ADVA Optical Networking Reports Solid Q2 2001 Financial Results.Business & Technology Editors MUNICH, Germany & RAMSEY, N.J.--(BUSINESS WIRE)--Aug. 7, 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 second quarter 2001 financial results for the period ending June 30, 2001, 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 . SECOND quarter 2001 financial results Sales in the second quarter 2001 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. 24.6 million, an increase of 43.2% over sales in the second quarter 2000 of EUR 17.2 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 amortization of goodwill and purchased intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible 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 Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. related to the stock option programs, decreased to EUR -1.7 million in the second quarter 2001, compared to EUR 0.2 million in the second quarter 2000. Pro forma net profit decreased to EUR -2.5 million in the second quarter 2001, compared to EUR 2.2 million in the second quarter 2000. Pro forma basic earnings per share totalled EUR -0.08 in the second quarter 2001, compared to EUR 0.07 in the second quarter 2000. "This quarter's substantial increase in revenue of 36.3% sequential growth over the first quarter 2001 and improvement in profitability highlights continued market acceptance of our broad solutions offering and our focus on tighter cost controls. Our flagship metro product, FSP FSP - File Service Protocol 3000, is gaining traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. , as is evident from the new 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 agreement announced today with Siemens. The new OEM partnership with Siemens is both strategic and long-term in nature, and marks an important step in further expanding our sales strategy to give us greater market access to incumbent and competitive service providers," said Andreas G. Rutsch, Chief Financial Officer. Actual net profit in the second quarter 2001 was EUR -17.4 million, compared to EUR -2.7 million in the second quarter 2000. This decrease in actual net profit was due to significant positive non-cash charges in the second quarter 2000 related to ADVA's stock option and other compensation programs resulting from negative stock price development. Basic earnings per share equalled EUR -0.54 in the second quarter 2001, compared to EUR -0.09 in the second quarter 2000. Sales during the first six months of 2001 reached EUR 42.7 million, an increase of 55.2% over sales during the first six months of 2000 of EUR 27.5 million. Pro forma operating income, excluding amortization of goodwill and purchased intangible assets relating to acquisitions, as well as non-cash charges related to the stock option programs, decreased to EUR -6.2 million during the first six months of 2001, compared to EUR 0.8 million during the first six months of 2000. Actual net profit during the first six months of 2001 was EUR -11.5 million, compared to EUR -40.2 million during the first six months of 2000. Basic earnings per share equalled EUR -0.36 during the first six months of 2001, compared to EUR -1.32 during the first six months of 2000. SECOND quarter 2001 highlights ADVA saw a marked improvement during the second quarter 2001 in customer opportunities for both the enterprise and metro segments, despite the market uncertainty and weak macroeconomic mac·ro·ec·o·nom·ics n. (used with a sing. verb) The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors. conditions. -- Metro service provider end customers increased from 25 in the second quarter 2000 to 35 in the second quarter 2001. -- A total of 9 service providers have purchased and trialed the FSP 3000 to date, and first revenues of EUR 3.3 million were recognized during the second quarter 2001. -- ADVA announced a contract for the FSP 3000 with UK-based XchangePoint in May 2001 through one of its sales partners. XchangePoint will install the FSP 3000 in its metro-area network infrastructure as it builds Internet exchange point facilities for Internet Service Provider peering and private data traffic exchange in major cities across Europe. -- Enterprise end customers increased from ca. 420 in the second quarter 2000 to more than 500 in the second quarter 2001 according to ADVA's estimates. -- Two new regional Value Added Reseller partners were added to ADVA's global network of distribution partners in the second quarter 2001. German-based Quante Netzwerke GmbH specializes in designing and implementing competitive and flexible networks for private and public telecommunication carriers, and Belgium-based Telindus Group focuses on designing, installing, and managing fixed and mobile networks. -- The FSP 2000 was launched in May 2001 as the next-generation product to ADVA's highly-successful FSP-I and FSP-II products. Targeted at enterprises and metro service providers, the FSP 2000 is designed specifically for high-speed customer premise applications and is ideal for storage applications. -- ADVA's tech support services for end customers in North America were strengthened in June 2001 through the launch of the FSP rapid response. This new 24-hour/7-day per week on-site service and support offering includes installation and maintenance, as well as product training classes, on-site repair service, and sparing. -- ADVA's worldwide team continued to expand to reach 439 employees at the end of the second quarter 2001 and 445 at August 1, 2001. -- Brian L. Protiva, ADVA's Chief Strategy Officer, was appointed in April 2001 as Chief Executive Officer. -- ADVA raised cash of EUR 7.0 million in June 2001 through a capital increase to provide further working capital for the year. Against this cash contribution from one of the Company's largest shareholders, the EGORA Group, ADVA increased its share capital in an amount of 1,076,923 shares. Business outlook "Although uncertainty about market growth lingers and there is not a clear trend on how rapidly large service providers will begin to invest in metro core ring network build-outs, we are confident in our solutions offering and remain positive about the market outlook in this strong and growing area of the telecom sector," said Brian L. Protiva, Chief Executive Officer. The Company projects sales in the third quarter 2001 of between EUR 27 million and EUR 29 August 7, 2001 million. It expects to achieve break-even pro forma operating profitability in the third quarter 2001. Conference call and Webcast In conjunction with the release of its second quarter 2001 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 Tuesday, August 7, 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. THIRD quarter 2001 earnings results ADVA will announce financial results for the third quarter and the first nine months of 2001 for the period ending September 30, 2001, on Tuesday, November 6, 2001. ADVA's complete financial statements and quarterly report for the first six months of 2001 can be found on its website at www.advaoptical.com. In addition, the Company's 2000 annual report is now available on its website. 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 See broadband. for 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, video, and voice applications. The ADVA product portfolio is sold through an international network of distributors, value-added resellers A value-added reseller (VAR) is a company that adds some feature(s) to an existing product(s), then resells it (usually to end-users) as an integrated product or complete "turn-key" solution. , and original equipment manufacturers, in coordination with ADVA's own regional sales offices and direct service-provider sales force. Customers include over 37 telecommunications organizations and metro service providers, as well as more than ca. 500 Fortune 1,000 companies, universities, and government agencies. Founded in 1994 and headquartered in Munich, Germany, ADVA has ten sites worldwide. The economic projections and forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. contained in this document relate to future facts. Such projections and forward-looking statements are subject to risks which cannot be foreseen fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. 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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