& cplSiteName &

ADVA Reports Q2 Results

Light Reading
News Wire Feed
Light Reading
7/24/2014
50%
50%

MUNICH -- ADVA Optical Networking (FSE: ADV) announced Q2 2014 financial results for the quarter ended on June 30, 2014, and prepared in accordance with International Financial Reporting Standards (IFRS).

Q2 2014 IFRS FINANCIAL RESULTS
Including the operations of recently acquired Oscilloquartz SA since April 4, 2014, in Q2 2014 revenues rose to a record high of EUR 87.2 million, up 11.2% vs. Q2 2013 at EUR 78.4 million and up 11.6% vs. EUR 78.1 million achieved in Q1 2014. This result is in the upper half of guidance of between EUR 84 million and EUR 89 million. IFRS pro forma operating income, excluding stock-based compensation and amortization & impairment of goodwill & acquisition-related intangible assets, amounted to EUR 0.4 million or 0.5% of revenues in Q2 2014, also in the upper half of guidance of between -2% and +2% of revenues. This compares to EUR 1.5 million or 2.0% of revenues in Q2 2013 and EUR 0.4 million or 0.5% of revenues in Q1 2014. The year-on-year pro forma operating income reduction is largely due to initially lower margin Oscilloquartz operations, expansion of our customer base into new verticals, and one-time certification costs for next-gen technology at one of our largest customers.

The IFRS operating income amounted to rounded nil in Q2 2014 after EUR 1.2 million in Q2 2013, and after EUR 0.1 million in Q1 2014. The key driver for the unfavorable year-on-year development is the above-mentioned decrease of pro forma operating income.

The IFRS net income amounted to rounded nil in Q2 2014, down from EUR 0.1 million in Q2 2013. This reduction was largely driven by the development of the operating result described above. These effects were partly compensated by net foreign currency exchange gains of EUR 0.3 million, after losses of EUR 0.2 million in Q2 2013 and by lower tax expenses of EUR 0.1 million in Q2 2014 after EUR 0.6 million in Q2 2013. Basic and diluted IFRS net earnings per share in Q2 2014 were nil each after nil respectively in Q2 2013.

“We are pleased with the development of our Q2 2014 revenues, reaching an all-time high of EUR 87.2 million, and at the upper half of guidance. The quarter-on-quarter increase of 11.6% is driven largely by investments in enterprise solutions, reflecting the continued network traffic growth due to the increasing adoption of cloud based services, coupled with rising demand for innovative enterprise network technology in a broad range of verticals. Year-on-year, the increase of 11.2% is primarily due to higher demand for carrier infrastructure solutions offering scalability and ease-of-use. Our pro forma gross margin decreased from 35.4% in Q1 2014 to 32.8% in Q2 2014. This reduction is largely related to the expansion into new verticals and one-time certification costs for next-gen technology. Prior to amortization of capitalized development projects, pro forma gross margin decreased from 42.7% in Q1 2014 to 38.9% in Q2 2014. Our pro forma operating margin came in at 0.5%, in the upper half of guidance, and also reflects the integration costs of our Oscilloquartz acquisition. We expect a sustainable improvement of our IFRS pro forma operating income and gross margins in Q3 2014. In addition, cash and cash equivalents were at an impressive high of EUR 79.1 million at the end of Q2 2014, up from EUR 77.1 million at the end of the previous quarter. Net liquidity increased to EUR 40.5 million, up EUR 2.0 million or 5% vs. the end of the previous quarter, demonstrating our commitment to managing our working capital and strengthening our balance sheet,” commented Jaswir Singh, chief financial officer & chief operating officer of ADVA Optical Networking.

Q3 2014 OUTLOOK
In Q3 2014, ADVA Optical Networking expects revenues to range between EUR 82 million and EUR 87 million, and anticipates pro forma operating income of between 0% 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 Q3 2014 and beyond. The pro forma operating income guidance provided above excludes any such potential impairment charges. ADVA Optical Networking will publish its Q3 2014 financial results on October 23, 2014.

