MARTINSRIED/MUNICH, Germany, and RAMSEY, N.J. -- ADVA Optical Networking (German Neuer Markt: ADV), a leading global provider of optical networking solutions, today announced first quarter 2001 financial results for the period ending March 31, 2001, and prepared in accordance with U.S. generally accepted accounting principles. Sales for the first quarter 2001 reached EUR 18.1 million, an increase of 75.3% over sales in the first quarter 2000 of EUR 10.3 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 -4.5 million during the first quarter 2001, compared to EUR 0.6 million during the first quarter 2000. These results reflect in particular lower margins from aggressive pricing given to customers and continued conservative inventory valuation, further expansion of ADVA's sales and tech support team, and significant investments in research & development associated with on-going product development and a larger R&D team. Pro forma net loss totalled EUR -3.5 million in the first quarter 2001, compared to EUR 0.4 million in the first quarter 2000. Pro forma diluted earnings per share totalled EUR -0.11 in the first quarter 2001, compared to EUR 0.01 in the first quarter 2000. "We are pleased to report continued top-line growth despite continued economic uncertainty and capital constraints in the first quarter 2001. We have recently seen the first positive indications in the buying patterns of our enterprise end customers, and remain on track for EUR 110 to 120 million in revenue for 2001," said Andreas G. Rutsch, Chief Financial Officer. "Significant and necessary investments in all areas led to an expected pro forma EBIT loss of EUR -4.5 million during the first quarter 2001. Tight cost-control measures have been implemented throughout all business areas to reach break-even for the full-year 2001."

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