ADVA reports sixth quarter of revenues in range EUR21-25m

7 November 2002 -- ADVA's Q3/2002 revenues were EUR22.0m (down just 1% on Q2 and 5.2% on a year ago), the sixth consecutive quarter of revenues between EUR21m and EUR25m.

7 November 2002 -- Metro DWDM equipment maker ADVA Optical Networking's Q3/2002 revenues were EUR22.0m (down just 1% on Q2 and 5.2% on a year ago).

The proportion of sales to the Europe, Middle East and Africa region rose from 70% in Q3/2001 to 79% in Q3/2002, while the proportion to North America fell from 29% to 17%. However, the latter should rebound as the market recovers, says chief marketing and strategy officer Brian McCann.

Operating income was EUR1.6m compared to a loss of EUR0.6m a year ago. Net income from continuing operations was EUR1.2m compared to a loss of EUR1.3m a year ago.

"We continued to see interest by both carriers and enterprises in investing at customer premise sites and in metro access networks, which led to our ability to generate a sixth consecutive quarter of stable revenues [between EUR21m and EUR25m]," said chief financial officer Andreas G Rutsch. "Higher gross margins, as a result of improved inventory management, greater operating efficiencies, and several quarter-specific positive effects from variations in regional distribution and product mix, enabled us to deliver a significantly higher pro forma operating income of EUR1.6m."

"Disaster recovery, storage area network connectivity, and local area network extension remain the most sought-after applications," said CEO Brian L Protiva.

Actual net loss was down from EUR93.2m a year ago - mainly due to the loss from discontinuing operations at its Cambridge, UK site in Q3/2001 - to EUR 0.1m.

Revenues during the first nine months of 2002 were EUR65.8m, similar to the first nine months of 2001. Operating results improved from a loss of EUR5.4m to income of EUR1.9m. This was due to greater operating efficiencies, cost-reduction measures, and higher gross margins. Net loss from continuing operations improved from EUR 6.1m to EUR 0.9m. Actual net loss improved from EUR104.6m to EUR5.3m.

In Q3/2002 eight new carrier and service provider customers, mainly city carriers and alternative service providers in Europe and Japan. In the first eight months of 2002 26 new enterprise and carrier customers were won together with partner INRANGE Technologies. "We balanced our marketing approach on both enterprise and carrier business opportunities," adds Protiva.

McCann adds that, while business used to be largely with enterprise customers, it is now approximately equal with carriers.
For Q4/2002 ADVA expects consistent revenues of EUR20-25m.

McCann told Lightwave Europe that ADVA's optical cross-connect development has been shelved temporarily and the staff and resources redeployed. Staffing has shrunk from 440 in Q3/2001 to 403 now. While ADVA will continue to add new features to its product lines, it doesn't see optical cross-connects or tunable filters as major market factors, adds McCann.

www.advaoptical.com

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