753 +31.6% 42,353 -1.4%
in % of revenues 37.4% 36.6% +0.8pp 34.6% +2.8pp
Pro forma operating income 9,004 5,137 +75.3% 9,599 -6.2%
in % of revenues 8.1% 5.9% +2.2pp 7.8% +0.3pp
Operating income 7,523 5,141 +46.3% 8,475 -11.2%
Net income 8,881 4,328 +105.2% 8,577 +3.5%
(in thousands of EUR) Dec. 31,
2015
Dec. 31,
2014
Change Sep. 30,
2015
Change
Cash and cash equivalents 93,850 83,877 +11.9% 79,269 +18.4%
Net liquidity 51,181 48,885 +4.7% 50,080 +2.2%

* Potential differences due to rounding

Q1 2016 OUTLOOK
In Q1 2016, ADVA Optical Networking expects revenues to range between EUR 117 million and EUR 127 million, and anticipates pro forma operating income of between 1% and 4% of revenues. 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 development expenses. In case of highly adverse business prospects, these reviews may result in non-cash impairment charges in Q1 2016 and beyond. The pro forma operating income guidance provided above excludes any such potential impairment charges. ADVA Optical Networking will publish its Q1 2016 financial results on April 21, 2016.

CONFERENCE CALL
In conjunction with the release of its full-year 2015 audited IFRS financial results on February 25, 2016, ADVA Optical Networking will host a conference call for analysts and investors at 3:00 p.m. CET / 9:00 a.m. EST. Participating in the call will be ADVA Optical Networking's Chief Executive Officer, Brian Protiva, and Chief Financial Officer, Ulrich Dopfer. Interested parties may dial in at +49 69 22 22 29 043 or +1 855 402 7766, pin code 8648 9048#, 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".

About ADVA Optical Networking
At ADVA Optical Networking we're creating new opportunities for tomorrow's networks, a new vision for a connected world. Our intelligent telecommunications hardware, software and services have been deployed by several hundred service providers and thousands of enterprises. Over the past twenty years, our innovative connectivity solutions have helped to drive our customers' networks forward, helped to drive their businesses to new levels of success. We forge close working relationships with all our customers. As their trusted partner we ensure that we're always ready to exceed their networking expectations. For more information on our products and our team, 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.

Published By:
ADVA Optical Networking SE, Martinsried/Munich and Meiningen, Germany
www.advaoptical.com

HUG#1989174

Source:ADVA Optical Networking SE