“Our record high revenue in Q2 2014 coupled with a strong pipeline and improved Q3 2014 pro forma operating income guidance indicates continued growth with a strong focus on strengthening our profitability. In the short-term, we did sacrifice margin growth by securing new business and acquiring Swiss-based Oscilloquartz. Both were strategic decisions to expand our solid foundation for future growth. ADVA Optical Networking is very well positioned to capitalize on the two dominant mega trends in the IT industry: cloud and mobility. The rapid rise and adoption of cloud-based IT-solutions drives enormous data center growth, fueling the demand for fiber-optic connectivity solutions. Our Big-Data-Transport offering provides high-performance connectivity with unparalleled security features – a value proposition that resonates well in the industry. And the growth of mobile services and devices continues to drive carrier infrastructure investment. More mobile broadband means not only more and better radio interfaces, it also means more fiber, more optical transmission solutions and more accurate timing; all things that we do exceptionally well. ADVA Optical Networking continues to reignite growth with game changing innovation and differentiating solutions serving as catalysts for investments in cloud and mobile infrastructure. While we remain committed to optimizing our costs, we are adding flexibility to our operations capacity and investing appropriately in revenue-generating activities. These are the key ingredients for renewed profitability. These efforts will increase our pro forma operating margin in the second half of 2014.

Differentiating ourselves with innovation will create further value for shareholders,” stated Brian Protiva, chief executive officer of ADVA Optical Networking.

ADVA Optical Networking (Frankfurt: ADV)

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Featured Video
From The Founder
The 'gleaming city on a hill,' Steve Saunders calls it. But who is going to take us from today's NFV componentry to the grand future of a self-driving network? Here's a look at the vendors hoping to make it happen.
Flash Poll
Upcoming Live Events
September 28, 2017, Denver, CO
October 18, 2017, Colorado Convention Center - Denver, CO
November 1, 2017, The Royal Garden Hotel
November 1, 2017, The Montcalm Marble Arch
November 2, 2017, 8 Northumberland Avenue, London, UK
November 2, 2017, 8 Northumberland Avenue – London
November 10, 2017, The Westin Times Square, New York, NY
November 30, 2017, The Westin Times Square
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Could 5G Have Found Its Glass Ceiling?
Dan Jones, Mobile Editor, 9/20/2017
1 Million Pirate Set-Top Boxes Sold in the UK
Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation, 9/20/2017
Comcast Shuts Down OTT Again
Mari Silbey, Senior Editor, Cable/Video, 9/19/2017
Photo Highlights: Operations Transformation Forum 2017
Ray Le Maistre, International Group Editor, 9/17/2017
WiCipedia: Endangered Species, 'the Pao Effect' & Bad Actors
Eryn Leavens, Special Features & Copy Editor, 9/22/2017
Animals with Phones
Live Digital Audio

Understanding the full experience of women in technology requires starting at the collegiate level (or sooner) and studying the technologies women are involved with, company cultures they're part of and personal experiences of individuals.

During this WiC radio show, we will talk with Nicole Engelbert, the director of Research & Analysis for Ovum Technology and a 23-year telecom industry veteran, about her experiences and perspectives on women in tech. Engelbert covers infrastructure, applications and industries for Ovum, but she is also involved in the research firm's higher education team and has helped colleges and universities globally leverage technology as a strategy for improving recruitment, retention and graduation performance.

She will share her unique insight into the collegiate level, where women pursuing engineering and STEM-related degrees is dwindling. Engelbert will also reveal new, original Ovum research on the topics of artificial intelligence, the Internet of Things, security and augmented reality, as well as discuss what each of those technologies might mean for women in our field. As always, we'll also leave plenty of time to answer all your questions live on the air and chat board.

Like Us on Facebook
Twitter Feed