ADVA Optical Networking Reports 2000 Financial Results April 30, 2001.Business Editors MARTINSRIED/MUNICH, Germany & RAMSEY, N.J.--(BUSINESS WIRE)--April 30, 2001 ADVA ADVA American Deaf Volleyball Association ADVA Advanced Soviet Optical Networking Communications between computers, telephones and other electronic devices using light. An optical network is far more reliable and has far greater potential transmission capacity than networking in the electrical domain. See optical fiber. (German Neuer Markt: ADV ADV Advertisement ADV Adverb ADV Advance/Advanced ADV Advantage (tennis) ADV Advise ADV Advocate ADV Advancement ADV Advent ADV Arbeitsgemeinschaft für Datenverarbeitung ADV Adversus (Latin: Against) ), a leading global provider of optical networking solutions, today announced consolidated 2000 financial results and restated consolidated 1999 financial results for the periods ended December 31 and prepared in accordance with U.S. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . 2000 financial results Sales for 2000 reached EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 60.7 million, an increase of 194% over sales in 1999 of EUR 20.6 million. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , excluding purchased in-process R&D, amortization of goodwill, and depreciation of purchased intangible assets relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc acquisitions, as well as non-cash charges related to the stock option programs, decreased to EUR -11.7 million during 2000, compared to EUR 0.9 million during 1999. These results reflect in particular the significant investments made by the company to expand its product portfolio and build up the critical resources necessary to secure long-term growth. Pro forma net loss totaled EUR -11.8 million in 2000, compared to EUR 1.1 million in 1999. Pro forma diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of totaled EUR -0.37 in 2000, compared to EUR 0.21 in 1999. "Despite extremely positive business development, our consolidated financial results announced today differ in comparison to operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: and net profit results announced previously and the expectations in the financial markets. The primary reason behind these variations is the significantly more stringent application of accounting standards under U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). following the change of our auditors. This has led to, among others, a deferral of sales from 2000 to 2001, significant one-time inventory write-offs, and increased accruals for products exchanges and warranties. With these measures, we have taken the most conservative stance on specific accounting issues. We are hereby creating a solid foundation for successful growth in 2001," said Andreas G. Rutsch, Chief Financial Officer. Actual net loss for 2000 was EUR -95.6 million Euro, compared to EUR -4.6 million for 1999. Diluted earnings per share equaled EUR -2.98 for 2000, compared to EUR -0.92 for 1999. During 2000, ADVA successfully completed four acquisitions and accounted for one-time charges of EUR 18.2 million as write-offs of purchased in-process R&D, EUR 32.5 million of amortization of goodwill, and EUR 9.5 million of amortization of purchased intangible assets. In conjunction with its stock option programs, ADVA incurred non-cash charges of EUR 23.7 million in 2000. The 1999 and 2000 financial results presented here have been finalized by the company's April 30, 2001 auditors, with the exception of the goodwill amortization of ADVA's four acquisitions during 2000 and non-cash charges resulting from stock option programs. Revenue breakdown ADVA's FSP-II was the top-selling product for the company in 2000, generating a total of 77% of sales. FSP-I comprised 11% of sales in 2000, and FSP FSP - File Service Protocol 500 comprised 5%. CELL-ACE and CELL-ACE-PLUS together generated 4% of sales. OCM OCM Oracle Certified Master (database administrator certification) OCM Organization for Competitive Markets OCM Onondaga Cortland Madison (counties in New York) OCM Olympic Council of Malaysia 4/8/16, ADVA's second-generation product, comprised 1% of sales and was phased out during the first quarter of 2000. DiskLink generated minimal sales in 2000. FSP 3000 was launched in March 2000 and first prototype shipments were delivered to service providers in October 2000. Geographically, demand from enterprise and service provider customers was particularly strong in the Americas, comprising 59% of sales. Sales in Europe comprised 38% of 2000 sales, and Asia-Pacific 3%. As a result of the deferral of sales, up to EUR 7 million in 2000 sales will be accounted for in the first and second quarters of 2001. Gross profit and operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. Pro forma gross profit increased from EUR 9.0 million in 1999 to EUR 20.2 million in 2000, an increase of 125%. Pro forma gross profit comprised 43.4% of sales in 1999 and 33.3% of sales in 2000. This decrease in gross profit as a percentage of sales is due to a significant one-time write-off in inventory, increased warranty accruals, sales deferrals, as well as a larger influence of OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and orders on the total sales volume. Pro forma selling, general and administrative ("SG&A") expenses increased from EUR 5.4 million in 1999 to EUR 19.6 million in 2000, an increase of 265%. Pro forma SG&A expenses comprised 26.1% of sales in 1999 and 32.3% of sales in 2000. ADVA continued to increase its level of sales and marketing activity expenditures in 2000, focusing on driving opportunities with end-customers. In addition, significant one-time write-offs were incurred in conjunction with product loan units. Pro forma research and development ("R&D") expenses increased from EUR 2.7 million in 1999 to EUR 12.2 million in 2000. Pro forma R&D expenses comprised 13.2% of sales in 1999, and 20.1% of sales in 2000. The rise in pro forma R&D expenses was associated with the addition of new personnel in conjunction with the acquisitions, the ongoing development of features for existing products and new products, and significant one-time write-offs of inventory. Business outlook ADVA continues to maintain earlier financial guidance for sales of between EUR 110 to 120 million in 2001, as given on March 26, 2001. Conference call and Webcast April 30, 2001 In conjunction with the release of its audited 2000 financial results, ADVA will host a conference call for investors at 3:00 p.m. CET CET abbr. Central European Time CET Central European Time CET n abbr (= Central European Time) → hora de Europa central CET abbr / 9:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy on Monday, April 30, 2001. Investors may listen live via Webcast on ADVA's website. Participating in the call will be ADVA's Chief Executive Officer, Brian L. Protiva, and Chief Financial Officer, Andreas G. Rutsch. To listen to the Webcast, interested investors are encouraged to log onto the broadcast at least 15 minutes prior to the call, located on the media archives page in the investor relations Investor relations The process by which the corporation communicates with its investors. section of ADVA's website at http://www.advaoptical.com. The call will be archived as an audio file on ADVA's website. The conference call presentation will also be available on the media archives page in the investor relations section of ADVA's website at http://www.advaoptical.com. Q1 2001 earnings results ADVA has rescheduled announcement of Q1 2001 financial results for the period ending March 31, 2001, on Tuesday, May 29, 2001. ADVA's consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge for the years 1999 and 2000 can be found on the company's website at www.advaoptical.com. About ADVA Optical Networking ADVA Optical Networking is a leading global provider of optical networking solutions for the deployment, management, and delivery of high-speed services within the metropolitan area and enterprise markets. ADVA is leveraging its core technologies and expertise in the enterprise market to maximize growth opportunities in the exploding metro market. Key services include high-speed data, storage, and video applications. The ADVA product portfolio is sold through an international network of distributors, value-added resellers, and original equipment manufacturers, in coordination with ADVA's own regional sales offices and direct service-provider sales force. As of February 2001, over 28 metro service providers and 480 enterprises have deployed ADVA's systems in more than 40 countries. Founded in 1994 and headquartered in Munich, Germany, ADVA has ten sites worldwide, including six R&D centers in Europe. 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 AG Optical Networking. ADVA AG 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 AG Optical Networking or the market in the shares of ADVA AG Optical Networking. Published by: ADVA AG Optical Networking, Martinsried/Munich and Meiningen, Germany ADVA Optical Networking Inc., Ramsey/New Jersey, USA www.advaoptical.com |
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