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ADVA Optical Networking SE: ADVA Optical Networking Reports Q1 2015 Financial Results In Line With Guidance

ADVA Optical Networking SE / ADVA Optical Networking Reports Q1 2015 Financial
Results In Line With Guidance. Processed and transmitted by NASDAQ OMX
Corporate Solutions. The issuer is solely responsible for the content of this
Q1 2015 revenues at EUR 95.6 million

Q1 2015 IFRS pro forma operating income of
EUR 3.7 million (3.9% of revenues)

Q2 2015 revenues expected to range
between EUR 105 million and EUR 110 million with
IFRS pro forma operating income between 3% and 6% of revenues

Martinsried/Munich, Germany. April 23, 2015.
ADVA Optical Networking (FSE: ADV) announced Q1 2015 financial results for the
quarter ended on March 31, 2015, and prepared in accordance with
International Financial Reporting Standards (IFRS).

Q1 2015

Revenues in Q1 2015 rose to a record high of EUR 95.6 million, up 22.4% vs.
EUR 78.1 million in Q1 2014 and up 10.2% vs. EUR 86.7 million in Q4 2014.
This result is slightly above guidance of between EUR 90 million and EUR 95
million. IFRS pro forma operating income, excluding stock-based compensation
and amortization&impairment of goodwill&acquisition-related intangible
assets, amounted to EUR 3.7 million or 3.9% of revenues, at the upper end of
guidance of between 0% and 4% of revenues. This compares to EUR 0.4 million
or 0.5% of revenues in Q1 2014 and EUR 5.1 million or 5.9% of revenues in Q4
2014. While the year-on-year rise of pro forma operating income is largely
due to higher revenues, the quarter-on-quarter reduction of pro forma
operating income results from a lower pro forma gross margin, most notably
related to variations in product and customer mix, the weakening of the EUR
against the USD and lower other operating income.

IFRS operating income amounted to EUR 3.3 million in Q1 2015, after EUR 0.1
million in Q1 2014. The key driver for this improvement is the
above-mentioned increase of pro forma operating income.

The IFRS net income amounted to EUR 4.3 million in Q1 2015, after a net loss
of EUR 0.4 million in Q1 2014. Beyond the improvement of the operating
income, net foreign currency exchange gains of EUR 2.1 million in Q1 2015
after rounded nil in Q1 2014 drove the rise in net income. These effects were
partially compensated by income tax expenses of EUR 0.9 million in Q1 2015
after EUR 0.2 million in Q1 2014. Basic and diluted IFRS net earnings per
share were EUR 0.09 each in Q1 2015 after EUR -0.01 each in Q1 2014.

"We are very pleased with the development of our Q1 2015 revenues, reaching an
all-time high of EUR 95.6 million, slightly exceeding guidance. This is a
strong increase of 22.4% vs. Q1 2014 and an increase of 10.2% vs. Q4 2014. It
also marks the fifth consecutive quarter with year-on-year growth. The
increase in revenue is largely driven by investments in enterprise solutions,
reflecting the continued network traffic growth due to the increasing
adoption of cloud based services, most notably in the Americas. Our pro forma
gross margin decreased slightly from 36.6% in Q4 2014 to 36.2% in Q1 2015,
due to variations in product and customer mix and the weakening of the EUR
against the USD. However, the impact of the changes in foreign currency
exchange rates to our pro forma gross profitability was compensated by net
gains from foreign currency hedging recorded below the operating-income line.
We achieved a pro forma operating income of 3.9% of revenues in Q1 2015, at
the upper end of guidance, demonstrating our continued focus on managing
operational costs. Also, our high quarter-end cash&cash equivalents and net
liquidity of EUR 73.4 million and EUR 40.5 million, respectively, demonstrate
ongoing financial strength," commented Ulrich Dopfer, chief financial officer
of ADVA Optical Networking.


In conjunction with the release of its Q1 2015 financial results on April 23,
2015, 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, Ulrich Dopfer. Interested parties may dial in at +49
69 22 222 9043 or +1 855 402 7766, pin code 5034 0392#, 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".

Q2 2015

In Q2 2015, ADVA Optical Networking expects revenues to range between EUR 105
million and EUR 110 million, and anticipates pro forma operating income of
between 3% and 6% 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 Q2 2015 and beyond. The pro forma operating income guidance provided above
excludes any such potential impairment charges. ADVA Optical Networking will
hold its annual shareholders' meeting on May 20, 2015, in Meiningen, Germany,
and will publish its Q2 2015 financial results on July 23, 2015.

"With record high revenue in Q1 2015 and a strong pipeline of opportunities,
ADVA Optical Networking is proving itself to be extraordinarily well
positioned as it continues its strong upwards trend. Our investments in
innovative connectivity and networking solutions which support the two mega
trends cloud and mobility are driving rapid growth for ADVA Optical
Networking. Supported by Infonetics Research[1], ADVA Optical Networking
posted extraordinary results in North America, ahead of its US competitors.
Our customers are paying more and more attention to secure network
connectivity. Thus, we are expanding our ConnectGuard(TM) portfolio to
provide encrypted Ethernet connectivity, enabling secure cloud access for
both fixed and mobile users. This complements our leadership position of
offering secure optical data center interconnection. With our deep and
longstanding industry know-how, our focus on the latest technology and a
diverse mix of customers, we have been able to grow our business
significantly. Data center interconnection and forward-looking cloud
computing applications remain key drivers of growth for the use of our 100G
and encryption features. These drivers will create further value for
shareholders," stated Brian Protiva, chief executive officer of ADVA Optical


| (in thousands of EUR, except earnings per share) Q1 2015 Q1 2014 |
| |
| Revenues 95,604 78,119 |
| Pro forma cost of goods sold -60,985 -50,503 |
| Pro forma gross profit 34,619 27,616 |
| Pro forma selling and marketing expenses -13,368 -11,389 |
| Pro forma general and administrative expenses -7,271 -6,313 |
| Pro forma research and development expenses -18,724 -16,695 |
| Income from capitalization of development expenses 7,526 5,063 |
| Other operating income and expenses, net 921 2,109 |
| Pro forma operating income 3,703 391 |
| Amortization of intangible assets from acquisitions -134 -171 |
| Stock compensation expenses -234 -135 |
| Operating income 3,335 85 |
| Interest income and expenses, net -265 -336 |
| Other financial gains and losses, net 2,106 40 |
| Income (loss) before tax 5,176 -211 |
| Income tax benefit (expense), net -912 -186 |
| Net income (loss) 4,264 -397 |
| |
| Earnings per share in EUR |
| Basic 0.09 -0.01 |
| Diluted 0.09 -0.01 |
# # #

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
your trusted partner we ensure that we're always ready to exceed your
networking expectations. For more information on our products and our team,
please visit us

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

For Press:

Gareth Spence
t +44 1904 699 358


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