ADVA Optical Networking Reports Audited 2011 IFRS Financial Results In Line with Expectations

MARTINSRIED/MUNICH, GERMANY--(Marketwire - Feb 22, 2012) -

Processed and transmitted by Thomson Reuters ONE.

The issuer is solely responsible for the content of this announcement.

Q4 2011 Revenues at EUR 83.4 Million,
IFRS Pro Forma Operating Income of EUR 7.4 Million (8.9% of Revenues)

FY 2011 Revenues at EUR 310.9 Million,
IFRS Pro Forma Operating Income of EUR 17.3 Million (5.6% of Revenues)

Q1 2012 Revenues Expected to Range
between EUR 79 Million and EUR 83 Million with
IFRS Pro Forma Operating Income between 2% and 5% of Revenues

ADVA Optical Networking
announced Q4 and audited full-year 2011 financial results for the period
ended
December 31, 2011, and prepared in accordance with International
Financial
Reporting Standards (IFRS).

Q4 2011 IFRS Financial Results

Revenues in Q4 2011 rose to a record high of EUR 83.4 million after EUR
79.4
million in Q4 2010 and EUR 79.3 million in Q3 2011. This result is at the
upper
end of guidance of between EUR 79 million and EUR 84 million. IFRS pro
forma
operating income, excluding stock-based compensation and
amortization &
impairment of goodwill & acquisition-related intangible assets,
amounted to
EUR 7.4 million in Q4 2011 or 8.9% of revenues, also at the upper
end of
guidance of between 6% and 9% of revenues. This compares to Q4 2010
IFRS pro
forma operating income of EUR 4.3 million or 5.4% of revenues, and to Q3
2011
IFRS pro forma operating income of EUR 5.5 million or 6.9% of revenues.
To a
large degree, the year-over-year improvement of pro forma operating
income is
due to revenue and gross margin growth as well as increased net
capitalization
of development expenses.

The IFRS operating income in Q4 2011 was EUR 6.7 million, up significantly
from
EUR 3.1 million in Q4 2010. The key drivers for this development are the
above-mentioned reasons for the increase in pro forma operating income.

The IFRS net income in Q4 2011 amounted to EUR 8.7 million after EUR 1.6
million
in Q4 2010. Beyond the improvement of the operating income, net foreign
currency
exchange gains of EUR 1.9 million in Q4 2011 after EUR 0.8 million in Q4
2010
drove this major improvement. Further, ADVA Optical Networking reported
income
tax benefits of EUR 0.5 million in Q4 2011 after income tax expenses of
EUR 1.9
million in Q4 2010. The Q4 2011 income tax benefit is due to
recognition of
deferred taxes in ADVA Optical Networking's U.S. entity. Basic and diluted
IFRS
net earnings per share were EUR 0.18 each, significantly up from EUR 0.03
each
in Q4 2010.

Full-Year 2011 IFRS Financial Results

Driven by increased Ethernet access and carrier infrastructure business,
revenues rose to a record high of EUR 310.9 million in 2011, 6.6% higher
than
the EUR 291.7 million reported in 2010. IFRS pro forma operating income at
EUR 17.3 million in 2011 or 5.6% of revenues was up from EUR 13.3 million
or
4.6% of revenues in 2010. This improvement is largely due to revenue and
gross
margin growth as well as increased net capitalization of development
expenses.

The IFRS operating income at EUR 13.2 million in 2011 also
increased
significantly from EUR 9.3 million in 2010. The major reason for this
positive
development is the above-mentioned increase in pro forma operating income.

Finally, IFRS net income amounted to EUR 16.9 million in 2011,
significantly up
vs. EUR 7.0 million in 2010. Beyond the development of the operating
income
mentioned above, the increase in the net result was positively
affected by
income tax benefits of EUR 2.9 million in 2011 after income tax
expenses of
EUR 4.0 million in 2010. The 2011 income tax benefit is due to
recognition of
deferred taxes in ADVA Optical Networking's U.S. entity in H2 2011.
Basic and
diluted IFRS net earnings per share were EUR 0.36 and EUR 0.35 in
2011,
significantly up from EUR 0.15 each in 2010.

Conference Call

In conjunction with the release of its full-year 2011 audited IFRS
financial
results on February 23, 2012, 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 & chief operating officer, Jaswir
Singh.
Interested parties may dial in at +49 69 201744 210 or +1 877 423 0830, pin
code
235 135#, 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".

Q1 2012 Outlook

In Q1 2012, ADVA Optical Networking expects revenues to range between EUR
79
million and EUR 83 million, and anticipates pro forma operating income of
between 2% and 5% of revenues. Further, ADVA Optical Networking notes that
it
will continue to perform detailed quarterly reviews of the expected
business
development in respect of all intangible assets, including capitalized
research
and development expenses. These reviews may result in non-cash impairment
charges in Q1 2012 and beyond. The pro forma operating income guidance
provided
above excludes any such potential impairment charges. ADVA Optical
Networking
will publish its Q1 2012 financial results on April 24, 2012.

IFRS Consolidated Income Statement
(in thousands of EUR,                       Q4      Q4       FY      FY
except earnings per share)                 2011    2010     2011    2010



Revenues                                  83,432  79,403  310,945  291,725

Pro forma cost of goods sold             -46,832 -45,656 -177,429 -170,501
--------------------------------------------------------------------------
Pro forma gross profit                    36,600  33,747  133,516  121,224

Pro forma
selling and marketing expenses           -11,296 -12,304  -43,411  -42,947

Pro forma
general and administrative expenses       -5,465  -5,932  -24,007  -23,277

Pro forma
research and development expenses        -16,848 -12,565  -60,083  -49,391

Income from capitalization of development
expenses, net of amortization for capitalized
development projects                       4,130     681    9,517    3,918

Other operating income and expenses, net     291     667    1,751    3,761
--------------------------------------------------------------------------
Pro forma operating income                 7,412   4,294   17,283   13,288

Amortization of
intangible assets from acquisitions         -640    -638   -2,493   -2,141

Stock compensation expenses                  -98    -551   -1,583   -1,848
--------------------------------------------------------------------------
Operating income                           6,674   3,105   13,207    9,299

Interest income and expenses, net           -378    -447   -1,531   -1,439

Other financial gains and losses, net      1,937     828    2,328    3,130
--------------------------------------------------------------------------
Income before tax                          8,233   3,486   14,004   10,990

Income tax benefit (expense), net            451  -1,863    2,935   -3,983
--------------------------------------------------------------------------
Net income                                 8,684   1,623   16,939    7,007



Earnings per share in EUR

   basic                                    0.18    0.03    0.36      0.15

   diluted                                  0.18    0.03    0.35      0.15

# # #

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.